Just Made a Payment with the New Fees

[ljudotina]

...I ask myself why I tell people its free.

why are you lieing to ppl?

[vpitcher07]

Does this sound correct?
Bought something on TigerDirect.com with Bitcoin - $86.88
Was expected to pay a miner fee by Bitcoin QT.   Worked out to $0.05

So I had to pay 5 cents fee on an $87 purchase.

Should we stop saying Bitcoin is free?  I mean ...

I know - beating a dead horse, but every time I have to pay, I ask myself why I tell people its free.

Set your computer to mine; run low priority in the background. Download the client and use your own PC to relay the transaction. It's free for those who support the network by mining. Non miners support the network with a small fee. Obviously your power cost is a factor, but it will likely average out for you if you just run a low priority process.

Google how to do it all if you aren't sure. The info is there.

This is very misguided advice. You are assuming that you would mine a block within the next few hours on your CPU which will never ever ever ever happen. If you mine a block using your CPU within the next 100 years at the current difficulty I'd be surprised. If everyone could just include their own transactions and mine the block that has that transaction, then the entire network is vulnerable to double spends and what not...

[jonald_fyookball]

"Little to no fees" is a favourable term I've seen used a lot.

The fee is based on the size of the data file and not the actual value of the coins being sent so it costs the same to send $10 or $10,000,000 worth of bitcoin.  Please correct me if I'm wrong.

you not wrong as you said 0.0001 is a low fee when sending $10mill.. but a huge fee for purchasing a candy bar,  bottle of pepsi, a banana, coffee, sandwich. a litre of car fuel..

you know, the main products that will make mainstreaming succeed.. so ignore the fee's when talking about millionaires laundering funds.. think about it from the common mans prospective.

i have said it on a different thread. but to pt more common man rospective on bitcoin..
fee's on average per block only add upto 0.25btc at most.

so demanding subsidies does not hlp out miners to be able to afford their electric. to explain ill just leave this food for thought
0.25btc = 1% of 25btc
mining pool fee's = 1%
mining pool owner = rich.
miners = not as rich.

so will miners realise your not getting richer from fee income
so will miners realise your not getting richer when selling cheap
so will miners realise your not getting richer when demanding people pay transaction tax (fee's)

I hope they will.  Why aren't they?

[DeathAndTaxes]

you not wrong as you said 0.0001 is a low fee when sending $10mill.. but a huge fee for purchasing a candy bar,  bottle of pepsi, a banana, coffee, sandwich. a litre of car fuel..

The fee is higher for all traditional electronic forms of payment.

[franky1]

you not wrong as you said 0.0001 is a low fee when sending $10mill.. but a huge fee for purchasing a candy bar,  bottle of pepsi, a banana, coffee, sandwich. a litre of car fuel..

The fee is higher for all traditional electronic forms of payment.

still no excuse for mining pool owners greed, the taxing of average joe consumer, and bitcoin price drops

[innocent93]

transaction fee is lower now, even wo have to pay for fee , but it is much more cheaper than bank hangling charge.

[DeathAndTaxes]

you not wrong as you said 0.0001 is a low fee when sending $10mill.. but a huge fee for purchasing a candy bar,  bottle of pepsi, a banana, coffee, sandwich. a litre of car fuel..

The fee is higher for all traditional electronic forms of payment.

still no excuse for mining pool owners greed, the taxing of average joe consumer, and bitcoin price drops

It isn't greed.  Fees are a rounding error on miner compensation and any pool making six figures a year knows that.  Fees are used to prioritize tx and avoid spam.  High priority txs don't require any fee.  Roughly 20% of all tx (at the time of the post when I ran the query) in the past 24 hours paid no fee.

However lets imagine there was no fee, it was impossible to pay a fee until some future block.  So what happens when someone makes 48927490147289379328437894732498374983 txs for free involving 1 satoshi each.  We go to a 39829137902 TB blockchain in one year?  

Even more mundane say a given miner is only willing to make a 700KB block (because losses due to orphans are real and a much bigger impact on net revenue than fees).  Now lets say 701KB of tx are waiting.  Who gets into the block?  Pick tx at random?  So randomly you could have to wait 50 blocks before getting confirmed?  Sound like a good plan?  Or maybe sort tx by priority?  So the rich get unlimited free tx (having large old coins) and the poors always go last (having smaller younger coins).  The worse part is that since there is no fee system they have no way to EVER get ahead of the "bitcoin rich" in priority.

Fees (which are insanely low compared to conventional payment systems and a rounding error for miner compensation) serve a purpose to prioritize the critical resource which is space in the next block.   It is how free markets work.  Price control (even price of zero) never work.  They simply never work, you either end up with excessive usage (and someone else pays the cost) or you end up with resource shortfall and having to put in place artificial limits (think gas lines in the oil shock of 1970s).

[MarketNeutral]

Not free, but relatively inexpensive. And don't forget that the age of the coins matters, too.

[jonald_fyookball]

you not wrong as you said 0.0001 is a low fee when sending $10mill.. but a huge fee for purchasing a candy bar,  bottle of pepsi, a banana, coffee, sandwich. a litre of car fuel..

The fee is higher for all traditional electronic forms of payment.

still no excuse for mining pool owners greed, the taxing of average joe consumer, and bitcoin price drops

It isn't greed.  Fees are a rounding error on miner compensation and any pool making six figures a year knows that.  Fees are used to prioritize tx and avoid spam.  High priority txs don't require any fee.  Roughly 20% of all tx (at the time of the post when I ran the query) in the past 24 hours paid no fee.

However lets imagine there was no fee, it was impossible to pay a fee until some future block.  So what happens when someone makes 48927490147289379328437894732498374983 txs for free involving 1 satoshi each.  We go to a 39829137902 TB blockchain in one year?  

Even more mundane say a given miner is only willing to make a 700KB block (because losses due to orphans are real and a much bigger impact on net revenue than fees).  Now lets say 701KB of tx are waiting.  Who gets into the block?  Pick tx at random?  So randomly you could have to wait 50 blocks before getting confirmed?  Sound like a good plan?  Or maybe sort tx by priority?  So the rich get unlimited free tx (having large old coins) and the poors always go last (having smaller younger coins).  The worse part is that since there is no fee system they have no way to EVER get ahead of the "bitcoin rich" in priority.

Fees (which are insanely low compared to conventional payment systems and a rounding error for miner compensation) serve a purpose to prioritize the critical resource which is space in the next block.   It is how free markets work.  Price control (even price of zero) never work.  They simply never work, you either end up with excessive usage (and someone else pays the cost) or you end up with resource shortfall and having to put in place artificial limits (think gas lines in the oil shock of 1970s).

Thanks for the lesson DT.  So, are we correct to assume that these dynamics won't likely change in the future? (Iow there is no reason to suspect miner greed will become an issue)

[pungopete468]

Does this sound correct?
Bought something on TigerDirect.com with Bitcoin - $86.88
Was expected to pay a miner fee by Bitcoin QT.   Worked out to $0.05

So I had to pay 5 cents fee on an $87 purchase.

Should we stop saying Bitcoin is free?  I mean ...

I know - beating a dead horse, but every time I have to pay, I ask myself why I tell people its free.

It's not free. It's not intended to be free. You are correct in questioning your motives for making that claim. Still, $0.05 is a lot less than fees for paying with any credit card; it's just more obvious because they payer includes the fee rather than the payee quietly pricing it in.

Set your computer to mine; run low priority in the background. Download the client and use your own PC to relay the transaction. It's free for those who support the network by mining. Non miners support the network with a small fee. Obviously your power cost is a factor, but it will likely average out for you if you just run a low priority process.

Google how to do it all if you aren't sure. The info is there.

This is terrible advice and would not help your situation in any way. Pay no attention to this idiot.

^ is right, you can only choose to include your own transactions when you solo mine. It was a poor idea; sorry.

Does this sound correct?
Bought something on TigerDirect.com with Bitcoin - $86.88
Was expected to pay a miner fee by Bitcoin QT.   Worked out to $0.05

So I had to pay 5 cents fee on an $87 purchase.

Should we stop saying Bitcoin is free?  I mean ...

I know - beating a dead horse, but every time I have to pay, I ask myself why I tell people its free.

Set your computer to mine; run low priority in the background. Download the client and use your own PC to relay the transaction. It's free for those who support the network by mining. Non miners support the network with a small fee. Obviously your power cost is a factor, but it will likely average out for you if you just run a low priority process.

Google how to do it all if you aren't sure. The info is there.

This is very misguided advice. You are assuming that you would mine a block within the next few hours on your CPU which will never ever ever ever happen. If you mine a block using your CPU within the next 100 years at the current difficulty I'd be surprised. If everyone could just include their own transactions and mine the block that has that transaction, then the entire network is vulnerable to double spends and what not...

I wasn't thinking about solo mining (where you can include your own transactions in the block you are hashing); I was thinking about pool mining... Unless you own the mining pool you can't choose to include your own transactions...

Again, sorry for the poor idea.

[franky1]

It isn't greed.  Fees are a rounding error on miner compensation and any pool making six figures a year knows that.

Fees are used to prioritize tx and avoid spam.  High priority txs don't require any fee.  Roughly 20% of all tx (at the time of the post when I ran the query) in the past 24 hours paid no fee.

However lets imagine there was no fee, it was impossible to pay a fee until some future block.  So what happens when someone makes 48927490147289379328437894732498374983 txs for free involving 1 satoshi each.  We go to a 39829137902 TB blockchain in one year?

Even more mundane say a given miner is only willing to make a 700KB block (because losses due to orphans are real and a much bigger impact on net revenue than fees).  Now lets say 701KB of tx are waiting.  Who gets into the block?  Pick tx at random?  So randomly you could have to wait 50 blocks before getting confirmed?  Sound like a good plan?  Or maybe sort tx by priority?  So the rich get unlimited free tx (having large old coins) and the poors always go last (having smaller younger coins).  The worse part is that since there is no fee system they have no way to EVER get ahead of the "bitcoin rich" in priority.

Fees (which are insanely low compared to conventional payment systems and a rounding error for miner compensation) serve a purpose to prioritize the critical resource which is space in the next block.   It is how free markets work.  Price control (even price of zero) never work.  They simply never work, you either end up with excessive usage (and someone else pays the cost) or you end up with resource shortfall and having to put in place artificial limits (think gas lines in the oil shock of 1970s).

i colour coded my responses to refer to the area's they answer:

thats called greed
all transactions should be treated the same. its just as bad as banks limiting daily withdrawal limits, ATM transactions,.bitcoin should never have become what it is today, controlling who or how people use their money! (explanation in brown)
the 5ksat satoshi dust limit prevents this and only able to do 2,100,000,000,000,000 transactions.. if the guy owned every bitcoin there ever was in the year 2140
currently each block has 1mb potential which means in your analogy all those 701kb of transactions would fit in the block = 1 block not 50... so unsure where you are even pulling 50 blocks from..
already rebuttled the priority concern
Free and control. in the sentence.. now that's comedy gold

[DannyHamilton]

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Looks like you're responding to franky1?

I put him on ignore a long time ago.

Now I remember why.  He isn't able to take a thought to its logical completion.  That makes any attempt to help him understand a complete waste of time.

He's been on this socialist "everyone should get everything for free from the magical resource providing ghost" rant for a long time, and no attempt to explain how the free market handles limited resources has had any success.

[DeathAndTaxes]

Thanks for the lesson DT.  So, are we correct to assume that these dynamics won't likely change in the future? (Iow there is no reason to suspect miner greed will become an issue)

Greed isn't necessarily bad.  Greed is what drives people to create new companies and services.  Coinbase for example and its investors/backers is taking a risk.  The risk is they will lose everything (including years of hard work) however they (like all companies/startups) take that risk for the potential profits they can secure. 

Now unchecked greed is bad.  The good thing about Bitcoin is it is an open network.  If some miners get to be too greedy, other miners will undercut them.  If some miners are too risky (cutting margins too thin) they will go bankrupt and be replaced by more conservative miners.  That is how open free networks self regulate.   You either believe in free markets or you don't.  If you don't then no system like Bitcoin (or any decentralized system) can ever work, they are doomed to failure from the genesis block. If you believe in free markets then the greed of any individual actor is irrelevant.  They will simply price themselves out of the market.

[DeathAndTaxes]

He's been on this socialist "everyone should get everything for free from the magical resource providing ghost" rant for a long time, and no attempt to explain how the free market handles limited resources has had any success.

I can see that.  I will avoid wasting my time in the future.  Hopefully others found it more informative.

[Foxpup]

I tell people its free.

You! Dammit, I've been trying to find out for years who keeps telling clueless noobs that Bitcoin transactions were free so that I could punch them in the face, and it was you all along! Do you have any idea how much time I've wasted correcting noobs whom you've been lying to? Do you? *punch* Now you made me hurt my hand. I hope you're happy.

[franky1]

a free market is where individual businesses can choose what fee's to charge

but having it hard coded into the protocol. is not freemarket as its affects everyone.

[DeathAndTaxes]

a free market is where individual businesses can choose what fee's to charge

but having it hard coded into the protocol. is not freemarket as its affects everyone.

There are no fees hardcoded in the protocol. 

[franky1]

a free market is where individual businesses can choose what fee's to charge

but having it hard coded into the protocol. is not freemarket as its affects everyone.

There are no fees hardcoded in the protocol.  

ok softcoded (seeing as the software gets updated) EG version 0.1-0.8 came up with a box that demanded a fee, and would not let you transact without a fee

in a true freemarket the bitcoin QT should not be asking for fee's, the bitcoin QT should notcare if its 5ksat or 1million bitcoin that is sent.

bitcoin has too many "features" now that is limiting how people transact
EG imagine a bank account which you want your family to send money to each birthday/christmas or your employer paying you a wage each month, your bank now as a default setting wants to change your bank account number for each transaction received. (sarcasticly thanking LukeJr for that idea)

and now you have hundreds of accounts all with one line in the bank statement..

translation: the wallet.dat growing with each transaction. requiring regular backup and having to input many privkeys into different client apps if you prefer paper backup.

its simply making bitcoins less easy to use and manage for average joe.

i would rather have 1 address being repeatably used as default
where my tx is
vin:1address
vout:1otheraddress
amount:1btc

instead of having to list loads of addresses as the funds are spread. causing the message asking for a fee due to data size..

but it seems a few people are narrow sighted using the vision of miners. and not average joe

expecting certain standard replies
1) if you reply, that the fee only appears if a TX exceeds certain data size, then your simply agreeing that there was some code that was demanding fee's.
2) if you reply fresh addresses are more secure. i think you already argued days ago that 10^160 is strong enough security
3) mintxfee is a voluntary amount over the current rules of datasize.

[Foxpup]

I'm responding against my better judgement, but I'm worried that noobs might mistake franky's posts for factual information.

in a true freemarket the bitcoin QT should not be asking for fee's, the bitcoin QT should notcare if its 5ksat or 1million bitcoin that is sent.

In a free market, nobody would use a client that asks for excessive fees. In any case, Bitcoin-QT in fact does not care how much you send or how much you pay in fees. The mintxfee option allows you to pay as much or as little in fees as you want.

[alyssa85]

You don't seem to have considered the economics of mining at all. With current rewards and fees, the orphan risk of including a transaction in a block far outweighs the fee, so we're relying on miners including transactions in blocks out of altruism. Some miners don't include any transactions in their blocks, and they make slightly more money on average. Paying no fees at all would further incentivize such behavior, jeopardizing the survival of the entire economy.

economics of mining should be, if the 25btc is being shared out too thinly.. dont sell it cheap and demand to be subsidized (with fee's)

instead, if miners stopped selling so cheap, the price would rise and they could then sell at higher prices to pay their electric bills.

but no the greedy impatient miners prefer to demand subsidies instead. causing higher transaction costs and lower bitcoin value..

The fees are nothing to do with mining or the economics of mining.

They were added to make it expensive for someone to attack the network with spam.

See:

https://gist.github.com/gavinandresen/2961409

If transactions are free, is cheap and easy to create tens of thousands of transactions- just send bitcoins to yourself over and over. Transaction spam like this is prevented using the priority metric-- because input age is a limited resource, the would-be spammer quickly uses it up and runs out of "aged" inputs to spend.

Legitimate users who might want to receive and then quickly spend bitcoin can still do so, they just have to pay a transaction fee.

The current rules for including transactions in the memory pool are working reasonably well, but to plan for the future the currently-hard-coded "free" and "low-priority" constants in the reference software will be replaced with variables that miners or users can change.