Excessive Bitcoin fees - page 4. | Bitcointalksearch.org

goldkingcoiner

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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?

The fees will only go high as long there is demand for transactions and there is only demand for transactions as long as the profit of the transaction justifies the large fee. For example, when all that Bitcoin NFT (Ordinals) stuff started, those NFTs were selling for very large sums. So large, in fact, that it was worth congesting the network and paying it (for the NFT minters, not the dumb saps buying them). But that hype has calmed down and so have the fees.

Bitcoin as a store of value is well worth a 7 dollar per transaction fee. But the devs are working on updates, so I see a rosy and decentralized future for Bitcoin.

Mate2237

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Op your question is very correct because there are times I also think of it why this fee is very high and if continues then average investors can't even invest in bitcoin or use the network to make some transaction because of the transaction fee. Because there are time the transaction fee is even higher than the amount of bitcoin you want to sell. The real purpose of bitcoin has not yet actualize and which is the real p2p of using it to buy things online. The ordinals of bitcoin really need to be deal with if they the developers of it have nothing to do with them but there is...

As you said time is coming that it is only the wealthy people will be using bitcoin because of the high transaction fee.

kawetsriyanto

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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?

I don't think only large institutions can use it. Everyone can use Bitcoin although they must pay higher fees for the transaction now. You must know it is not about large institution or small institution, all of people pay higher fees now. When you have a large number of Bitcoin, you will pay bigger fees as well.

By the way, the high transfer fees won't last forever. It will gradually decrease again when the number of transactions will be decreasing. If it is getting higher now, it is because more people trying to move their Bitcoin to CEX. They may prepare to sell their Bitcoin, they may try to rebuy when it is dropping again the price.

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

Won't this centralize the network if most can only trade bitcoin on centralized exchanges?

Bitcoin can be traded in decentralized exchanges. You are wrong if you assume it is only traded in centralized exchanges.
We have many decentralized exchanges, some of them are even popular enough.
Take a look on this https://coinmarketcap.com/rankings/exchanges/dex/.

oktana

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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?

It wouldn’t centralize Bitcoin but yes, it’ll affect the rate at which people transact with it. But know that no matter how high the transaction fee gets, Bitcoin will always be decentralized and you are not forced to use a centralized exchange to transact with it. But I hope it doesn’t get to that point because I can’t imagined how bad that would be.

moonie

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Quote from: Cookdata on March 04, 2024, 03:19:50 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?

You are missing things together but let's de-concatenate your questions and discuss them one after the other.

When large institutional investors use Bitcoin blockchain to make transactions, it will lead to more unconfirmed transaction in the mempool waiting for miners to mine them or include them into the next block and in the case where the mempool get congested, the institutional investors and everyother that make transactions will have to pay a higher fees before their transaction can get included into the next available block for transaction to be go comfirm.

There is no way this makes the transaction to be centralized, transaction on blockchain can never be centralized but if the institutional investors make use of centralized exchanges to trade it still doesn't make bitcoin centralize. The bitcoin centralization and power lies between the miners, the node and the Bitcoin protocol. This is impossible and can't be done to Bitcoin.

What if the exchange also runs a mining pool Wink

Cookdata

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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?

You are missing things together but let's de-concatenate your questions and discuss them one after the other.

When large institutional investors use Bitcoin blockchain to make transactions, it will lead to more unconfirmed transaction in the mempool waiting for miners to mine them or include them into the next block and in the case where the mempool get congested, the institutional investors and everyother that make transactions will have to pay a higher fees before their transaction can get included into the next available block for transaction to be go comfirm.

There is no way this makes the transaction to be centralized, transaction on blockchain can never be centralized but if the institutional investors make use of centralized exchanges to trade it still doesn't make bitcoin centralize. The bitcoin centralization and power lies between the miners, the node and the Bitcoin protocol. This is impossible and can't be done to Bitcoin.

moonie

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Quote from: Z-tight on March 04, 2024, 12:58:28 PM

Quote from: moonie on March 04, 2024, 11:40:50 AM

The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If one were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.

Tx fees spiked again, but it had been low for sometime now. I don't know if it is ordinals or fomo buying that is causing the congestion in the network, but right now tx fee is ~ 80 sats/vbyte as i type this, which is very high. During periods of high tx fee, i don't recommend that people buy through dca, you would be paying too much in fees if you are buying at different intervals, so it is better to buy less frequently and much more in amount for each purchase.

But if you defer actual coin acquisition to less frequent intervals, you average less purchasing power anyhow, as price historically tends to rise over time.

Z-tight

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Quote from: moonie on March 04, 2024, 11:40:50 AM

The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If one were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.

Tx fees spiked again, but it had been low for sometime now. I don't know if it is ordinals or fomo buying that is causing the congestion in the network, but right now tx fee is ~ 80 sats/vbyte as i type this, which is very high. During periods of high tx fee, i don't recommend that people buy through dca, you would be paying too much in fees if you are buying at different intervals, so it is better to buy less frequently and much more in amount for each purchase.

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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?

When that happens then people will start using altcoins for daily transactions and bitcoin will become a coin used for big amounts, and it will be this way because the fees for transactions will be huge, Just think about it, buy a $2 coffee and pay $50 as transaction fee just doesn't have sense. But with coins like dogecoin or Litecoin it will be totally possible to buy a $2 coffee and pay the network fee.

moonie

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Hello all,

Thank you for your thoughtful feedback and insights

Exciting times as we approach ATHs. However, I notice that fees always go up a lot when the price is more volatile. Naturally, people are more inclined to keep their coins on exchanges during these periods, which is obviously not a good thing.

The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If one were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.

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Quote from: Moreno233 on March 03, 2024, 05:51:40 AM

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?

I get scared when I imagine this happening especially during the recent times the fees went too high. It was a sad time to remember and I do wish we do not get to that point again. I must admit that I for once, doubted the possibility of Bitcoin adoption in the mainstream because such high fees is not something someone who wants to pay for goods and services will be willing to pay. It defeats the essence of using Bitcoin for payment. We also saw more people storing their Bitcoin in CEX to avoid paying high fees especially thpse using the DCA method which require regular transactions. Wish we will never get to that point again.

You shouldn’t get scared if this happened because it only means that more people will hold their Bitcoin because it’s very expensive to transfer and do a quick trade using it. People will value holding that time due to the expensive fee. This is only possible if Bitcoin price skyrocket to insane price level because the transaction will not stay in high amount(fiat value) for too long if the reason is due to increased on Bitcoin transactions.

Bitcoin fee is based on sat amount which means if the time comes that Bitcoin fee is expensive even without network congestion, I think all of us Bitcoin holder will have a massive profit due to huge price increase.

Moreno233

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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?

I get scared when I imagine this happening especially during the recent times the fees went too high. It was a sad time to remember and I do wish we do not get to that point again. I must admit that I for once, doubted the possibility of Bitcoin adoption in the mainstream because such high fees is not something someone who wants to pay for goods and services will be willing to pay. It defeats the essence of using Bitcoin for payment. We also saw more people storing their Bitcoin in CEX to avoid paying high fees especially thpse using the DCA method which require regular transactions. Wish we will never get to that point again.

bhadz

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The fees are quite stable nowadays and that's so much better compared to the time when the network was attacked by the bitcoin ordinals spams. Why we're always thinking that it is only the large institutions can afford to pay such fees? You'll never know how many individuals out there globally that are low profile and can pay such fees as long as they need to transfer any BTC from them to anyone that they're sending or needing to get some payment from them. But what we all want is to see Bitcoin again in great shape in terms of its fees and hopefully it goes back to 1 sat/vByte for every transaction that we make. But since we're in a bull run, I am not expecting that we'd see that anytime soon.

kentrolla

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Quote from: Z-tight on March 02, 2024, 02:31:52 PM

Quote from: vitya1982 on March 02, 2024, 10:38:05 AM

Well, it depends on how high is the fee. $1 for the transaction is nothing. And even $10 is not much if you're transferring thousands of USD in Bitcoin.

Take note that tx fees should be valued in sats/vbyte and not in dollars or any other currency. We used to make tx's with as low as 1 sat/vbyte before, right now fees are not as bad as it was during the ordinals craze, but not as low as it was when tx fees were very cheap. It is worth mentioning that people make a lot of micro payments using BTC, and if what they have to pay in fees is equivalent to $1 or above, then it may be considered expensive. However, like you said, if you are sending a large amount or making cross-border payments, then that amount in fees is good.

Yes the problem here is we are happy when the value of Bitcoin increases and we should be aware that the fee is calculated in SAT as you have clarified and it's not the increase in fee structure but rather the value of SAT gets increased, since this is not based on USD we feel pinch in our pocket when making transactions. This is something which we cannot resolve and the two options left to use would be either don't make micro payments through BTC when you feel the price is high as we compare it with our currency, second use any other altcoin for micro payments as I use TRX for such purpose and we need to understand that fee will increase when the value has increased and we cannot compare it with USD or other currency but SAT.

Z-tight

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Quote from: vitya1982 on March 02, 2024, 10:38:05 AM

Well, it depends on how high is the fee. $1 for the transaction is nothing. And even $10 is not much if you're transferring thousands of USD in Bitcoin.

Take note that tx fees should be valued in sats/vbyte and not in dollars or any other currency. We used to make tx's with as low as 1 sat/vbyte before, right now fees are not as bad as it was during the ordinals craze, but not as low as it was when tx fees were very cheap. It is worth mentioning that people make a lot of micro payments using BTC, and if what they have to pay in fees is equivalent to $1 or above, then it may be considered expensive. However, like you said, if you are sending a large amount or making cross-border payments, then that amount in fees is good.

jrrsparkles

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If only few people are making transactions then obviously the fee will get lowered after sometime unless someone really want to burn their money to keep the retail users from using the Bitcoin network. As far as I know the clogs won't last for very long but the one that lasting long is due to the ordinals spam but fees went considerably to low range from where it was but still 1sat/byte tx seems far away considering the bull already kicked in so obviously there will be more play on the network.

vitya1982

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Quote from: tbct_mt2 on March 02, 2024, 10:02:14 AM

Quote from: AHOYBRAUSE on March 02, 2024, 06:00:56 AM

Fees are not high at all in the past weeks.
You can't look at the btc price and say fees are high, it's still the same sat/b it was before, only 1 sat is worth more now.

People will have different views on this.

If they see it in satoshi spent for transaction fee, they will feel more comfortable.
If they see it in $ value of their satoshi spent for transaction fee, they will feel uncomfortable because they are spending more $ than in the past when Bitcoin price was cheaper than in 2024.

I believe we can not find an agreement for this as it depends on personal view.

Well, it depends on how high is the fee. $1 for the transaction is nothing. And even $10 is not much if you're transferring thousands of USD in Bitcoin.

tbct_mt2

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Quote from: AHOYBRAUSE on March 02, 2024, 06:00:56 AM

Fees are not high at all in the past weeks.
You can't look at the btc price and say fees are high, it's still the same sat/b it was before, only 1 sat is worth more now.

People will have different views on this.

If they see it in satoshi spent for transaction fee, they will feel more comfortable.
If they see it in $ value of their satoshi spent for transaction fee, they will feel uncomfortable because they are spending more $ than in the past when Bitcoin price was cheaper than in 2024.

I believe we can not find an agreement for this as it depends on personal view.

AHOYBRAUSE

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Fees are not high at all in the past weeks.
You can't look at the btc price and say fees are high, it's still the same sat/b it was before, only 1 sat is worth more now.

We can consider ourselves happy we don't see fees like 100-200sat/b at the moment.
Last time the price went through the roof the transaction fees skyrocketed to like 30$ per transaction.

These days we have at the moment are so easy peasy, I don't even know why somebody brought this thread back out.

ABCbits

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Quote from: JiiBs on March 01, 2024, 02:37:41 PM

Quote from: ABCbits on February 27, 2024, 07:13:00 AM

--snip-

I don’t find anyone to really do anything for free especially, when it’s going to cost them something to do it. Miners gets to procure these devices to enable them mine and get the rewards that follow, they spend on energy too used by these devices that have pushed environmentalist to take interest on energy used by mining and so, having any hope that these shouldn’t be subsidized from fees is a mistaken idea.

Yeah, usually there's string when someone do something for free. For example, ViaBTC offer free acceleration service in order to promote their pool and paid acceleration service.

Quote from: JiiBs on March 01, 2024, 02:37:41 PM

While the model of high fees would not be acceptable, it tends to persist only for a period of time and that in itself is acceptable. In a way, it discourages users from making more and more transactions which would in turn result in scarcity and that is good for the system I think.

I disagree, it'd also discourage people from using Bitcoin as currency or payment method.

Topic: Excessive Bitcoin fees - page 4. (Read 1438 times)