The cost of bitcoin system is too high.it is not a cheap payment at all.

[oyasumi]

Compare to mainframe used in banks,the cost of Bitcoin is much more higher.Now transaction fee is low because the cost of system is undertake by people who buy bitcoins,not people who use bitcoins.

The cost of using Visa and MC is huge. Shops must buy a dedicated terminal which costs at least $300, and there's a higher fee to pay for each transaction. Then there's Visa which I'm sure has back office with servers in every country the service is offered. We're talking of a network with several thousands dedicated servers in it. This wasn't made in a day, and it took billions to build...

1.
In Bitcoin system,the number of transactions per ten minutes is about 200 times.In Visa clearing system,the number is millions.
2.
Bitcoin system is clearing system,but visa is not just clearing system(BASE II).
For example,if you lost your visa card,you can contact to visa,let them handle the problem.
you can also save money when you go shopping.
It need money,but it is not the cost of visa clearing system.
3.
Servers in visa clearing system just process transactions,but in Bitcoin system,Servers also do hash race,and just one servers' working is effective at one time.
If there is no block reward,the transactions fee would be about 30 dollars in Bitcoin system.

[oyasumi]

338492    16 minutes    306    3,975.02 BTC    KnCMiner    134.8
338491    18 minutes    174    4,104.85 BTC    GHash.IO    99.3
338490    23 minutes    73    755.77 BTC    AntPool    62.36
338489    22 minutes    66    707.01 BTC    KnCMiner    36.18
338488    25 minutes    418    10,970.23 BTC    AntPool    521.66
338487    31 minutes    269    4,067.65 BTC    85.195.114.243    685.81
---------------------------------------------------------------------------------------
Average number of transactions per block:218
The value of 25 bitcoins:278*25=6950
The cost of per transaction:6950/218=31.8(dollars)

218 transactons per ten minutes,It can be processed by a Gameboy or APLLE II.But in Bitcoin system,it need 6950 dollars per ten minutes,30024000 dollars per month.

So, when the block reward is cut in half will the cost to run the network half as well?

How many coins are rewarded each block for the PoS, Litecoin system?

It will be two possibility：transactions fee higher or security lower.
The biggest part of Bitcoin system'cost is for defending from 51% attack.

You've confused the block reward and the transaction fees. The 25 bitcoin reward is paid to the miners by the bitcoin network and that will halve in 2016. The transaction fees are what is paid over and above the 25btc block reward. At the moment it is usually less than 1btc per block and that it all that is paid by the users as transaction fees.

Developers can set transaction fees to any number,and the system will be no change,because the cost of Bitcoin system is not paid by transaction fees,but by block reward now.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

[oyasumi]

You mean transactions' processing is not contained in mining?
It's seem to be different from my understanding.
Just 218 transactions per 10 minutes,cost is 6950 dollars,is it because of PoW,will it happened again after 20 years later?
For example,there are some transactions,it need one computer to process,but in Bitcoin system,it need 200 computers to hash race,20 computer to process transactions itself,and just one computer's working is effective.So how can bitcoin's cost be lower?

I don't get your point.
1. See https://blockchain.info/charts/n-transactions we have ~ 100000 transactions/day, this results in 694 transactions/10minutes
2. I won't agree to set costs to 6950 dollar, in case I mine all bitcoins and safe them in my wallet, the costs to mine do not change but the price would highly probably went up and so your calculated costs would went up too.
3. I would not set dollar as the basis for a calculation of the costs, because the dollar should not be seen as a "god", and if we really want to discuss the costs, we should have a look at the energy consumption, needed materials for example to build miner/computer, working hours and so on.

1.
I just talk about an example,which shows the real average cost of Bitcoin system.
2.
In fact,it has gone up too if you use it now.
The system cost is relative to the price now,because it is paid by block reward(25 coins).
And the security level is relative to the system cost.
3.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

[cryptworld]

it is actually not expensive because you could maintain the network with less miners.

the point it that more and more miners are insanely increasing the network power

[Troonetpt]

yes it waste too much energy.

[pedrog]

Freedom doesn't come cheap!

[doggieTattoo]

Compare to mainframe used in banks,the cost of Bitcoin is much more higher.Now transaction fee is low because the cost of system is undertake by people who buy bitcoins,not people who use bitcoins.

The cost of using Visa and MC is huge. Shops must buy a dedicated terminal which costs at least $300, and there's a higher fee to pay for each transaction. Then there's Visa which I'm sure has back office with servers in every country the service is offered. We're talking of a network with several thousands dedicated servers in it. This wasn't made in a day, and it took billions to build...

1.
In Bitcoin system,the number of transactions per ten minutes is about 200 times.In Visa clearing system,the number is millions.

When you calculate the cost per transaction, it is generally accepted that the cost to process a bitcoin transaction is lower when you calculate the estimated electric cost. If you use the value of found blocks (including block subsidies) then visa is cheaper

2.
Bitcoin system is clearing system,but visa is not just clearing system(BASE II).
For example,if you lost your visa card,you can contact to visa,let them handle the problem.
you can also save money when you go shopping.
It need money,but it is not the cost of visa clearing system.

You would actually contact the issuing bank to replace your lost/stolen credit card. The same goes with any payment disputes. The payment network would generally be unaffected

3.
Servers in visa clearing system just process transactions,but in Bitcoin system,Servers also do hash race,and just one servers' working is effective at one time.
If there is no block reward,the transactions fee would be about 30 dollars in Bitcoin system.

If there was no block subsidy (not reward) then yes the cost per transaction would be higher, although it would not quite be $30 per transaction. The theory is that over time the number of transactions will increase enough so that TX fees will rise enough to cover the reduced block subsidies. 

[Elwar]

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

[amaclin]

The theory is that over time the number of transactions will increase enough so that TX fees will rise enough to cover the reduced block subsidies. 

I think that the number of transactions will decrease enough so that TX fees cover the reduced block subsidies.
Zero transactions. Zero tx fees. Zero blocks. Zero subsidies. Zero value. 

[freebit13]

Developers can set transaction fees to any number,and the system will be no change,because the cost of Bitcoin system is not paid by transaction fees,but by block reward now.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

Yes, but by then there should be more transactions in every block... at the moment they are pretty empty. The system was designed this way to reward miners so they would build up the necessary network security. It is the plan that the block reward will be offset by transaction fees as the network grows and more people use it. It is organic and has worked pretty well so far.

[bitdraw]

includ government bailouts, inflation loss etc. in your comparison and suddenly the bitcoin network seems cheaper to maintain than the banking sector

[johnyj]

Bitcoin is first a monetary system and then a payment network, it is not appropriate to compare a monetary system to a payment network like VISA. There is big difference here. VISA does not care how much USD worth, but bitcoin network must decide how much bitcoin worth through mining

The banking system's biggest cost is to force their zero-cost fiat money to circulate by passing a law. The cost to make that law is almost the wealth of the whole nation. If Russia trys to force everyone in US to use Rubble, you will see how huge that cost will be  

For a voluntarily monetary system like bitcoin, its value is not forced upon its users by law, but through market behavior, e.g. the lowest cost to get bitcoin will decide its value. So mining cost works as a reference baseline for bitcoin's value. If there is a shortcut that you can get cheap coins like in PoS coins, then everyone will take that route to get coins and no one will pay for it (there is no law forcing you to accept PoS coin), the coin's value will plummet to the cost of that cheapest method

[amaclin]

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

[johnyj]

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

Maybe the word "care" is not accurate, can I say that VISA is not responsible for any currency's value? Do they care that USD just rose against Rubble for more than 50% thus the transaction cost in Russia is 50% higher if counted in Rubble?

[countryfree]

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

Don't forget fraud costs, a sizeable chunk of the transaction fees goes towards paying the costs of fraudulent transactions from stolen card data etc. About 6 billion dollars a year last I heard, not really fair burdening the consumer with the inefficiencies of an outdated network

Both arguments are correct, but they don't relate to the cost of the currency used. Visa operates with about every currency in the world. If a given currency goes down, they'll just raise their operating costs in that given currency.

[oyasumi]

it is actually not expensive because you could maintain the network with less miners.

the point it that more and more miners are insanely increasing the network power

Less miners,less security.
If all bitcoin worth 1 million and attacker is going to using 10 thousands to attack the Bitcoin system,
then,when all bitcoin worth 10 millions,the attacker is going to using 100 thousands to attack the Bitcoin system.

[Kazimir]

Less miners,less security.

Completely irrelevant.

Mining bitcoins is by definition never expensive, or even 'too' expensive. If it's worth it to mine bitcoins, more people will do so, and difficulty will increase. Until it becomes not worth it anymore, then some people will stop mining, and difficulty will decrease. This dynamic equilibrium will automatically maintain itself due to the very nature of Bitcoin.

Saying that the cost of the Bitcoin system is "too high" is just plain retarded, and completely ignorant of fundamental Bitcoin basics.

[oyasumi]

Compare to mainframe used in banks,the cost of Bitcoin is much more higher.Now transaction fee is low because the cost of system is undertake by people who buy bitcoins,not people who use bitcoins.

The cost of using Visa and MC is huge. Shops must buy a dedicated terminal which costs at least $300, and there's a higher fee to pay for each transaction. Then there's Visa which I'm sure has back office with servers in every country the service is offered. We're talking of a network with several thousands dedicated servers in it. This wasn't made in a day, and it took billions to build...

1.
In Bitcoin system,the number of transactions per ten minutes is about 200 times.In Visa clearing system,the number is millions.

When you calculate the cost per transaction, it is generally accepted that the cost to process a bitcoin transaction is lower when you calculate the estimated electric cost. If you use the value of found blocks (including block subsidies) then visa is cheaper

2.
Bitcoin system is clearing system,but visa is not just clearing system(BASE II).
For example,if you lost your visa card,you can contact to visa,let them handle the problem.
you can also save money when you go shopping.
It need money,but it is not the cost of visa clearing system.

You would actually contact the issuing bank to replace your lost/stolen credit card. The same goes with any payment disputes. The payment network would generally be unaffected

3.
Servers in visa clearing system just process transactions,but in Bitcoin system,Servers also do hash race,and just one servers' working is effective at one time.
If there is no block reward,the transactions fee would be about 30 dollars in Bitcoin system.

If there was no block subsidy (not reward) then yes the cost per transaction would be higher, although it would not quite be $30 per transaction. The theory is that over time the number of transactions will increase enough so that TX fees will rise enough to cover the reduced block subsidies. 

1 and 2,I don't  get your point.
3
Just as I said,Bitcoin(PoW) need hash race,and,many computer work,but just one computer's working is effective at one time.
So,what you said will not happen.

[oyasumi]

Developers can set transaction fees to any number,and the system will be no change,because the cost of Bitcoin system is not paid by transaction fees,but by block reward now.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

Yes, but by then there should be more transactions in every block... at the moment they are pretty empty. The system was designed this way to reward miners so they would build up the necessary network security. It is the plan that the block reward will be offset by transaction fees as the network grows and more people use it. It is organic and has worked pretty well so far.

Organic?So why is system's cost so high when transactions is just 200 times?
A plan?Bitcoiner say Bitcoin is a cheap payment for transaction fee is just 0.0001,why?
25 bitcoins,0.0001*200 bitcoins,there is a big difference.
And,a truth is, Bitcoin(PoW) need hash race,and,many computer work,but just one computer's working is effective at one time.
So,I don't think there is a way to fill it.
And I also have another question.If the transactions number is millions per ten minutes,will Bitcoin system work well?It seems no evidence.

[oyasumi]

http://media.coindesk.com/2014/07/Picture-5-630x210.png

http://media.coindesk.com/2014/07/Picture-23-630x227.png

http://media.coindesk.com/2014/07/Picture-7-630x316.png

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

First,I don't know where these coindesk's number come from，and,which part is counted.
Second,I think some number should not put together.
For example, glod mining and Bitcoin mining,It is different.
It's not fair to both glod and Bitcoin.