It costs $0.09 cents to send $0.24 cents of Bitcoin? Really?

[itsAj]

Sorry but I think the OP has a point. I think the fees should be proportionate to the money being transferred maybe multiplied by the time to confirm. I'm not a mathematician but there must be someone to workout a formulae.

The fees should be proportionate to the amount of work that it takes to confirm a transaction. Generally speaking it does not take any more work to confirm a 10,000 BTC transaction then it takes to confirm a .005 BTC transaction (assuming the same number of inputs and outputs), so why should the user pay more if the miners are doing the same amount of work?

This is exactly true. There is no reason to pay the miners more just because you are transacting a large amount of money. It is also not fair to the miners if they are paid less then the market rate for smaller transactions. If this kind of system were to be implemented then it would be very difficult to get smaller transactions confirmed and small transactions would be given lower priority by the miners.

[bitjoint]

It costs $0.09 cents to send $0.24 cents of Bitcoin?  Really?

And $0.00 to move BTC200k??? 

http://www.coindesk.com/194993-btc-transaction-147m-mystery-and-speculation/

[Nikinger]

Why not set the fees to 0.00001 BTC (1000 Satoshis) instead of 0.0002 (20000 Satoshis)?
Had to wait times up to some hours but it confirmed mostly. If the amounts are that small, then it's likely not too important to confirm quickly.

[lucaspm98]

You can adjust it to any amount. Anyways, that's still cheaper than any other money transfer method out there!

[Emperion]

Hi -

Tried to send $0.24 worth of bitcoin and this pops up:


https://lh4.googleusercontent.com/-VjHB22LKq_E/U_ErypA9CQI/AAAAAAAAQlg/chDa1jLrhaw/s649-no/lolaz.jpg

Is this what they mean when they say Bitcoin can never be used for micro transactions?   

Is this one of the 10 million things the Bitcoin dev team should have fixed 12 months ago, but has slated for "some time in the next 5 years" instead ?

Meanwhile the entire financial industry sees Bitcoin as having major flaws and never incorporates it.

And we never go ot the moon, because a bunch of developers have decided "we dont need that fixed right now.  we'll do it later" ?

Or is this something else?

-B-

Hopefully this will change in the future, if Bitcoin's value increases and the transaction fee remains the same, it could become more costly to send micro transactions like this.

[itsAj]

It costs $0.09 cents to send $0.24 cents of Bitcoin?  Really?

And $0.00 to move BTC200k??? 

http://www.coindesk.com/194993-btc-transaction-147m-mystery-and-speculation/

This was likely because the coins had not been moved in such a long time. The longer it has been since the last time a coin has been spent, the higher priority a TX that contains the subject coins. The TX was also very small in terms of the size on the blockchain.

[freedomno1]

It costs $0.09 cents to send $0.24 cents of Bitcoin?  Really?

And $0.00 to move BTC200k??? 

http://www.coindesk.com/194993-btc-transaction-147m-mystery-and-speculation/

This was likely because the coins had not been moved in such a long time. The longer it has been since the last time a coin has been spent, the higher priority a TX that contains the subject coins. The TX was also very small in terms of the size on the blockchain.

No large amounts of Bitcoins are considered High priority transactions
While their is a relation to coin-age these type of transactions are large and significant so there is no need to pay a transaction fee.

[betterangels]

you can try electrum and set a 0 fee
but it may take some time to get received
 

[itsAj]

It costs $0.09 cents to send $0.24 cents of Bitcoin?  Really?

And $0.00 to move BTC200k??? 

http://www.coindesk.com/194993-btc-transaction-147m-mystery-and-speculation/

This was likely because the coins had not been moved in such a long time. The longer it has been since the last time a coin has been spent, the higher priority a TX that contains the subject coins. The TX was also very small in terms of the size on the blockchain.

No large amounts of Bitcoins are considered High priority transactions
While their is a relation to coin-age these type of transactions are large and significant so there is no need to pay a transaction fee.

I am not saying they are high priority transactions today, I am saying that if the TX fee was based on the amount being transferred then large transactions would receive higher priority because the miners would receive a higher fee for the transaction.

It is important to note that the individual miners (or pools when a pool finds a block) are the ones who set the policy as to which TXs are confirmed in a found block.

[wasserman99]

It costs $0.09 cents to send $0.24 cents of Bitcoin?  Really?

And $0.00 to move BTC200k??? 

http://www.coindesk.com/194993-btc-transaction-147m-mystery-and-speculation/

This was likely because the coins had not been moved in such a long time. The longer it has been since the last time a coin has been spent, the higher priority a TX that contains the subject coins. The TX was also very small in terms of the size on the blockchain.

If the size of the TX (in terms of space on the blockchain) is small enough then there is no reason for the miners to force the sender to pay a fee. Also if the sender was somehow associated with a mining pool then they can simply have the pool confirm the TX when the pool finds it's next block.

[scottsecret]

As time goes on and BTC is no longer plagued by 10% inflation to pay for security, we will see transaction fees need to rise to maintain a reasonable level of security.

[itsAj]

As time goes on and BTC is no longer plagued by 10% inflation to pay for security, we will see transaction fees need to rise to maintain a reasonable level of security.

The total TX fees will need to rise, not the TX fee per transaction. When more people use bitcoin more often, the number of transactions per second will rise, causing more overall TX fees.

[CozyLife]

Set your fees lower. On a side note, why in the world are you sending 0.24¢ to begin with?

[ariyaromadhona]

So if i send 5 BTC it cost 2 BTC? nuff said 
great Logic man 

[RaheemRaj]

So if i send 5 BTC it cost 2 BTC? nuff said 
great Logic man 

NO thats not the point the point is that you cant send small amounts because the fee will be more than you are sending.

[StevenS]

Bitcoin payment isn't really viable for restaurant type establishment.

I disagree. A while ago, we took my brother to Ocean Blue Sushi. I forgot what the dollar amount was, but with tip it came to 136.2 mBTC. The Mycelium mobile wallet used the default fee of 0.1 mBTC, which is less than 0.1%. My payment was confirmed in a few seconds by the network, which was reported to the app (Coinbase?) on the restaurant's tablet.

[Chopperman]

Bitcoin payment isn't really viable for restaurant type establishment.

I disagree. A while ago, we took my brother to Ocean Blue Sushi. I forgot what the dollar amount was, but with tip it came to 136.2 mBTC. The Mycelium mobile wallet used the default fee of 0.1 mBTC, which is less than 0.1%. My payment was confirmed in a few seconds by the network, which was reported to the app (Coinbase?) on the restaurant's tablet.

So instead of the restaurant paying about 10c to process your credit card (and you getting about 1c in Credit Card points), you paid about 5c on top of the bill.  Via coinbase, they pay 0% fees to sell the BitCoin to them instantly for $$ (first $1M) 
No wonder businesses are interested, 0% chance of chargeback, and the customer pays the fees.     Unless the businesses gives you a discount for BitCoin purchases, it's not to your benefit though.

[Cryddit]

This (transaction fee based on storage space/transmission cost of the tx) is a flaw in the Bitcoin protocol. 

We pay transaction fees to miners (at least in theory) to secure the network.  But it is not the storage space or transmission cost that is what makes the network require security. 

It seemed to make sense under the initial using-spare-compute-power model that the expense of securing the network was largely a bandwidth and storage expense borne in common by everybody - but that is not how it has turned out.  The expense of securing the network is in hardware for hashing farms and in power bills.  bandwidh and storage expense is not the major expense of providing what we're paying for, and charging people for bandwidth and storage is an inaccurate allocation of resources.  The people who secure the blockchain - ie, the miners - are paying the major expenses associated with security themselves when they buy the hardware and pay their power bills. 

What we are trying to secure is the value on the blockchain - and therefore IMO the transaction fees to secure it ought to be based on the value transferred. 

We need to move to an accurate economic model because an inaccurate one (such as we have now) cannot endure in competition with an accurate one.

[StevenS]

So instead of the restaurant paying about 10c to process your credit card (and you getting about 1c in Credit Card points), you paid about 5c on top of the bill.  Via coinbase, they pay 0% fees to sell the BitCoin to them instantly for $$ (first $1M) 
No wonder businesses are interested, 0% chance of chargeback, and the customer pays the fees.     Unless the businesses gives you a discount for BitCoin purchases, it's not to your benefit though.

Point taken.

Although these small amounts are really just noise compared to the 15% tip I left.

[itsAj]

Bitcoin payment isn't really viable for restaurant type establishment.

I disagree. A while ago, we took my brother to Ocean Blue Sushi. I forgot what the dollar amount was, but with tip it came to 136.2 mBTC. The Mycelium mobile wallet used the default fee of 0.1 mBTC, which is less than 0.1%. My payment was confirmed in a few seconds by the network, which was reported to the app (Coinbase?) on the restaurant's tablet.

So instead of the restaurant paying about 10c to process your credit card (and you getting about 1c in Credit Card points), you paid about 5c on top of the bill.  Via coinbase, they pay 0% fees to sell the BitCoin to them instantly for $$ (first $1M)  
No wonder businesses are interested, 0% chance of chargeback, and the customer pays the fees.     Unless the businesses gives you a discount for BitCoin purchases, it's not to your benefit though.

The costs associated with accepting credit cards are much higher then that. As a general rule the actual cost of processing a credit card transaction (before charge-backs are taken into consideration) is roughly 3%. If you have good credit then you can likely get 1% back from cash back and/or rewards points from your credit card company. This makes it so you essentially pay at the very least 2% higher price because a merchant accepts credit cards. I don't think that many merchants process more then $1 million in bitcoin transactions so accepting bitcoin is more or less free for them.