Topic: Are transaction fees expected to rise over time? (Read 1795 times)
In terms of BTC, TX fees per transaction/KB will decrease over time. In terms of TX fees per block they are expected to rise as more people accept BTC and thus send TXs.
I think miners should collectively act to keep fees as low as possible in USD value to maximise potential adoption while it's still early in the life of bitcoin.
Miners can't collectively force fees higher any more than they can collectively force fees lower. Miners have almost no pricing power when it comes to fees. Once v 0.9 becomes the majority of the network the cost to relay will be 0.01 mBTC per KB (~0.6 cents). Will miners require a higher fee to include a tx in the next block? Maybe but the history has shown they have just gone with the flow. Right now I don't know a single miner which requires more than 0.1 mBTC per KB (the min to relay imposed by v0.8x) to include a tx in a block. I think miners should collectively act to keep fees as low as possible in USD value to maximise potential adoption while it's still early in the life of bitcoin. Fees will go down in btc, but I don't think it's in anyones interest for fees to ever go up in USD. Not for a long time anyway. If miners processed low fee transactions it would lessen the barrier of entry for some people.
IOW, continue the strategy of bait-n-switch, and without even a twinge of recognition. One can hardly blame those who harbor some suspicions of the ethics of the Bitcoin community.
If one doesn't want fees, just open up the transaction rate. That will rather quickly achieve the vision of there being about 6 copies of the blockchain held by organizations who can handle the load. These types will probably pay a person to use Bitcoin or at least offer a zillion valuable perks for doing so. The value of the information stream coming from the userbase makes it an economically viable business model. Just like modern e-mail.
In the mean time, if one patronizes outfits which use authentication systems supplied by the large American internet organizations then said organizations can enjoy some of the benefits of mining the info stream without even undergoing the relatively minor hassle and expense of operating clusters of Bitcoin supernodes.
Why do you expect downward pressure on the transaction fee? As the block rewards continue to be cut in half, miners will be expecting to get more and more of their profits through the collection of fees.
Fees may rise marginally in USD terms but a rising exchange rate means they will fall in BTC terms. Fees today (measured as BTC per KB) are 1% of what they were initially and the block reward is half as much (in BTC terms). Will fees rise on a USD basis? Maybe but maybe not. Miners have very little pricing power. The block reward prior (including avg fees per block) prior to the last halving was ~50.00 BTC and today it is ~25.01 to 25.10. The rise in fees per block has more to do with the 10x increase in tx volume than miners exerting any pricing pressure.
I think miners should collectively act to keep fees as low as possible in USD value to maximise potential adoption while it's still early in the life of bitcoin. Fees will go down in btc, but I don't think it's in anyones interest for fees to ever go up in USD. Not for a long time anyway. If miners processed low fee transactions it would lessen the barrier of entry for some people.
Even if we see another 10x rise in transaction volume by the next reward halving, I still think it's more profitable in the long run for bitcoin to charge the lowest fees possible.
Why do you expect downward pressure on the transaction fee? As the block rewards continue to be cut in half, miners will be expecting to get more and more of their profits through the collection of fees.
Fees may rise marginally in USD terms but a rising exchange rate means they will fall in BTC terms. Fees today (measured as BTC per KB) are 1% of what they were initially and the block reward is half as much (in BTC terms). Will fees rise on a USD basis? Maybe but maybe not. Miners have very little pricing power. The block reward prior (including avg fees per block) prior to the last halving was ~50.00 BTC and today it is ~25.01 to 25.10. The rise in fees per block has more to do with the 10x increase in tx volume than miners exerting any pricing pressure.
I can almost guarantee the tx fees are going to rise. As bitcoin grows it will only be natural for the fees to rise. It also depends on how you look at it.. Technically the fees are changing every day with the value of bitcoin fluctuating, however in terms of will the tx fee ever rise above .0001? The simple answer is yes.
Yeah the value of the fees goes up as the value of the currency rises. The market will take care of the rest. You can all ready get a transaction through faster by sending with a higher fee.
I think there will actually be downward pressure in the price as the transaction volume increases due to economies of scale.
Why do you expect downward pressure on the transaction fee? As the block rewards continue to be cut in half, miners will be expecting to get more and more of their profits through the collection of fees.
That's funny, I've been doing BTC transactions for years now and haven't paid a single satoshi in fees.
Recently I have heard reports about miners refusing to confirm those transactions where the fee is not paid. There were multiple threads here, in the Economics sub-section.
I can almost guarantee the tx fees are going to rise. As bitcoin grows it will only be natural for the fees to rise. It also depends on how you look at it.. Technically the fees are changing every day with the value of bitcoin fluctuating, however in terms of will the tx fee ever rise above .0001? The simple answer is yes.
Yeah the value of the fees goes up as the value of the currency rises. The market will take care of the rest. You can all ready get a transaction through faster by sending with a higher fee.
I think there will actually be downward pressure in the price as the transaction volume increases due to economies of scale.
I can almost guarantee the tx fees are going to rise. As bitcoin grows it will only be natural for the fees to rise. It also depends on how you look at it.. Technically the fees are changing every day with the value of bitcoin fluctuating, however in terms of will the tx fee ever rise above .0001? The simple answer is yes.
I'm getting the fee from Electrum which is currently 0.0002. Electrum is the best option for most use cases in my opinion. Although, the higher mandated fee does make it less attractive.
Electrum shouldn't be charging a higher fee than other clients. Bitcoin fees are per KB so if you have a tx which is 2x as large (size not value) then it is going to be 2x the fee of one under a 1KB.
You can override electrum suggested fee both on the transaction level and the default settings.
I usually send with 0 fees with electrum unless amount is tiny.
I was curious how this is done so I started a new topic regarding this in the Electrum subforum: https://bitcointalksearch.org/topic/m.7199730
Feel free to explain if you have the time. Thanks.
legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
I'm getting the fee from Electrum which is currently 0.0002. Electrum is the best option for most use cases in my opinion. Although, the higher mandated fee does make it less attractive.
Electrum shouldn't be charging a higher fee than other clients. Bitcoin fees are per KB so if you have a tx which is 2x as large (size not value) then it is going to be 2x the fee of one under a 1KB.
You can override electrum suggested fee both on the transaction level and the default settings.
I usually send with 0 fees with electrum unless amount is tiny.
That's funny, I've been doing BTC transactions for years now and haven't paid a single satoshi in fees.
I guess you must be using bitcoins that haven't moved around a lot prior to you sending them. I'm not entirely sure how it works but I think something along those lines applies, something to do with the number of inputs impacting on the size of the block.
PS. Loving the avatar - brings back memories!
That's funny, I've been doing BTC transactions for years now and haven't paid a single satoshi in fees.
I'm getting the fee from Electrum which is currently 0.0002. Electrum is the best option for most use cases in my opinion. Although, the higher mandated fee does make it less attractive.
Electrum shouldn't be charging a higher fee than other clients. Bitcoin fees are per KB so if you have a tx which is 2x as large (size not value) then it is going to be 2x the fee of one under a 1KB.
PayPal can even be closer to 4% when sending to foreign countries depending on the situation.
It can be much higher. Once I received a payment from the UK, in Pound Sterling. Immediately they deducted close to 3% on fees and another 2% on currency conversion (UKP to USD). When I withdrew the money to my bank account, they deducted another 2% (USD to local currency).
In terms of USD value are transaction fees going to get more expensive over time? At ~13 cents USD they're pretty high for transactions under $10.
Where do you get $0.13 from? The average tx is <1KB and the min fee to relay for v0.8+ is 0.1 mBTC which is ~$0.06. That is falling to 0.01 mBTC in v0.9+ which is more like $0.006.
Quote
Now this doesn't affect me personally. But we see a lot of talk about bitcoin helping out the unbanked, and bringing bitcoin to Africa and such, and higher transaction fees are really going to limit bitcoin's potential in certain markets.
Fees are even higher for the unbanked. mPesa which is probably the most successful private payment network is Africa is about 5x the cost of Bitcoin to transaction $10l.
I'm getting the fee from Electrum which is currently 0.0002. Electrum is the best option for most use cases in my opinion. Although, the higher mandated fee does make it less attractive.
PayPal can even be closer to 4% when sending to foreign countries depending on the situation.
That and they often freeze your funds and raid your bank account.
legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
PayPal can even be closer to 4% when sending to foreign countries depending on the situation.
At the current rate , Bitcoin may exceed Paypal in transaction fees for microtransactions. That would go directly against what Bitcoin is for.
I think you are confused at what PayPal fees are. Bitcoin tx fees (average of $0.06 per tx) is nowhere near what PayPal charges ($0.40 plus 2.99%).
Let your bitcoins age/use older inputs and you will pay 0 tx fees 
Quote from: https://en.bitcoin.it/wiki/Transaction_fees
A transaction may be safely sent without fees if these conditions are met:
It is smaller than 1,000 bytes.
All outputs are 0.01 BTC or larger.
Its priority is large enough (see the Technical Info section below)
It is smaller than 1,000 bytes.
All outputs are 0.01 BTC or larger.
Its priority is large enough (see the Technical Info section below)
Quote from: https://en.bitcoin.it/wiki/Transaction_fees
Transaction priority is calculated as a value-weighted sum of input age, divided by transaction size in bytes:
priority = sum(input_value_in_base_units * input_age)/size_in_bytes
priority = sum(input_value_in_base_units * input_age)/size_in_bytes
Jump to: