Transaction fee

[willmcgugan]

Hi,

Who gets the transaction fee that specified in the software? And does it really speed up transactions?

Will

[SmokeTooMuch]

You (the sender) pay(s) it (and decide(s) how much), and the one who generates the block, which your transaction is in, gets the fee.

Afaik it won't really speed it up in the current situation, but as soon as bitcoin becomes more popular it will help proceeding transactions faster.

[theGECK]

Thank you very much, I've been thinking about reading up on it since I've been seeing people talk about it as the next reason to mine after the reward goes from 50 to 25 BTC.

[Gavin Andresen]

Afaik it won't really speed it up in the current situation, but as soon as bitcoin becomes more popular it will help proceeding transactions faster.

Actually, I'm considering turning on transaction fees for the Bitcoin Faucet because small transactions with "new" coins are given very low priority, and recently new users are noticing that their Faucet coins are not arriving promptly.

[Mike Hearn]

That'd just be a temporary workaround though, right? We're not anywhere near any of the actual bottlenecks in the software itself yet.

[theGECK]

When people use transaction fees right now, are they awarded to the person who finds the block? Or is it just the 50 BTC reward.

[FreeMoney]

Afaik it won't really speed it up in the current situation, but as soon as bitcoin becomes more popular it will help proceeding transactions faster.

Actually, I'm considering turning on transaction fees for the Bitcoin Faucet because small transactions with "new" coins are given very low priority, and recently new users are noticing that their Faucet coins are not arriving promptly.

Ouch, gotta worry about word getting out that "Bitcoin charges 20% on microtransactions".

But of course slow transactions look bad too.

[barbarousrelic]

Is there any incentive at all to pay transaction fees if the block size is less than its maximum size? If the block is less than the maximum size, won't all transactions be included in the block regardless of fees paid?

[FreeMoney]

Is there any incentive at all to pay transaction fees if the block size is less than its maximum size? If the block is less than the maximum size, won't all transactions be included in the block regardless of fees paid?

Some miners are not putting transactions in if there is no fee. I presume this is to incentivise fees.

[jgarzik]

Is there any incentive at all to pay transaction fees if the block size is less than its maximum size? If the block is less than the maximum size, won't all transactions be included in the block regardless of fees paid?

Some miners are not putting transactions in if there is no fee. I presume this is to incentivise fees.

Evidence?

I see plenty of blocks with zero fees.

[caveden]

There's a "default fee policy" implemented in the default client that says that the space for free transactions is only 4KB, although the block may be bigger.
Most miners seem to implement this policy. So it's already happening that many free transactions are not managing to enter any block.

This is being discussed on other topics right now.

[FreeMoney]

Is there any incentive at all to pay transaction fees if the block size is less than its maximum size? If the block is less than the maximum size, won't all transactions be included in the block regardless of fees paid?

Some miners are not putting transactions in if there is no fee. I presume this is to incentivise fees.

Evidence?

I see plenty of blocks with zero fees.

Oh, I didn't mean most, just that there must be some. I've had transactions not get in the next block. And when that happens it usually takes a few blocks to get. Now that I'm thinking about it, maybe I'm wrong. The delayed transactions may only have happened when I sent ~10 and usually all but one would get in which means there aren't miners who only take fees. Maybe miners that usually take zero fee, but delay with some probability? Seems unlikely. I also thought I'd seen others having the same issue, but I didn't look carefully.

This was over a month ago, but I assumed it still happened and I just wasn't seeing it because I'm sending less often now.

I'm probably totally wrong.

[theymos]

There's a "default fee policy" implemented in the default client that says that the space for free transactions is only 4KB, although the block may be bigger.
Most miners seem to implement this policy. So it's already happening that many free transactions are not managing to enter any block.

There's 27kB for free transactions, though only 4kB for low-priority free transactions.

[jgarzik]

Oh, I didn't mean most, just that there must be some. I've had transactions not get in the next block. And when that happens it usually takes a few blocks to get. Now that I'm thinking about it, maybe I'm wrong. The delayed transactions may only have happened when I sent ~10 and usually all but one would get in which means there aren't miners who only take fees. Maybe miners that usually take zero fee, but delay with some probability? Seems unlikely. I also thought I'd seen others having the same issue, but I didn't look carefully.

This was over a month ago, but I assumed it still happened and I just wasn't seeing it because I'm sending less often now.

At present, fees are nothing compared to the block reward.  It makes no economic sense for a miner to avoid fee-free blocks.

[FreeMoney]

Oh, I didn't mean most, just that there must be some. I've had transactions not get in the next block. And when that happens it usually takes a few blocks to get. Now that I'm thinking about it, maybe I'm wrong. The delayed transactions may only have happened when I sent ~10 and usually all but one would get in which means there aren't miners who only take fees. Maybe miners that usually take zero fee, but delay with some probability? Seems unlikely. I also thought I'd seen others having the same issue, but I didn't look carefully.

This was over a month ago, but I assumed it still happened and I just wasn't seeing it because I'm sending less often now.

At present, fees are nothing compared to the block reward.  It makes no economic sense for a miner to avoid fee-free blocks.

Yeah, I wouldn't do it. But I could see people thinking "I'm going to be doing this for a long time and the sooner people get in the habit of paying fees the better for me". Like I said though I'm probably wrong. It was probably just low priority payments not fitting in that part because I was doing a bunch and they were small and probably new since I had been receiving lots of small amounts around that time.

[FreeMoney]

Afaik it won't really speed it up in the current situation, but as soon as bitcoin becomes more popular it will help proceeding transactions faster.

Actually, I'm considering turning on transaction fees for the Bitcoin Faucet because small transactions with "new" coins are given very low priority, and recently new users are noticing that their Faucet coins are not arriving promptly.

Would it help if you restructured that way payments were sent so that it wouldn't always be new coins from the change of the last transaction? Like maybe break your stash into a bunch of .05 addresses and let them age and then you can send them out with no change?

[Gavin Andresen]

Would it help if you restructured that way payments were sent so that it wouldn't always be new coins from the change of the last transaction? Like maybe break your stash into a bunch of .05 addresses and let them age and then you can send them out with no change?

No.  The only way to "break your stash" is to create transactions that are broadcast; splitting your wallet into lots of small transactions makes the problem worse for you and everybody else (it is more 'expensive' to handle fistfulls of nickels and pennies, even in the bitcoin world).

[FreeMoney]

Would it help if you restructured that way payments were sent so that it wouldn't always be new coins from the change of the last transaction? Like maybe break your stash into a bunch of .05 addresses and let them age and then you can send them out with no change?

No.  The only way to "break your stash" is to create transactions that are broadcast; splitting your wallet into lots of small transactions makes the problem worse for you and everybody else (it is more 'expensive' to handle fistfulls of nickels and pennies, even in the bitcoin world).

Okay, I was thinking that since the splitting was going to be done anyway you could just do it early to give the coins age and therefore priority.

But if that's no good would it at least help a little to not put donations all in one address so that the entire faucet balance doesn't get sent as change every time?

Maybe I'm confused or maybe that isn't even happening anymore, thanks for humoring me.

[theGECK]

I don't think it's the coin's age as it is the transaction's. So splitting your wallet wouldn't do anything but give you lots of small wallets.

[barbarousrelic]

Is there any incentive at all to pay transaction fees if the block size is less than its maximum size? If the block is less than the maximum size, won't all transactions be included in the block regardless of fees paid?

Some miners are not putting transactions in if there is no fee. I presume this is to incentivise fees.

How does this work exactly? Say I send a transaction without a fee, and the next ten blocks are all generated by miners who require fees. Will my transaction remain with zero confirmations for the next ten blocks?