Topic: Could transaction fee become too expensive? (Read 1043 times)

I wish to see the fee be around $1.00 per transaction so that it what I set my client to pay.

This rate seems like it would provide enough value for solving a block (absent a block reward) that it would keep mining decentralized, but would not be enough so that it is worth trying to monopolize mining absent some other incentive.

The incentives to monopolize mining would be to attack the system for profit, or to harvest intelligence and suck users into one's service portfolio for other forms of exploitation.  Such dangers cannot be ruled out, but there are theoretical ways it might be dealt with in future developments since it is a open-source project where users decide what codebase to use.

$1.00 per transaction is a screaming deal for frictionless and potentially international trade in my opinion.  Much better than wires, and also much faster and more convenient.  Every time I make a Bitcoin transaction and pay only this amount I am delighted.

The 'marketshare' for the aformentioned need alone would argue for vastly higher BTC values I believe, so there is not need to expose Bitcoin to the risks of trying to service thousand of transactions per second for everyone who wants a cup of coffee could have their entry on a global and persistent block-chain.  I am quite confident that trying to do so would change the nature of the solution in a significant and very negative way.

It is a denial of service prevention mechanism.  You can however compile your own client and avoid this check.  However most likely all your peers will simply drop the tx as not having the min fee for low priority txs.

Just to be clear there is only a min fee on low priority txs and it is done to prevent someone from spamming the network at no cost, crashing nodes, filling the memory pool, and (although this is less of an issue now) filling blocks with worthless spam and massively bloating the blockchain to kill future adoption (imagine today having to download a 20 TB blockchain).

The min mandatory fee to relay on low priority txs is simply a defense mechanism it wasn't intended to be a revenue generator.  Miners are free to set their own fee requirements potentially higher than the min mandatory fee on both high and low priority txs.

To avoid people's frustration when their transactions would take forever to be included into a block. Not everyone, especially among newcomers, understands how transactions and confirmations works.

It's the default value, it can be overwritten via command line parameter (in reference implementation). Several clients have a field for the fee that can be set directly in the UI.

I think with the current value of Bitcoin, 0.00001 BTC should be an acceptable transaction fee.

Why enforce minimums in code? Shouldn't this be a setting of some sort? The software can recommend a fee based on the rules, but if you choose not to include it, then your transaction will just take a very long time (or never) to confirm.

https://blockchain.info/charts/n-transactions

86400 seconds in a day. So roughly 1 transaction per second.

Higher volume and higher exchange rate, yep.

We don't have 7tps right now more like <0.5 tps.  The current protocol rules are limited to 1Mb blocks which is a cap of 7tps.  Many believe that will be raised eventually.

I didn't know it has been lowered that many times.

So I guess the volume of transactions and technology should increase a lot to be enough reward for miners when coin count cap is reached.

Currently I've heard we have around 7 transactions per second, at 0.001 BTC per transaction, multiplied by 10 minutes (avg time to solve a block) is 4.2 BTC, if my math is right.

The min fee has been lowered three times in the history of Bitcoin.  From 0.1 to 0.01 to 0.0005 to 0.0001.  It can and will be lowered in the future.  Generally the devs of the reference client have lowered the min fee to keep the cost in the range of a few US pennies.

The fee rates now represents a small amount of value, but in the eventual new raise in value those amounts won't be so easy to ignore.

0.0001 BTC is now te equivalent of 0.10 u$s (it used to be a penny).

If I understand the wiki, the minimum fee is the one I described above. For not very expensive transactions this will be too much.

I couldn't find any discussions that go in depth on this issue. Also in the fact that the bigger pools (the ones that always resolve blocks) might push increments on the fee rates.

I think this is my only concern about Bitcoin atm.