Fees are not evil.
Fees are just part of the costs of running and maintaining a decentralized network.
Low fees, or 'no fees', is a temporary state that exists by externalizing the costs to others.
There was a very interesting post about this very thing on Medium which i highly recommend:
https://medium.com/@rusty_lightning/the-three-economic-eras-of-bitcoin-d43bf0cf058a
Topic: Evilness in the fees (Read 1573 times)
First of all I will like to say people does not have much problem with fees but the unreasonable HIGH fees is not justified. Miners and exchanges changing more fees to confirm the transaction quickly seems like a blackmailing technique or a way of corruption. I totally agree concept of fees is not rightly designed and it need to get improvise seeing the need of the time.
You mean to say that system or process for charging fees by miners is evil.
Just like in fiat transaction we are dependant upon banks or govt as an intermediatory third party, In BTC transaction, miners are the third party that approves the transaction and for that, they charge high and unreasonable fees. And this dependency upon miners make BTC centralized in its own way, which is really very sad.
Just like in fiat transaction we are dependant upon banks or govt as an intermediatory third party, In BTC transaction, miners are the third party that approves the transaction and for that, they charge high and unreasonable fees. And this dependency upon miners make BTC centralized in its own way, which is really very sad.
In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.
They have interest in maintaining a constant waiting line.
Maybe they already do that now.
The real problem is in the concept of the fees itself***: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
***EDIT: The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil
They have interest in maintaining a constant waiting line.
Maybe they already do that now.
The real problem is in the concept of the fees itself***: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
***EDIT: The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil
I totally agree with your point of view. It seems we switched from banks to miners. But what's the actual difference between banks and miners? In both cases they process the transactions so even using Bitcoin we don't have a real full control on our transactions.
paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong.
I think you have this concept wrong. Bitcoin transaction capacity is at it's peak, and it has been there for several years. That's why one of the major concerns regarding bitcoin right now, is to solve this problem that is at the root of it's scalability limitations. Some want o on-chain solutions, like increasing the block size, others think that off-chain solutions are better for the long term, and an example of this is segwit and eventually the lighting network.
Now, what you are suggesting is that miners keep the waiting line big, in order for users to pay higher fees to get priority, but this is wrong. The capacity is at it's peak like I said, and this is why the waiting is long, and there is nothing miners can do about it right now. Paying high fees just gives you priority and there is nothing wrong with that. To solve the long waiting line problems, then you need to solve the blockchain scalability issues, so that transactions are processed faster. If they are fast, the waiting is small, and there is no incentive to pay big fees.
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Maybe they already do that now.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.
I corrected my first message to "The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil".
I was just focusing on the dynamic of this free fee system and showing the vicious loop in this dynamic. Not trying to say fees are bad.
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I propose an example of implementation: https://bitcointalksearch.org/topic/what-about-optional-degressive-fees-2457763
Reminds me of a historical problem that in it's day was very serious.
How to make the trains run on time.
I get your point. I think the system just followed the same system as to the other physical fiat transactions for products and services, not just in Bitcoin and cryptocurrencies. This may be some sort of unfair but that's how the world goes. If you pay more, you get a better service. And in the case of Bitcoin transaction, you pay more and you get a faster transaction. It's like buying in Amazon and choosing the fastest delivery time with of course the most expensive delivery.
The number of bitcoin transactions is increasing, so until btc is fully exploited, how long will a transaction be validated, and who will confirm when there are no miners?
I do understand what you are trying to say but that's how it is buddy. Miners will choose obviously the the transaction with higher fees to earn more profit. It's all about the priority here. The one who needs to get the transaction done quickly will have to pay high priority fee and vice versa.
It's not that lower fee transactions are kept on hold forever but they are done a little later. You could also accelerate your transaction if you don't want to pay high fees but want to boost your transaction speed at the same time. According to me there should be a pool that mines only lower fee transactions in order to keep the network stabilized but then they should also be paid something other than just the mining fee so that they can earn profit from mining.
It's not that lower fee transactions are kept on hold forever but they are done a little later. You could also accelerate your transaction if you don't want to pay high fees but want to boost your transaction speed at the same time. According to me there should be a pool that mines only lower fee transactions in order to keep the network stabilized but then they should also be paid something other than just the mining fee so that they can earn profit from mining.
I believe everybody feels your pain with this topic.
Although segwit2x should of done something about it there has not been much change expect the quickness of the sends but that is about it.
Although segwit2x should of done something about it there has not been much change expect the quickness of the sends but that is about it.
Use Bitcoin Cash. Core / Legacy Bitcoin Team will never fix the problems because they are blinded by money, bankers, and their own personal selfish interests.
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Maybe they already do that now.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.
I corrected my first message to "The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil".
I was just focusing on the dynamic of this free fee system and showing the vicious loop in this dynamic. Not trying to say fees are bad.
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I propose an example of implementation: https://bitcointalksearch.org/topic/what-about-optional-degressive-fees-2457763
But it gives incentive to miners to keep the waiting line and this is wrong.
It's not useful to think of "the miners" as this single, monolithic entity. Miners are competing with one another for those fees. Bitmain might control a lot of hash power, but they don't have a monopoly on it. It's not like a supermarket chain can singlehandedly drive up the prices of milk just by marking it up in their stores.
Mining pools are all trying to undercut one another with hash power distribution and better mining/propagation code, and as subsidy drops, the incentive is increasingly about fees. What you're saying can only be true if all miners are colluding together to keep fees high. That seems unlikely given global distribution and competition, but I'm interested in hearing any evidence you might have.
That is fair as for me.
if you want to make your transaction faster - just pay higher fee, but if you have time - just wait till your transaction will be approved
if you want to make your transaction faster - just pay higher fee, but if you have time - just wait till your transaction will be approved
In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.
That's monopoly, and that's what scares me, you and everyone over the Bitcoin network because they know that they are the life-line of the whole network.
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They have interest in maintaining a constant waiting line.
I agree with you here because they want bigger values in fee but they should understand that this will only drag users far from the concept of Bitcoins which was meant to serve everyone to make it possible for everyone to transact at lowest fees. The value in fee/transaction is probably still lower, but I believe if this monopoly will continue, we are not too far to see even $100 asked as a fee.
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Maybe they already do that now.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
This is not the real picture actually, just think that if governments kick in and take the advantage of this by taking over the whole mining concept, it may go centralized and everyone will suffer which is a real threat to the whole community.
If you need to speed up confirmation time, then you need to mine blocks faster - it's as simple as that. With an average of 10 minutes to generate a block, then one can expect around 30 minutes for two confirmations. Messing with the blocksize and other changes won't change that simple fact.
Totally most wallets are nonsense in fees calculation, I use 50 sat/byte or even less, usually tx get confirmed in day or two.
The fee's and transaction times are controlled by the miners, who would profit from a globally adopted network that could be used for merchant services. So despite the theory, there would be a lot more value in speeding up transactions and lowering fees. Because then bitcoin would actually be usable as a proper currency in real world application.
The fees aren't a problem but the lack of block space is. I have proposed a way to scale the bitcoin network on chain https://bitcointalksearch.org/topic/split-bitcoin-2381234 , so far the development team is afraid to make radical moves. Meanwhile BCH and co. slowly but surely creep up https://coinmarketcap.com .
Doing something radical to counter Bitcoin Cash, will be more stupid now. Bitcoin Core has set a road map to work towards implementing the
Lightning Network as a total solution. A lot of us might not like the direction this is going in, but it is definitely a better solution than just
kicking the can down the road with constant Block size upgrades.
What did you propose? Total solution?
No, it is just one idea.
It would be nice to be able to try it out, say on testnet.
But it gives incentive to miners to keep the waiting line and this is wrong.
Double edge sword.
Because while you deny tx in your blocks you also lose the tx fees.
Which the other miners will not, increasing their profits, adding more private miners to their pool with the incentive in earnings, gaining more hashrate, more blocks...you get the point.
Even if they try to form a cartel, there are a lot of miners who will switch to the pools that mine full blocks giving those the advantages.
And please don't start with the theory that wu has all the hashrate in the world.
They don't really need to form a cartel if it is common interest for all. Creating a waiting line has a fixed cost. But when the waiting line is created it raises fees for a long time.
Also, even if a minority of miners try to create a waiting line it will slow down the transaction (proportionally to their hash power) so they might manage to create waiting transactions and raise the fees
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But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.
No! Its actually a long term benefit for them too considering that increasing the amount of miners today is absolutely too difficult. Bitcoin mining today requires a whole lot of effort than ever. Only a handful of established miners are able to tackle such issues. And they are picking up advantage of this very thing.
ok, so you say that if fees go higher it will not bring more hash power because today mining is already difficult enough?
then the ones who do business selling mining hardwares will want to raise the fee even higher
you see where i'm going? you have a short term equilibrium with the fees that seems okay, but the long term equilibrium would really arm the transactions. I'm really trying to spot the evil part here. I believe it can be fixed in many ways.
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Yep, but this is real problem: without fees miners will not have incentives for mining and it will be better to mine empty blocks rather than full blocks.
More miners - better system. If someone don't want to mine your transactions, another will do that.
if we agree on the problem solutions will come
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