Do you want to pay the fee?

[Soros Shorts]

0.0001/kB BTC fee * $1000/BTC = $0.10. You can avoid fees that are multipliers of the minimum by not filling your wallet with only trivial dust payments that are more expensive to spend than to discard.

This.  This is why loitering around "free bitcoin dust" sites is a waste of time and a bad idea.  I remember when I finally had enough 'dust' to do something with, the transaction fee was brutal. But I paid it, because, lesson learned.

Running a p2pool node at a low hash rate (currently below 10 GH/s) also causes this problem. I have about $2000 worth of BTC dust crumbs sitting in a p2pool mining account and the client is asking for about $400 in fees to transfer them out. I think I know how to reduce this by transferring larger chunks into the address and letting them sit for a few months and become candidates for higher priority transactions.

[kwoody]

when all 21m coins have been mined, transaction fees will supposedly be valuable enough to continue the act of mining and adding compute power to the network. transaction fees are desirable.

[Cryddit]

(EDIT; I WAS WRONG WHEN I POSTED THIS AND OVERSTATED FEES BY MORE THAN A FACTOR OF TEN.  I AM DEEPLY SORRY FOR THE TROUBLE THEREBY CAUSED TO EVERYONE. -- CRYDDIT)


FWIW, fee being about a dollar means about 12 "coins" are being used.

If you're only trying to spend a dollar, this means you must be paying in dimes and nickels.  

So you're looking at your wallet and it says you have X available;  but because it's in nickels and dimes you'll burn half of that in tx fees when you try to spend it. So you probably only have about 1/2 X that can actually be used.  The rest will be blown on fees.  Aaaand, that kinda sucks.

If you were paying with a ten-dollar bill, your tx fees would be about 7 cents.

The thing that most don't get is that this doesn't depend on how much money you're trying to transfer, as it does in a sane world; it depends on how many individual coins you use.  So spending a ten dollar bill *and* a penny will cost twice the "sales tax" of spending just the ten dollar bill.  

I'll have to look at the code, but it may be even worse than that.  If this size coin is also the only thing you have that you can use to pay your tx fees, you'll be making your transaction twice as large when you add coins to cover tx fees; so the client may be wrong here and your $1 transfer will actually be a nonstandard tx until you sink $2 into fees.

I think that bafflement on this point is one of the problems with the interface.  The wallet should show the actual *spendable* amount (the amount that will be left after paying the tx fees to spend it) rather than some imaginary amount you won't be able to actually use.  It would banish a few illusions about how much you're actually being paid by sites that pay out in these tiny tiny coins.

Translate all amounts above into Bitcoin of course.  Instead of "dollar" I mean "about .001 Bitcoin" and instead of "nickels and dimes" I mean "txouts worth .00008 Bitcoin or thereabouts."  "pennies" or increments of .000001 bitcoin truly *are* dust; they cannot normally be spent without incurring more in transaction fees than they are worth in money.

[Cryddit]

EDIT;  I WAS WRONG WHEN I POSTED THIS AND OVERSTATED FEES BY APPROXIMATELY A FACTOR OF TEN.  SEE PAGE 4 OF THIS TOPIC FOR A DETAILED CORRECTION.  --CRYDDIT.

when all 21m coins have been mined, transaction fees will supposedly be valuable enough to continue the act of mining and adding compute power to the network. transaction fees are desirable.

Actually I think they'll be considerably higher than that considering what I anticipate the value of Bitcoin to be at that time. Mining fees will need to be reduced considerably for Bitcoin processing to remain "cheaper than alternatives" when Bitcoin goes north of US$10K, or the per-coin transaction fee will be 80 cents.  Even for smallish purchases there are usually at least 3-4 txid's involved, so is a "usual" transaction fee of $2.40 or $3.20 per transaction entirely reasonable for processing each and every one of your daily purchases?  Bearing in mind that today credit card companies are doing it for a nickel or so plus 1% of the transaction amount?

So save that dust; if they do reduce transaction fees in the future, it may become spendable again.

[sidazhang]

Is the minimum bitcoin fee arbitrarily set in the system? Is there even scope to lower it substantially in the future?

[Birdy]

Is the minimum bitcoin fee arbitrarily set in the system? Is there even scope to lower it substantially in the future?

Currently yes. There is a plan to create an other fee system that will choose an appropiate fee within the next bitcoin-qt update.

[deepceleron]

Is the minimum bitcoin fee arbitrarily set in the system? Is there even scope to lower it substantially in the future?

Fees are for the health of the bitcoin network, and serve to ensure that transactions cost enough that transactions are not used for flooding the network with activity by attackers, and are actually used for non-trivial money transfers. Enforced minimum fees have been reduced before when the real-world value increased beyond simply "transaction disk space should cost something".

It is set arbitrarily by consensus in the software that all Bitcoin users use - every node has a no-relay policy for non-minimum fee transaction, effectively blocking communication of transactions without it. The 0.0001 BTC minimum for relay has been in place for 2.5 years, even when mining required more. Fees are required only for certain transactions, such as if any amount spent is less than 0.01 or if the coins being sent are recent to the wallet.

Pools can include whatever transactions in blocks they want, but minimum fee blocking rules have only been knowingly altered by one pool. With the network as busy at it is now, it is best to set the optional fee above the minimum anyway if you want your money reliably sent quickly.

You cannot simultaneously complain about:

* Why do we pay fees?, it should be free for me,
* Why doesn't my transaction confirm? and,
* Why does the blockchain of all transactions take so long to download.

[Cryddit]

You cannot simultaneously complain about:

* Why do we pay fees?, it should be free for me,
* Why doesn't my transaction confirm? and,
* Why does the blockchain of all transactions take so long to download.

Well, you can acknowledge that these are pain points that anyone considering a new design should try to minimize.  But for Bitcoin as it exists the relationship between these are a thing that cannot be changed without radically changing the design.

If you want to create an altcoin that actually contributes something to human knowledge and capability, provides new capabilities that might be taken up into Bitcoin, and isn't just  some derivative farting around, pump-and-dump crap, find a good design solution to those three (or even any two of those three) problems and test it thoroughly in an alt-chain.

We should be striving to fix the design problems in Bitcoin, if we truly want it to dominate.

[lerelerele]

No fee no bitcoin, no fee no bitcoin
I remember when we use to pay...

[B!tC0in]

Who's going to want to pay an extra $0.10 every time I buy something from a shop? I might aswell use cash as its free to transact, I see this is as a core problem and a big barrier to bit coin adoption. Fees should be a % of the total transaction or at least on a partial gradient as small day-to-day purchases already are uneconomical and are only going to become more uneconomical in the future.

[lerelerele]

Who's going to want to pay an extra $0.10 every time I buy something from a shop? I might aswell use cash as its free to transact, I see this is as a core problem and a big barrier to bit coin adoption. Fees should be a % of the total transaction or at least on a partial gradient as small day-to-day purchases already are uneconomical and are only going to become more uneconomical in the future.

When i go to a shop they charge me a 21% of taxes, no product is under 5c and i never go to a shop to buy less than 50c in total, make your maths, bitcoin have the cheapest taxes in the first world.

[theta]

Who's going to want to pay an extra $0.10 every time I buy something from a shop? I might aswell use cash as its free to transact, I see this is as a core problem and a big barrier to bit coin adoption. Fees should be a % of the total transaction or at least on a partial gradient as small day-to-day purchases already are uneconomical and are only going to become more uneconomical in the future.

When i go to a shop they charge me a 21% of taxes, no product is under 5c and i never go to a shop to buy less than 50c in total, make your maths, bitcoin have the cheapest taxes in the first world.

Using bitcoins would not avoid sales tax. What B!tC0in said is very simple: You walk into a sandwich shop, a sandwich costs $3 (includes sales tax), you can buy it for $3 in cash or for $3.30 in BTC (assuming BTC price has risen more). You would be stupid to pay in BTC.

[Barek]

Using bitcoins would not avoid sales tax. What B!tC0in said is very simple: You walk into a sandwich shop, a sandwich costs $3 (includes sales tax), you can buy it for $3 in cash or for $3.30 in BTC (assuming BTC price has risen more). You would be stupid to pay in BTC.

The merchant may offer a discount for electronic payment. Cash handling costs (counting it, bringing it to bank, fear robbery if too much cash, ...).

Consumer may not want to carry around cash, but carries the phone anyways.

How much do you think about getting a snack, a coffee, or a drink? Don't tell me you are going to care about those <10 cent.

[Georgio]

The fee is OK. I don't mind it and always pay it. This is the way we support the system.
We are all here using Bitcoin and we should be positive towards it. Paying the minimum fee, advertising the system, implementing it to our websites (for webmasters). Like this we all can benefit in the the long run.

[DeeSome]

Please excuse if this has been asked before but quite a while back I mined 1.10024 coins through pools over a period of several weeks receiving payments on average  of 0.01xxxxxxx to 0.02 coins.
If I want to send a payment of say 0.5 coins to someone am I going to have to pay a fortune in fees because my one whole coin is comprised of lots of little bits?

[lerelerele]

If the seller have to pay this ----> http://www.mastercard.com/us/merchant/pdf/MasterCard_Interchange_Rates_and_Criteria.pdf he would pay also de bitcoin fee

[cloudstef520]

So excepersive!~

[jimmypagey]

So you need to send a fee on every transaction correct? Like what if I wanted to import a paper wallet of 28 bitcoins. do I pay a fee to import it on blockchain? then when I want to split those 28 bitcoins into separate paper wallets, lets say 2 bitcoins in each paper wallets. I would have to pay a fee? How much is standard fee on 2 btc? or is it automatically set on blockchain? is it true your transaction may never get sent through??  & is it possible that a hacker can steal all of them as they go through the blockchain?  BTW do I press import or sweep?? whats the difference???

[Remember remember the 5th of November]

when all 21m coins have been mined, transaction fees will supposedly be valuable enough to continue the act of mining and adding compute power to the network. transaction fees are desirable.

Actually I think they'll be considerably higher than that considering what I anticipate the value of Bitcoin to be at that time. Mining fees will need to be reduced considerably for Bitcoin processing to remain "cheaper than alternatives" when Bitcoin goes north of US$10K, or the per-coin transaction fee will be 80 cents.  Even for smallish purchases there are usually at least 3-4 txid's involved, so is a "usual" transaction fee of $2.40 or $3.20 per transaction entirely reasonable for processing each and every one of your daily purchases?  Bearing in mind that today credit card companies are doing it for a nickel or so plus 1% of the transaction amount?

So save that dust; if they do reduce transaction fees in the future, it may become spendable again.

While people that shop with credit cards and whatnot get charged a fee, those that shop with cash don't. Point is, while I can see the need to pay a fee for a cross-city or cross-country transaction, it's really unreasonable to pay the fee for a transaction you made to the clerk in front of you.

[Cryddit]

EDIT; I WAS WRONG WHEN I POSTED THIS AND OVERSTATED FEES BY APPROXIMATELY A FACTOR OF ONE HUNDRED.  I WAS OVERSTATING THEM BY ABOUT A FACTOR OF TEN OTHERWISE BUT I FAILED TO MULTIPLY CORRECTLY WHEN I WAS DOING THIS AND GOT AN EXTRA FACTOR OF TEN.  --CRYDDIT

Please excuse if this has been asked before but quite a while back I mined 1.10024 coins through pools over a period of several weeks receiving payments on average  of 0.01xxxxxxx to 0.02 coins.
If I want to send a payment of say 0.5 coins to someone am I going to have to pay a fortune in fees because my one whole coin is comprised of lots of little bits?

If you want to spend 0.5 Bitcoins, (say, $500) and that takes you 30 to 50 of the size coins you've got, you'll be paying 25 to 38 dollars in transaction fees.  That's more reasonable than the situation the OP is faced with, but still damned annoying.