i thought transaction fees are optional?

[Stephen Gornick]

ETA: worth noting sendmany option can greatly reduce fees for making many insignificant transactions.

Insignificant? I don't claim to fully understand how it works, could you clarify what transactions are insignificant?

The amounts are irrelevant.  This is because bitcoin fees are based on the size of the data that make up the transaction and not the amount of bitcoins spent in the transaction.  

Take the transactions from the Bitcoin Faucet for example.  That is an example of a microtransactions-based service running today.  Those payments are sent out in batches.  The 0.0005 fee is paid per batch so the actual fee for each recipient from the faucet is a fraction of 0.0005 BTC.  Sendmany makes it possible for the fee to be trivial even for microtransactions.

2nd: Make a million payments in one year for instance, and the fees will simply render significant overhead.

Yup -- that scenario is one that Bitcoin, a decentralized ledger system, does not serve.  Though if you have a service that handles those micro transactions internally (denominated in bitcoins or something backed by bitcoins even) and only sends to and receives from the blockchain the deposits and withdrawals for its customers, then you can do that and is something well served by Bitcoin.

[GCInc.]

I was asking for an example.

You would have to think of one yourself, if you dare to think outside the sphere of conventional merchandising. I am implying a value transfer system that could transcend the current use of any currency. I admit it is idealistic. But I think it's useful to let it out that we were disappointed to find out Bitcoin will not be our saviour for that problem.

Why would anyone need to send millions of single tiny transactions in a year? Micro-coin-tumbling?

Like I told, there is a whole new world of applications for that. Only now I know it's off the Bitcoin topic though.

At some time in the future, the only payment miners will receive will come from tx fees

Ok, that solves it (for the side I wouldn't prefer). I'm only learning of the internals, wasn't sure that would ever be the case.

As for insignificant transactions, I'd consider that anything which is less than ~$1 worth of Bitcoins

You realize such consideration is truly arbitrary and in reality there aren't such as insignificant transactions - other than ones for testing. The whole concept of transaction implies that something non-insignificant is moving.

But like you said, zero transaction fee is just a question of policy and not defined by the system. If miners received reward blocks forever then a zero fee system could carry on. Indeed, we'll have to wait for another system to set us free from the cost of transferring value.

Sendmany makes it possible for the fee to be trivial even for microtransactions.

Thanks. Only now do I realize this is technically possible. It certainly is not apparent when one starts to use and even learn some internals of bitcoin.

Though if you have a service that handles those micro transactions internally (denominated in bitcoins or something backed by bitcoins even) and only sends to and receives from the blockchain the deposits and withdrawals for its customers, then you can do that and is something well served by Bitcoin.

Yes, well, it seems Bitcoin at least sets us halfway there for enabling feasible transfer of miniscule value. Being dependent on a second tier system can however be compared to bitcoin being dependent on USD, which is not sustainable, but it seems all that can be done.

... which brings us to my earlier question: How large zero-fee pool would be required to ensure timely (to some degree, and not arbitrary like now) transmittal of zero fee payments?

[Stephen Gornick]

How large zero-fee pool would be required to ensure timely (to some degree, and not arbitrary like now) transmittal of zero fee payments?

It isn't just having a miner that will accept zero-fee that is a factor here.  

The bitcoin software run by the nodes specifically will, by design, refuse to relay these tiny, zero-fee transactions.  So even if there is a miner willing to include them the miner will never know of them as they were never relayed by the peers.  (there is one exception -- if the client doing the spend knows the IP address(es) of miners that will accept these zero-fee transactions the client can be configured to explicitly connect to these miners.)

So let's go back to the very first part of this thread -- the title:
  "i thought transaction fees are optional?"

The correct response is:
  "You thought wrong, sorry."

[Raoul Duke]

So let's go back to the very first part of this thread -- the title:
  "i thought transaction fees are optional?"

The correct response is:
  "You thought wrong, sorry."

Maybe it's time to change the wording on the wiki, etc.?

[Asiketeisc]

If miners received reward blocks forever then a zero fee system could carry on.

That would cause inflation, effectively costing you money anyway.

And how would you prevent spam?

[GCInc.]

That would cause inflation, effectively costing you money anyway.
And how would you prevent spam?

Valid questions. I was just clarifying where the ambiguity was, and not attempting to question Bitcoin's ingenious mechanisms that are being time proven as we talk.

Maybe an electronic value transfer system that carries no cost is impossible, not the least because of those two problems. At least, we can not conjure such up by throwing a few words around at our leisure here.