Evilness in the fees

[Stedsm]

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

That's monopoly, and that's what scares me, you and everyone over the Bitcoin network because they know that they are the life-line of the whole network.

They have interest in maintaining a constant waiting line.

I agree with you here because they want bigger values in fee but they should understand that this will only drag users far from the concept of Bitcoins which was meant to serve everyone to make it possible for everyone to transact at lowest fees. The value in fee/transaction is probably still lower, but I believe if this monopoly will continue, we are not too far to see even $100 asked as a fee.

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.

This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.

[Snub]

That is fair as for me.
if you want to make your transaction faster - just pay higher fee, but if you have time - just wait till your transaction will be approved

[marky89]

But it gives incentive to miners to keep the waiting line and this is wrong.

It's not useful to think of "the miners" as this single, monolithic entity. Miners are competing with one another for those fees. Bitmain might control a lot of hash power, but they don't have a monopoly on it. It's not like a supermarket chain can singlehandedly drive up the prices of milk just by marking it up in their stores.

Mining pools are all trying to undercut one another with hash power distribution and better mining/propagation code, and as subsidy drops, the incentive is increasingly about fees. What you're saying can only be true if all miners are colluding together to keep fees high. That seems unlikely given global distribution and competition, but I'm interested in hearing any evidence you might have.

[Borilla]

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.

This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.

I corrected my first message to "The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil".
I was just focusing on the dynamic of this free fee system and showing the vicious loop in this dynamic. Not trying to say fees are bad.

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I propose an example of implementation: https://bitcointalk.org/index.php?topic=2457763.0

[BluOrb]

Use Bitcoin Cash. Core / Legacy Bitcoin Team will never fix the problems because they are blinded by money, bankers, and their own personal selfish interests.

[EtihadBitcoin]

I believe everybody feels your pain with this topic.
Although segwit2x should of done something about it there has not been much change expect the quickness of the sends but that is about it.

[pawanjain]

I do understand what you are trying to say but that's how it is buddy. Miners will choose obviously the the transaction with higher fees to earn more profit. It's all about the priority here. The one who needs to get the transaction done quickly will have to pay high priority fee and vice versa.
It's not that lower fee transactions are kept on hold forever but they are done a little later. You could also accelerate your transaction if you don't want to pay high fees but want to boost your transaction speed at the same time. According to me there should be a pool that mines only lower fee transactions in order to keep the network stabilized but then they should also be paid something other than just the mining fee so that they can earn profit from mining.

[sibachao97]

The number of bitcoin transactions is increasing, so until btc is fully exploited, how long will a transaction be validated, and who will confirm when there are no miners?

[franco123]

I get your point. I think the system just followed the same system as to the other physical fiat transactions for products and services, not just in Bitcoin and cryptocurrencies. This may be some sort of unfair but that's how the world goes. If you pay more, you get a better service. And in the case of Bitcoin transaction, you pay more and you get a faster transaction. It's like buying in Amazon and choosing the fastest delivery time with of course the most expensive delivery.

[Spendulus]

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.

This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.

I corrected my first message to "The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil".
I was just focusing on the dynamic of this free fee system and showing the vicious loop in this dynamic. Not trying to say fees are bad.

-----
I propose an example of implementation: https://bitcointalk.org/index.php?topic=2457763.0

Reminds me of a historical problem that in it's day was very serious.

How to make the trains run on time.

[FrueGreads]

paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong.

I think you have this concept wrong. Bitcoin transaction capacity is at it's peak, and it has been there for several years. That's why one of the major concerns regarding bitcoin right now, is to solve this problem that is at the root of it's scalability limitations. Some want o on-chain solutions, like increasing the block size, others think that off-chain solutions are better for the long term, and an example of this is segwit and eventually the lighting network.

Now, what you are suggesting is that miners keep the waiting line big, in order for users to pay higher fees to get priority, but this is wrong. The capacity is at it's peak like I said, and this is why the waiting is long, and there is nothing miners can do about it right now. Paying high fees just gives you priority and there is nothing wrong with that. To solve the long waiting line problems, then you need to solve the blockchain scalability issues, so that transactions are processed faster. If they are fast, the waiting is small, and there is no incentive to pay big fees.

[Boseda]

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

They have interest in maintaining a constant waiting line.

Maybe they already do that now.

The real problem is in the concept of the fees itself***: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.

***EDIT: The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil

I totally agree with your point of view. It seems we switched from banks to miners. But what's the actual difference between banks and miners? In both cases they process the transactions so even using Bitcoin we don't have a real full control on our transactions.

[kimochidesh]

You mean to say that system or process for charging fees by miners is evil.
Just like in fiat transaction we are dependant upon banks or govt as an intermediatory third party, In BTC transaction, miners are the third party that approves the transaction and for that, they charge high and unreasonable fees. And this dependency upon miners make BTC centralized in its own way, which is really very sad.

[dogandogru]

First of all I will like to say people does not have much problem with fees but the unreasonable HIGH fees is not justified. Miners and exchanges changing more fees to confirm the transaction quickly seems like a blackmailing technique or a way of corruption. I totally agree concept of fees is not rightly designed and it need to get improvise seeing the need of the time.

[jman0war]

Fees are not evil.
Fees are just part of the costs of running and maintaining a decentralized network.

Low fees, or 'no fees', is a temporary state that exists by externalizing the costs to others.
There was a very interesting post about this very thing on Medium which i highly recommend:

https://medium.com/@rusty_lightning/the-three-economic-eras-of-bitcoin-d43bf0cf058a