Excessive Bitcoin fees

[franky1]

ill ask again
anyone else think that the next node release should measure fees in bumps of 1sat per 10byte(100sat/kb)
 instead of 5sat per byte(5000sat/kb) bump default, especially when entering the year of the next halving cycle/ATH year

where by if a 226byte tx was
266sat(1sat/byte) then 1356sat (6sat/byte) then 2486sat(11sat/byte) defaults
but instead were starting from
23sat(1sat/10byte) 46sat(2sat/10byte) 68sat(3sat/10byte)

Sure, it sounds reasonable to me for base fee to adjust in order to reflect increasingly valuable satoshis.
In fact, your account makes me think... what if devs conspire to keep base fee high in exchange for kickbacks from miners?

they dont get kickback from miners, because if they could they would have in last 15 years..
their kickback is make bitcoin expensive and annoying to promote the sandbox unfinished subnetworks that facilitate middlemen fee's for routed payments between institutions that sponsor them
(look into river financial hosting alot of the LN liquidity and sponsoring core devs as one of many examples, DCG previously)

[Bobrox]

The main problem when sending bitcoin with difference kinds of wallet are excessive Bitcoin fees, for small transaction will get difficult choose they have paid over $3 to $5 and some time could be large amount of fees have to sent. I think sending small fund of bitcoin as transaction is not friendly for user want to sent little amount of bitcoin but worth for huge amount of bitcoin.
Get possibilities increasing large fees bitcoin transaction in the future when bitcoin raise to higher price make small fund transaction not really worth when adopting bitcoin as payment transaction. Get exceptional if have or support with lightening network without take any fees transaction yet and likely is most worth way for sending bitcoin.

[moonie]

The main problem when sending bitcoin with difference kinds of wallet are excessive Bitcoin fees, for small transaction will get difficult choose they have paid over $3 to $5 and some time could be large amount of fees have to sent. I think sending small fund of bitcoin as transaction is not friendly for user want to sent little amount of bitcoin but worth for huge amount of bitcoin.
Get possibilities increasing large fees bitcoin transaction in the future when bitcoin raise to higher price make small fund transaction not really worth when adopting bitcoin as payment transaction. Get exceptional if have or support with lightening network without take any fees transaction yet and likely is most worth way for sending bitcoin.

I agree, I'm sorry that the bitcoin experience hasn't improved

ill ask again
anyone else think that the next node release should measure fees in bumps of 1sat per 10byte(100sat/kb)
 instead of 5sat per byte(5000sat/kb) bump default, especially when entering the year of the next halving cycle/ATH year

where by if a 226byte tx was
266sat(1sat/byte) then 1356sat (6sat/byte) then 2486sat(11sat/byte) defaults
but instead were starting from
23sat(1sat/10byte) 46sat(2sat/10byte) 68sat(3sat/10byte)

Sure, it sounds reasonable to me for base fee to adjust in order to reflect increasingly valuable satoshis.
In fact, your account makes me think... what if devs conspire to keep base fee high in exchange for kickbacks from miners?

they dont get kickback from miners, because if they could they would have in last 15 years..
their kickback is make bitcoin expensive and annoying to promote the sandbox unfinished subnetworks that facilitate middlemen fee's for routed payments between institutions that sponsor them
(look into river financial hosting alot of the LN liquidity and sponsoring core devs as one of many examples, DCG previously)

this sounds like it could be an equally big issue of developer incentive misalignment

[franky1]

The main problem when sending bitcoin with difference kinds of wallet are excessive Bitcoin fees, for small transaction will get difficult choose they have paid over $3 to $5 and some time could be large amount of fees have to sent.

imagine any auction
where bidding starts at $1
in any scenario of competitive bids. imagine if the auction house incremented the next bid by $5, with 10 SEPARATE bids the price hits $51
now imagine if the auction house incremented the next bid by $0.10 with 10 separate bids the price hits $2

lowering the increment bidders have to fight over, allows more opportunity of priority without the fee going 50x

..
most wallets are based on core underlying code so follow their defaults. so first port-of-call is to get core to sort themselves out, then the rest will follow

[davis196]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

High transaction fees means bigger revenue and profits for the miners, so more miners will start mining BTC and the hashrate will get adjusted to another level. On the other hand, ridiculously high transaction fees will scare away many BTC investors and traders, therefore the demand for BTC will drop, which means that the BTC price will also drop. This will eventually lead to lower transaction fees. The market always finds ways to regulate itself. The level of decentralization of the BTC network doesn't depend of the number of users and companies, that are sending and receiving BTC. It depends on the number of active miners and nodes. However, I might be wrong about this, because I'm not a blockchain expert.

[Richbased]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

Your questions are quite contradictory but however, it's not only large institutions that can afford the use of Bitcoin Blockchain due to high transactions fees because there are also individuals that have high amount of Bitcoins and wouldn't care about the transaction fees inasmuch as the system is decentralized.

Bitcoin was invented to be a decentralized currency so I don't see any reason or whatsoever that would tend to change the decentralized nature of Bitcoin regardless of high transactions fees or congestion in the mempool and moreover, recently we can vividly see that there have been a reduction in the congestion and transactions fees also reduced as well so hopefully with time everything is gonna normalize.

It is obvious that these congestion in mempool and high transactions fees have been a reoccurrence in the crypto industry and afterwards returns back to normalcy so it shouldn't cause a panic in anyway as the system would be restored by it's developers .

[Alpha Marine]

BTC is already centralised to a certain extent though it's still largely decentralised thankfully. Ordinals and bullish behaviour are forcing fees to move upwards again and again which is something that everyone has already gotten used to at this point.

BTC is not in any way centralized. It has never been centralized and it's not centralized now. The BTC itself is yours, you own it, you can sell it when you want, or hold it forever.
The problem is using centralized means to deal with BTC. Like centralized exchanges and so on.
Drinking a new fine in an old glass doesn't make the wine an old win. So centralized institutions using BTC don't make BTC centralized

The dollar worth of fees is as low as just above a dollar currently, hopefully it gets even lower.

The fact that events in the economy affect Bitcoin doesn't make it centralized. The players of Bitcoin all live in an economy and if the events of the economy affect these players, then it might affect Bitcoin.

[ABCbits]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees?

Nobody knows for sure. But i certainly hope Bitcoin community would also accept Bitcoin sidechain and increasing block size (following hardware/internet growth) as additional options to prevent that from happening.

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

It won't centralize the network, assuming it's not expensive to run full node and no single group have majority of hashrate.

[Rehan Zakir]

I suggest that crypto companies introduce Bitcoin Layer 2 solution projects. Bitcoin transaction fees are very high, making transactions in Bitcoin annoying. Introducing Layer 2 solution projects could reduce fees by 10 times, similar to what Arbitrum, Optimism, and other Layer 2 projects have done. Exchanges also impose heavy fees on withdrawals, so reducing these excessive fees would be beneficial.

[livingfree]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees?

Even if Bitcoin fees go to $100 per transaction, I don't think that they'll be the only ones to afford to pay the fees. However, I do not wish to reach that point seeing it happen with Bitcoin because I did experience and saw that with ERC20 transactions.

It was a terrible experience and that's why if it happens for Bitcoin which it actually did last year, we just have to wait to let the network and its fee calm down.

Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

The network is already set and it won't change just because only those who can avail to pay the high fees don't make it centralized.

[kryptqnick]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

I don't think that's going to happen. The fees aren't progressing, they're just occasionally spiking. As was noted by others, the fees are currently very reasonable, for example, with less than $2 for a priority transaction. Also, I don't think that adoption of Bitcoin by large institutions will make the fee situation worse. Large institutions don't tend to make tons of small transactions, I believe, and they tend to have their own centralized (so, not on-chain) platforms for people who want to interact with Bitcoin or any other asset. So their impact shouldn't be significant, and regular people will be useful to use Bitcoin directly.

[moonie]

It's February 26, 2024, and Bitcoin fees are high again. Didn't satoshi say we should always allow a certain number of free transactions? What good is a cryptocurrency for the un-banked that costs more than a bank to use?

Why is the present status quo acceptable?

[The Cryptovator]

Due to fees or whatever reason, Bitcoin won't become centralised because it was designed in a decentralised way. A major part of Bitcoin would be handed over to centralised organisations if the fees increased significantly and the general public couldn't afford the transaction fees. But I do not expect this situation to occur; there will undoubtedly be a solution. We saw a few days ago that transaction fees were very high. But it was affordable, at least. Developers will find a solution to transaction fees. 

[adaseb]

Bitcoin broke $53K, $54K, $55K, $56K and $57K today and the fees are 20 sats/byte. Which is very cheap. Looking at Ethereum the fees are 45 Gwei or so which is about $3 for a simple ETH transfer, so this isn't a concern really.

Most of us pretty much only do large transfers on these networks and use L2 for everything else. I have been doing this since 2017 pretty much and got used to it. Bitcoin network is not designed to be used to buy a cup of coffee and neither is Ethereum. This is where all the L2 networks like Lignting, Liquid, Arbitrium, Polygon, ZkSync, etc come into play.

Those networks are very cheap and transactions are very fast.

[Sebas.tian]

This is one of the advantage that make me to like  Bitcoin team, they feel the pain or worry about their investors to consider the gas fee before it makes their investors to start thinking another alternative that will make the team to lose investors. I think, the current gas fees that occur few days ago is not too high compared to other coin like Ethereum gas fee 45 where high fees is charged for every transaction their investors make, but Bitcoin gas fees is very low and it will make many companies to use this new gas fees to embrace Bitcoin again. Based on what happened to the gas fee of Bitcoin, I will definitely increase my capital when another bearish market appear, so that I will achieve more income than what I achieved few hours ago in the market.

[martinex]

It's natural that currently we see many people and investors increasingly enthusiastic about the prospects of bitcoin, especially as the price is a little closer to touching ATH again. Now. If this is the case, the transaction fee will automatically increase and it will subside by itself and BTC belongs to everyone, so it's not just those with strong hands who can afford it, we, ordinary people can also invest with BTC, it's just that the amount of ownership is different and this is definitely a way for investors to expand their investment reach beyond stocks and bonds.

[ABCbits]

It's February 26, 2024, and Bitcoin fees are high again. Didn't satoshi say we should always allow a certain number of free transactions?

Mining isn't charity activity, so don't expect miner or pool would do that. Besides, it's just suggestion and was never enforced by Bitcoin protocol.

What good is a cryptocurrency for the un-banked that costs more than a bank to use?

IMO if those people are unbanked not due to lack of money, Bitcoin still offer some advantage.

Why is the present status quo acceptable?

Personally i don't accept it, but Bitcoin community is on conservative side.

[leonair]

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

A centralized exchange must be used for trading to avoid transaction fees. But when one wants to hold bitcoin he must buy bitcoin and hold it in a non-custodial wallet because we all know a saying that not your key not your bitcoin. If you use a decentralized wallet, you will be in full control of your Bitcoins. In this case paying some fee for the safety of your bitcoins will not be a big deal.

[AirtelBuzz]

Bitcoin broke $53K, $54K, $55K, $56K and $57K today and the fees are 20 sats/byte. Which is very cheap.
Those networks are very cheap and transactions are very fast.

Today the price of Bitcoin has increased, but the amount of Bitcoin fees has not increased with it. It is often seen that as the price of Bitcoin increases, so does the amount of Bitcoin fees. According to mempool.space today, Bitcoin fees amount


https://mempool.space/

A centralized exchange must be used for trading to avoid transaction fees. But when one wants to hold bitcoin he must buy bitcoin and hold it in a non-custodial wallet because we all know a saying that not your key not your bitcoin. If you use a decentralized wallet, you will be in full control of your Bitcoins. In this case paying some fee for the safety of your bitcoins will not be a big deal.

You must use a non-custodial wallet to avoid transaction fees and keep your assets safe. If you are using a custodial wallet then there is a fixed fee that you have to pay for any token transaction that they charge and then make the transaction.

If you use a non-custodial wallet instead of a custodial wallet, then you can trade any token you want with a fee.

[Kelward]

Bitcoin system is organized and quite easy to predict, it has its seasons, bull run, bear run and halving, also a time when mempool is congested, it had congestions towards the last quarter of last year, and people who are knowledgeable about how Bitcoin seasons works were not panicked, they knew that it happens. To the layman's understanding, when there are too many transactions, the mempool will be congested and transaction fees will be high, when eventually the mempool dicongests, transaction fees will come back to normal, simple economics.

Unless hopefully the Bitcoin developers does something to address the issue, we're still stuck with the system, if a holder can't pay the high fees, when there's congestion, then let him use alternative means that have been mentioned on this thread.