My Business Accepts Small Payments - They Are Arriving In Wallet "Unspendable"

[BitDownUnder]

Thank you for reading my question, and extra thanks to those who can provide input.

My business accepts payment in Bitcoin, with smaller items being purchased for as little as $30USD. Buyers have never had an issue with the fees inherently attached to using Bitcoin, as they've always been quite reasonable.

My most recent received funds have a message attached:

"This transaction amount is too small compared to current Bitcoin network fees. Spending these funds will need a Bitcoin network fee cost comparable to the funds itself"

I have researched, and do understand that network fees have jumped 800%, similar to 2017. My question(s) I cannot find clear answers to are as follows:

-If the transaction fee plummeted down right now, is the $30USD transaction I received a viable, usable, $30?
-If Bitcoin doubled in value, and my $30USD is now worth $60USD, is the transaction fee to spend it still close to it's value? Do I now have a spendable $30 with a $30 fee attached?
-Should I stop taking these micro payments immediately? Are they going to remain useless and undependable? They do not need to be moved or spent this month, or this year. But if I am accepting something of no value in exchange for a product which ha value, obviously I should stop immediately.

Thank you SO much for any input. I understand these are simple questions, which may have been asked countless times, but I have not been able to find answers.

Thanks again.

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[joniboini]

What wallet you're using to manage your funds?

Essentially this happens because the tx is not yet confirmed. I don't know why your wallet says "comparable to the funds itself", but I think it means you'll need to do a child for parent transactions if you want to spend that input soon. The fees won't be as high as it sounds. Just use fees checker websites like blockchair and set your fees to the recommended fees or a bit higher than that.

The worst-case scenario is the buyer funds will get pushed out of the mempool and they will need to send it to you again (which usually happens within 2 weeks). A solution would be to ask the buyer to increase the fees through RBF and don't send the product first. Only send the product you're selling after there's enough confirmation. If that's not possible (say you're selling coffee or something similar), maybe try to use Lightning Network, assuming your buyer is fine with it.

[pooya87]

first of all you are not using $ so you should stop reporting the values in $ terms. consequently you are not paying the fees in $, it is in bitcoin which is the second part, the fee is paid in bitcoin per size of the transaction in bytes (or more accurately in virtual bytes). so if you have received 0.00322BTC (approximately $30) in one transaction, when you want to spend it your transaction size will be small and you can pay a small fee compared to if you had received it in many smaller transactions like 60x 0.000053BTC transactions in which case you will have to pay a huge fee due to the huge size of the transaction.

so if your "micro-payments" are in such small amounts the answer is yes you should stop accepting these tiny payments.

[LoyceV]

I recommend you read Fees are LOW/HIGH, use this opportunity to Consolidate your small inputs!, it explains how to handle fees and how to make low-fee transactions at the right moment.

One option would be to make your customers pay for the fee needed to consolidate the payments. That's what Bitpay does: they charge their own "network fee" to cover their transaction fee (on top of the network fee you pay when you make the transaction).

[BitDownUnder]

Awesome feedback!

To be clear, when I said accepting “micro transactions” - the lowest item I sell is valued at $20USD, and I would be receiving the payment for that in one Bitcoin transaction.

I am using the BitLox wallet currently, but am open to alternatives.

And also to clarify - this isn’t because the sender didn’t include a high enough fee - I’ve had transactions like that stay “pending” for a few hours, but they’ve always cleared.

The message next to these transactions hasn’t disappeared after days, though these are confirmed transactions in my wallet.

Perhaps the Bitlox wallet is simply aware of the massive fees at the moment? And when they return to normal, my warnings will vanish?

[LoyceV]

Perhaps the Bitlox wallet is simply aware of the massive fees at the moment?

I don't know the wallet, but it looks like it. That's actually a good thing, because in 2017 I've seen many transactions where dust was included as input. Including those very small amounts of Bitcoin raised the fees more than it was worth, which means the wallet made a terrible choice.

And when they return to normal, my warnings will vanish?

There is no "normal" when it comes to Bitcoin fees: as long as there are more transactions than can be included in new blocks, fees will keep increasing until people start using other means than Bitcoin. And when there are less transactions than fit the blocks, fees can quickly drop to the minimum of 1 sat/byte.
If you're not using it yet, you could switch to SegWit addresses. This leads to smaller transactions (in bytes) and thus lower fees. Since I don't know your wallet I don't know if it's supported.
There's a catch though: there are 2 types of SegWit addresses, and not all (of your customer's) wallets support addresses starting with bcq1, which gives the lowest fees).

[slaman29]

The problem now is these payments are not so small. $30 is not small at all, but the "problem" is now, Bitcoin at $9000 means $30 is "only" about 300,000 satoshi (which isn't small at all to me).

The short answer is, don't worry and wait for congestion to come down. When the network is normal, you should be able to use the spends again.

OR switch to a wallet that will let you set your own fees (then, something you are comfortable with and just wait.

[coinycoiny]

Are we avoiding the elephant in the room here?

Don't accept payments in bitcoin and you won't have a problem.

[gentlemand]

-Should I stop taking these micro payments immediately? Are they going to remain useless and undependable? They do not need to be moved or spent this month, or this year. But if I am accepting something of no value in exchange for a product which ha value, obviously I should stop immediately.

As long as the payments are confirmed in your wallet there will always be times when fees are borderline negligible so they can be moved. Even if fees are high, you can still send with a much lower fee and the chances are good it'll clear within a quiet period in a few days unless things are really intense, and they don't get that bonkers that often.

If my business was built on items of a low valuation that were sold for Bitcoin I would be wondering how much longer accepting raw BTC would be viable for.

Fees do of course waver all over the joint and we may get many more dead phases where low to no fees reign, but having business regularly stopping and starting because payments were failing or seizing up would get old rapidly.

It depends on what you're selling, whether you're in a hurry and whether you have suppliers to pay. If not then you're in better shape but fee spikes still turn off potential custom.

[o_e_l_e_o]

To be clear, when I said accepting “micro transactions” - the lowest item I sell is valued at $20USD, and I would be receiving the payment for that in one Bitcoin transaction.

$20 is not a microtransaction by any means, and is easily sendable even in the current network conditions provided you are able to set your own fees.

I am using the BitLox wallet currently, but am open to alternatives.

I have never used this wallet, but from a quick search it seems that you are unable to set your fees when using it. Perhaps you can confirm - when you try to make a transaction, just does the wallet just tell you how much the fee is going to be, without any way to customize it? If this is the case, this is a bad design and is the reason why you can't access your coins right now. If you are desperate to move the money, you can import your 12/18/24 word seed phrase in to a software wallet like Electrum, set a fee manually, and move your coins. Note that doing so exposes your seed phrase to the internet and makes your coins less secure, so I would only do this if absolutely necessary. Moving forward, you might want to think about changing to hardware wallet that allows you to set your own fees, such as a Ledger device.

And also to clarify - this isn’t because the sender didn’t include a high enough fee - I’ve had transactions like that stay “pending” for a few hours, but they’ve always cleared.

Correct. This has nothing to do with the fee the sender used on the previous transaction.

Perhaps the Bitlox wallet is simply aware of the massive fees at the moment? And when they return to normal, my warnings will vanish?

Fees had been high for the last week or so, but we are currently confirming transactions with fees around 8 sat/vbyte, which really isn't high at all.

[ranochigo]

I am using the BitLox wallet currently, but am open to alternatives.

What kind of business are you running? A brick and mortar store or an online website?

I don't encourage people who are running a business to use normal wallets or hardware wallets. It would be a lot more convenient for merchants to adopt POS services like Bitpay, cryptopayments etc. They streamline the process for you and you don't usually have to worry about menial stuff like this.

And also to clarify - this isn’t because the sender didn’t include a high enough fee - I’ve had transactions like that stay “pending” for a few hours, but they’ve always cleared.

The message next to these transactions hasn’t disappeared after days, though these are confirmed transactions in my wallet.

Perhaps the Bitlox wallet is simply aware of the massive fees at the moment? And when they return to normal, my warnings will vanish?

The network fee surges at times and it doesn't always cost so much to send funds. If possible, you should wait for a bit for the network to get less busy before sending the funds elsewhere. Sending the funds now would eat into your revenue by a significant portion.

[Yogee]

"Should I stop taking these micro payments immediately?"

How often do you usually replenish your supplies? If you do it once a week, I don't think you have to worry about the fees when converting or spending. Accumulate all micro-payments and spend it once a week at a low fee using methods suggested by other members.

[Jonyshake71]

fee is totally connection with btc. If btc pump, we have to pay high fee. But if consumers don't give normal fee before translation, then transaction would be pending even till a month. That's may a difficulty for your business

[thesmallgod]

network congestion on the blockchain is the main reason why the transaction fee is always high. However, depending on the wallet you are using, you can select different policy fee. The main reason why your wallet is suggesting that message is because the amount you have $30 is probably the average transfer fee at that moment. However, in case the bitcoin price fall and the network is less congested, the fee will also be lower than that but you should also know that the bitcoin equivalent in what you have will also reduce. If you don't normally withdraw your money from the wallet frequently, I will advice you to continue taking payment in bitcoin. However, you can add some other crypto payment options such as ETH and XRP. Those are less congested.

[o_e_l_e_o]

fee is totally connection with btc. If btc pump, we have to pay high fee.

The price is far less related to your total fee than the current state of the mempool. Paying 1 sat/vbyte for a 1-input-2-output transaction at the current price will cost you around 3 cents. If bitcoin doubles to $20k, the same fee will only increase to 6 cents. If, on the other hand, the mempool rapidly fills up and you need to pay fees of 50 sat/vbyte, as we've seen in the last week, then the fee for that same transaction now becomes $1.50. The main reason the fee goes up when bitcoin pumps is because the mempool fills up with people trying to move their coins to and from exchanges, not because the price increases.

The main reason why your wallet is suggesting that message is because the amount you have $30 is probably the average transfer fee at that moment.

This is nonsense. $30 has never been the average transfer fee, even during the bull run at the end of 2017. Each block is currently clearing out all transactions down to 8 sats/vbyte, which for a standard transaction as above is around 20 cents.

[buwaytress]

The main reason why your wallet is suggesting that message is because the amount you have $30 is probably the average transfer fee at that moment.

I just spent an overestimate yesterday for next block transaction and I paid just under $7 (72k satoshi) but on a fat tx with 2 additional inputs. Effectively 260 sat/byte fee, so I could have paid half that on a lean transaction. So definitely, not the average transfer fee, which was probably half that.

But again, we're only talking this amount because Bitcoin's $9k. Maybe one day average fee would be $30 if ~150 satoshi is worth $30, but that day's not here yet.

@OP: I know it's bewildering but the first move from you is to identify your wallet to us, and then switch to a different wallet (should be easy to do with import). Just let this period pass. You'll be able to spend and consolidate all those 300k sat inputs for very low fees when things get to a normal level. I know it looks high now but I've seen 250k+ in queue and it always comes down eventually.

[The Cryptovator]

I am using the BitLox wallet currently, but am open to alternatives.

Seems it is a hardware wallet and I am not familiar with it. Just curious, how are you accepting bitcoin by this wallet? Via API? A hardware wallet should have a option to set fees manually.

Anyway you may use a payment gateway and I will prefer for BTCPay Server. This is open source Non-custodial wallet/payment processor means you will have control of your private keys. You may accept bitcoin and other altcoin as well including lighting network if you host yourself. There is no processing nor additional fees except miner fee. You would read necessary documents here.

Don't accept payments in bitcoin and you won't have a problem.

You shouldn't discourage someone from use bitcoin. If you can't solve the problems or if you don't know/want just ignore.

[cryptoworld99]

I don't consider $30 as a small input, double-check with your wallet provider to see if they can help you out... checkout, coinpayments they're pretty good for small. businesses.