It is pointless if the BTC fees increases along with rise in BTC price!

[coolcoinz]

The title is applicable to small transactions and not the big fish category (ex. 1000k, 10k or more)

I have observed many times whenever there is rise in the price it will proportionally increase the fees as well. BTC becomes useless if I want transfer my coffee bill worth $5 or lets say lunch of $50 bucks if I have to pay more than 10-15 USD for single transaction.

Bitcoin was unfit for buying coffee years ago. In 2017 you wouldn't be able to do it without losing money. It was the same ever since. Your problem is exchanging bitcoin to usd prices. You're using bitcoin but thinking USD instead of pricing items in BTC. If I am to buy a car for 1 BTC and I have to pay 0.0001 to do it, I'm completely fine with that.
Your rant is pretty much what people in 2014 were saying when it was already too expensive to buy a pack of smokes or a coffee for Bitcoin. Later it became too expensive to buy pizza or any restaurant meal. This is how things progress and we have to accept it.

[1715681850]

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[Lavander]

I wonder why you are going to consider it as pointless, does it mean that you will not profit anymore if in case there is an increase of bitcoin fees once the bitcoin price will keep on increasing?

It will be good if you will avoid using bitcoin for your daily transaction or quick payments especially if you are only sending a very little amount as it will be pointless for sure but in other hand, bitcoin is good if you will just buy and hold it as the bitcoin price now is keep on hitting a new ATH every now and then.

[o_e_l_e_o]

It is probably the greed in the big mining companies to take advantage of the current pump by clogging the mempool by not allowing any low sat fee transactions to go through into any block and taking only high sat fee transactions for confirmations.This gives the air to the greed of other small miners too, and they also set the minimum fee higher to attract high fee transactions in their blocks.

I don't think you understand how mining works. No miner is clogging the mempool. No miner is setting a higher minimum fee. All miners are simply maximizing profits (as any sensible person would do) by taking the highest fee transactions first in to the limited space in each block.

correct me if I am wrong but does this mean that the reason why the transaction fee increases (other than people flooding the blockchain with transactions) is that there are not enough miners to solve blocks every ten minutes to keep the transaction traffic to minimal?

No, not at all. The mining difficulty is readjusted every 2 weeks to keep the block time to an average of 10 minutes, despite fluctuations in hashrate. If suddenly half the mining power disappeared from the network, then things would be slower for at most a few of weeks, but then the network would readjust to the new hashrate. At the moment we are pretty stable actually, and over the past 2 weeks are only running around 4 blocks (40 minutes) behind where we "should" be, on average.

Participating on Level 2 requires a transaction on Level 1 first. The system can't accommodate everyone's participation, nor will many people be able to afford participating.

The system can accommodate it, and people can afford it. To open a Lightning channel on the base layer requires a single transaction. Once your channel is open, you can theoretically make unlimited transactions through that channel, being limited only by the amount of funds you have in the channel. I can open a channel with 1 BTC in it, paying a few cents in fees at a rate of 1 sat/vbyte, and then I can buy myself a $5 coffee every day for 15 years at current prices, making ~5,500 transactions on Lightning, all without making another transaction on the base layer.

[2double0]

Why you worry so much when the bitcoin fee is high , worry about if your not earning bitcoin anymore try to find a exchange site or wallet where you can use lighting network for you to have a small fee's and   fast transaction but in my own experience i just save them all for one transaction or if i wanted to withdraw i always exchange my bitcoin into coin that my country has so it will be small fee's and then withdraw it directly into my bank. But it always up to you when you wanna do it or not because we all wishing to have small transaction fee every time we want our money out.

What to do if you have btc on an exchange which charges high for your withdrawal? You have no choice but to go for an altcoin which has less fee and still transfers at a much better speed than btc. I am not against btc or in favor of altcoins, I am against the high fees which are even more than those small transactions we pay.

It is probably the greed in the big mining companies to take advantage of the current pump by clogging the mempool by not allowing any low sat fee transactions to go through into any block and taking only high sat fee transactions for confirmations.This gives the air to the greed of other small miners too, and they also set the minimum fee higher to attract high fee transactions in their blocks.

I don't think you understand how mining works. No miner is clogging the mempool. No miner is setting a higher minimum fee. All miners are simply maximizing profits (as any sensible person would do) by taking the highest fee transactions first in to the limited space in each block.

Accepted that they take highest fee transactions first. I am sorry I blamed miners alone when the companies who pay it are equally responsible for this as they intentionally pay higher, and this cycle runs till there are more high paying entities.

[GGUL]

Participating on Level 2 requires a transaction on Level 1 first. The system can't accommodate everyone's participation, nor will many people be able to afford participating.

The system can accommodate it, and people can afford it. To open a Lightning channel on the base layer requires a single transaction. Once your channel is open, you can theoretically make unlimited transactions through that channel, being limited only by the amount of funds you have in the channel. I can open a channel with 1 BTC in it, paying a few cents in fees at a rate of 1 sat/vbyte, and then I can buy myself a $5 coffee every day for 15 years at current prices, making ~5,500 transactions on Lightning, all without making another transaction on the base layer.

You can, of course, create such a channel and use it in this way, but it will just be an atypical case that will not make a significant difference.
What matters is how the channels will be used by most users.
According to the calculations of LN developers, the average lifetime of the channel will be 3 months. Don't ask me why so much, it's not my calculations.
Now we have the ability to make ~10 million transactions per month. The channel needs 2 transactions-opening and closing. This means that 10 million*3 months /2-> 15 million. That is, there will be 15 million channels. 15 million users if each has an average of one channel, or 7.5 million if the average is 2 channels per user.  And this is if all transactions are set aside for creating and closing LN channels. And since this will not happen, some users will use blockchain transactions for their own purposes, this number can be safely reduced.

If someone tells you that using LN and 1MB. block we reach a billion users- don't listen to it. He's either an idiot or he'll cheat you.

[nutildah]

One of the interesting things about BTC is its one of the only assets that becomes more expensive to transact as it rises in price. Thus, its fundamental value as a currency decreases as it rises in price. In addition to the intelligent stuff that o_e_l_e_o said, the infrastructure is more in place to take the burden off Layer 1, whereas it wasn't there in 2017 -- which is why the price can go a lot higher this time around before high fees render Bitcoin useless as a currency.

In addition to Lightning there's also Liquid, which is another L2 system that can currently be used to shuttle BTC back and forth from a few different exchanges without having to pay a fee.

OP is absolutely right -- fees should remain small enough to allow BTC to be viable as a currency instead of everyone having to shift the narrative that its not a currency and its a store of value. To most people who use actually use it for what it was designed to do, its ability to act as a currency is much more important than anything else.

[IShishkin]

Participating on Level 2 requires a transaction on Level 1 first. The system can't accommodate everyone's participation, nor will many people be able to afford participating.

The system can accommodate it, and people can afford it. To open a Lightning channel on the base layer requires a single transaction. Once your channel is open, you can theoretically make unlimited transactions through that channel, being limited only by the amount of funds you have in the channel. I can open a channel with 1 BTC in it, paying a few cents in fees at a rate of 1 sat/vbyte, and then I can buy myself a $5 coffee every day for 15 years at current prices, making ~5,500 transactions on Lightning, all without making another transaction on the base layer.

You can, of course, create such a channel and use it in this way, but it will just be an atypical case that will not make a significant difference.
What matters is how the channels will be used by most users.
According to the calculations of LN developers, the average lifetime of the channel will be 3 months. Don't ask me why so much, it's not my calculations.
Now we have the ability to make ~10 million transactions per month. The channel needs 2 transactions-opening and closing. This means that 10 million*3 months /2-> 15 million. That is, there will be 15 million channels. 15 million users if each has an average of one channel, or 7.5 million if the average is 2 channels per user.  And this is if all transactions are set aside for creating and closing LN channels. And since this will not happen, some users will use blockchain transactions for their own purposes, this number can be safely reduced.

If someone tells you that using LN and 1MB. block we reach a billion users- don't listen to it. He's either an idiot or he'll cheat you.

Good point. What do you think is a fair transaction fee for Bitcoin transaction assuming that
a) Bitcoin is "scaled" to the Visa level so that there is enough space for every "coffee-transaction"
b) it remains as decentralized as now (~50k full nodes online)
c) users do not subsidize mining with tx fees and miners do not give "free ride" for users who haven't paid enough tx fees for "transaction processing"?
So how much should cost the tx processing in some abstract Lightning Network or other anticipated "highly-scalable network" designed to meet one's bold expectations?

[dansus021]

I have observed many times whenever there is rise in the price it will proportionally increase the fees as well. BTC becomes useless if I want transfer my coffee bill worth $5 or lets say lunch of $50 bucks if I have to pay more than 10-15 USD for single transaction.

That is the reason for bitcoin lightning network, bitcoin lightning network transaction fee is very negligible, for now, it is as low as $0.00005 or lower. For making small transactions and for everyday transactions that require low amount, people will not have any option later than to resort to bitcoin lightning network which has low transaction fee.

Do not just think that bitcoin is just only a money, it is also an asset.

I heard of it about the lightning network its very helpful when bitcoin fee right now when bitcoin reach new ATH "WHALES"/investor that hold much bitcoin start to transferring their Bitcoin to an exchange.

and i have an idea why company like paypal offer payment from user to user its more cheaper right

[TGD]

I have observed many times whenever there is rise in the price it will proportionally increase the fees as well. BTC becomes useless if I want transfer my coffee bill worth $5 or lets say lunch of $50 bucks if I have to pay more than 10-15 USD for single transaction.

That is the reason for bitcoin lightning network, bitcoin lightning network transaction fee is very negligible, for now, it is as low as $0.00005 or lower. For making small transactions and for everyday transactions that require low amount, people will not have any option later than to resort to bitcoin lightning network which has low transaction fee.

Do not just think that bitcoin is just only a money, it is also an asset.

I heard of it about the lightning network its very helpful when bitcoin fee right now when bitcoin reach new ATH "WHALES"/investor that hold much bitcoin start to transferring their Bitcoin to an exchange.

and i have an idea why company like paypal offer payment from user to user its more cheaper right

They are using internal transfer so it has no fee or minimal fee at all. The problem was your BTC there can't be transfer outside there wallet so it's just a coin representing BTC itself. It's good for short trading purposes only but if you want to use it for long term investment, buying there coin is not a good idea because you don't full control of your asset and not all user have PayPal.

[bryant.coleman]

The fee is calculated in Satoshis/Byte and it will remain constant irrespective of the exchange rates. That means that when you translate the transaction fee to fiat currency, it becomes more and more expensive with the rise in exchange rates. For example, if the transaction fee is BTC0.0001, then you will be paying $1 when the exchange rate is $10K. But when the exchange rates increase to $30K, you will be paying three times that much in terms of fiat currency, although in terms of Satoshis, the fee remains constant.

[Argoo]

I have observed many times whenever there is rise in the price it will proportionally increase the fees as well. BTC becomes useless if I want transfer my coffee bill worth $5 or lets say lunch of $50 bucks if I have to pay more than 10-15 USD for single transaction.

Bitcoin is a digital gold and despite of the fact that bitcoin is able to used as a mean of transactions, it is not a perfect tool for you (at least now) to be used as a payment method. Bitcoin is more similar to a storage asset, not a payment method. The Lightning Network can help bitcoin adoption and expand its usecase as a payment method. It is for the future and maybe in the future, there will be more solutions and not only Lightning Network.

The problem is it's unfair system if we want to make quick payments for daily usage.

The average bitcoin blocktime is 10 minutes so that you can not ask for quick transactions. You need to wait about 10 minutes in average even if you use the highest fee on the mempool. Of course, it can be confirmed anytime in few seconds to 10 minutes after you broadcast your transaction.

The beauty of Bitcoin is it has a very healthy network, with too high total hashrates so that your fund and your transactions will be secured by the network. Your transaction on altcoin networks can be double spent but on the bitcoin network, the probability is almost zero.

Think different!

I think of transaction fee in satoshi per the total amount of bitcoin or satoshi in my transaction. If I look at the issue like this, I always find opportunities to move my bitcoin with cheap fee.

Obviously, the fee in USD will be different and it is affect seriously by the price per one bitcoin.

Example with https://bitcoindata.science/plot-your-transaction-in-mempool.html

• I make a transaction with 1 input, 2 outputs, and the address format is Bech32.
• Amount of BTC in the transaction: 0.01 BTC
• Fee rate is 1 sat/(v)byte
• Fee: 0.00000142 BTC
• The fee costs 0.0142% of my the transaction value. It is not expensive.

For an ordinary user who just wants to use cryptocurrency, and primarily bitcoin, and not delve into various additional technical problems, the establishment of a lightning network will present a certain difficulty. Therefore, if this function does not work automatically, most likely, bitcoin will be used as a means of payment for relatively large transactions. Of course, unless a better solution to this problem is found.

[Charles-Tim]

and i have an idea why company like paypal offer payment from user to user its more cheaper right

I am not a PayPal fan and I do not use PayPal at all. But, what I know is that this is not new at all, even if you are transferring on custodial wallets like coinbase, the fee is free from user to user. But, the mining fee is charged if you are transferring to another non-coinbase wallet entirely, but what PayPal can not provide as they only provide not bitcoin but just a number, which also is not transferable to a bitcoin wallet. PayPal users can not transfer Bitcoin but can only buy and sell Bitcoin.

[Swordsoffreedom]

~
BTC becomes useless if I want transfer my coffee bill worth $5 or lets say lunch of $50 bucks if I have to pay more than 10-15 USD for single transaction.
It feels like I am literally overpaying for the little transactions.

Where there are problems, there are solutions too. I always say if you want to use Bitcoin to buy grocery items or pay coffee bills, use your state's popular custodial service. This problem can be solved by making custodial p2p transactions for a small amount of transactions.

For example, Coinbase is the most widely used custodial wallet in the United States, India, and many more countries. Luno Wallet is very popular in Africa, Indonesia. In the case of little transactions, there is no extra fee to pay for P2P transactions using these wallets.

[Vishnu.Reang]

Where there are problems, there are solutions too. I always say if you want to use Bitcoin to buy grocery items or pay coffee bills, use your state's popular custodial service. This problem can be solved by making custodial p2p transactions for a small amount of transactions.

For example, Coinbase is the most widely used custodial wallet in the United States, India, and many more countries. Luno Wallet is very popular in Africa, Indonesia. In the case of little transactions, there is no extra fee to pay for P2P transactions using these wallets.

P2P transactions involve very low fee and can be an attractive option for making small-sized payments. But we can't ignore the disadvantages while performing such transactions. The advantage with direct payments is that we are making the transaction using our own wallet and no one will be able to seize the funds that are stored in them. But custodial wallets are centralized and there is a small chance that the service provider can freeze your account, or even seize your coins.

[o_e_l_e_o]

You have no choice but to go for an altcoin which has less fee and still transfers at a much better speed than btc.

The main reason altcoins transfer faster and cheaper is two-fold: First, their networks are dead, and so their blocks (or their equivalent system) are empty. It's easy to get included in a block when no one wants to use your coin. Secondly, they are far less secure than bitcoin. Even the "top" bitcoin forks take several days to achieve the same level of security as bitcoin achieves in an hour, and the minor coins can take months or even years before they are as secure. This is reflected in the fact that a number of "top" altcoins have been successfully 51% attacked.

I am sorry I blamed miners alone when the companies who pay it are equally responsible for this as they intentionally pay higher, and this cycle runs till there are more high paying entities.

Yeah, it's not the miners' fault that fees are high. Rather it is all the exchanges and services which charge ridiculous withdrawal fees, and all the users using web wallets which dictate ridiculous fees or automatic fee algorithms without looking at the mempool themselves.

-snip-

Now, I'm not saying Lightning is the solution to all scaling issues, but I also don't think it's quite as black and white as you are making it out to be. Lightning is still in its infancy - it is not surprising that many channels are short lived. As people become more familiar and more confident with the technology, then they will be happier funding their channels with more bitcoin and therefore leaving them open for longer. If the opening and closing of Lightning channels starts filling the mempool, then fees will go up, and users will be incentivized to keep their channels open for more than 3 months. Lots of users still use custodial solutions to store their bitcoin, be that on web wallets or exchanges, and so a single Lightning channel opened by one of these services has the potential to serve thousands of users.

[Swordsoffreedom]

Where there are problems, there are solutions too. I always say if you want to use Bitcoin to buy grocery items or pay coffee bills, use your state's popular custodial service. This problem can be solved by making custodial p2p transactions for a small amount of transactions.

For example, Coinbase is the most widely used custodial wallet in the United States, India, and many more countries. Luno Wallet is very popular in Africa, Indonesia. In the case of little transactions, there is no extra fee to pay for P2P transactions using these wallets.

P2P transactions involve very low fee and can be an attractive option for making small-sized payments. But we can't ignore the disadvantages while performing such transactions. The advantage with direct payments is that we are making the transaction using our own wallet and no one will be able to seize the funds that are stored in them. But custodial wallets are centralized and there is a small chance that the service provider can freeze your account, or even seize your coins.

Emm, somewhat you are right that custodial wallet can freeze our account at any time and even thay can seize our account too. that's why we should have to use popular and trustworthy service. I didn't here coinbase seized someones account without any reason, its true that they frequently ask for KYC for making their service more secured but I got them loyal.

To get rid of these hassles you can keep very little bitcoin in these accounts. Just keep as much bitcoin as you need to pay monthly coffee bills, and other bills here so that you don't have to incur huge losses even if they freeze your account.

[New_order]

I would have say that other projects like BCH are better in terms of low transaction fees but isn't this applicable to all other crypto projects too? XRP, LTC, BCH have low gas fee, better than bitcoin but if all these altcoins can surge to where bitcoin is today won't their gas fee surge as well? This is something that's yet to be fixed in Crypto space

[mk4]

I would have say that other projects like BCH are better in terms of low transaction fees but isn't this applicable to all other crypto projects too? XRP, LTC, BCH have low gas fee, better than bitcoin but if all these altcoins can surge to where bitcoin is today won't their gas fee surge as well? This is something that's yet to be fixed in Crypto space

It would most likely be the case with BCH and LTC. As with XRP, yes, fees are indeed cheap, and that’s because the platform is centralized in the first place; to the point that I’d honestly just use PayPal or a creditcard lol.

Again, layer 2 solutions like LN are the way to go. It’s just that people refuse to try it out even though LN wallets(like Phoenix) have been A LOT better in terms of UX. That, and that unfortunately exchanges still doesn’t accept LN. Apparently Kraken is going to receive LN deposits in early 2021 though.

[o_e_l_e_o]

that's why we should have to use popular and trustworthy service. I didn't here coinbase seized someones account without any reason, its true that they frequently ask for KYC for making their service more secured but I got them loyal.

Coinbase? Trustworthy? Lol.

Coinbase lock accounts and seize funds regularly without any reason. Their customer support is terrible, they do not respond to tickets, and users are left locked out of their funds for weeks on end. Just go and look at their subreddit - 50% of the threads are people with issues which are being ignored by Coinbase. I even saw this thread pop up in /r/bitcoin yesterday - https://www.reddit.com/r/Bitcoin/comments/kkyb1g/sorry_for_this_i_need_karma_to_get_coinbase/. A user needs to farm enough Reddit karma so he can post a complaint on their subreddit because he has been locked out of his account for no reason and support are ignoring him. As he notes in his post, "That should tell you all you need to know about putting money in coinbase." This is what you call a "trustworthy" exchange?

Their ridiculous KYC policies doesn't make anything more secure - if anything, it makes it less secure for you. It helps them to stay in the good graces of the government, but it means more and more of your data is being sold and shared with third parties.

XRP, LTC, BCH have low gas fee, better than bitcoin but if all these altcoins can surge to where bitcoin is today won't their gas fee surge as well?

It's easy to have low fees when nobody uses your coin. BCash and Litecoin combined together make less than a third of the number of transactions that bitcoin makes, not to mention they have both been bleeding out and losing value constantly against BTC for the last few months. The reason BTC's mempool is full is because people actually use BTC. Litecoin's block time is 2.5 minutes compares to Bitcoin's 10 minutes, but they are not comparable. 1 LTC confirmation is not the same as 1 BTC confirmation. In fact, it takes over 600 LTC confirmations and therefore over a day to reach the same level of security as 6 Bitcoin confirmations in a hour.

[ranochigo]

Emm, somewhat you are right that custodial wallet can freeze our account at any time and even thay can seize our account too. that's why we should have to use popular and trustworthy service. I didn't here coinbase seized someones account without any reason, its true that they frequently ask for KYC for making their service more secured but I got them loyal.

To get rid of these hassles you can keep very little bitcoin in these accounts. Just keep as much bitcoin as you need to pay monthly coffee bills, and other bills here so that you don't have to incur huge losses even if they freeze your account.

If you have to adopt centralised services just to use Bitcoin for your payments, then you might as well use PayPal.

Coinbase is by no means a suitable alternative to rising fees and any other services like it doesn't serve as a suitable solution in the long run. Services like that will provide you with lower fees since the transfer is done within their own database, but you're sacrificing the transparency and the privacy of the individual. There's no company that would ever provide you with free services to transfer, there must be some strings attached. If you want to focus on low fees, I rather focus the efforts on LN and similar implementations.

Coinbase is a prime example of a company that doesn't give it's user the control of their own coins. They often freeze accounts on the basis of tainted coins which are often built on unfounded allegations.