Miner's fee a barrier to mass adoption

[DoomDumas]

I understand that the miner's fee is just a few cents, but am I the only one that sees it as a potential problem?

Situation 1: I buy something and refuse to pay the fee.  I know that blockchain.info will put it back in my account after 24 hours if it isn't confirmed.  Thus, merchants may refuse to take BTC fearing these types of "charge backs."

"so merchants just insist on a miner's fee!" is the simple answer, but imagine a busy restaurant or store ringing up lots of transactions an hour, usually by the typical teenage or marginally trained employees.  A lot of no fee transactions may slip through the cracks.

Situation 2: People making small purchases (under $10) for fast food or coffee are not going to want to tack on a few cents every time.

 "People shouldn't be so cheap!" is the easy answer to that, but they definitely are. Go ask people if they are willing to pay a few pennies every time they use their debit cards and see what the reactions are. Consumers hate that.

Ideas? Solutions?

Sorry to disapoint you here, but look carefully to debit cards/bank fees, it's a lot bigger than you may think imo !

[BitTrade]

Miner's fee is nothing compared to the potential problem we face if we start using the term "millibitcoin" or "millibit" as the standard denomination for bitcoin.  Talk about a branding nightmare.  

[msc]

Miner's fee is nothing compared to the potential problem we face if we start using the term "millibitcoin" or "millibit" as the standard denomination for bitcoin.  Talk about a branding nightmare.  

It's not ideal, but it shouldn't really be a problem as long as your wallet makes it clear and lets you switch.  It would be an improvement for small in-person transactions, even now.  But, Bitcoin should probably still be used as the brand name any time that you're not discussing a particular payment amount.

[odolvlobo]

Miner's fee is nothing compared to the potential problem we face if we start using the term "millibitcoin" or "millibit" as the standard denomination for bitcoin.  Talk about a branding nightmare.  

I totally agree. Look what the terms "c-note", "benjamin", "buck", "quarter", "dime", "nickel", "penny", and "cent" have done to the dollar! I don't think it will ever recover.

[DannyHamilton]

Miner's fee is nothing compared to the potential problem we face if we start using the term "millibitcoin" or "millibit" as the standard denomination for bitcoin.  Talk about a branding nightmare.  

I totally agree. Look what the terms "c-note", "benjamin", "buck", "quarter", "dime", "nickel", "penny", and "cent" have done to the dollar! I don't think it will ever recover.

Don't forget:

large, grand, G's, jackson, sawbuck, tenner, ten-spot, fin, bones, beans, greenback, clams, simoleons, smackers, two bits.

I suspect with a bit of searching, regional nicknames can be found as well.

[steelhouse]

The current fee of 0.0001 is about less than 2 US cents.

Merchants don't need to insist on a fee. But merchants will insist on a confirmation.

The solution is to have a fee of about $1-5 per transaction.  Thus about 0.01 at todays rate.  You want to get all the bastards like satoshi dice from spamming the chain.  What you do is you have 3-4 major exchanges acting as wallets for petty cash.  You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there.  From there you just buy and sell and the exchange get a small amount of additional revenue.  If the site goes broke or skips town you lose your $100.   However, they have the incentive to stay with their fee.

These exchanges could even use a common wallet thus everyone would be using the same wallet.  Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers.  This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin.  This is actually already being done today in many ways.

Higher fees is the solution not the problem.  If you buy a $20,000 car or house, a $5 fee is not a problem.  You might even want to use a wallet for that for a paper trail and proof you paid.

[DeathAndTaxes]

The current fee of 0.0001 is about less than 2 US cents.

Merchants don't need to insist on a fee. But merchants will insist on a confirmation.

The solution is to have a fee of about $1-5 per transaction.  Thus about 0.01 at todays rate.  You want to get all the bastards like satoshi dice from spamming the chain.  What you do is you have 3-4 major exchanges acting as wallets for petty cash.  You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there.  From there you just buy and sell and the exchange get a small amount of additional revenue.  If the site goes broke or skips town you lose your $100.   However, they have the incentive to stay with their fee.

These exchanges could even use a common wallet thus everyone would be using the same wallet.  Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers.  This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin.  This is actually already being done today in many ways.

Higher fees is the solution not the problem.  If you buy a $20,000 car or house, a $5 fee is not a problem.

Congratulations you just invented banking.  When 3 or 4 clearing houses handle 90% of transactions it will be no different than banks today.   Bank fees don't HAVE to be high.  Credit Cards don't HAVE to cost 3%.  They are high because the banks WANT to profit on the backs of their users. 

[steelhouse]

The current fee of 0.0001 is about less than 2 US cents.

Merchants don't need to insist on a fee. But merchants will insist on a confirmation.

The solution is to have a fee of about $1-5 per transaction.  Thus about 0.01 at todays rate.  You want to get all the bastards like satoshi dice from spamming the chain.  What you do is you have 3-4 major exchanges acting as wallets for petty cash.  You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there.  From there you just buy and sell and the exchange get a small amount of additional revenue.  If the site goes broke or skips town you lose your $100.   However, they have the incentive to stay with their fee.

These exchanges could even use a common wallet thus everyone would be using the same wallet.  Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers.  This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin.  This is actually already being done today in many ways.

Higher fees is the solution not the problem.  If you buy a $20,000 car or house, a $5 fee is not a problem.

Congratulations you just invented banking.  When 3 or 4 clearing houses handle 90% of transactions it will be no different than banks today.   Bank fees don't HAVE to be high.  Credit Cards don't HAVE to cost 3%.  They are high because the banks WANT to profit on the backs of their users.  

No you are not forced to use the clearing houses.  There are no fees and anyone can set-up their own system. It also is not banking as banking involves loans.  It is a simple means to get the transactions off the blockchain.  Can bitcoin handle a million transactions a second?  Any clearinghouse charging more than 0.5% fee will not be used.

[jbreher]

 Can bitcoin handle a million transactions a second? 

I thought I saw a post 'round hereabouts that indicated that the peak transaction volume seen by the Visa network was on the order of 25,000 transactions a second. I took it to be a statement from true knowledge, though I did not verify this for myself.

I guess my point is that it would seem that bitcoin will not have to handle a million transactions a second even if it should become the standard worldwide currency of retail trade - at least for a generation or so.

Of course, I _could_ be repeating the claim of a charlatan.

[MAbtc]

So, let's say bitcoin is worth $1,000,000. To send a hundred satoshis, is it still going to cost me many hundreds of times that much in transaction fees? Off-chain only for transactions < $50,000?  

[zvs]

So, let's say bitcoin is worth $1,000,000. To send a hundred satoshis, is it still going to cost me many hundreds of times that much in transaction fees? Off-chain only for transactions < $50,000?  

obviously the fee isn't something that's going to remain static

also, individual pools/miners can change it if they like, just as i've changed it from ed: 0.0001 to 0.0005.  if it was worth $1,000,000, i'd adjust it to much less

the main point is to keep spam like horse staple  battery from being kept in your tx pool

[Dabs]

You know, if we do business, I could care less about what fee you paid, as long as your transaction confirms. I'll accept most deals below a few hundred bitcoins on one confirmation, but usually it ends up taking a few more because of time delays and banking and preparing whatever it was that you bought.

[C. Bergmann]

The current fee of 0.0001 is about less than 2 US cents.

Merchants don't need to insist on a fee. But merchants will insist on a confirmation.

The solution is to have a fee of about $1-5 per transaction.  Thus about 0.01 at todays rate.  You want to get all the bastards like satoshi dice from spamming the chain.  What you do is you have 3-4 major exchanges acting as wallets for petty cash.  You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there.  From there you just buy and sell and the exchange get a small amount of additional revenue.  If the site goes broke or skips town you lose your $100.   However, they have the incentive to stay with their fee.

These exchanges could even use a common wallet thus everyone would be using the same wallet.  Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers.  This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin.  This is actually already being done today in many ways.

Higher fees is the solution not the problem.  If you buy a $20,000 car or house, a $5 fee is not a problem.  You might even want to use a wallet for that for a paper trail and proof you paid.

This will cut of some usabilities of bitcoin, so I think its a bad idea.

Why not reward those using the qt with free transactions? This would be an incentive to store the allday-growing blockchain and could be the foundation of micropayment-services

[Dabs]

How would the network know that I sent a transaction using QT? There isn't a protocol for it now and any client can pretend to be the reference client, and the miners ... ... would not have any incentive to process transactions without a fee if they are low priority.

[C. Bergmann]

don't know, am no IT / technician. Just thought it could be a solution?

But ... qt builds a node, so first notize of tx happens instantly only in qt, couldn't this be a proof?

[Dabs]

I think the nodes don't know if the other nodes hold the full blockchain or not, just that they got a transaction forwarded to them. It's up to the node to inspect the transaction to see if it's legit.

Also, nodes don't mine. Miners do the work of confirming. Of course, miners probably run full nodes (they have to, I believe.)

[Mike Hearn]

The way fee's work are being redesigned by Gavin at the moment. I would expect and hope that they will be lower in future. The biggest problem at the moment is they don't float. If the BTC/USD exchange rate doubles, effective fees double as well.

[BobMarley]

The OP is right the fees are ridiculous, it essentially makes microtransactions impossible

[wtfvanity]

The OP is right the fees are ridiculous, it essentially makes microtransactions impossible

Since bitcoin's entire purpose was to make microtransactions possible...

[dancupid]

Everything we pay for includes fees - the price of every item we buy is the sum of the effort needed to process that item plus any profit the merchant wishes to take from the sale.
When you pay with cash, the merchant has already priced in the effort required to process that cash into the price of the merchandise.

Bitcoin is easier to process than cash, and cheaper than paypal and credit cards for the merchant.

So next time you pay with Bitcoin ask the merchant if he wouldn't mind giving you a penny discount on the price since you are saving him so much time and effort- though he may point out that the time it takes him to answer this question and process your discount costs him more than one penny.