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Author Topic: Transaction fee clarifications needed  (Read 1211 times)
cepler
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July 22, 2011, 07:58:31 PM
 #1

I just got back into this Bitcoin thing after a long long hiatus back when the client did mining and GPU's didn't do mining...anyhoo I never really got any coins back then so I neve really fully utilized the client...

Recently I've been putting my GPU to work and I've gotten a couple bitcoins and was going to move some to an exchange.  I went to send them and I've been told I need to include a transaction fee (!?).  So of course I 'do the needful' and Google a bit to try to clarify why I'm being requested to pay a fee and what the fee would need to be...  So I adjust my client try again and it keeps telling me larger and larger amounts.  While Googling I didn't really find a clear explaination about the hard coded rules that related to my wallet.  There was a vague reference to 'new' transactions costing more to send out but nothing concise..

As a (re)new user it's quite frustrating to have some coins and not be able to send them anywhere.  My wallet has about 49 transactions right now, most of them in the 0.01 to 0.05 range because I would gradually thru the day move them off the pool server to my wallet not realizing this would bite me later.  So my questions are:

1) How 'old' does a transaction need to be to be considered cheap/free to transact out?  My lowest # of confirmations is now at about 158.

2) Is there a way I can consolidate my coins myself?  How?

3) Can someone PLEASE make the client dialog display a meaningful calculated message instead of the very vague 'something is wrong, you need to put SOME for of transaction but we're not gonna tell you how much or what the actual problem is' message.  That thing is like a Microsoft error message, absolutely NO help.  No accurate fee calculation and a list of 3 vague reasons...

Angry *Frustrated*  Angry
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Stephen Gornick
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July 23, 2011, 12:58:33 AM
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3) Can someone PLEASE make the client dialog display a meaningful calculated message instead of the very vague 'something is wrong, you need to put SOME for of transaction but we're not gonna tell you how much or what the actual problem is' message.  That thing is like a Microsoft error message, absolutely NO help.  No accurate fee calculation and a list of 3 vague reasons...

There are several things you can do.

The fee is tiny assuming you are using a current client (currently v0.3.24-beta).

IF even that tiny fee is too much, switch to a really old client and take your chances as to how long your transaction will take.  Version 0.3.20 didn't impose any fee.
 - http://sourceforge.net/projects/bitcoin/files/Bitcoin/

Assuming those transaction are coming from a pool, you might be able to increase the payout threshold so that you don't have such tiny, spam-like payments, going forward.

Because every transaction ends up in everyone's blockchain, those transactions have a cost in terms of network bandwidth, storage space.  Fees are just a cost of doing business with any payment network and Bitcoin's fees are low, if not the lowest.

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July 23, 2011, 01:12:14 AM
 #3

You're not getting charged fees because of your transactions being new, you're being charged fees because you're trying to construct large (in network size) transactions from tiny coins. It's a very bad idea to get tiny pool payouts for this reason.

You can try doing payments to yourself for small amounts (if you have a bunch of 0.01 to 0.05 transactions, then maybe 0.03 to 0.10) to combine some of the coins together, but even that will likely need some fees.

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geek-trader
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July 23, 2011, 01:18:55 AM
 #4

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

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July 23, 2011, 01:21:43 AM
 #5

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

+1

I actually tried to explain there were fees once.  No such thing as a free lunch, even in Bitcoin utopia.  I got some smart ass reply about being a sheep to the credit card companies.  Maybe you'll have better luck.

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July 23, 2011, 01:22:41 AM
 #6

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

+1

I actually tried to explain there were fees once.  No such thing as a free lunch, even in Bitcoin utopia.  I got some smart ass reply about being a sheep to the credit card companies.  Maybe you'll have better luck.
+2
error
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July 23, 2011, 01:28:36 AM
 #7

I'm surprised nobody has put this in the FAQ.

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jackjack
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July 23, 2011, 02:15:00 AM
 #8

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

+1

I actually tried to explain there were fees once.  No such thing as a free lunch, even in Bitcoin utopia.  I got some smart ass reply about being a sheep to the credit card companies.  Maybe you'll have better luck.
+2
Clearly, +3

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July 23, 2011, 04:06:11 AM
 #9

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

+4 Cool

So let me see if I got it. The problem is that the value being transferred is too small. Is that it? If I send 10BTC I won' get charged, but if I send 0.01 I will because I am spamming the network. So how is this value calculated? I suppose that when bitcoins are worth $1000 a piece you won't be charging $5 for a $20 transaction...
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July 23, 2011, 04:20:05 AM
 #10

So let me see if I got it. The problem is that the value being transferred is too small. Is that it? If I send 10BTC I won' get charged, but if I send 0.01 I will because I am spamming the network. So how is this value calculated? I suppose that when bitcoins are worth $1000 a piece you won't be charging $5 for a $20 transaction...
It's not the size of the transaction in terms of the number of coins exchanged but the size of the transaction in terms of the number of inputs and outputs. Someone with 10,000 bitcoins could spam the network with a transaction that spread those 10,000 bitcoins into 1,000 accounts and then another transaction that gathered them back from 1,000 accounts into one account. They could do this over and over. They'd be "large" in terms of numbers of bitcoins, but still just as spammy.

The issue here is that you have to "gather" all the small transactions into one pile. That's going to mean a fee. It works out to be about a penny for every seven sources you need to gather from with the latest client. This assumes all of your bitcoins have sat still for at least a day.

There are ways you can avoid the fee by breaking the transaction into smaller gathers and letting each transaction sit for a day before gathering it into a bigger one. But this is probably more trouble than it's worth.

I join the chorus of people arguing that it's important to be up front about the transaction fees and document them more clearly so that people know what to expect. Also, there are people running clients who specifically accept all transactions without fees and who specifically connect to miners with the same policy.

Luke Dash Jr. runs such a node. Adding the following to your command line will connect your client to it:
-addnode=173.242.112.53
Your client will try to hide the fact that it originated a transaction, 'dribbling' it out to nodes randomly. So it might take a few hours before it by luck gets to the right node.

I am an employee of Ripple.
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cepler
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July 23, 2011, 05:45:17 AM
 #11

So do some people just set their wallet for mining pools to their exchange address instead of their actual wallet to help avoid some of these fees?  Will I have any issues getting the coins out of there if I put them in as small transactions?
error
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July 23, 2011, 06:02:58 AM
 #12

So do some people just set their wallet for mining pools to their exchange address instead of their actual wallet to help avoid some of these fees?  Will I have any issues getting the coins out of there if I put them in as small transactions?

Assuming the service you send coins to can handle this (some can, some cannot) then you're just pushing the inevitable transaction fees on to the service provider. It's still better to not request tiny payouts. You don't expect your employer to pay you every ten minutes, do you?

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hugolp
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July 23, 2011, 06:09:35 AM
 #13

This comes up again and again, and I always say the same thing, and get ignored.

People don't care about paying this tiny fee.

People are upset / confused because it is explained so POORLY,  and that many Bitcoin boosters claim "no fees".

Set expectations properly.  Explain the fees.  People don't mind paying the fee, they just don't like "surprise" fees that they don't understand.

+5

I was unaware for a big while that the client included transactions fees automatically as well. And its not only the fact that there is no FAQ or other explanation, but that you are setting zero fees to the client but it sends a fee without telling you. It should not be that way and it feels like cheating. The client should say that its sending a minimum fee as a way to get the transaction processed.
cepler
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July 23, 2011, 06:29:43 AM
 #14

So do some people just set their wallet for mining pools to their exchange address instead of their actual wallet to help avoid some of these fees?  Will I have any issues getting the coins out of there if I put them in as small transactions?

Assuming the service you send coins to can handle this (some can, some cannot) then you're just pushing the inevitable transaction fees on to the service provider. It's still better to not request tiny payouts. You don't expect your employer to pay you every ten minutes, do you?

Well...  One person's 'tiny' is another person's entire days worth of work.  What do you define as tiny and what do you define as a normal amount?  Not everyone has a mining operation with 6 machines with 3 6990's in each.  Right now I'm just using a single 5870 to mine when I'm not gaming.
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July 23, 2011, 08:13:28 AM
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Well...  One person's 'tiny' is another person's entire days worth of work.  What do you define as tiny and what do you define as a normal amount?  Not everyone has a mining operation with 6 machines with 3 6990's in each.  Right now I'm just using a single 5870 to mine when I'm not gaming.

And I have two 5850s. Tongue For the pools I participate in, my minimum payout is set to 0.25 BTC. I should probably raise that, since I'm getting paid more often than I'm spending the things.

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Stephen Gornick
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July 23, 2011, 08:24:39 AM
 #16

you are setting zero fees to the client but it sends a fee without telling you.

I don't know of any versions that did that.

The most recent version (v0.3.24) will pop up a dialog box that says the transaction fee is required and will display the amount.

its not only the fact that there is no FAQ

Added.
 - http://en.bitcoin.it/wiki/FAQ#How_much_will_the_transaction_fee_be.3F

Please know that the client cannot say something like: the fee for getting this transaction processed in the next block is N bitcoins.

That is because there is no set fee.  When the client comes up with a number, it is only making an estimate.  It is up to the miner to determine whether or not to include a transaction.  The higher the fee, the more likely the transaction will get included.  Even a high fee though is not a guarantee.

Currently, the 50 BTC reward is adequate for many miners so that is why you will see transactions with no fee in many of the blocks yet.  

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July 23, 2011, 09:26:46 AM
 #17

I don't know of any versions that did that.

The most recent version (v0.3.24) will pop up a dialog box that says the transaction fee is required and will display the amount.

Im using bitcoin-qt. To be honest, I dont remember if I the last time I used the official client version it was .23 or .24 so it may have been solved already and blaming you guys for something that its bitcon-qt fault.

Quote

Great.

Quote
Please know that the client cannot say something like: the fee for getting this transaction processed in the next block is N bitcoins.

That is because there is no set fee.  When the client comes up with a number, it is only making an estimate.  It is up to the miner to determine whether or not to include a transaction.  The higher the fee, the more likely the transaction will get included.  Even a high fee though is not a guarantee.

Currently, the 50 BTC reward is adequate for many miners so that is why you will see transactions with no fee in many of the blocks yet.

I know. It depends on what the miners decide to incude on the blocks and obviously a higher fee is a bigger incentive. Nobody is specting that you predict the behaviour of the miners. The explanation in the wiki is great.
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July 23, 2011, 09:40:21 AM
 #18

you are setting zero fees to the client but it sends a fee without telling you.

I don't know of any versions that did that.

The most recent version (v0.3.24) will pop up a dialog box that says the transaction fee is required and will display the amount.

its not only the fact that there is no FAQ

Added.
 - http://en.bitcoin.it/wiki/FAQ#How_much_will_the_transaction_fee_be.3F

Please know that the client cannot say something like: the fee for getting this transaction processed in the next block is N bitcoins.

That is because there is no set fee.  When the client comes up with a number, it is only making an estimate.  It is up to the miner to determine whether or not to include a transaction.  The higher the fee, the more likely the transaction will get included.  Even a high fee though is not a guarantee.

Currently, the 50 BTC reward is adequate for many miners so that is why you will see transactions with no fee in many of the blocks yet.  


It could however give an average fee/kb for the last 10 blocks or so.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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