Linking fees to fiat?

[Thekool1s]

So fellow bitcointalk members, we have seen many people complain about 'high fees'. The problem here is that those users only take fiat into consideration, never thinking that it only costs 50k Satoshis for a transaction of an average size.

I was thinking of a solution for this, now i am not a technical person, so i need your input on this, if this is even possible or not. Can the core developers link the fee to say 0.05 cents in fiat terms? So if bitcoin is at 9k it will cost 0.00000555 btc to send a transaction, if bitcoin drops to 8k it will cost 0.00000625 btc to send a transaction and so on. Keeping the transaction fees to 0.05 cents at all times. If the transaction size is greater than 226 bytes and less than 500 bytes it will cost 10 cents and so on.

Is this possible via a soft fork? Should even this be implemented? Or will it work in the long run, i would like to hear your opinions on this.

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[Jet Cash]

It's better to use Bitcoin imho. All Fiat currencies are unstable, and it would be difficult to know which one to choose.

[Monartis]

I don't know whether the idea is viable but I do commend you for taking a creative approach, in search of a solution.

[TheQuin]

The fees are already linked to fiat in a way. It is purely driven by supply and demand. When many people consider that fees are too high they choose to delay sending a transaction or send it with a low fee and just wait longer for it to confirm. The only reason fees go as high as they do is that there are enough people willing to pay those fees. As the price of Bitcoin increases the BTC value at which people choose not to pay will decrease.

[Thekool1s]

It's better to use Bitcoin imho. All Fiat currencies are unstable, and it would be difficult to know which one to choose.

I don't know if you are being sarcastic or just trolling.. If you really think fiat isn't stable right now. I think you need a medical check up mate.

It's not bad idea, but which exchange API is reliable for your idea and which exchange API is trust able for your idea

Well what's better than Google? It has an api for currency exchange rates. That can be used.

Also, i'm sure few people will oppose this idea.

Duh! One doesn't have to be a Sherlock to figure out who these people will be. I think they will come to terms if the users push them to.

I don't know whether the idea is viable but I do commend you for taking a creative approach, in search of a solution.

Thank you  

The fees are already linked to fiat in a way.

Lets remove that ambiguity and make it clear? Don't you agree with that?  

When many people consider that fees are too high they choose to delay sending a transaction or send it with a low fee and just wait longer for it to confirm.

Well this is the point where bitcoin becomes a tool for the elites and less of a payment system for the masses.

As the price of Bitcoin increases the BTC value at which people choose not to pay will decrease.

Not sure about this part. Miners may decline to accept all the payments, what will happen then? They may argue that they want atleast 30Sat/byte etcs.. Have to think about this part..

[khaled0111]

If I understood your proposal correctly, I think you want the transaction fee to be fixed using a FIAT currency (then, automatically convert it to BTC)!!
Well, I think you can do that without waiting for a fork to happen, just put the amount you want to pay (you can use a USD to BTC converter) when sending your transaction, many wallets offer the possibility to define Tx fee.
The problem is if miners will accept to confirm it when you add low fee. 

[TheQuin]

The fees are already linked to fiat in a way.

Lets remove that ambiguity and make it clear? Don't you agree with that?  

It not ambiguous it is the market forces of supply and demand, they affect Bitcoin in the same way as they do fiat currencies. The important part of your suggestion was to remove that and have fixed fees. I don't think that is desirable.

Well this is the point where bitcoin becomes a tool for the elites and less of a payment system for the masses.

You could argue that but I would say that's why some altcoins are doing so well. We're all free to chose whether or not we use Bitcoin for transactions. Long term I see fees reducing drastically when Lightning Network comes in.

Not sure about this part. Miners may decline to accept all the payments, what will happen then? They may argue that they want atleast 30Sat/byte etcs.. Have to think about this part..

Miners really are not a single entity. If some miners choose not to mine transactions below a certain fee then others will when they are the only transactions left with a fee on them. If you keep a close eye on what is in the mempool you'll see that it usually clears out completely after a period of congestion like we have had recently, even transactions of less than 1 sat/byte get confirmed when there is nothing else left.

[HeRetiK]

The question which fiat currency to use could probably be solved by using a composite of the most widely used fiat currencies. In the end I still see 2 challenges:

1) Defining a reliable exchange rate source. So far Bitcoin is pretty much self contained without relying on external information sources. Not even timestamps are fully trusted.

2) This still wouldn't prevent a fee market from emerging. Someone will always be willing to pay a premium to get first in line, regardless of whether you calculate the price in fiat or BTC terms. As a result the fees will still increase according to network load factor.

It's better to use Bitcoin imho. All Fiat currencies are unstable, and it would be difficult to know which one to choose.

/thread

[cellard]

Fees must be paid in Bitcoin... it is part of how the system works. You would most likely need a hardfork for such a change. Maybe with lightning network channels you can route them somehow to fiat but I don't see the point, as it was mentioned, the fees are what they are because the resources (blockchain space) is limited. It's like if there was an auction every 10 minutes to get inside the blockchain, and highest fees get a priority. This doesn't change no matter where you link the fees with.

[Thekool1s]

Well, I think you can do that without waiting for a fork to happen, just put the amount you want to pay (you can use a USD to BTC converter) when sending your transaction, many wallets offer the possibility to define Tx fee.

I know, but there isn't a consensus, anyone can bid higher and get faster confirmations. Its like a pay to play system. Where if you have money to burn you can get a benefit of quick confirmations.

The problem is if miners will accept to confirm it when you add low fee.

That's a big question here, if a consensus is created to send only 0.05 cents with each transaction, will they stop mining? or start to exclude the payments.

2) This still wouldn't prevent a fee market from emerging. Someone will always be willing to pay a premium to get first in line, regardless of whether you calculate the price in fiat or BTC terms. As a result the fees will still increase according to network load factor.

Makes sense. Well my idea isn't viable then, their is a limitation that we need to factor in.

[master2080]

I think linking fees to fiat will require a decentralized exchange first.

[btcton]

As Thekool1s described, such a system would require a consensus. It would be impossible to implement such system if even a single of the miners disagree with it, which given how you described it to be is actually very likely. Right now, the fees you pay for a transaction to be executed simply put you at a certain priority in the mempool. Miners then (usually) grab those with the highest priority, which would be the ones paying the highest fees. The system would simply interfere with this already natural supply-and-demand transaction flow. Another issue would be how to handle transactions when the mempool is overflowing? How do you prioritize transactions over others? Any possible solution would bring issues. For example, if miners processed transactions by age, the waiting time or delay for transactions to be processed would be enormous during times in which the network is congested. A first-come-first-serve basis is not always ideal, especially when it comes to financial transactions which may have real levels of priorities.

[olubams]

So fellow bitcointalk members, we have seen many people complain about 'high fees'. The problem here is that those users only take fiat into consideration, never thinking that it only costs 50k Satoshis for a transaction of an average size.

I was thinking of a solution for this, now i am not a technical person, so i need your input on this, if this is even possible or not. Can the core developers link the fee to say 0.05 cents in fiat terms? So if bitcoin is at 9k it will cost 0.00000555 btc to send a transaction, if bitcoin drops to 8k it will cost 0.00000625 btc to send a transaction and so on. Keeping the transaction fees to 0.05 cents at all times. If the transaction size is greater than 226 bytes and less than 500 bytes it will cost 10 cents and so on.

Is this possible via a soft fork? Should even this be implemented? Or will it work in the long run, i would like to hear your opinions on this.

You are very correct to have taken that and make such insinuation but the fact is there is no way we can separate the two because subconsciously, you just do the calculations before sending anything. Imagine wanting to send a transaction and I have to use $30 to send it which is equivalent to more than one month rake home of some people in the country. When that happen, you don't keep quiet because you can't just live with such high fees.

[posi]

I don't know if that is possible through the use of fork but blockchain have some sort of features where user can make their account balance or transaction show in bitcoin or USD.

[brontosaurus]

So fellow bitcointalk members, we have seen many people complain about 'high fees'. The problem here is that those users only take fiat into consideration, never thinking that it only costs 50k Satoshis for a transaction of an average size.

I was thinking of a solution for this, now i am not a technical person, so i need your input on this, if this is even possible or not. Can the core developers link the fee to say 0.05 cents in fiat terms? So if bitcoin is at 9k it will cost 0.00000555 btc to send a transaction, if bitcoin drops to 8k it will cost 0.00000625 btc to send a transaction and so on. Keeping the transaction fees to 0.05 cents at all times. If the transaction size is greater than 226 bytes and less than 500 bytes it will cost 10 cents and so on.

Is this possible via a soft fork? Should even this be implemented? Or will it work in the long run, i would like to hear your opinions on this.

Yes its absolutely possible and is the need of hour too. Watching bitcoin climbing just over $11000 will mean each satoshi is now worth 0.00011$ and an average swift transaction carries a weight of lets assume around 150 sats/byte. Considering a 200 byte transaction is now costing around $3.3 if people hope bitcoin to reach $100000 the fees would reach $30 per transaction. So that means if you pay someone $100 30% would just vanish out in air. I don't really think this is something what most people want from their currency.

So this idea of fees linked with fiat is really the need of hour if we are looking forward to BTC as a currency or else one would simply rely on it as an asset giving good return.

[btcton]

So fellow bitcointalk members, we have seen many people complain about 'high fees'. The problem here is that those users only take fiat into consideration, never thinking that it only costs 50k Satoshis for a transaction of an average size.

I was thinking of a solution for this, now i am not a technical person, so i need your input on this, if this is even possible or not. Can the core developers link the fee to say 0.05 cents in fiat terms? So if bitcoin is at 9k it will cost 0.00000555 btc to send a transaction, if bitcoin drops to 8k it will cost 0.00000625 btc to send a transaction and so on. Keeping the transaction fees to 0.05 cents at all times. If the transaction size is greater than 226 bytes and less than 500 bytes it will cost 10 cents and so on.

Is this possible via a soft fork? Should even this be implemented? Or will it work in the long run, i would like to hear your opinions on this.

Yes its absolutely possible and is the need of hour too. Watching bitcoin climbing just over $11000 will mean each satoshi is now worth 0.00011$ and an average swift transaction carries a weight of lets assume around 150 sats/byte. Considering a 200 byte transaction is now costing around $3.3 if people hope bitcoin to reach $100000 the fees would reach $30 per transaction. So that means if you pay someone $100 30% would just vanish out in air. I don't really think this is something what most people want from their currency.

So this idea of fees linked with fiat is really the need of hour if we are looking forward to BTC as a currency or else one would simply rely on it as an asset giving good return.

I don't think you have read the past few posts if you really are going to agree with OP without addressing any of the issues everyone else has been bringing up about the fees being tied to a fiat value. Sure, it might be possible, but at least the way OP proposes it is an absolutely abysmal idea. It diverges from the concept of free market and does not address many of the issues that are solved by miners being able to prioritize transactions by their value. I suggest you start reading posts in a thread before you reply yourself.

[kimochidesh]

Absolutely agree with you, fees are getting really high now a days. A reasonable solution needs to be found in order to continue BTC as a practical transaction entity. If a fee is about 0.00000555BTC for Bitcoin at 9K, that cost around 7cent which is quite genuine to pay and nobody got any problem with. It will definitely help BTC to gain more popularity and can be used as real-time currency for day to day transaction.

[jman0war]

If set to USD, the change would be somewhat ideologically supporting USD as the 'worlds reserve currency'.

While that may be reflective of USD status across the globe, it would be politically unpalatable by many.

[rule144]

As btc climbs, perhaps the answer would be to reduce the amount of sats; it would be fair and logical this way as well as keeping it competitive.  imho.

[Thekool1s]

How can we reach a consensus that's the big question here. How to make awareness among users that not to send the recommended fees by the clients they are using. Also those who want fast confirmations, also shouldn't send more than let's say 0.50 dollars per transaction. It's a matter of spreading the word i think and sticking to it.

What's the best way to do this? Signature campaigns? Contact clients and make them set the default fees to 0.05 cents and so on. Sounds too much work for me but i will think of something..