Killer transaction fee

[2weiX]

Everywhere Bitcoin is pimped as the one cure of "transactin fees".

Today, I wanted to send 0.4BTC to a friend. Seems I need to pay 0.03 BTC transaction fee.
Isn't that a little steep?

Just to understand:

Who (by which mechanism) decides the size of fees?
Who gets those fees? (I'm guessing some mining pool operator)
Is there a way to NOT pay 10% when sending smallish amounts of BTC?

[giantdragon]

I pay 0.0005 BTC for small transactions.

[2weiX]

I pay 0.0005 BTC for small transactions.

nice!
why's that?

[Djao]

download the newest version of the client, I guess you still run an old version since your fees are so high

[jackjack]

download the newest version of the client, I guess you still run an old version since your fees are so high

0.3.25 still asks for a 0.0005 BTC fee

[2weiX]

have 0.3.22 installed and set to 0.0005
still...


0.03 is a LITTLE steep, isnt it?

[Tasty Champa]

dude upgrade! That's what they were trying to tell you.
make sure you make a copy of your wallet.dat just in case.

[the founder]

I think many people use ewallets to avoid fees.
http://www.flexcoin.com/?page_id=103

AND

Transactions to a Bitcoin address from the same wallet provider are usually completed internally and, if so, will not be processed on the Bitcoin P2P network. Auditing tools such as the Block Explorer will not show any activity for this transaction.
https://en.bitcoin.it/wiki/EWallet

[julz]

To put the 0.0005 in perspective..

At current rates of just under $14/BTC - It equates to about a 2.7% fee if you want to throw someone a US quarter.


or..  for those who heard about bitcoins 'low fees' and are just getting started with bitcoin  and to try it out, get their free 0.001 BTC from the bitcoin faucet..
it's half their wallet. 


Clearly the fees are high for small transactions - and as miners are currently well rewarded by the 50 BTC block payout, it's not for that.

Apparently the fees help stop someone spamming the network..  although.. I don't see why a 'proof of recent work' can't be required in each transaction to help prevent this.
(something based on the current difficulty level which will take some 'average' computer about a second or two to compute)

[Mike 71]

For those who think about that flexcoin stuff:

Be aware that this is just a central site with a database that stores all ewallets and transfers.

With bringing in some solutions for 'bitcoin problems', it also totally take out the sense of bitcoin. Its centralized, located in one country and has one owner who have to follow the authority of his country. If the owner shut the site down tomorrow (or is forced to), all BTC on this accounts will be lost.

Maybe its useful for some low bitcoins amounts you dont really care if you lose them, but not more!

Greetings
Mike

[the founder]

For those who think about that flexcoin stuff:

Be aware that this is just a central site with a database that stores all ewallets and transfers.

With bringing in some solutions for 'bitcoin problems', it also totally take out the sense of bitcoin. Its centralized, located in one country and has one owner who have to follow the authority of his country. If the owner shut the site down tomorrow (or is forced to), all BTC on this accounts will be lost.

Maybe its useful for some low bitcoins amounts you dont really care if you lose them, but not more!

Greetings
Mike

Mike there are benefits to have a central location... IE: 200 machines each with bitcoin balances is not manageable...  the other fact is transfer fees would be free if transferred from flexcoin to flexcoin as compared to bitcoin to bitcoin... which is what this thread is about.

I'm not saying your wrong, because you're not wrong..  I'm just stating that there are some extreme benefits to running flexcoins.

[killer2021]

Yea I thought the fees were too high too. I think a fee of around 1 US cent is, "fair."

[GoWest]

To put the 0.0005 in perspective..

At current rates of just under $14/BTC - It equates to about a 2.7% fee if you want to throw someone a US quarter.


or..  for those who heard about bitcoins 'low fees' and are just getting started with bitcoin  and to try it out, get their free 0.001 BTC from the bitcoin faucet..
it's half their wallet.  


Clearly the fees are high for small transactions - and as miners are currently well rewarded by the 50 BTC block payout, it's not for that.

Apparently the fees help stop someone spamming the network..  although.. I don't see why a 'proof of recent work' can't be required in each transaction to help prevent this.
(something based on the current difficulty level which will take some 'average' computer about a second or two to compute)

Check your math please.  The OP was sending 0.4BTC and, if he had the new client installed, would have paid a 0.0005BTC fee.

0.0005BTC * $14/BTC = $0.007 = 7/10 of a cent.

Nothing wrong with that fee.

[Jered Kenna (TradeHill)]

Yea I thought the fees were too high too. I think a fee of around 1 US cent is, "fair."

When you compare it to 3% from Paypal or a bank wire that costs $40 from the senders bank $30 from a bank they didn't tell  you is in the middle and $15 to receive for a total of $85 ...
For what Bitcoin does it is unreal how cheap it is.

Jered

[ctoon6]

I think the fees should be around .05% or MABY 1%. if you think about it, if bitcoin does ever take off and houses a trillion dollar economy, think of how much as little as .05% would give you. right now at USD14.00 you make about USD700. if only USD10,000 where done in 1 block, you would make USD500. I would have to guess more than 10,000 are done per 10 minutes. and to insure that we get as many transactions as possible, we should avoid internal bitcoin swapping. don't skip the network, you need to help secure it.

[evoorhees]

I think the fees should be voluntary and market-based. I like the idea that transactions are prioritized based on the fees attached to them. I'd imagine it will evolve to where you'll be able to see how long a transaction is likely to take given a certain fee, and you can pay fees according to your time preferences.

This has the double benefit of signalling to payment processors (miners) whether capacity needs to increase or decrease. If the network is getting clogged with transactions, and people are paying increasing fees to get their transaction done faster, then the profit for miners rises and new miners enter. Same if the market slows down, fees will drop and miners can withdraw capacity.

It's all very elegant 

[Phenomenon]

I think the fees should be voluntary and market-based. I like the idea that transactions are prioritized based on the fees attached to them. I'd imagine it will evolve to where you'll be able to see how long a transaction is likely to take given a certain fee, and you can pay fees according to your time preferences.

This has the double benefit of signalling to payment processors (miners) whether capacity needs to increase or decrease. If the network is getting clogged with transactions, and people are paying increasing fees to get their transaction done faster, then the profit for miners rises and new miners enter. Same if the market slows down, fees will drop and miners can withdraw capacity.

It's all very elegant 

EXACTLY.  The beauty of the free market is that the prices will work out.  People who wish to not provide a transaction fee, or provide a very low fee, will end up waiting much longer than those who voluntarily provide a fee.

Having some fee amount or % determined by some central authority or organization is contrary to the purpose of bitcoin.

[istar]

Since removing the fee is not possible out of security. To protect the network.

Why not have a fee based on percent ? Is that not possible?

If bitcoin is supposed to make microtransactions the fee cant eat up that transaction.

Unless its somehow possible to solve with open transactions software.

[the founder]

Since removing the fee is not possible out of security. To protect the network.

Why not have a fee based on percent ? Is that not possible?

If bitcoin is supposed to make microtransactions the fee cant eat up that transaction.

Unless its somehow possible to solve with open transactions software.

that's my point, the lower the transaction the higher as a percentage is the fee... hence why people need to move to ewallets...  so wallet to wallet transfers are free as it doesn't have to wait till the next block, the miner isn't involved hence doesn't require a transaction fee....   in a perfect world an ewallet would have clients such as bitcoin exchanges, restaurants, coffeeshops, etc... and literally you could have fluid transactions that would not incur transfer fees.

If one of the ewallets caught critical mass this topic would be ALMOST moot, as you would still need miners to generate new bitcoins.. and in all actuality some people would still want the client on their desktop even though they have trouble reaching it from their phone..

[CydeWeys]

that's my point, the lower the transaction the higher as a percentage is the fee... hence why people need to move to ewallets...

Ewallets are a horrible idea and throw away the most important aspect of Bitcoin, that it is decentralized.  All so that you can, what, avoid a .0005 BTC fee on some transactions?  You realize that's less than a USD cent right now?