How to give btc users no transaction fees.

[BlackHatCoiner]

But I don't see it change every single moment. I see a price displayed when I place my order on a website or when I take my goods to the cashier to be rung up.

If the merchant wants USD and not BTC, then the product that costs $10 will be sold for 24,000 sats. If the price suddenly (or not) decreases by 10% then your purchasing power also does too. The merchant won't ask you for 24,000 sats, but for 26,400. Without noticing it, you'd need 2,400 sats more; not because of the demanding; simply because the merchant doesn't ask for a fixed amount of Bitcoins, but measures them in USD instead. So, essentially, what the merchant does with the Bitcoins is a little much of your concern.

I have dealt with someone who was only accepting one fixed price (310,000 sats) for his product. He's allowed to leave it the same forever. The problem is that if Bitcoin becomes more valuable than before, so does his product.

You can't really deny the irony. As long as the currency you use for living isn't Bitcoin, you're doomed to calculate the in-between exchange rate. Fees included.

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[o_e_l_e_o]

If the merchant wants USD and not BTC, then the product that costs $10 will be sold for 24,000 sats. If the price suddenly (or not) decreases by 10% then your purchasing power also does too. The merchant won't ask you for 24,000 sats, but for 26,400. Without noticing it, you'd need 2,400 sats more; not because of the demanding; simply because the merchant doesn't ask for a fixed amount of Bitcoins, but measures them in USD instead.

I appreciate all that. What I'm saying is that I don't care enough to either check the exchange rate or not buy the product or service. If I'm going to use bitcoin as a currency (which I am), then I'm going to use it as a currency, and that means spending it when I need to spend it without thinking "Maybe if I wait till tomorrow I'll get a better rate on this product/service". Just like with DCA for holding, if you just spend it when you want to spend it then it all averages out over time. Sure, sometimes I'll pay a bit more and sometimes I'll pay a bit less, but that's a price (pun intended ) I'm willing to pay for using bitcoin as a currency.

As long as the currency you use for living isn't Bitcoin, you're doomed to calculate the in-between exchange rate.

Only if there is an item being sold for USD, and I want to sell the necessary amount of BTC to have enough USD to buy that item, which I never do. Anything I can buy with BTC, I buy with BTC. Anything I can't, I buy with USD. I couldn't tell you the last time I actually just sold some BTC for USD in a straight exchange.

[larry_vw_1955]

Except it would be rejected by the network since the mempool already contains a transaction spending those inputs, and RBF cannot be used since the fee on the new transaction would be lower, not higher.

Well of course it wouldn't be rejected. New rules would be in place that allowed a transaction that had a fee to be replaced by a transaction with zero-fee. Similar to RBF but in the other direction.

You are still paying for it, just in terms of electricity and hardware degradation rather than in bitcoin. Nothing stopping you from mining some useless altcoin, dumping it for a few hundred sats, and using that to pay your bitcoin fees.

Well yes there is, it costs money to get into mining. For example, you can't use an office computer to mine things. It needs expensive GPU which may not last a long time. Then you have to buy another one. Also, you have to be able to find an exchange to unload your "useless altcoin" as you referred to it. And that may not be so easy and you have to trust shady exchanges maybe to do that.

A lower supply isn't necessarily a bad thing on a macroscopic level.

But I would think it would imply people using smaller and smaller fractions of bitcoins in transactions. There's a limit to how far down that goes though, one satoshi. If one satoshi ever got to be worth alot then what do you do then?

[BlackHatCoiner]

If I'm going to use bitcoin as a currency (which I am), then I'm going to use it as a currency

I like seeing it that way, but there are tons of things that prevent me from doing it. There's so much speculation behind all this and the point of a currency is to finally behave stably. But, it won't. It turns out, that nowadays, a currency has to be approved from the government to operate properly; we aren't living with bargaining nor with gold coins' usage. These things are long gone and the way Bitcoin works misses out that fact.

I believe we're into an experiment; some say that it's the new gold. I personally find one characteristic that makes it not look like that either. It's been owned by civilians, but gold from the governments and that's probably why its price is being so manipulated. Simply put, it's something new.

Just think what would happen if the whole world used a deflationary currency during the pandemic...

But I would think it would imply people using smaller and smaller fractions of bitcoins in transactions. There's a limit to how far down that goes though, one satoshi. If one satoshi ever got to be worth alot then what do you do then?

If one satoshi ever worths a lot or simply more than the dust amount, we can agree upon a hard fork where we'll extend it to twelve subunits.

[larry_vw_1955]

No one would be enforcing pow on the users or mandating that. It would just be an option. I'd love to have the option to let my cpu do some number crunching in exchange for a free btc transfer. As long as it didn't take too long.

You can. Miners don't want to include transactions that don't have a fee because there is no benefits in for them, other than to have a slower block propagation.

I assume you're referring to the current state of things.

There is nothing that can make miners include zero-fees transaction, arbitrarily giving miners Bitcoins in lieu of transaction fees involves significant economics repercussions and definitely would need far more research in that.

If there was a financial incentive for them to mine zero-fee transactions they would. But I agree it requires more study. You can't just say you're going to pay them 10 bitcoin for every block mined neglecting everything else.

Since a reasonable timeframe for a CPU to generate a sufficiently expensive PoW would be in the range of hours, then it would make little sense. Too cheap, and you risk having spammers clog up the network.

Well I think 2 or 3 hours is not unreasonble. It could be alot cheaper than paying an actual transaction fee. Obviously it's not going to work for someone that needs to send alot of individual transactions in a short timeframe. But it would be ideal for the casual bitcoin weekend warrior. They would really get excited about the prospect of paying no fee!

Too cheap, and you risk having spammers clog up the network.

Ahh yes the old spammer problem clogging up the network. Hasn't bitcoin dealt with them just fine already? Or are they still waiting in the woodwork ready to descend upon innocent miners once the lights turn off like a bunch of hungry cockroaches?

But I would think it would imply people using smaller and smaller fractions of bitcoins in transactions. There's a limit to how far down that goes though, one satoshi. If one satoshi ever got to be worth alot then what do you do then?

If one satoshi ever worths a lot or simply more than the dust amount, we can agree upon a hard fork where we'll extend it to twelve subunits.

Why stop at 12? Heck why not go all the way to 100 subunits? Then we're talking!

I mean you could guarantee you would never run out of bitcoin even though there's a 21 million max supply! Just rename 1 bitcoin to a milli-bitcoin and you've just turned 21 million of them into 21 billion.

[moderator's note: consecutive posts merged]

[BlackHatCoiner]

Why stop at 12? Heck why not go all the way to 100 subunits? Then we're talking!

We usually don't take seriously any amounts that are under the dust. Currently, you can't broadcast a transaction that funds less than 547 sats. This isn't an arbitrary number choice. It is calculated to be cents in terms of USD. At the moment, 547 sats are equal with 22 cents. Back in 2011, the dust amount was 0.01 BTC, but the exchange rate was $1-$5.

In order for us to assume that one satoshi is valuable enough to not consider it a dust amount, it should worth around 1-20 cents. That makes 1 BTC = 1-20 million dollars. I think we're fine with eight sub-units for the next 4-8 years.  

I mean you could guarantee you would never run out of bitcoin even though there's a 21 million max supply! Just rename 1 bitcoin to a milli-bitcoin and you've just turned 21 million of them into 21 billion.

If you cut an extra piece for each slice of pizza, you don't have two pizzas. You just cut your pizza into two pieces.

[Pmalek]

That's the point I'm making. I generally don't think of the price of the product in USD.

Maybe you don't, but the merchants certainly do. If their product or service is priced $100, they will want the equivalent in bitcoin at the time you make that purchase. One day, that item might be 0.002 BTC, the other day it can be 0.001 BTC or 0.003 BTC. I have rarely come across a shop selling its gear for a fixed amount in bitcoin. If I noticed that I am paying 50% more or less than I did the last time, I would be curious to find out why. And that's where you have to go back to the fiat value of the item to find out if it just got more expensive/cheaper, or has the value of Bitcoin changed.

[vjudeu]

If one satoshi ever worths a lot or simply more than the dust amount, we can agree upon a hard fork where we'll extend it to twelve subunits.

Hard fork will be rejected, because even soft fork was, see: https://bitcointalk.org/index.php?topic=5330102

Why stop at 12? Heck why not go all the way to 100 subunits? Then we're talking!

Technically it is possible (as mentioned in the topic above), for example we could have one byte for moving decimal dot and seven bytes for amounts. Seven bytes is enough to cover all 21 million BTC today with eight decimal places, so when going to smaller units, they should still be expressed as 64-bit numbers. If anyone would need more precision, then two outputs will cover what 128-bit number could, but I think there will be almost no cases where more than one output will be needed. Moving decimal dot by three places would mean 21k BTC with millisatoshi precision, and that could mean using "03" byte prefix instead of "00", going to 100 subunits could be simply done by using "5c" prefix. That format would allow us to use up to "ff" prefix with 255+8, so 263 decimal places! Of course such amounts will be rejected on mempool level in the same way as dust amounts are rejected today.

[ranochigo]

If there was a financial incentive for them to mine zero-fee transactions they would. But I agree it requires more study. You can't just say you're going to pay them 10 bitcoin for every block mined neglecting everything else.

Correct.

Well I think 2 or 3 hours is not unreasonble. It could be alot cheaper than paying an actual transaction fee. Obviously it's not going to work for someone that needs to send alot of individual transactions in a short timeframe. But it would be ideal for the casual bitcoin weekend warrior. They would really get excited about the prospect of paying no fee!

It depends. The time taken to generate that is dependent on your own PC/phone which ends up as kind of a discriminatory policy; only those who have a sufficiently powerful computers can generate it quickly and those who don't have that can take hours or days. Going by this, then those people are very likely to not want to waste their time to try to do this and would rather pay $1 - $5 to just immediately send their transaction.

Ahh yes the old spammer problem clogging up the network. Hasn't bitcoin dealt with them just fine already? Or are they still waiting in the woodwork ready to descend upon innocent miners once the lights turn off like a bunch of hungry cockroaches?

Nope. Bitcoin dealt with it just fine because fees became so expensive. A few years ago, the spam was artificially generated and it wasn't necessarily expensive, considering the costs of Bitcoin at that time. Botnets are fairly suitable for spamming the network, if you introduce a PoW which is fast on CPUs and going by the concept.

[BlackHatCoiner]

And that's where you have to go back to the fiat value of the item to find out if it just got more expensive/cheaper, or has the value of Bitcoin changed.

Well, he justifies it as following:

I'm willing to pay for using bitcoin as a currency.

Look, it isn't bad to want financial freedom or deflation over your currency. It is perfectly acknowledged to want avoidance of a currency whose value decreases over time by an entity. It is also understandable to not want handing over your custody of your money to a third-party. But, you should also see this skeptically instead of credulously.

In the last centuries, economists concluded that: Currency = Politics. A state can't operate if they're unable to control the currency that is being used. The fact that they may harm the economy with their bubbles doesn't mean that we have to turn this obsoletely. Dreaming of a world where Bitcoin prevails sounds pretty anarchistic; we aren't in the P&S section and it's aimless to discuss about such case, but I personally disagree.

I believe in Bitcoin, but I don't see it as a currency brought to solve the “corrupted” modern financial system. Since no state controls it, it'll probably remain a speculating asset that is considered very useful. Just like gold, it isn't used for exchanging goods, but it could be used perfectly as a store of value.



<monologue>

But, BlackHatCoiner, gold stores value by its future usage; if Bitcoin isn't planned to be used as a currency, doesn't that make it valueless in the future?

</monologue>

Well, actually, it will never stop being used. There will always be people willing to accept it as a payment method. As long as few accept it, it can be used as a store of value. Most of the gold isn't been used for jewelry & technological stuff either; the majority is kept by governments.

[Pmalek]

Well, actually, it will never stop being used. There will always be people willing to accept it as a payment method. As long as few accept it, it can be used as a store of value. Most of the gold isn't been used for jewelry & technological stuff either; the majority is kept by governments.

If you watched the movie Borat, you might remember the scene where he offers an antique dealer a bag of pubic hair as a method of payment for breaking items in his shop. It's obviously a mockery, but imagine if there was a market for quality pubic hair. That would make it a payment method as well so long there are people who are willing to trade goods and services for it. But the majority won't be thinking how much something is worth in terms of pubic hair. It would be wonderful if one day Bitcoin could become such an economy where you won't have to use fiat as a comparison. I doubt it, but we will know more in 20-30 years.   

[BlackHatCoiner]

I doubt it, but we will know more in 20-30 years.

The thing you saw in the movie is an economic term called “barter”. People simply exchange goods & services with no mediums such as money. This is how people started transacting before the very first appearance of money. But, I wouldn't say that I could somehow compare it with Bitcoin.

Bitcoin is indeed money/medium of exchange/currency; don't get me wrong. I'm just not in agreement that it can work in a global manner, where every state adopts it as their main currency. In other words, I don't expect the lightning network to ever “prevail” in the world. The way I see it is that the majority of its users will never stop behaving speculatively about it, or at best, it could be considered as the new digital gold from each country. But, 'til there.

[o_e_l_e_o]

There's so much speculation behind all this and the point of a currency is to finally behave stably.

And such stability will be reached as and when we reach significant adoption. But if no one ever adopts it as a currency, then we will never get there. Someone has to be an early adopter.

It turns out, that nowadays, a currency has to be approved from the government to operate properly; we aren't living with bargaining nor with gold coins' usage.

Only because every currency we've had so far has been government issued. Bitcoin is something new.

Maybe you don't, but the merchants certainly do.

And as I explained above, I don't really care what the merchants choose to do. It is none of my business. I want to use bitcoin as a currency, so I will continue to use bitcoin as a currency.

[larry_vw_1955]

I mean you could guarantee you would never run out of bitcoin even though there's a 21 million max supply! Just rename 1 bitcoin to a milli-bitcoin and you've just turned 21 million of them into 21 billion.

The term you're looking is redenomination, but usually it's used to reduce amount of zeros.

No kidding! I owned this stock once and they did some type of stock split and I ended up with nothing except a few bucks cash in my account and no shares!

Nope. Bitcoin dealt with it just fine because fees became so expensive. A few years ago, the spam was artificially generated and it wasn't necessarily expensive, considering the costs of Bitcoin at that time. Botnets are fairly suitable for spamming the network, if you introduce a PoW which is fast on CPUs and going by the concept.

when you first brought up the issue of spam, i thought there's 2 ways to deal with spammers on the network in my "free transaction fee" utopia.

#1) If you are able to identify spamming bitcoin addresses, then you punish them by placing them on a blacklist that all miners keep and share just like they share other things. An address could stay on the blacklist for an agreed upon amount of time, say 6 months or 1 year. Whatever.

#2) If you are able to identify spamming bitcoin addresses, you punish them financially. How that would be done is a good question but it would involve debiting their bitcoin balance.

As you alluded to, the idea of having to pay expensive fees served as a deterrant to spammers.

[moderator's note: consecutive posts merged]

[BlackHatCoiner]

#1) If you are able to identify spamming bitcoin addresses, then you punish them by placing them on a blacklist that all miners keep and share just like they share other things. An address could stay on the blacklist for an agreed upon amount of time, say 6 months or 1 year. Whatever.

Spamming isn't necessarily in the mempool only. One could spam by having their transactions included into blocks. What those folks do with the fulfilling of 547 sats is clearly spamming.

Spamming won't be prevented by blacklisting addresses. A network attacker could use temporary burning addresses for each transaction, as a result for you to still keep those, but in your blacklist. Also, how will you differentiate a regular address from a spamming one? In the transaction I linked you, the spammer funded both their and others' people addresses. Should they be blacklisted too?

#2) If you are able to identify spamming bitcoin addresses, you punish them financially. How that would be done is a good question but it would involve debiting their bitcoin balance.

I'll answer you very simply:  The nodes can't punish anyone; especially financially. In order for debiting their Bitcoin balance, they'd have to somehow provide a signature from the attacker's address, otherwise the whole purpose of this system where we sign digitally with our unique private keys corrupts. They can't sign and thus, they can't detract any amounts.

Only because every currency we've had so far has been government issued. Bitcoin is something new.

Well, every society we've been so far required a government to work properly, so yes it was issued by it. As I said, currency equals politics.

[pooya87]

If you are able to identify spamming bitcoin addresses, then you punish them~

The problem with "spam" is that it is a matter of perspective. These transactions aren't breaking any consensus rules, not even standard rules. We call them "spam" just because they have certain attributes that we dislike. Any kind of restriction will consequently limit the protocol which is not a good idea.

[Pmalek]

#1) If you are able to identify spamming bitcoin addresses, then you punish them by placing them on a blacklist that all miners keep and share just like they share other things. An address could stay on the blacklist for an agreed upon amount of time, say 6 months or 1 year. Whatever.

What mechanisms would be in place to prevent me and my friends to put you on that blacklist simply because I don't like you or because I am a jerk? Who decides who goes on the blacklist and who doesn't? Is it like a democratic voting system? How would you prevent that from becoming a popularity contest where those powerful enough could influence the opinions of others to make decisions that favor them?

#2) If you are able to identify spamming bitcoin addresses, you punish them financially. How that would be done is a good question but it would involve debiting their bitcoin balance.

You are proposing a system that would have a backdoor that turns Bitcoin into a custodial service where individual users aren't in full control of their money because it can be taken away from them. 

[ranochigo]

#1) If you are able to identify spamming bitcoin addresses, then you punish them by placing them on a blacklist that all miners keep and share just like they share other things. An address could stay on the blacklist for an agreed upon amount of time, say 6 months or 1 year. Whatever.

#2) If you are able to identify spamming bitcoin addresses, you punish them financially. How that would be done is a good question but it would involve debiting their bitcoin balance.

As you alluded to, the idea of having to pay expensive fees served as a deterrant to spammers.

Probably answered fully by the users above; no censorship should happen on the network. Much less one that is decided through arbitrary criteria and risk affecting certain users as a collateral.

I appreciate the brainstorming and the ideas that you've proposed. However, I find that it really isn't anywhere near the most pressing issues, or an issue at all for that matter that would justify additional strain on the network nodes, and being subjected to red tapes during the implementation, by the miners, mainly. Paying a fee for transactions is just fine; if users are complaining about high fees, then well too bad. Going by the proposal, then they would be waiting for hours or days to make any transaction. I'll very much rather pay $10 and get it over and done with. You'll probably run into the problem with larger botnets and specialized computing arrays offering services for the PoW as dictated in your proposal eitherways.

There is no such thing as no fees. If you are going to have PoW as a substitute, then you are paying for the fees in the form of additional strain on your CPU and electrical costs. It would have to be more expensive than paying the fees as you are also putting a strain on the rest of the network, for making them validating the transaction's PoW. This will probably never happen in Bitcoin, but feel free to try it as an altcoin.

[o_e_l_e_o]

then you punish them by placing them on a blacklist that all miners keep and share just like they share other things.

Terrible idea. Bitcoin is no longer fungible.

If you are able to identify spamming bitcoin addresses, you punish them financially.

Even worse idea. Bitcoin is no longer trustless, decentralized, secure, or censorship resistant.

I'll quite gladly pay a few sats per transaction to not destroy Bitcoin as we know it, thanks.

Well, every society we've been so far required a government to work properly, so yes it was issued by it. As I said, currency equals politics.

And bitcoin is a new currency which isn't issued by a government. You can't say bitcoin can't be a currency because every currency is government issued when bitcoin is the first that isn't. It is proving that statement wrong time and time again.

[BlackHatCoiner]

And bitcoin is a new currency which isn't issued by a government. You can't say bitcoin can't be a currency because every currency is government issued when bitcoin is the first that isn't. It is proving that statement wrong time and time again.

It is a currency; what it can't be in my opinion is a reserve currency used by ever person in a society. In other words, it can't replace the current financial system; the “fiat”. Simply, because it can't be controlled by the government, which is required for a proper functionality of the economy.

The technology of Bitcoin is indeed something relatively new, but deflationary currencies like gold coins were a thing thousands of years ago and with the today's world, they'd fail miserably. Inflation is sometimes required due to the increase of population. The more the people, the worse the economy.

Just imagine of a world where the main currency of the societies is deflationary not controlled by the government... Complete fuckin' chaos...