What would happen to the transaction fee if bitcoin SKYROCKETED

[gtraah]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

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[pedrog]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

Who cares, we would be billionaires!!!

And more decimal places can be added...

[cbeast]

There are many solutions. It's just an engineering problem. Each solution will depend on how bitcoin is used.

[bigasic]

That will be a great problem to have...that would mean that 1 bitcoin would be worth 1 million dollars. I think we are a long way off from those numbers. But Im sure if it becomes an issue well have a solution.

[Kluge]

If BTC becomes much more valuable, then Tx fees can be lowered with max block sizes increased given the increased price allows for tx fees to be lower in nominal value while still paying a similar real value when compared to fiat (or goats, or cheeseburgers, or whatever). Cost of "normal network functions" doesn't necessarily increase with price, so it's reasonable to bring down the "minimum" fee while increasing the amount of transactions able to be stuffed into it (within reason, and I think we're allowing too many transactions to be potentially stuffed into blocks right now), and of course to reduce the minimum Tx BTC amount to be considered dust.

[Ron~Popeil]

It really is just a question of moving decimal points a few spots as needed. AS long as everyone is getting value for their btc or hashing power things should be fine. 

[contantisaluti]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

In this so successful scenario and with BTC having a so high value in $, it's right and correct the fee is $1-$2. For your daily needs just convert a fraction of your BTC in another cryptocurrency (e.g. LTC) with a lower value; surely in this case BTC should not the only cryptocurrency accepted, especially for cheap purchases as the one you mentioned.

[Beliathon]

Thread would be made 900% more accurate to near-future reality by replacing "if" with "when" in every instance.

[keithers]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

Who cares, we would be billionaires!!!

And more decimal places can be added...

If BTC skyrockets...there will be no more $10 meals allowed .   Maybe $10 bottles of water...jk

[namecoin]

If bitcoin value increases a lot, more decimal place can be introduced.  Transaction fee can be changed as well.

[bryant.coleman]

If bitcoin value increases a lot, more decimal place can be introduced.  Transaction fee can be changed as well.

I don't think that the miners are going to be happy with that suggestion. Already they are complaining that the mining is very unprofitable. Any further attempted reduction in the transaction fee will face a lot of opposition.

[QuantumQrack]

As long as you can specify your own transaction fee, the problem will take care of itself naturally.  i.e. I will keep my transaction fees in line with what they are currently... a few pennies per transaction.

[zimmah]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

they would move the decimal places so that you can have fractions of a satoshi. They can easily add another 8 decimals.

That will be a great problem to have...that would mean that 1 bitcoin would be worth 1 million dollars. I think we are a long way off from those numbers. But Im sure if it becomes an issue well have a solution.

in fact 1 bitoin would be 100 million dollars in that case. And that would make most of us multi-millionaires or even billionares.

Not completely impossible either. Could happen within the next 10 years.

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

In this so successful scenario and with BTC having a so high value in $, it's right and correct the fee is $1-$2. For your daily needs just convert a fraction of your BTC in another cryptocurrency (e.g. LTC) with a lower value; surely in this case BTC should not the only cryptocurrency accepted, especially for cheap purchases as the one you mentioned.

bitcoin is meant for both large and micro transactions, and as long as the protocol is maintained in the right way, there's no need for altcoins at all.

If bitcoin value increases a lot, more decimal place can be introduced.  Transaction fee can be changed as well.

I don't think that the miners are going to be happy with that suggestion. Already they are complaining that the mining is very unprofitable. Any further attempted reduction in the transaction fee will face a lot of opposition.

Mining fees have been lowered before and they will lower again. Some miners can join a pool which still charges higher fees, but they will be beaten by the pools with lower fees and more miners. Eventually they will never find any blocks and they will give up and join bigger pools (with lower fees) or stop mining. If miners become too greedy they will not last.

Miners always must make a decision between a lot of transactions with a low fee, or a few transactions with a high fee. But since more transactions means more fees in total, as well as a higher and more stable bitcoin value, most smart miners will accept the lowest fee possible, while still being profitable. For example it's better to have 10000 transactions per second for a 0.00000050 fee than 100 transactions per second for a  0.00000100 fee

[shadowphoenix]

not much would happen imho..business as usual.

[bryant.coleman]

Mining fees have been lowered before and they will lower again. Some miners can join a pool which still charges higher fees, but they will be beaten by the pools with lower fees and more miners. Eventually they will never find any blocks and they will give up and join bigger pools (with lower fees) or stop mining. If miners become too greedy they will not last.

Yes... that was what I was talking about. Even during the last time, there was a lot of opposition from some of the major mining pools. The next time, the opposition is going to be much more vocal.

[jambola2]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

In today's economy , there are around 5 trillion dollars , if you consider all economies.

Let's say 15 million BTC are mined , that will mean that even if the entire economy is only Bitcoin , each Bitcoin will be worth 5,000,000,000,000/15,000,000 = 333,333$ in today's money.

Bitcoin will never be worth a million $ of today's money. Sure , it may happen one day when USD has inflated so much that it is worth a cent of today's money. But in comparison to the money of now , Bitcoin can not cross a million.

[DolanDuck]

The transaction fee can be lowered, in the last years we have seen that case before so it's not a real problem.
Also btc development isn't stopped therefore, if needed, some other decimal numbers can be added.

[jambola2]

In today's economy , there are around 5 trillion dollars , if you consider all economies.

Even more

Okay , take it as 6.3 trillion , assuming there are all 21m BTC mined.
That will still be 300k , which is much lesser than necessary to cause a problem resulting in need to further divide Bitcoin.

It is unlikely that Bitcoin will ever cross a million $ , but I expect it to definitely hit the 10k range.
People who expect it to reach 1m in a few years are extreme fanatics.

Comparing Bitcoins future growth to the 300x boost it saw ages ago is stupid.
If Satoshi told 2 people about BTC when he first envisioned it and tripled the Bitcoin enthusiasts in a minute , we should not expect that to happen again in a minute.

TLDR; Bitcoin will rise , but even if it becomes as big as USD is now , it will be under 40k$ per Bitcoin (of todays USD value)
We will not need to further divide BTC in a long long time and if we do , we will have far more capable devs waiting to do so.

[bryant.coleman]

Also btc development isn't stopped therefore, if needed, some other decimal numbers can be added.

1BTC = 100,000,000 Satoshi. We don't need anymore decimal places, unless Bitcoin crosses the $10 million mark. And I don't think that Bitcoin will ever reach that much in exchange rate, at least during this century.

[Kluge]

Just to throw this out there...

Fed M2 is >$11t right now and has been increasing at an insane rate in the past few years, ~9% annually. Assuming 11m spendable coins now, we get to - wait for it - $1m/btc on the nose if BTC matches USD (without factoring in displacement)! -- but what's interesting is that we're right around a 9% annual rate of inflation with BTC right now -- basically, any increase in nominal $price right now has to come from an increase in "real" investment money, but this will be changing. Before the next halving, the rate will dip well below the M2 inflation rate. Assuming M2 maintains its current course, BTC should be increasing 4-6% annually from USD inflation after the next halving, then ~7%/yr in the next halving. That's without factoring any kind of real growth in.

Anyway -- just looking at the effects of compounding inflation 10 years down the line, 11t @ 9% growth annually gets us to $26t M2. We'll have around 16-17M spendable coins at that point (I'll say 16.5M), I think, so we get ~$1.58M/BTC if it meets USD usage (and assuming that usage results in the same price effect).

What really underlines Bitcoin's awesomeness as a savings vehicle comes after that point, though, because inflation will be pretty much gone from BTC at that point. Assuming the USG keeps pumping M2 @ 9% for ANOTHER 10 years after, we get to ~$62t M2. Bitcoin, however, will only inflate to having maybe 18M spendable coins (and at this point, coin losses may actually match target inflation rate). 20 years down the road, then, the number we're referencing becomes ~$3.44M/BTC.

That brings us to 2034, yeah? (yeah.) Anyway, we have another 66 years in this century, so let's just figure the numbers out for the end product. 66 years of M2 inflation @ 9% gets us to 18.2Q (quadrillion, in case that's your first time seeing it! ). Assuming 19M spendable coins (after this point and probably somewhere in this range of time, BTC is deflating due to "coin loss leakage"), we get to ~$958M/BTC. I think, by the end of this century, either BTC goes over $1b/coin or it dies.

[zimmah]

Dont you think mining fees are already quite low

no,

mining fees are pretty reasonable since block rewards are high enough to cover mining expenses.

Once block reward halved another 3 or 4 times or so miners can start to worry about transfer fees. That will be many years from now.

By that time the amount of transactions will be so high that even with a much smaller transfer fee than we currently have the transfer fee total will far outweigh the block reward. And most likely the transfer fees in total would be even more than 50 bitcoins per block.

[teukon]

What would happen to the transaction fee if bitcoin SKYROCKETED

Well, the block reward will skyrocket in real terms, so the cost of processing a transaction fee will also skyrocket (consider how the inclusion of a transaction increases the probability that a block will be orphaned).

This certainly puts upward pressure on transaction fees, but there are good reasons to believe that they will not rise in real terms to as great an extent (consider that many pools process transactions for free today).  Even so, I would expect that fees will rise hugely following a typical period of stubbornness.

Note: This is all under the rather tenuous assumption that Bitcoin remains decentralised.

[Beliathon]

Speaking of skyrocketing...

[bryant.coleman]

Speaking of skyrocketing...

Well... one thing is clear... the Mt Gox effect is no longer able to overshadow the good news flooding in from all the nooks and corners (Li Ka Shing, Branson, Bitpay, Xapo, DISH.etc).

[contantisaluti]

In today's economy , there are around 5 trillion dollars , if you consider all economies.

Even more

Okay , take it as 6.3 trillion , assuming there are all 21m BTC mined.
That will still be 300k , which is much lesser than necessary to cause a problem resulting in need to further divide Bitcoin.

It is unlikely that Bitcoin will ever cross a million $ , but I expect it to definitely hit the 10k range.
People who expect it to reach 1m in a few years are extreme fanatics.

Comparing Bitcoins future growth to the 300x boost it saw ages ago is stupid.
If Satoshi told 2 people about BTC when he first envisioned it and tripled the Bitcoin enthusiasts in a minute , we should not expect that to happen again in a minute.

TLDR; Bitcoin will rise , but even if it becomes as big as USD is now , it will be under 40k$ per Bitcoin (of todays USD value)
We will not need to further divide BTC in a long long time and if we do , we will have far more capable devs waiting to do so.

I think the main problem of BTC is the NO advertising and NO communication of itself. If TVs and newspapers of all the world should launch an insistent and well explained promotional campaign tomorrow, it could reach $100k before next sunday
The world is not aware of BTC, it's still in its ignorance..especially peoples with ridicolous government currencies (so excluding USD, EUR, GBP, JPY, etc. that should be the less interested)

[teukon]

I think the main problem of BTC is the NO advertising and NO communication of itself. If TVs and newspapers of all the world should launch an insistent and well explained promotional campaign tomorrow, it could reach $100k before next sunday

Was this a problem for gold and silver in their early days?

I agree that Bitcoin has had adoption problems in the past.  2009 was a great example of that.  But I maintain that slow adoption is among the least of Bitcoin's problems today.  In fact, I submit that excessive evangelism leading to artificially stimulated adoption is becoming a problem.  A lot of people are being led to believe that Bitcoin is more polished and less risky than it really is.

[zimmah]

it's still better than fiat.

people are let to believe fiat is much safer and more polished than it really is, while in reality it only benefits a few.

[Beliathon]

In today's economy , there are around 5 trillion dollars , if you consider all economies.

Even more

Okay , take it as 6.3 trillion , assuming there are all 21m BTC mined.
That will still be 300k , which is much lesser than necessary to cause a problem resulting in need to further divide Bitcoin.

It is unlikely that Bitcoin will ever cross a million $ , but I expect it to definitely hit the 10k range.
People who expect it to reach 1m in a few years are extreme fanatics.

Comparing Bitcoins future growth to the 300x boost it saw ages ago is stupid.
If Satoshi told 2 people about BTC when he first envisioned it and tripled the Bitcoin enthusiasts in a minute , we should not expect that to happen again in a minute.

TLDR; Bitcoin will rise , but even if it becomes as big as USD is now , it will be under 40k$ per Bitcoin (of todays USD value)
We will not need to further divide BTC in a long long time and if we do , we will have far more capable devs waiting to do so.

The world is not aware of BTC, it's still in its ignorance..especially peoples with ridicolous government currencies (so excluding USD, EUR, GBP, JPY, etc. that should be the less interested)

You're right, but it doesn't matter. You don't need to advertise for something this good. The internet didn't have much advertisement in 1994, yet it caught on just fine.

Go to wikipedia, type "history of the internet" and use edit -> find (ctrl+f) "nearly instant in historical terms". Read that sentence several times until the implications sink in.

The rise of the internet is the story of what happens when a decentralized, organic, open, evolving entity goes up against the ancient clunky model of centralization.

Bitcoin is the same story, accelerated by greed.

[redwhitenblue]

Here is what I mean,

Imagine if 1 satoshi = $1 ..... WHat would happen to the fee, I mean 1 satoshi is smallest fraction of a bitcoin. It would be stupid to buy a $10 meal and the fee being $1-$2

This problem would likely be solved prior to the value of 1 satoshi being $1

I would guess that one of the below solutions would be implemented when the value of one Bitcoin reaches either five or six figures when measured in USD.

1. The most likely solution would be that the Blockchain would be hardforked with a change to the Bitcoin protocol so that one bitcoin is divisible by (probably) 14 digits (however this value, x, could be anything as long as it is greater then 8.

2. The next most likely solution would be to have more off chain transactions with sites like Coinbase. Generally speaking, only larger transactions would be included in the blockchain so that he tx fee would be small compared to the size of funds being transferred.

This presents a number of issues. The primary issue would be this would cause centralization of bitcoins to major players, which is something that Bitcoin is suppose to stop/reverse. Another major issue would be that by the time this would happen the block rewards would likely be substantially lower then they are now (probably either 3.125 or 6.25 BTC plus tx fees per block) and having a lower amount of TX fees could compromise the security of the network as there would be less of an incentive to mine making it easier to execute double spend attacks.

[bryant.coleman]

Today there was a very significant development. The combined Bitcoin mining hash rate hit 100,000,000 GH/s. The exchange rates are not rising proportional to the change in hash rates. That spells trouble for the miners.

[teukon]

Another major issue would be that by the time this would happen the block rewards would likely be substantially lower then they are now (probably either 3.125 or 6.25 BTC plus tx fees per block) and having a lower amount of TX fees could compromise the security of the network as there would be less of an incentive to mine making it easier to execute double spend attacks.

3.125 BTC is more than 10% of the current block reward in bitcoin terms.  If from "skyrocketing" you have in mind a rise of 10-fold or more then difficulty should in fact be higher than it is today.

[Corelianer]

In today's economy , there are around 5 trillion dollars , if you consider all economies.

Even more

Okay , take it as 6.3 trillion , assuming there are all 21m BTC mined.
That will still be 300k , which is much lesser than necessary to cause a problem resulting in need to further divide Bitcoin.

It is unlikely that Bitcoin will ever cross a million $ , but I expect it to definitely hit the 10k range.
People who expect it to reach 1m in a few years are extreme fanatics.

Comparing Bitcoins future growth to the 300x boost it saw ages ago is stupid.
If Satoshi told 2 people about BTC when he first envisioned it and tripled the Bitcoin enthusiasts in a minute , we should not expect that to happen again in a minute.

TLDR; Bitcoin will rise , but even if it becomes as big as USD is now , it will be under 40k$ per Bitcoin (of todays USD value)
We will not need to further divide BTC in a long long time and if we do , we will have far more capable devs waiting to do so.

I think the main problem of BTC is the NO advertising and NO communication of itself. If TVs and newspapers of all the world should launch an insistent and well explained promotional campaign tomorrow, it could reach $100k before next sunday
The world is not aware of BTC, it's still in its ignorance..especially peoples with ridicolous government currencies (so excluding USD, EUR, GBP, JPY, etc. that should be the less interested)

I totally agree. I just bougt me a couple of t-shirts with "In cryptography we trust" and "Starve the banks".

[Dr. Pepper]

The fee has and can always be adjusted and probably will be if the value skyrocketed, but what happens when the opposite happens? The fees are so tiny anyway really.

[Kluge]

Today there was a very significant development. The combined Bitcoin mining hash rate hit 100,000,000 GH/s. The exchange rates are not rising proportional to the change in hash rates. That spells trouble for the miners.

Yeah, but $/hash is decreasing dramatically as ASIC producers continue pushing their prices to something reasonable. WH/hash is decreasing, too. That'd be an interesting graph...

[bryant.coleman]

Yeah, but $/hash is decreasing dramatically as ASIC producers continue pushing their prices to something reasonable. WH/hash is decreasing, too. That'd be an interesting graph...

Agreed. But the initial capital expenditure is only a small part of the overall expenses. What about the electricity charges? As the hash-power increases, the miners will consume more and more electricity.

[lewisg]

There may be a good number of transactions, but I guarantee it's not a significant part of the volume spike and  transaction fee will go up.

[jbreher]

Yeah, but $/hash is decreasing dramatically as ASIC producers continue pushing their prices to something reasonable. WH/hash is decreasing, too. That'd be an interesting graph...

What about the electricity charges?