Excessive Bitcoin fees | Bitcointalksearch.org

Abiky

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Quote from: moonie on August 05, 2024, 05:23:59 AM

Are exorbitant fees not a form of censorship, insofar as they restrict smaller transactions from being recorded on-chain?

Not exactly. You can always set your own fee when sending BTC from your preferred wallet. The transaction will take longer to confirm, but it'll still go through. Assuming you don't pay a very low fee, of course (transaction could get stuck in the mempool for a week). There are methods to save money on fees while reducing wait times as much as possible. I'm talking about re-broadcasting transactions, paying a one-time fee for multiple transactions (batch transactions), or paying a slightly higher fee on a new transaction to make miners accept your previous transaction (child pays for parent/cpfp, or replace by fee/rbf).

On-chain network fees can't high forever. At some point, they will decline giving you the opportunity to make your move. If you're desperate to save money and time, why not use Bitcoin's Lightning Network or an altcoin like Litecoin or Dogecoin? Cheesy

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Quote from: Casdinyard on August 05, 2024, 11:07:49 AM

Fees are the least of your concerns at this point. I mean it's definitely part of a larger problem, but most of this wouldn't happen if not for the fact that bitcoin's not made to be this massive in the first place. And while you have a point with centralizing bitcoin pools since now they can only be traded in exchanges and nowhere else, the equivalent is pretty much centralization as well, in terms of increasing the size of each bitcoin block which is currently limited to only 1mb (correct me if I'm wrong).

So yeah, at this point I would say we're in a deadlock situation where every option we have leads to centralization of network congestion, and in that regard, I'd be more than happy to choose the lesser destructive option between the two which is just keeping things as it is.

Bitcoin is made for the masses, it's the masses that doesn't understand Bitcoin in the first place. 2009 should be a great year for someone to create something that is capable of competing with Visa and other popular payments platforms and majorly the banks. However, Satoshi made the transaction time cap at 10 minute on the average. He did that because he gave priority to decentralization over any other things and he gave up scalability for it.

There is 3 keys to a great system of cryptography, that's decentralization, speed, and security. You must forgone speed to get decentralization and that's why speed is given and decentralization with security remains the top most prioritize thing in the Bitcoin. You can't do without it if we want full decentralization and if we want speed, it's either we give speed up over decentralization but Bitcoin will never do that, speed will remain like that way.

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Quote from: moonie on February 12, 2024, 12:40:27 PM

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

Fees are the least of your concerns at this point. I mean it's definitely part of a larger problem, but most of this wouldn't happen if not for the fact that bitcoin's not made to be this massive in the first place. And while you have a point with centralizing bitcoin pools since now they can only be traded in exchanges and nowhere else, the equivalent is pretty much centralization as well, in terms of increasing the size of each bitcoin block which is currently limited to only 1mb (correct me if I'm wrong).

So yeah, at this point I would say we're in a deadlock situation where every option we have leads to centralization of network congestion, and in that regard, I'd be more than happy to choose the lesser destructive option between the two which is just keeping things as it is.

moonie

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Quote from: Abiky on July 26, 2024, 08:25:08 PM

Quote from: moonie on February 12, 2024, 12:40:27 PM

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

High network fees will force people to leave their coins on centralized exchanges and/or centralized wallet providers (also known as custodians). But I wouldn't worry about this, since fees are not meant to stay high forever. At some point, they will decline back to considerable levels. As of now, network fees are cheap again. I'm certain developers are continuously working on scaling the Blockchain to help prevent fees from spiraling out of control. A quick solution would be to introduce "fractional satoshis" for cheaper transfers.

No matter what big exchanges or institutions try to do, they won't be able to buy all of BTC's circulating supply because some people will resort to self-custody. That small percentage makes a difference. Hopefully, Bitcoin stays decentralized and censorship-resistant for generations.

Are exorbitant fees not a form of censorship, insofar as they restrict smaller transactions from being recorded on-chain?

Abiky

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Quote from: moonie on February 12, 2024, 12:40:27 PM

What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

High network fees will force people to leave their coins on centralized exchanges and/or centralized wallet providers (also known as custodians). But I wouldn't worry about this, since fees are not meant to stay high forever. At some point, they will decline back to considerable levels. As of now, network fees are cheap again. I'm certain developers are continuously working on scaling the Blockchain to help prevent fees from spiraling out of control. A quick solution would be to introduce "fractional satoshis" for cheaper transfers.

No matter what big exchanges or institutions try to do, they won't be able to buy all of BTC's circulating supply because some people will resort to self-custody. That small percentage makes a difference. Hopefully, Bitcoin stays decentralized and censorship-resistant for generations.

crptm

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If transaction fees on the Bitcoin network become so high that only large institutions can afford to transact directly on the blockchain, it could indeed lead to more trading being pushed onto centralized exchanges. This shift would mean that most individual users and small businesses might only interact with Bitcoin through these exchanges, rather than through direct blockchain transactions. Writing this only sounds unfair, imagine if it actually happens, what will we do then?

This scenario could lead to a form of centralization that could impact one of Bitcoin's fundamental values: decentralization, where no single entity has complete control over the entire network.

We can only hope that the Bitcoin community is aware of these potential issues and is continuously working on solutions. Rising fees pose a challenge to maintaining Bitcoin’s decentralized nature, but ongoing technological developments are aimed at mitigating these risks to keep Bitcoin open and accessible.

we-btc

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Quote from: AHOYBRAUSE on June 22, 2024, 10:59:35 AM

Every time I see that there is a new comment here I wonder what the fees at the moment are and of something happened again to spike the fees.
But looking at them now I a relieved that this is not the case. So I wonder, why dig this thread out that was inactive for about 2 months? We should all be happy with reasonable fees at the moment.

I see the value of Bitcoin coming from its potential use as a currency. The limited supply and decentralization only benefit the user if Bitcoin is a decentralized currency. These features keep central players for devaluing the currency by creating more. If Bitcoin is not used as a currency then these Bitcoin features don't serve the user as intended.

If you think that Bitcoin is a currency than the current $2 or $3 fee is excessive. Imagine trying to buy a cup of coffee with a $2 transaction fee.

A $3US transaction fee is 2.5% of $120US. For transactions less the $120 it is more cost effective to use the current financial system.

Miners are making bitcoin less attractive as a currency by pushing the fees up in order to validate their business models. Runes and Ordinals are the tool being used to keep the fees high.

AHOYBRAUSE

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Quote from: Kraus4 on June 22, 2024, 04:38:03 AM

Rising Bitcoin fees pose a concern for decentralization, potentially limiting access to smaller users. This underscores the importance of scaling solutions to maintain network accessibility and prevent centralization.

Every time I see that there is a new comment here I wonder what the fees at the moment are and of something happened again to spike the fees.
But looking at them now I a relieved that this is not the case. So I wonder, why dig this thread out that was inactive for about 2 months? We should all be happy with reasonable fees at the moment.

Kraus4

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Rising Bitcoin fees pose a concern for decentralization, potentially limiting access to smaller users. This underscores the importance of scaling solutions to maintain network accessibility and prevent centralization.

Easteregg69

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Quote from: microsurfer on April 19, 2024, 07:16:55 AM

L2 is the only solution since they will never increase block size in btc

Switch to "immutable" and kling on. Where's the vote?

microsurfer

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L2 is the only solution since they will never increase block size in btc

vino.gcs

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Quote from: Litzki1990 on April 19, 2024, 02:55:48 AM

It is definitely a big problem for the common investor or common user when it comes to trading bitcoins with extra transaction fees. Normal users may spend a maximum of $2 to $5 on a Bitcoin transaction but a normal user will not pay $20 to $40 transaction fees for a $50 to $100 transaction. But the comfort for the users is that the transaction free is never fixed when the transaction fee is excessive then the transaction fee comes back to the normal level. If an investor needs to trade and there are additional transaction fees while doing the transaction, I would tell him that you should wait for that time and try to trade again when the transaction fee is comparatively lower.

currently the problem is that there are many ordinals transactions, apparently not to mention that they are competing for who can mine the first block of the fifth era

Rabbitqt

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Welcome to BTC this is why it will never be a replacement daily transactions.

Litzki1990

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It is definitely a big problem for the common investor or common user when it comes to trading bitcoins with extra transaction fees. Normal users may spend a maximum of $2 to $5 on a Bitcoin transaction but a normal user will not pay $20 to $40 transaction fees for a $50 to $100 transaction. But the comfort for the users is that the transaction free is never fixed when the transaction fee is excessive then the transaction fee comes back to the normal level. If an investor needs to trade and there are additional transaction fees while doing the transaction, I would tell him that you should wait for that time and try to trade again when the transaction fee is comparatively lower.

jrrsparkles

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If someone decides to hijack Bitcoin network then they have to burn few hundred thousands of dollars for every block which makes that it's not really possible in long run so attacking via network fees will just eat the money of attackers.

The excessive fees on Bitcoin network is due to the inscription of ordinals when investors think that NFT is going to moon and burning their BTC as fees.

Moreno233

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Quote from: SickDayIn on April 13, 2024, 08:40:29 AM

Fees are typically only high when the network is congesed due to a specific event, and are not high all.of the time. It was only a few days ago that the US Government transferred $2 billion of BTC to Coinbase and paid $1.74 in fees alone. I do believe that Bitcoin will become a storage of wealth and less likely be used for daily transactions like groceries or gas. The lightning network solves that if it is required though.

High fees following network congestion is one of the major challenge I have seen in Bitcoin and it is usually refer to as scalability challenge. Unless I am not getting properly, scalability is a big problem to Bitcoin and hope something can be done to handle it. We all saw how ordinals messed up the Bitcoin network that lead to high fees, that not being the first time we are experiencing such major congestion.

I do think that the transfer of $2 billion worth of Bitcoin to Coinbase by the US government is the reason for the recent high fees because according to you, they paid as little as $1.74 as fee. There could be other reasons but one or few transactions does not seem like something that can lead to the congestion of the Bitcoin network.

SickDayIn

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Fees are typically only high when the network is congesed due to a specific event, and are not high all.of the time. It was only a few days ago that the US Government transferred $2 billion of BTC to Coinbase and paid $1.74 in fees alone. I do believe that Bitcoin will become a storage of wealth and less likely be used for daily transactions like groceries or gas. The lightning network solves that if it is required though.

legendbtc

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Quote from: Z-tight on April 13, 2024, 03:55:18 AM

Quote from: Skybuck on April 12, 2024, 10:10:43 PM

Bitcoin fees seem to be roughly same as long ago, at least in terms of btc price.

When is long ago? For sometime the fee rate has been low, but it seems like the spam attack has started again and the fee rate has spiked once more. As i type this, the fee rate for high priority tx's is ~ 50 sats/vbyte and there are ~ 170k unconfirmed tx's in the mempool. Finally, take note that BTC price does not determine the fee you will pay in order for your tx to be confirmed, it is your tx size and the network congestion that determines that.

Don't blame the congested bitcoin network or rising bitcoin transaction fees on spam attacks like ORDI or more recently RUNES. Because think about it, if one day bitcoin becomes popular and is used by everyone in the world, this will also happen and be even more serious. So what we need and hope is that developers will soon have a solution to fix this before worse things happen instead of just blaming.
Bitcoin transaction fees are too high, it's true, and this makes many retail investors feel unhappy is also true, and what we need is a solution, not blame.

Z-tight

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Quote from: Skybuck on April 12, 2024, 10:10:43 PM

Bitcoin fees seem to be roughly same as long ago, at least in terms of btc price.

When is long ago? For sometime the fee rate has been low, but it seems like the spam attack has started again and the fee rate has spiked once more. As i type this, the fee rate for high priority tx's is ~ 50 sats/vbyte and there are ~ 170k unconfirmed tx's in the mempool. Finally, take note that BTC price does not determine the fee you will pay in order for your tx to be confirmed, it is your tx size and the network congestion that determines that.

Iranus

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Quote from: Synchronice on April 12, 2024, 08:55:57 AM

Quote from: Iranus on April 12, 2024, 03:33:13 AM

Have you tried checking bitcoin's transaction fees today and if I remember correctly the transaction fees are around 40$ per transaction?

No way, transaction fees weren't that high today, during the time I posted, it was around 6-7 dollars but just right now it's up to $20 based on average native segwit transaction of 140 sat/vByte.
$40 is also still affordable for some people. If transaction fees $100 or something like that and will stay that way for more than two weeks, I think then there will be a major decision made about Bitcoin's block size or other solutions but I think that people just move on altcoins and don't use Bitcoin for daily transactions.

Bitcoin transaction fees are even more volatile than bitcoin prices, LOL. If you only make transactions every few months or you are investing in bitcoin with capital of a few hundred thousand dollars and a few million dollars, then a fee of $40-50 is an affordable and insignificant price. But for those who only invest a few thousand USD or make many transactions every day, it is not as small as you think, even spending 4 USD per transaction is a problem for many people, not to mention higher.

There is no need to wait for bitcoin transaction fees to increase to $100 for people to switch to altcoins, many have already done this.

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