[Jun 2024] Fees are high, wait for opportunity to Consolidate your small inputs

[Upgrade00]

I imagine a LN app that works similar to the setup of a VPN where - with the simplest version - you just install the app, choose the country and click connect. I know more measures can be taken to increase security and privacy etc., but for the average Joe to get going with LN in order to be able to transact at reasonable transactions costs, an app for LN should probably work like that.

This may be controversial but the average Joe may not need to use Bitcoin LN. Cash is the best fit for small scale daily transactions, incurs zero fees and is accepted everywhere. Those who need LN to make small, regular online transactions will be technical enough to set up a lightning channel. I don't think there's anything too technical about it, but I understand there's a barrier to adoption when it "looks" difficult to understand.

If there are apps like that, then it is a problem of visibility that people don't know where to find them or which developers to trust. As soon as people have to read into documentation, I think that slows down growth far too much. <snip>

Everyone who will adopt Bitcoin will find their way to it and use it appropriately. The conventional financial system works fine for a lot of people who don't want any form of custody or privacy.

<snip>I'm okay with that. I'd much rather send $100 to a well-connected custodial LN wallet than sending $7k in my own LN hot wallet.

I agree on this.

[Dump3er]

I imagine a LN app that works similar to the setup of a VPN where - with the simplest version - you just install the app, choose the country and click connect. I know more measures can be taken to increase security and privacy etc., but for the average Joe to get going with LN in order to be able to transact at reasonable transactions costs, an app for LN should probably work like that.

This may be controversial but the average Joe may not need to use Bitcoin LN. Cash is the best fit for small scale daily transactions, incurs zero fees and is accepted everywhere. Those who need LN to make small, regular online transactions will be technical enough to set up a lightning channel. I don't think there's anything too technical about it, but I understand there's a barrier to adoption when it "looks" difficult to understand.

Of course, of course. There is no disagreement here between you and me. Cash is the best fit for many use cases in many economies. I was more referring to this hypothetical scenario where people would decide to transition to using bitcoin via LN. If there is no easy use, then of course cash will remain the best option for everything pretty much forever in relatively stable economies. But if the goal is to foster adoption among those who want to use it for microtransactions, then some development/educational progress is inevitable. People are used to plug and play, they want to click maximum two buttons and be set up. Exactly as you said, when it "looks" difficult.

If there are apps like that, then it is a problem of visibility that people don't know where to find them or which developers to trust. As soon as people have to read into documentation, I think that slows down growth far too much. <snip>

Everyone who will adopt Bitcoin will find their way to it and use it appropriately. The conventional financial system works fine for a lot of people who don't want any form of custody or privacy.

Again we agree and I am not in a place where I would have to complain about available services to transmit value from A to B. I am all good, I am just speaking from the perspective of potential adoption on a global scale and here technologies like LN do matter because otherwise people go and use alternative crypto networks, which generally is fine, but I think bitcoin could still do better as it hasn't reached its innovative peak, if it will ever.

[LoyceV]

This may be controversial but the average Joe may not need to use Bitcoin LN. Cash is the best fit for small scale daily transactions, incurs zero fees and is accepted everywhere.

Here, cash is used less and less. People use more and more electronic payments, nowadays including contactless payments. The fact that you can be charged on multiple cards just for having your wallet close to a check-in machine doesn't seem to bother people.
I'd prefer cash for privacy, or anything else that doesn't create eternal records of who-pays-what in several databases.

[dkbit98]

I'd prefer cash for privacy, or anything else that doesn't create eternal records of who-pays-what in several databases.

Same here.
I don't trust banks and they can always turn off payment cards and say that system is not working, that is already happening in some countries.
By using cards and phones for payments all the time people are just supporting introduction of CBDC crap and cash ban.

[LoyceV]

Someone is broadcasting a small fortune in transaction fees:

(source)

The number of incoming transactions is often above average in batches, but now it's continuous for hours:

(source)

Most of the transactions are consolidations, like this one: it has received and sent 2 transactions in the past few days, all in a similar pattern. That's $6600 in transaction fees per transaction, consolidating in the dumbest possible way.

What to make of this? Why would anyone do this?

[BlackHatCoiner]

What to make of this? Why would anyone do this?

Here's why:

You are probably right, dumb people don't have infinite money but you completely ignore that there is an infinity of dumb people and they are constantly expanding like the universe does. So, technically we have an infinite money.

[stompix]

What to make of this? Why would anyone do this?

To piss off people who are waiting for 1sat/vb to consolidate their dust?  

There are two entities at this right now:
- moron number one, OKX, they have thrown a huge chunk of tx themselves, funds generated from their multisig , there's no doubt there
- maybe moron two (assuming it's not okx) who has a really interesting history, he is the one that funded the address you mentioned:
https://mempool.space/address/bc1qprdf80adfz7aekh5nejjfrp3jksc8r929svpxk

In these 3 months:

Total received   ‎9,277,164.37521068 BTC
Total sent   ‎9,276,943.46038816 BTC
89,086 transactions, all overpaid

We need a blockexplorer that shows how much each address has spent on fees!

LE:

I don't understand current transactions flooding mempool like 2eee1dacec1f807c681166518c32ce8fbe9c1d109423ed9c7c92a71fa1a6b52b, which spend around 150 2-of-3-multisig inputs worth 0.7x-ish BTC and pay a Tx fee of 11,111,874sat worth $7,923. That's in my opinion more than bonkers...

Of course, we don't know what such transactions are all about and maybe it's better not to know what kind of shady activities make such transactions "economic" for the sender.

It's OKX and it's not something unusual, they always tend to overpay, but this time seems like more morons have managed to get the same timing, as Binance is not doing as any favor either right now.

[Cricktor]

I don't understand current transactions flooding mempool like 2eee1dacec1f807c681166518c32ce8fbe9c1d109423ed9c7c92a71fa1a6b52b, which spend around 150 2-of-3-multisig inputs worth 0.7x-ish BTC and pay a Tx fee of 11,111,874sat worth $7,923. That's in my opinion more than bonkers...

Of course, we don't know what such transactions are all about and maybe it's better not to know what kind of shady activities make such transactions "economic" for the sender.

The receiving address of many of those pending consolidations seems mostly to be bc1quhruqrghgcca950rvhtrg7cpd7u8k6svpzgzmrjy8xyukacl5lkq0r8l2d. Quite a lot of traffic in the past and now, every few seconds transactions with destination to this address pour in currently...

Regarding the past coin turnover of this address (more than 3.6m BTC) I'd assume it bolongs to some exchange or so.

And as of block 846896 tx fees surpassed the block subsidy, likely for some more blocks to come as those overpriced large consolidations keep pouring in like from a faucet. Madness, but a feast for miners!

[LoyceV]

That's $6600 in transaction fees per transaction, consolidating in the dumbest possible way.

I stand corrected: they're now paying $15,000 per transaction.

[BlackHatCoiner]

It might be a controversial take, but I'd rather have a delayed yet proper second layer solution, even if it's going to dissatisfy those transacting on-chain for a long time, than have every user temporarily satisfied but tricked into believing that rising the on-chain capacity arbitrarily is the way to go over the long term.

The future of money requires proper DoS protection and a self-sustainability assurance mechanism, and that's the block size limit. The fact that an on-chain transaction currently costs $30 is evidence that it works.

[philipma1957]

That's $6600 in transaction fees per transaction, consolidating in the dumbest possible way.

I stand corrected: they're now paying $15,000 per transaction.

blocks 846,874 to 846,934

fees are all over 1.04 btc and some are over 5 coins

so 60 blocks average fee for them around 3.5 coins

[Synchronice]

What to make of this? Why would anyone do this?

Here's why:

You are probably right, dumb people don't have infinite money but you completely ignore that there is an infinity of dumb people and they are constantly expanding like the universe does. So, technically we have an infinite money.

Thanks for quoting me because I received a message on Telegram. I'm on vacation and haven't visited mempool.space and thanks to this quote, I received a notification on Telegram and I can't believe what my eyes has to see. Why on earth is anyone consolidating all the unconsolidated transactions today with 300-400 sat/vByte fees?

It's OKX and it's not something unusual, they always tend to overpay

Is there any explanation to why they overpay? Usually, every business tries to save as much as possible and it's a little confusing why should they be overpaying transaction fees (a lot).

The future of money requires proper DoS protection and a self-sustainability assurance mechanism, and that's the block size limit. The fact that an on-chain transaction currently costs $30 is evidence that it works.

Call that an evidence but can you afford to make a Bitcoin transaction? I can't afford (maybe can but don't plan to waste money stupidly). It's becoming unattractive payment method for so many people, I think that that's more of a loss than an evidence that it works (DoS protection and a self-sustainability assurance mechanism).

To me, it looks like advocating for an extremely high house prices while not being able to afford a house.

[BlackHatCoiner]

Call that an evidence but can you afford to make a Bitcoin transaction?

It's not worth it, no!

It's becoming unattractive payment method for so many people

That's absolutely true.

I think that that's more of a loss than an evidence that it works (DoS protection and a self-sustainability assurance mechanism).

That's your opinion, and it's totally respected. As I said, in my opinion, it's more preferable to have that undoubtedly big loss than risk destroying this beautiful concept in 20 years from now.

To me, it looks like advocating for an extremely high house prices while not being able to afford a house.

Sounds reasonable if the people who build the houses must continue building and selling them, no matter what, or all houses disappear. I don't want a large mansion for a few thousand dollars if I risk having it gone.

[LoyceV]

What to make of this? Why would anyone do this?

Here's why:

You are probably right, dumb people don't have infinite money but you completely ignore that there is an infinity of dumb people and they are constantly expanding like the universe does. So, technically we have an infinite money.

With ordinals or runes, I can imagine someone's selling that crap to countless dumb people. But in this case, I don't see how anyone can sell it to gullible victims. It looks like one dumb person who's wasting millions of dollars, and usually people who are that dumb don't have that kind of money (anymore).

We need a blockexplorer that shows how much each address has spent on fees!

That's not really possible: most addresses have multiple inputs.

I don't understand current transactions flooding mempool like 2eee1dacec1f807c681166518c32ce8fbe9c1d109423ed9c7c92a71fa1a6b52b, which spend around 150 2-of-3-multisig inputs worth 0.7x-ish BTC and pay a Tx fee of 11,111,874sat worth $7,923. That's in my opinion more than bonkers...

Even better if they keep creating small inputs to consolidate. See this address: none of it makes any sense.

It might be a controversial take, but I'd rather have a delayed yet proper second layer solution, even if it's going to dissatisfy those transacting on-chain for a long time, than have every user temporarily satisfied but tricked into believing that rising the on-chain capacity arbitrarily is the way to go over the long term.

I "joined Bitcoin" in 2015. In 2017, blocks were full for the first time, which lead to very high transaction fees. That was 6.5 years ago. I'd love to see an actively used second layer solution, but it's taking too long.

The future of money requires proper DoS protection and a self-sustainability assurance mechanism, and that's the block size limit. The fact that an on-chain transaction currently costs $30 is evidence that it works.

The spam protection may work, but if it also restricts using Bitcoin as a payment system, it's damaging adoption. What's the point of a blockchain when it stores 80% spam?

so 60 blocks average fee for them around 3.5 coins

Why would anyone burn 15 million dollars on this?

[BlackHatCoiner]

I "joined Bitcoin" in 2015. In 2017, blocks were full for the first time, which lead to very high transaction fees. That was 6.5 years ago. I'd love to see an actively used second layer solution, but it's taking too long.

Yes, it does. In 2017, people started working on lightning, because they thought it'd incentivize everyone to use it for instant, cheap micro-transactions over on-chain means. And it does work, to an extent, but they didn't think it'd be very unappealing to use for the average user. Now people want to implement other second-layers, some of which will be independent with optional lightning support.

This is a free market. It's a matter of trial and error. Unfortunately, it takes time, because of two reasons:

• Softforking Bitcoin is an extremely slow process, and many L2 solutions require certain softforks.
• Writing code voluntarily takes time. Even to Satoshi, it took 2 years to write Bitcoin, as far as we know.

[philipma1957]

What to make of this? Why would anyone do this?

Here's why:

You are probably right, dumb people don't have infinite money but you completely ignore that there is an infinity of dumb people and they are constantly expanding like the universe does. So, technically we have an infinite money.

With ordinals or runes, I can imagine someone's selling that crap to countless dumb people. But in this case, I don't see how anyone can sell it to gullible victims. It looks like one dumb person who's wasting millions of dollars, and usually people who are that dumb don't have that kind of money (anymore).

We need a blockexplorer that shows how much each address has spent on fees!

That's not really possible: most addresses have multiple inputs.

I don't understand current transactions flooding mempool like 2eee1dacec1f807c681166518c32ce8fbe9c1d109423ed9c7c92a71fa1a6b52b, which spend around 150 2-of-3-multisig inputs worth 0.7x-ish BTC and pay a Tx fee of 11,111,874sat worth $7,923. That's in my opinion more than bonkers...

Even better if they keep creating small inputs to consolidate. See this address: none of it makes any sense.

It might be a controversial take, but I'd rather have a delayed yet proper second layer solution, even if it's going to dissatisfy those transacting on-chain for a long time, than have every user temporarily satisfied but tricked into believing that rising the on-chain capacity arbitrarily is the way to go over the long term.

I "joined Bitcoin" in 2015. In 2017, blocks were full for the first time, which lead to very high transaction fees. That was 6.5 years ago. I'd love to see an actively used second layer solution, but it's taking too long.

The future of money requires proper DoS protection and a self-sustainability assurance mechanism, and that's the block size limit. The fact that an on-chain transaction currently costs $30 is evidence that it works.

The spam protection may work, but if it also restricts using Bitcoin as a payment system, it's damaging adoption. What's the point of a blockchain when it stores 80% spam?

so 60 blocks average fee for them around 3.5 coins

Why would anyone burn 15 million dollars on this?

Well remember if they have a direct deal with foundry (biggest pool) they could get a fee kickback.

I have been studying the high fee attacks since 2017. I have multiple examples  that can be done that could make money.

Most of them you need to involve 40% of the hashrate not 51% and the pools need to share with at the person jacking the fees.

[BitcoinGirl.Club]

Why on earth is anyone consolidating all the unconsolidated transactions today with 300-400 sat/vByte fees?

Mempool is now a pump and dump scheme LOL

[philipma1957]

Why on earth is anyone consolidating all the unconsolidated transactions today with 300-400 sat/vByte fees?

Mempool is now a pump and dump scheme LOL

if a runes and or ordinal guy is in collusion with 40% of the pools it could be true.

[Synchronice]

I think that that's more of a loss than an evidence that it works (DoS protection and a self-sustainability assurance mechanism).

That's your opinion, and it's totally respected. As I said, in my opinion, it's more preferable to have that undoubtedly big loss than risk destroying this beautiful concept in 20 years from now.

To me, it looks like advocating for an extremely high house prices while not being able to afford a house.

Sounds reasonable if the people who build the houses must continue building and selling them, no matter what, or all houses disappear. I don't want a large mansion for a few thousand dollars if I risk having it gone.

I respect your opinion too but I simply don't understand why you advocate it when there are so many cons. It's simple, if Bitcoin transaction fees will remain high, people won't use it. The less people use Bitcoin, the less there will be a need of it as a payment method which leads to less adoption. Less activity will result in the death of Bitcoin as a payment method, at least. Less activity on Bitcoin will also promote alternative cryptocurrencies and I won't be surprised if any altcoin will take the first place on the market.
If block size won't increase, there will be no space for new customers who want to make Bitcoin transactions daily and there are billions of people on earth. 600K daily transactions that we see on Blockchain, is really nothing for such a big population. Block size limit is the limit of how many people will be able to use Bitcoin. If we want massive adoption in forms of payment and protection from DDOS, a new model is necessary. At the moment, a slight block size increase is necessary, we can't have 1 MB or 4 MB block size in 2024, the technology has advanced, RAM, CPU, GPU, SSD, everything is significantly more powerful than in 2009 and significantly affordable.

To be honest, I don't understand why should I use a 2nd layer solution. If anyone has to use 2nd layer (I don't mean LN exactly), it's ordinals and runes spammers. Normal users, who want to use Bitcoin as a p2p payment method, should be able to use Bitcoin as it is without 2nd and 3rd layers.

Well remember if they have a direct deal with foundry (biggest pool) they could get a fee kickback.

That's what I think, it became a too dirty deal. I even think that ordinals and runes creators work with big mining pools to artificially increase the transaction fee. The scheme should be this: Some people inscribe ordinals and runes, pay extremely high transaction fees (then get all the fees back from pools), increase the transaction fee for everyone, they scam people with dumb ape and other JPEGs and that's all. They make money from creating and selling tons of ordinals, miners make money from increased transaction fees. I have no other explanation because I have seen many posts when NFT creators where crying for increased ETH transaction fees and now they want to pay thousands of dollars on Bitcoin blockchain? Doesn't make sense.

[BlackHatCoiner]

If block size won't increase, there will be no space for new customers who want to make Bitcoin transactions daily and there are billions of people on earth.

This is precisely my point. If we are billions, then we can't all fit by making on-chain transactions on a daily basis. This is true for 4 MB blocks as much as it is for 40, or for 400 MB. It is only a matter of time before these sizes become considered insufficient as well, and we need to go even higher than that.

And this is the good scenario. For if the adoption (or demand for on-chain transactions) does not follow the block's capacity increase, then the network will not be sufficiently self-sustainable.

At the moment, a slight block size increase is necessary

I agree, but you know what they say. The best argument for 4 MB block size is that we already have 4 MB block size. I would rather have something close to 20 MB, so that the network could be less hostile to people who just want to make on-chain payments, but political issues will arise. It'd give Bitcoin some "breathing space" until the softforks, though, I agree it wouldn't harm (apart from politically).

Normal users, who want to use Bitcoin as a p2p payment method, should be able to use Bitcoin as it is without 2nd and 3rd layers.

"Should" is a complex and problematic verb. One person's actions impact another. If you think about it, your transaction occupies the space another person could use. It might sound exaggerated, but your freedom to make on-chain transactions directly influences another person's freedom to do the same. Just because something is considered a "human right" or "privilege" doesn't mean it comes without a cost. Dictate who should bear that cost, and you've essentially created a government.

Second layer solutions aim to minimize your influence on others' freedom as much as possible. That is the goal, in my view.