The answer to this question could be a big deal.

[Blockchain_IO]

I'm new to the forum, but I wanted to ask a question, that the answer to, may be a big deal. I understand transaction fees and why they are used. I also understand that they are at present less than 1% of each block reward. Can the Bitcoin protocol be updated in such a way to allow transaction fees in other than btc? If miners could accept layered protocol assets (like counterparty/mastercoin assets) as transaction fees, then that would add an incentive to mine and secure the network and allow a whole host of new asset types that represent very small values.

I've been messing around with CounterParty for the last couple of days. What I envision is very small value asset, say a token backed by 1 milligram of gold (~$0.04 in today's value), for this example call it MILLIGOLD. It would be divisible. Instead of paying the transaction fee in btc, which would double the cost to send that one token, you could include a fee, of say 0.1 MILLIGOLD. If enough people trade that asset in each block, the reward could be substantial.

In not extremely technical, but this should be possible with small changes to the Bitcoin protocol itself, right? I think miner incentives will be of increasing importance as we approach the 2016 reduction in reward.

Cheers.

[franky1]

if the fee was 1 miligram of gold $0.04.... in 10 years gold price would make that miligram worth maybe $0.06

but the satoshi dust tx fee. if hoarded for ten years would be worth alot more

(imagine when bitcoins-litecoins were worth only a couple pennies just 3-5 years ago... now worth $640-$8 respectively)

plus the delivery cost to peoples houses for a miligram of gold exceeds the value. so im guessing you want to run a gold hoard business selling receipts of miligrams, where people trade these receipts not the physical gold... next question would be the trust that you would be around in 10 years and no sipping a starbucks on a beach with mark karpeles.

the reason for bitcoins existence is clear.. no middle men required (even if noobs end up using them because they are lazy or dont understand bitcoins true features)

[Blockchain_IO]

if the fee was 1 miligram of gold $0.04.... in 10 years gold price would make that miligram worth maybe $0.06

but the satoshi dust tx fee. if hoarded for ten years would be worth alot more

True, but... the incentive structure for miners is very complex, and as the block reward halves again and again, the transaction fees will have to go up respectively to compensate and keep the miners mining. That makes micro transactions less and less likely as time goes on. By adding an option to take fees in another asset, btc transaction fees can stay low. The transaction fee I proposed was a 0.1 milligram gold fee ~$0.004.

plus the delivery cost to peoples houses for a miligram of gold exceeds the value. so im guessing you want to run a gold hoard business selling receipts of miligrams, where people trade these receipts not the physical gold... next question would be the trust that you would be around in 10 years and no sipping a starbucks on a beach with mark karpeles.

the reason for bitcoins existence is clear.. no middle men required (even if noobs end up using them because they are lazy or dont understand bitcoins true features)

Redemption would be an problem to solve for the issuer and add to the natural market forces (perhaps a minimum limit, like 1 gram), but that doesn't negate all the added incentives. There is already a gold backed asset on the CounterParty platform, I don't have to start one.

(Imagine BitPay or some future Bitcoin giant, offering a dividend yielding asset share, and all the incentives that that would bring to the mining game. Now add that to tree chains, where smaller miners could mine specific transaction types in each block to target an asset. This is not an elementary question.)

[Eotnak]

if the fee was 1 miligram of gold $0.04.... in 10 years gold price would make that miligram worth maybe $0.06

but the satoshi dust tx fee. if hoarded for ten years would be worth alot more

True, but... the incentive structure for miners is very complex, and as the block reward halves again and again, the transaction fees will have to go up respectively to compensate and keep the miners mining. That makes micro transactions less and less likely as time goes on. By adding an option to take fees in another asset, btc transaction fees can stay low. The transaction fee I proposed was a 0.1 milligram gold fee ~$0.004.

plus the delivery cost to peoples houses for a miligram of gold exceeds the value. so im guessing you want to run a gold hoard business selling receipts of miligrams, where people trade these receipts not the physical gold... next question would be the trust that you would be around in 10 years and no sipping a starbucks on a beach with mark karpeles.

the reason for bitcoins existence is clear.. no middle men required (even if noobs end up using them because they are lazy or dont understand bitcoins true features)

Redemption would be an problem to solve for the issuer and add to the natural market forces (perhaps a minimum limit, like 1 gram), but that doesn't negate all the added incentives. There is already a gold backed asset on the CounterParty platform, I don't have to start one.

(Imagine BitPay or some future Bitcoin giant, offering a dividend yielding asset share, and all the incentives that that would bring to the mining game. Now add that to tree chains, where smaller miners could mine specific transaction types in each block to target an asset. This is not an elementary question.)

and what has history shown us so far, have the fees gone up or have they in fact gone down?