average confirmation time 18 minutes?

[C. Bergmann]

Maybe it's the new Chines Bitcoin users. Ether way it's time to call the major pool operators and ask them to stop being greedy bastards and let in all non fee transactions until the blocks are full.

So, how are miners greedy and users who don't want to send them a tiny 0.0001 (3 cents) tx fee not greedy?

All participants need to responsibly treat the network and be nice to each other. Without miners bitcoin is dead, why not pay them this small fee to keep the network running? Truely is this the "why worry about a speck in your friend's eye when you have a log in your own" kind of thing.

Somebody always has to pay for the banquet, there is no free cheese ever. So grow up, and understand you have to pay for everything in life, even in bitcoin. Bitcoin is run and used by people, and people are always sinful, it's their nature, so pay your dues and enjoy the system.

If you look at the charts at blockchain.info, you see this:

we actually have more transactions each day as we ever had. That's good, Bitcoin is used, and that a foundation for Bitcoin's value.

http://blockchain.info/de/charts/n-transactions-excluding-popular?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

But this is just the beginning. Bitcoin isn't used widely. When the actuall number of transaction is too high for the network to be handled without delay - what will happen, when Bitcoin really starts to be used as a payment.

Than you see that miner's income has never be as high as now

http://blockchain.info/de/charts/miners-revenue

Also you see, that miner's income for every transaction has never be as high

http://blockchain.info/de/charts/cost-per-transaction

[Abdussamad]

But this is just the beginning. Bitcoin isn't used widely. When the actuall number of transaction is too high for the network to be handled without delay - what will happen, when Bitcoin really starts to be used as a payment.

Transaction fees will go up. Companies will spring up that offer off-chain wallets with quick confirmation times and very low fees. Most will get hacked and people will loose money. Some will survive and build up a solid reputation over time.

[porcupine87]

As far as I understand a block can have 1mb. With 50kb per transaction this is 2000 transactions, and would be 0.2btc, which is <1% of the block reward. Now one has ask the question by how many percent a found block will be more likely orphaned when there is a 1Mb (or 250kb = 0.2% of 25btc) block size? Has anyone numbers? I bet pool operators have!

[DeathAndTaxes]

As far as I understand a block can have 1mb. With 50kb per transaction this is 2000 transactions, and would be 0.2btc, which is <1% of the block reward. Now one has ask the question by how many percent a found block will be more likely orphaned when there is a 1Mb (or 250kb = 0.2% of 25btc) block size? Has anyone numbers? I bet pool operators have!

People have asked, estimated and simulated.   Still nobody is saying max out blocks.   However right now the average block is 200KB with a large portion being under 100KB. An average block size of just 300KB would clear 90% of the backlog.  Also 50KB per transaction?  Ouch.  No the average tx is <1KB.  Of course fees are per kb so 0.1 mBTC on 50 1KB txs is no different than 5 mBTC fee on a single 50 KB tx.  Lastly on your math 1 MB = 1024KB so that is only ~20 tx of 50 KB ea not 2,000.

Hopefully pool operator are also forward thinking.  Many pools include some free txs despite them adding 0% more revenue.   Remember if Bitcoin collapsed or adoption falls and there is lots of negative press about it being dysfunctional and impossible to use as a payment system then the BTC the miners are making are worth less.   Miners benefit by keeping the tx system "healthy".   The fact that many pools are leaving PAYING tx likely means the issue is a configuration one not an intended policy.  One recent block included 0.02 BTC worth of paying tx, 80 free tx and then behind 0.08 BTC worth of paying tx.   That doesn't make economic sense for any miner so either pool operators are dumb or tx selection configuration is non-optimal.

  

[justusranvier]

The fact that many pools are leaving PAYING tx likely means the issue is a configuration one not an intended policy.

This is going to be a problem until the transaction rate has increased by about two orders of magnitude.

Once transaction fees become as significant the subsidy in terms of miner revenue pool operators won't ignore them any more.

[DeathAndTaxes]

The fact that many pools are leaving PAYING tx likely means the issue is a configuration one not an intended policy.

This is going to be a problem until the transaction rate has increased by about two orders of magnitude.

Once transaction fees become as significant the subsidy in terms of miner revenue pool operators won't ignore them any more.

I am not sure.  I have been analyzing blocks, compared to the memory pool and I have seen lower tx fee transactions be included along with free transactions while higher or same valued tx (sometimes older) be not included. 

My guess is that at least one miner (miner in this case is the person controlling the block construction) likely has a non-optimal tx selection setup.  My guess is they have a hard target of say 100KB  and reserve some of it (say 20KB) for free tx.  This results in the pool leaving paying tx. 

Honestly the latency and thus orphan effect on the difference between a 300KB block and 100KB block is negligible for a well connected miner (once again miner is the person creating and publishing blocks) it may simply be a configuration "issue".

Now if blocks were nothing but 100% paying tx going from highest to lowest then I would agree you probably are right.   The good news is the block subsidy will continue to fall this will remove the distortion from the market over time.

[justusranvier]

My guess is that at least one miner (miner in this case is the person controlling the block construction) likely has a non-optimal tx selection setup.  My guess is they have a hard target of say 100KB  and reserve some of it (say 20KB) for free tx.  This results in the pool leaving paying tx. 

Honestly the latency and thus orphan effect on the difference between a 300KB block and 100KB block is negligible for a well connected miner (once again miner is the person creating and publishing blocks) it may simply be a configuration "issue".

What I'm saying is that when there are 25 BTC/block worth of transaction fees available, then miners will pay very close attention to their configurations to make sure their block filling heuristics are optimal.

Right now they have a very weak incentive to care because the subsidy dwarfs everything else so I'm not surprised that configurations are suboptimal.

[Lauda]

But this is just the beginning. Bitcoin isn't used widely. When the actuall number of transaction is too high for the network to be handled without delay - what will happen, when Bitcoin really starts to be used as a payment.

Transaction fees will go up. Companies will spring up that offer off-chain wallets with quick confirmation times and very low fees. Most will get hacked and people will loose money. Some will survive and build up a solid reputation over time.

Why hacked?

[cr1776]

Maybe it's the new Chines Bitcoin users. Ether way it's time to call the major pool operators and ask them to stop being greedy bastards and let in all non fee transactions until the blocks are full.

If you feel that way, you can set up a pool, buy miners and adhere to the rules you want.  Pools take time and money, they are no more "greedy" than people who want "free" transactions.

[porcupine87]

As far as I understand a block can have 1mb. With 50kb per transaction this is 2000 transactions, and would be 0.2btc, which is <1% of the block reward. Now one has ask the question by how many percent a found block will be more likely orphaned when there is a 1Mb (or 250kb = 0.2% of 25btc) block size? Has anyone numbers? I bet pool operators have!

People have asked, estimated and simulated.   Still nobody is saying max out blocks.   However right now the average block is 200KB with a large portion being under 100KB. An average block size of just 300KB would clear 90% of the backlog.  Also 50KB per transaction?  Ouch.  No the average tx is <1KB.  Of course fees are per kb so 0.1 mBTC on 50 1KB txs is no different than 5 mBTC fee on a single 50 KB tx.  Lastly on your math 1 MB = 1024KB so that is only ~20 tx of 50 KB ea not 2,000.

Ouh, I meant one tx is 500bytes. I should more think before I write^^ But the rest was correct.

Hopefully pool operator are also forward thinking.  Many pools include some free txs despite them adding 0% more revenue.

I don't really understand why they do that. You really think it is a fault in the configuration?

Remember if Bitcoin collapsed or adoption falls and there is lots of negative press about it being dysfunctional and impossible to use as a payment system then the BTC the miners are making are worth less.

   
The miner does not care about bad press against Bitcoin. He cares about profit. It is no healthy system when it is dependent on voluntary benificial miners. But maybe a big pool has more incentives. But when you say that they include 0 fee tx then the pools or miners have an incentive to include them.



Maybe it would be an solution to double the standard tx fee to 0.0002? 

[hathmill]

Why spend energy on crunching tx at all. Just crunch the ones with high fee and ignore free tx and free up time to render block. Sure its bad for the golden goose, but what does it matter... the ASIC can only be used for a small time anyway. Selfish thinking only about the moneym ie a free market. Im not sure it will work out in the end. Enter an altcoin or a patch?

[Barek]

Are there really transactions stalled that include a 0.0001 fee? All I see linked here are no-fee ones.

I don't see a problem with delaying no-fee transactions.

[rbdrbd]

But this is just the beginning. Bitcoin isn't used widely. When the actuall number of transaction is too high for the network to be handled without delay - what will happen, when Bitcoin really starts to be used as a payment.

Transaction fees will go up. Companies will spring up that offer off-chain wallets with quick confirmation times and very low fees. Most will get hacked and people will loose money. Some will survive and build up a solid reputation over time.

And with this comes increased centralization and the addition of a counterparty with its own inherent trust requirements. It will be interesting to see how these potential developments fit up against the altcoins.. I'm specifically thinking of Peercoin, with it's proof of stake (which as I understand it POS blocks currently comprise the bulk of blocks issues on the PPC network, but not the bulk of new coins generated.) SunnyKing has been stating for years that transaction fees could be an issue with any successful POW-only crypto currencies.

[DeathAndTaxes]

Why spend energy on crunching tx at all. Just crunch the ones with high fee and ignore free tx and free up time to render block. Sure its bad for the golden goose, but what does it matter... the ASIC can only be used for a small time anyway. Selfish thinking only about the moneym ie a free market. Im not sure it will work out in the end. Enter an altcoin or a patch?

ASICS are used to find a nonce which gives the block the proper hash.  You do this once per block which may contain an arbitrary (well currently capped at ~4000) number of transactions.  The actual block header creation is computationally "cheap".  A single CPU core can validate about 15,000 tps.