Are transaction fees expected to rise over time?

[Este Nuno]

In terms of USD value are transaction fees going to get more expensive over time? At ~13 cents USD they're pretty high for transactions under $10. Now this doesn't affect me personally. But we see a lot of talk about bitcoin helping out the unbanked, and bringing bitcoin to Africa and such, and higher transaction fees are really going to limit bitcoin's potential in certain markets.

Do you think at some point we'll see miners voluntarily reduce transaction fees? Or perhaps the opposite, more and more miners not including low fee transactions thus driving the price up.

As the market is now, are we heading towards increases? Or do you think the transaction fee issue is one that will be resolved on it's own? I think some people might underestimate how much of a limiting factor it could be.

[Beliathon]

Stop thinking in terms of USD. Soon the USD will have no value to speak of. Thinking in terms of BTC will be far more fruitful.

[Beyonce]

The fee can and will be adjusted accordingly.

[jambola2]

Stop thinking in terms of USD. Soon the USD will have no value to speak of. Thinking in terms of BTC will be far more fruitful.

But the utility of Bitcoin will continue increasing.

Currently , if you decide to buy a mug , you will pay transaction fees of around 2.5%
What happens when the cost of that mug in Bitcoin is lesser , but the transaction fees are the same ?

At the current rate , Bitcoin may exceed Paypal in transaction fees for microtransactions. That would go directly against what Bitcoin is for.

So , rephrasing his question against your nitpicking , "Will the value of transaction fees be expected to increase over time in comparison to the goods we buy with them ?"

[RepublicSpace]

Miners are overwhelmingly paid by the automatic block reward, and not from transaction fees. This is a form of inflation in the bitcoin economy.

[jambola2]

In terms of USD value are transaction fees going to get more expensive over time? At ~13 cents USD they're pretty high for transactions under $10. Now this doesn't affect me personally. But we see a lot of talk about bitcoin helping out the unbanked, and bringing bitcoin to Africa and such, and higher transaction fees are really going to limit bitcoin's potential in certain markets.

Do you think at some point we'll see miners voluntarily reduce transaction fees? Or perhaps the opposite, more and more miners not including low fee transactions thus driving the price up.

As the market is now, are we heading towards increases? Or do you think the transaction fee issue is one that will be resolved on it's own? I think some people might underestimate how much of a limiting factor it could be.

Sooner or later , people will stop offering such high fees and miners will be forced to accept these lower fees.
This may not happen in the short term , but when the fees exceed around 25c , it will hit a hard cap and fees will definitely reduce.

[TheGame]

I've wondered the same thing about the fees. To send very small amounts it's not very practical. Maybe something will have to be done about this.

[jambola2]

Miners are overwhelmingly paid by the automatic block reward, and not from transaction fees. This is a form of inflation in the bitcoin economy.

What do you mean by inflation ?

The block reward continuously halves to prevent inflation. The fees are in place to ensure that the incentive to maintain the network remains even after the block reward is negligible.

[ticoti]

i think fees should be even lower
transaction speed is aproblem that needs to be solved

[jbrnt]

Transaction fees are utilmately decided by the pools and miners. They can choose to accept or reject transactions with lower than standard fees. We have little say in this, but we can try to force them to accept lowers fees if we all use a lower fee. If bitcoin price continue to rise, we can expect them to accept 0.00001 as standard fee.

[Este Nuno]

Stop thinking in terms of USD. Soon the USD will have no value to speak of. Thinking in terms of BTC will be far more fruitful.

That's some wild speculation. Even so, transaction fees will have to be compared to something. Whether that's gold, rice, or litecoin, bitcoin will always have a value. And a transaction fee will also have a corresponding value. The USD part isn't important here at all.

The fee can and will be adjusted accordingly.

The fee can be anything miners want it to be, but the question is what will it be and when. And who is going to take steps to ensure that it doesn't price out 2 billion or more people.

[Este Nuno]

In terms of USD value are transaction fees going to get more expensive over time? At ~13 cents USD they're pretty high for transactions under $10. Now this doesn't affect me personally. But we see a lot of talk about bitcoin helping out the unbanked, and bringing bitcoin to Africa and such, and higher transaction fees are really going to limit bitcoin's potential in certain markets.

Do you think at some point we'll see miners voluntarily reduce transaction fees? Or perhaps the opposite, more and more miners not including low fee transactions thus driving the price up.

As the market is now, are we heading towards increases? Or do you think the transaction fee issue is one that will be resolved on it's own? I think some people might underestimate how much of a limiting factor it could be.

Sooner or later , people will stop offering such high fees and miners will be forced to accept these lower fees.
This may not happen in the short term , but when the fees exceed around 25c , it will hit a hard cap and fees will definitely reduce.

25c fees would be a disaster really. Bitcoin will go on and people will still invest and use it for large purchases when it's convenient but it will seriously lose a lot of competitive edge.

[jambola2]

As I said before , miners will reduce fees when they notice that lesser people are offering those fees.
The propogation of a transaction should be treated like any service , whose price is decided by demand.

If there are too high fees , with nobody willing to accept the fees , they will reduce over time as miners realise that they would earn more with more transactions.

[cuddaloreappu]

many people do not factor in the number of transactions per second which is a key variable in this discussion, today bitcoin has it capped to 7 but in future that limit could be removed and if there are 5000 tps like visa and mastercard, then even very little transaction fees can support the miners...

[Este Nuno]

As I said before , miners will reduce fees when they notice that lesser people are offering those fees.
The propogation of a transaction should be treated like any service , whose price is decided by demand.

If there are too high fees , with nobody willing to accept the fees , they will reduce over time as miners realise that they would earn more with more transactions.

At this point though will most miners even notice, or care? The transaction fees are minimal compared to the block reward. I could see it being ignored even if transaction volume was dropping.

The problem is that miners might not even know what they are potentially missing. For example if miners agreed to cap fees at one penny and that helped spread adoption worldwide(and thus raising the price of bitcoin) they might actually make more money. But if miners are only focused on the short term optimization of profits via supply and demand with transaction fees then they might miss a long term opportunity to grow bitcoin.

Now is the time to forgo minor profits for potential growth. The block reward is still very large and nickeling and diming people in the early stages of bitcoin can't possibly have more benefit than maximising the chance for people around the world to adopt bitcoin. And the only way it's going to happen is if miners decide as a group that it's in their best interest to charge less fees.

Lowering transaction fees doesn't automatically guarantee that bitcoin is going to be adopted by groups that are resistant to using bitcoin because of the standard transaction fee. But we do know that for certain people and for certain sizes of transactions the fees are a barrier and they are a problem that can be solved. Removing the barrier is just one step in increasing the probability that more people can use bitcoin.

Of course people can try to send their transactions with any fee they want but in the current market very few miners will bother processing those transactions which makes bitcoin not worth using for those attempting to circumvent fees.

[Ilsk]

Fees are useful to prevent spam on the blockchain. Without fees, or with very low fees, blockchain would be too big for most people. 

[Este Nuno]

Fees are useful to prevent spam on the blockchain. Without fees, or with very low fees, blockchain would be too big for most people. 

I think a fraction of a cent is probably enough to deter spammers from sending too much dust.

As far as the blockchain goes, it's already quite big and at this point most people are going to be better served using Electrum for a number of reasons. Of course the community should still try to have as many full nodes as they can going, but the average user is not going to be running a full node.

[unexecuted]

Transaction fees will have to go up. But honestly, current transaction fees are very high already, much higher than credit cards--but they are hidden in the block rewards and shared via inflation.

[unexecuted]

Imagine that the US Mint printed lots of extra cash and gave it to VISA in return for visa charging no fees.
So if the transaction fees replace block rewards, the difference may be more about marketing than economics (though who actually pays for the network changes too).

[Foxpup]

In terms of USD value are transaction fees all products and services everywhere going to get more expensive over time?

FTFY. The answer is yes, incidentally.