Bitcoin Forum
December 10, 2016, 06:46:50 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2] 3 4 5 »  All
  Print  
Author Topic: Bitcoin: low transaction fees, I don't think so  (Read 6663 times)
fergalish
Sr. Member
****
Offline Offline

Activity: 440


View Profile
June 15, 2012, 09:37:57 PM
 #21

So the most popular response is: if you don't like it, do it yourself. Maybe it's just me, but that response just that seems so... childish. [sarcasm]Oh yeah, and unpredictable[/sarcasm]. Reminds me of "It MY ball, so if you don't play the way I say, I'm taking my ball back." What, do I have to learn how to do everything? Ever heard of specialisation of labour? I've already chosen my career and it wasn't software dev. Does that mean I have to be a slave to the software devs, or is there not some better method? Is the bitcoin revolution really going to just make *everyone* selfish, as is seems so far, or can we not hope for better?

Many people in this forum complain of government protection of the banking monopoly allowing the banks to charge outrageous fees with impunity.  Well look here - all hail the free market - where the fees are just as high.
1481395610
Hero Member
*
Offline Offline

Posts: 1481395610

View Profile Personal Message (Offline)

Ignore
1481395610
Reply with quote  #2

1481395610
Report to moderator
1481395610
Hero Member
*
Offline Offline

Posts: 1481395610

View Profile Personal Message (Offline)

Ignore
1481395610
Reply with quote  #2

1481395610
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481395610
Hero Member
*
Offline Offline

Posts: 1481395610

View Profile Personal Message (Offline)

Ignore
1481395610
Reply with quote  #2

1481395610
Report to moderator
1481395610
Hero Member
*
Offline Offline

Posts: 1481395610

View Profile Personal Message (Offline)

Ignore
1481395610
Reply with quote  #2

1481395610
Report to moderator
1481395610
Hero Member
*
Offline Offline

Posts: 1481395610

View Profile Personal Message (Offline)

Ignore
1481395610
Reply with quote  #2

1481395610
Report to moderator
cst
Member
**
Offline Offline

Activity: 115

The Cosmos doesn't care about you.


View Profile
June 15, 2012, 10:03:49 PM
 #22


Really, guys, what's the point of a revolutionary new currency if nothing really changes? We'll just get a different cartel of geek bankers? I was hoping for better.


You still don't get it. Transaction fees != fees for using services (btc mixing, exchange, stock ex etc..)
proudhon
Legendary
*
Offline Offline

Activity: 1148



View Profile
June 15, 2012, 10:08:58 PM
 #23


Really, guys, what's the point of a revolutionary new currency if nothing really changes? We'll just get a different cartel of geek bankers? I was hoping for better.


You still don't get it. Transaction fees != fees for using services (btc mixing, exchange, stock ex etc..)

That's true.  But good luck getting around fees for using services to use bitcoin.  It's not that easy.  For most people, they're going to transfer money from their bank to a service then to a bitcoin exchange.  Then they've got to buy bitcoins.  If they want traditional back, then they've got to do the same thing the other way.  And the service fees to use bitcoin in this way are probably higher than the transaction fees in the traditional system.  Bitcoin to bitcoin transactions are low cost.  But, the bitcoin economy isn't isolated, and as a practical matter most everyone will have to pay service fees to use bitcoin, and in so doing will probably pay more to use bitcoin than if they had used a traditional currency.
Grix
Hero Member
*****
Offline Offline

Activity: 536



View Profile WWW
June 15, 2012, 10:11:19 PM
 #24

The day bitcoin is truly mature is when there are enough services accepting them so that you would never have to convert to and from official currencies. Paypal sucks in many ways, but I love the fact that I can sell one thing for paypal and then spend it in various places without ever having to meddle with bank accounts and credit cards. When bitcoin is there, third party fees are irrelevant, because you wouldn't have to use any.

Buy High Powered Lasers from BitLasers.com
BTC: 1Fahk2aa4NS4Qds4VDAL4mpNArDEdV2K5K
mccorvic
Hero Member
*****
Offline Offline

Activity: 518



View Profile
June 15, 2012, 10:15:01 PM
 #25

 dollar to dollar transactions low cost.  But, the dollar economy isn't isolated, and as a practical matter most everyone will have to pay service fees to use dollar

FTFY

And saying that people will "probably" or "maybe" pay more fees != will pay more.

I feel that you're stating one position (bitcoins have high fees) and then providing arguments for a totally different position (bitcoin services cost too much)

You might have something to discuss on the latter, but you're not doin' a good job.

Offering Video/Audio Editing Services since 2011 - https://bitcointalk.org/index.php?topic=77932.0
asdf
Hero Member
*****
Offline Offline

Activity: 527


View Profile
June 15, 2012, 10:28:35 PM
 #26

If bitcoin is what it's cracked up to be ( and it probably is ) then soon we won't be using fiat at all. Goods and services for fiat will move to bitcoin one by one. Every time a new business accepts bitcoins, bitcoins become more attractive, more business are encouraged to accept bitcoins.

Once this happens, all transactions will be bitcon transactions with 1/2 cent fees. Services converting between fiat will be redundant.
jim618
Legendary
*
Offline Offline

Activity: 1708



View Profile WWW
June 15, 2012, 10:32:33 PM
 #27

Bitcoin is still quite a small market (in terms of the user base) - it is probably only the size of a small (European) town of users at the moment. This makes fees higher than they will be in the future when bitcoin is larger.


I was doing my monthly accounts today and also looking at the number of MultiBit downloads. MultiBit will always be free but I worked out how much it would actually cost per user per month if it were to "wash its face" on purely commercial terms. By this I mean generate enough cash to cover somebody's living costs.  The cost breakdown gives an idea of where all these services get their fee percentages from.

Here are the numbers:
Say I need euro1000 a month to pay my bills. Europeans have a term for this - 'Euromillista'. It is a living but not a terribly glamourous one.

At the moment there are somewhere around 2500 downloads of MultiBit. Let's pretend every one of those downloads is an active user. If it was a commercially run subscription service you would need, net, 40 cents per user per month to total euro1000 per month. Gross - before tax, running costs etc - you probably need 1 euro per user per month.

You can see how a commercial organisation starts having to charge 1% of transaction volume to raise that amount.

Fortunately, if and when Bitcoin grows in terms of users, I would expect the rates people need to charge to go down. A website serving 1000 downloads a day does not cost ten times one that serves 100 a day.

MultiBit HD   Lightweight desktop client.                    Bitcoin Solutions Ltd   Bespoke software. Consultancy.
Portnoy
Legendary
*
Offline Offline

Activity: 1820

My money; Our Bitcoin.


View Profile
June 15, 2012, 10:38:36 PM
 #28


Really, guys, what's the point of a revolutionary new currency if nothing really changes? We'll just get a different cartel of geek bankers? I was hoping for better.


You still don't get it. Transaction fees != fees for using services (btc mixing, exchange, stock ex etc..)

He clearly isn't talking about transaction fees. A lot of you need to go back and read what he actually is talking about.

He makes some good points. I agree that sombunall ( 'some but not all' ) new Bitcoin businesses are missing a great
opportunity by seeming to go after the quick buck rather than having a more long term vision which would help not
only their own business but Bitcoin as a whole.  

I stated a similar view when I saw how much money some people were asking for their music on the coindl site.  

What is the incentive for someone to buy something with this weird bitcoin stuff on some dodgy
and ugly(imo) website if they can get something just as good, or better, for the same price at itunes?  

A lot of newbie Bitcoiner merchants seemingly can't see how they may make more money by selling a song
hundreds of times for nickels and dimes rather than a few songs for a $1.  

Bitcoin is perfect for microtransactions because all the profit doesn't get eaten up in paypal or CC fees...
and everyone here no doubt knows of the other advantages for consumers and merchants.

A lot of people still don't get that average people don't give a crap about the advanced crypto tech
or egalitarian philosophy of bitcoin, but if they can save a significant amount of money then they
surely would consider using it.


Buy Bitcoin from CoinbaseXapo
Faucets & Earn Bitcoin Sites: FreeBitco.in; BitsForClicks; Moonbit
proudhon
Legendary
*
Offline Offline

Activity: 1148



View Profile
June 15, 2012, 10:43:18 PM
 #29

 dollar to dollar transactions low cost.  But, the dollar economy isn't isolated, and as a practical matter most everyone will have to pay service fees to use dollar

FTFY

And saying that people will "probably" or "maybe" pay more fees != will pay more.

I feel that you're stating one position (bitcoins have high fees) and then providing arguments for a totally different position (bitcoin services cost too much)

You might have something to discuss on the latter, but you're not doin' a good job.

You're right.  I'm suggesting that the fees to use bitcoin are more because you have to pay the service fees for traditional currency services plus service fees demanded by bitcoin exchanges.
repentance
Hero Member
*****
Offline Offline

Activity: 840


View Profile
June 15, 2012, 11:00:11 PM
 #30


A lot of people still don't get that average people don't give a crap about the advanced crypto tech
or egalitarian philosophy of bitcoin, but if they can save a significant amount of money then they
surely would consider using it.



It's a combination of cost and convenience.  $4 per month gets me unlimited transactions on my bank account, I can transfer small amounts, and the charge for overseas transactions is trivial (I used my debit Mastercard to pay Amazon $27 last month and my bank charged me a whole 6 cents for making an international transaction).  I'm willing to pay $4 per month for that level of convenience.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
proudhon
Legendary
*
Offline Offline

Activity: 1148



View Profile
June 15, 2012, 11:06:14 PM
 #31


A lot of people still don't get that average people don't give a crap about the advanced crypto tech
or egalitarian philosophy of bitcoin, but if they can save a significant amount of money then they
surely would consider using it.



It's a combination of cost and convenience.  $4 per month gets me unlimited transactions on my bank account, I can transfer small amounts, and the charge for overseas transactions is trivial (I used my debit Mastercard to pay Amazon $27 last month and my bank charged me a whole 6 cents for making an international transaction).  I'm willing to pay $4 per month for that level of convenience.

Bingo.  Getting in and out of bitcoin is actually comparatively really expensive, I think.
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
June 15, 2012, 11:50:51 PM
 #32

don't forget that you're dealing in a currency whose price is going UP.
evoorhees
Legendary
*
Offline Offline

Activity: 994


Democracy is the original 51% attack


View Profile
June 16, 2012, 12:49:06 AM
 #33

[rant warning]

Well, everywhere you see bitcoin promoted or advertised, they'll give you the selling points - rapid transactions (hours instead of days), pseudonymous, secure, inflation-proof, and, not least, near-zero transaction fees.

This last, the near-zero fees, might be true of the protocol, but it is absolutely not true for all the services that have sprung up.  There are, to my knowledge, very few services that offer less than 0.5% fee, most would be around 2-3% - roughly a credit card transaction fee.

What got me started on this was TorWallet's announcement of a mixing service https://bitcointalk.org/index.php?topic=87387.0.  Now, that seems like a wonderful service, but it charges 3% for mixing your coins, while a similar competing service, BitcoinFog, charges 2%.  Let's think about that.  BitcoinFog says he gets "thousands of bitcoins per day" moving through his service (see above thread, msg 17).  2% of thousands is, let's say, 50 bitcoins per day or about $300 per day, or $9000 per month.  Now that is way more than anything you might need to run the server.  A low-cost server might be $10 per month, a high-end might be, what, $50 per month?  So, assuming a high-end server (BTC 0.2 per day) handling 3000 bitcoins per day and an admin costing BTC 4 per day on average, a reasonable fee might be 0.2/3000 ~ 0.005% for server costs, 4/3000 ~ 0.1% for admin.

Now you might well say, STFU, go do your own.  Well, I would.  But let me tell you another story.  Where I live, the govt built a nice new bridge over the river.  It cost a lot of money, so there was a toll to go over it.  Now, 30 years or so later, the bridge has gathered enough tolls to be fully paid off many many times over, but the toll keeps getting more and more expensive.  I realise that there are maintenance costs, but they'd be far less than the tolls.

Same with bitcoin services - the devs have to be paid for the initial investment.  But if that were all, then you'd expect the fee for a service to reduce over time, and to reduce as more people use the service.  That hasn't happened with any bitcoin service that I'm aware of yet, leading me to think that service ops just want to milk the pundits as much as possible.

So - is it possible to use bitcoins with "near-zero" fees?  I don't think so.

[/rant]

Okay Fergalish, we need to have a talk.

You seem to be upset that people who provide you with services charge a fee and retain profit from that fee. Tell me, what is it you do for work? Are you charging your employer anything more than the cost of your food and shelter? If so, you are profiting from your employer in the same way these service providers (such as the Tor mixing service) are doing. Complaining about it is hypocritical. Profit is not bad, it is good. I want there to be more profit in Bitcoin... I hope tomorrow there are twice as many Bitcoin services earning profit.

Now, if you're simply upset because bitcoin is promoted as "without fee" then you are misunderstanding how this works. Bitcoin itself, as a payment system peer-to-peer has no fee (or the very tiny voluntary fee). You can send money without fee right now, go give it a try. However, if you want MORE services than simple money transfer (like coin washing, for example), then you'll be asked by the provider to pay for it.

Any value-added service above and beyond the core money transfer system of Bitcoin is going to require payment (costs + profit). If you find a service provider's fee to be too high, then don't use them. Simple simple!

fergalish
Sr. Member
****
Offline Offline

Activity: 440


View Profile
June 16, 2012, 08:56:40 AM
 #34

You still don't get it. Transaction fees != fees for using services (btc mixing, exchange, stock ex etc..)
He clearly isn't talking about transaction fees. A lot of you need to go back and read what he actually is talking about.
Ahhhhhh, thank you.

You're right.  I'm suggesting that the fees to use bitcoin are more because you have to pay the service fees for traditional currency services plus service fees demanded by bitcoin exchanges.
So, Proudhon, and others, argue that the service fees are, in part, due to transferring wealth in and out of bitcoin-dom (e.g. €1 SEPA transfer etc).  If that were the case, then (and I choose MtGox only as a representative example) MtGox would have smaller fees for changing a USD MtGox balance into a BTC MtGox balance - no external bank transactions necessary.  But the fee is 1.2%.  Is 1.2% of some 50,000 bitcoins per day a reasonalbe amount?  Or, again only a representative example, look at TorWallet.  It exists only in bitcoin-dom with no external bank involvement.  Nobody has refuted my estimate for server and admin costs which would be much smaller than the actual fee.

Therefore, Proudhon and others, I reject the claim that bitcoin service fees are related to moving money in and out of the bitcoin economy.  If that were so, then, not only would TorWallet have lower fees (or I've grossly underestimated their costs), but also asdf's hypothesis will come to pass, but I'm not so hopeful:
Once this happens, all transactions will be bitcon transactions with 1/2 cent fees.


Are you charging your employer anything more than the cost of your food and shelter? If so, you are profiting from your employer in the same way these service providers (such as the Tor mixing service) are doing.
You're oversimplifying.  It's not a black-and-white situation.  If my food and shelter costs were $1000 per month, then it's not like charging $1500 or $2000 is grossly unreasonable.  But suppose I were one of the usual cronies milking the system for what it's worth - a doctor, a lawyer, a politicial, a banker, etc.  And I ask for $10000 per day (think about bankers with $5M yearly bonuses, on top of their salary), is that still reasonable?  Is it reasonable to insist on being paid an enormous amount just because people are willing to pay?  Does it never become "greed"?

A lot of newbie Bitcoiner merchants seemingly can't see how they may make more money by selling a song
hundreds of times for nickels and dimes rather than a few songs for a $1.   
I've had a similar argument on this forum about the cost of digital goods, e.g. an mp3. My argument was similar to Portnoy's - should I pay $1 for an mp3 because I consider it worth that much to me, or should I pay $0.001 because if 1,000,000 people buy it, then the author will have been abundantly well paid?  Why is it that big-name musicians earn tens of millions of dollars per year, while less known musicians, often of a much superior quality, barely scrape a living?  I am fully aware that this is the free market, but, bearing in mind the root causes of the current economic mess, can't any of you capitalists stop for a moment to thiink: is it fair?  Really - try to think if greed is truly the best way for humanity to shine.  Think about whether rewarding people with fabulous wealth is the best way to attract the best people for a job (be that politician, or banker, etc), or if it's the best way to attract the greediest people.

Fortunately, if and when Bitcoin grows in terms of users, I would expect the rates people need to charge to go down. A website serving 1000 downloads a day does not cost ten times one that serves 100 a day.
Then why does an e-book, or an mp3 on itunes, have a price which is comparable to the physical book or CD on high-street?  I agree, in an ideal world prices would come down, but I'm just a born sceptic.
makomk
Hero Member
*****
Offline Offline

Activity: 686


View Profile
June 16, 2012, 09:06:40 AM
 #35

"Bitcoin is the cheapest way to send somebody money"

Whether that's true depends on what 'money' is understood to mean.  If 'money' just refers to bitcoins, then, yeah, that's probably true.  But if what's meant is that it's the cheapest way to send somebody, say, USD, then no, it's very unlikely to be true considering the fees to transfer money to an exchange, then buy the bitcoins on the exchange for a fee, then send the bitcoins, then have the other person convert back to traditional currency.  I haven't done the math, but I'm willing to bet that for most transactions, that whole process is a lot more expensive, and probably not that much quicker, than sending somebody money through a bank.
Even if you're not exchanging to USD on either end, it's still probably going to be more expensive in practice because of the higher prices of buying items in Bitcoins as opposed to USD. If you think about it, pretty much all the commercial sellers offering goods for Bitcoins have to immediately exchange for USD since that's what they paid for the goods in, and they'll want to take an extra cut on top of that to compensate for exchange rate risk, plus Bitcoin is a small market with not much competition, etc...

Quad XC6SLX150 Board: 860 MHash/s or so.
SIGS ABOUT BUTTERFLY LABS ARE PAID ADS
Mike Hearn
Legendary
*
Offline Offline

Activity: 1526


View Profile
June 16, 2012, 10:33:41 AM
 #36

Centralized services do tend to accumulate fees and policies, those actors then often try and raise barriers to entry. It's one of the reasons banking is so messed up today. So I don't think the original complaint is meritless.

The solution to many of these problems is to design entirely decentralized P2P equivalents of popular services like exchanges.

Without any service fees to fund them, we must first solve the problem of creating public goods via assurance contracts. That would let people easily pledge, Kickstarter style, to the development of new P2P systems to replace popular services.

The limiting factors today are:

  • Lack of a solid Kickstarter style system. Of course, somebody could throw up a website and make one very easy, but then we're back to having a centralized service that would charge fees Wink A decentralized assurance contract protocol is possible (see the wiki), but hasn't been built yet.
  • Lack of enough people with the credibility, skills, passion and time to do an excellent job of fulfilling the assurance contracts. Building these systems is not easy, in fact it's almost always much harder than doing a centralized service. So a huge bottleneck is insufficient skilled engineers in the community.
  • Lack of documentation, libraries, examples and experience to make building Satoshi-style decentralized services easy.

I think all these will get resolved with time as the community grows. I have the interest and ability to tackle many of these problems, but right now I'm pretty happy with my current job, and it's unclear how much money could really be raised to develop P2P solutions for all these markets. Also, I'm busy ensuring that mobile wallets can work purely P2P (and therefore fee-less). That's a 2 year project already, but it lays the groundwork for many other things.
TangibleCryptography
Sr. Member
****
Offline Offline

Activity: 476


Tangible Cryptography LLC


View Profile WWW
June 16, 2012, 01:48:34 PM
 #37

Even if you're not exchanging to USD on either end, it's still probably going to be more expensive in practice because of the higher prices of buying items in Bitcoins as opposed to USD. If you think about it, pretty much all the commercial sellers offering goods for Bitcoins have to immediately exchange for USD since that's what they paid for the goods in, and they'll want to take an extra cut on top of that to compensate for exchange rate risk, plus Bitcoin is a small market with not much competition, etc...

I sell wireless airtime (which I pay for in dollars) for 2% to 6% off and still have a profit margins.  Something which is impossible in your analysis.  My processing costs (including currency risk) is still much lower than credit card costs plus fraud.

jgarzik
Legendary
*
Offline Offline

Activity: 1470


View Profile
June 17, 2012, 02:37:58 AM
 #38

  • Lack of a solid Kickstarter style system. Of course, somebody could throw up a website and make one very easy, but then we're back to having a centralized service that would charge fees Wink A decentralized assurance contract protocol is possible (see the wiki), but hasn't been built yet.

Agreed...  a bitcoin-denominated kickstarter seemed like a natural early-stage service.  Surprised it has not appeared.


Jeff Garzik, bitcoin core dev team and BitPay engineer; opinions are my own, not my employer.
Donations / tip jar: 1BrufViLKnSWtuWGkryPsKsxonV2NQ7Tcj
Herodes
Hero Member
*****
Offline Offline

Activity: 868


View Profile
June 17, 2012, 03:22:37 AM
 #39

Personally I never used a mixing service, because I never had the need for it. Thus I've paid 0 fees for a bitcoin mixing service. I suppose however that those paying for having their coins mixed is ready to pay a fee for this service. If they're not, they simply won't use that service.

As for the fee structure itself..

There are usually one or more coders behind a website, and coders need money to pay for food, housing, bills etc.. If the fees are too high, then the market will adjust fees as more competitors enter.

One might think that a website runs itself all by itself, and the only thing you'd need to do is to do the initial coding and then just let it run all by itself, never doing anything more.

Well, what about os updates, security updates, bitcoind updates, feature updates, suppport, marketing, affiliates, and fixing any odd problem that may occur, ddos attacks, hackers, various service failures etc.

Fact is, if you want to run a web based service, and you want to run it well, there's a lot of work involved, of course depending on the complexity and how much effort you want to put into it.

I agree the "Well, then do it yourself" is a very childish response. Anyone should be allowed to give critism without actually doing something themselves, however, until you actually made a similar service yourself, then you don't know all the work involved to have it running, and I think this is one of the reasons why people give this response.

Many non-coders think that making a website is very easy, and don't look at it as actual work, but usually what the visitor sees when visiting a web site is just the top of the iceberg, and there's a lot of code behind it which someone has typed on their keyboard and spent a lot of hours doing.

In my view, anyone should be allowed to take any fee they seem fit for any service they create, and if the fee is too high, then the free market will adjust this itself.

For instance, some fixed rate exhanges and bitcoin exchanges may seem to take very high fees, however, what the average user does not take into account when he complain about that is that most such services are hit hard with fraudulent transactions. And these needs to be covered by the legit users.

Lastly, bitcoin transactions itself has very low transaction fees, however exhanging from fiat money into bitcoin may have a conversion fee, and services where you use bitcoin may have a fee as well. We are all free to use or not to use these services.
evoorhees
Legendary
*
Offline Offline

Activity: 994


Democracy is the original 51% attack


View Profile
June 17, 2012, 03:56:20 AM
 #40


Are you charging your employer anything more than the cost of your food and shelter? If so, you are profiting from your employer in the same way these service providers (such as the Tor mixing service) are doing.
You're oversimplifying.  It's not a black-and-white situation.  If my food and shelter costs were $1000 per month, then it's not like charging $1500 or $2000 is grossly unreasonable.  But suppose I were one of the usual cronies milking the system for what it's worth - a doctor, a lawyer, a politicial, a banker, etc.  And I ask for $10000 per day (think about bankers with $5M yearly bonuses, on top of their salary), is that still reasonable?  Is it reasonable to insist on being paid an enormous amount just because people are willing to pay?  Does it never become "greed"?

It is natural, moral, legitimate, efficient, and productive to seek the highest profit one can obtain, so long as one doesn't resort to fraud, deception, trickery, or theft in order to obtain it. It is by the mechanism of each individual seeking to maximize profit (so long as it's done honestly) by which proper market price discovery occurs, and resources are allocated most effectively. If you charge below what you can otherwise obtain, you are sending a signal that the service you're providing is less valuable than otherwise, meaning production of that service will be lower than otherwise, meaning other market participants will be misled by a price signal that was distorted.

Indeed, one could make the argument that charging less than you can, while being good for the person on the other side of the transaction, is in fact harmful in aggregate to those around you.

Pages: « 1 [2] 3 4 5 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!