Topic: Explain why high bitcoin transactions are expensive? (Read 549 times)
As bitcoin fees increased and depositors did not decrease, at this time fee is not significant when the bitcoin price is at the $ 10,000 threshold. I think there will be a change in fees when the bitcoin reaches the higher value threshold.
Actually, It is not expensive. The thing is that Bitcoin is expensive. Generally, paying 50k sat is enough for transactions
Suppose that Bitcoin is $1 and you need to pay $500, your fee is 5 cent. Think of a Swift, almost $20.
I believe that paying more than 20 cents for a crypto-transaction with 1 input and 2 outputs is too expensive for me. If Bitcoin had full segwit adoption and dynamic block size for increasing block size when there is a high usage period, there would be no need for other altcoins usage and the price would be much higher. Suppose that Bitcoin is $1 and you need to pay $500, your fee is 5 cent. Think of a Swift, almost $20.
What most people don't get is that resources are expensive, so you cant keep raising the blocksize as big as needed to keep it from getting full, this is what BCash supporters don't get. They unironically believe there is no downfall to that, that it has no impact on the decentralization of the network.
Now any attempts to hardfork into bigger blocksizes will just result in altcoins. Satoshi predicted this would happen. He should have thought about a way to do blocksize increases as a soft fork if he wanted blocks to ever be increased again.
Now any attempts to hardfork into bigger blocksizes will just result in altcoins. Satoshi predicted this would happen. He should have thought about a way to do blocksize increases as a soft fork if he wanted blocks to ever be increased again.
High bitcoin transactions can be considered expensive if the amount used as a transaction in small quantities, but if the number of transactions in the number of lots then the transaction will be cheap
Actually, It is not expensive. The thing is that Bitcoin is expensive. Generally, paying 50k sat is enough for transactions
Suppose that Bitcoin is $1 and you need to pay $500, your fee is 5 cent. Think of a Swift, almost $20.
Suppose that Bitcoin is $1 and you need to pay $500, your fee is 5 cent. Think of a Swift, almost $20.
Personally, I feel bitcoin trading charges are quite good for small purchases, is due to the overload of the excavator so new transaction costs so high would not explain to me, thanks
Actually I think that Bitcoin transaction fees are proving to be profitable for so-called bitcoin "miners". Miners work out complex cryptographic puzzles to add transactions to the blockchain, a decentralized record of all bitcoin transactions. They are paid in bitcoin in return for their services beside Transaction fees are based on the size of a transaction based on the number of inputs and outputs
Hello Minhxx,
To confirm what has been previously said by others on this topic, actually transaction fees are at a low rather than a high now. Due to the massive implementation of Segwit by exchanges and brokers, transactions now take less fees to be processed. If you would like an explanation about Segwit then we would be happy to inform you or if you want to read more on the topic, a more detailed explanation on Segwit can be found here. The scaling problem bitcoin encountered in the last couple of months has been eased due to this new approach actually decreasing the fees per transaction.
When using your personal wallet for making transaction always check if you can decide your own transaction fees. Some wallets automatically send a transaction fee with your payment. This could lead to you paying too much fee per transaction, therefore we always suggest you check out the current transaction fees on the following website here. By estimating how fast a transaction needs to arrive in the recipients wallet you can chose the according fee for the transaction.
With kind regards,
The Anycoin Direct team
To confirm what has been previously said by others on this topic, actually transaction fees are at a low rather than a high now. Due to the massive implementation of Segwit by exchanges and brokers, transactions now take less fees to be processed. If you would like an explanation about Segwit then we would be happy to inform you or if you want to read more on the topic, a more detailed explanation on Segwit can be found here. The scaling problem bitcoin encountered in the last couple of months has been eased due to this new approach actually decreasing the fees per transaction.
When using your personal wallet for making transaction always check if you can decide your own transaction fees. Some wallets automatically send a transaction fee with your payment. This could lead to you paying too much fee per transaction, therefore we always suggest you check out the current transaction fees on the following website here. By estimating how fast a transaction needs to arrive in the recipients wallet you can chose the according fee for the transaction.
With kind regards,
The Anycoin Direct team
So, the seconds you waste trying to calculate the "perfect" block, are the seconds that your competitors are using to generate hundreds of thousands of hashes to be that much closer to the 12.5 BTC reward.
You are right, the "extra fees" which can be collected in the "perfect block" is not so high (in truth is extremaly low compared with the the total of fees+coinbase reward), and the main profit of the miners is still the 12.5 BTC.
When we reach a point where fees paid greatly outweighs the base block reward, it might be more beneficial to calculate "perfect" blocks.
But about the reach of the end of the block rewards... The problem of mounting the perfect block is still very hard to compute (the algorithm has a polynomial complexity and its inviable with the current amount of transactions to be computed), and this problem dont have any linear solution until now, and maybe we will need a new method for this. (we have ~100 years for this, so...).
Curiosity: the complexity of the 0-1 knapsack problem is O(nW), where n is the number of objects (transactions) and W is the capacity (1MB), and lets round the n to 1000 and the W is 1000000000 bytes. So (1^3)*(1^9)= 1^12. And a modern home computer can do about 1^9 calcules/second (i dont know how many calcules of this type a asiic can do per second, I will be greatful if somebody inform me), so in a home computer we waste about (1^12)/(1^9)=(1^3)=~16 minutes. This is 16 minutes to calcule how the miner will build the block, and it still need to calcule the hashes !
You're also neglecting the time constraints... Mining is competitive... VERY competitive. Especially given the total hash rate, cost of electricity, amount of reward and value of Bitcoin that we currently have.
At the end of the day, the "fees" amount to maybe 10-15% of the total block reward that a miner will get... and only when fees are REALLY high. Currently, block rewards are around 12.52 BTC to 12.7 BTC... so the total fees per block are currently only between 0.02 and 0.2 BTC! Which is a reward "bonus" of maybe 1 to 1.5% at the moment over the 12.5 BTC.
So, the seconds you waste trying to calculate the "perfect" block, are the seconds that your competitors are using to generate hundreds of thousands of hashes to be that much closer to the 12.5 BTC reward.
When we reach a point where fees paid greatly outweighs the base block reward, it might be more beneficial to calculate "perfect" blocks.
At the end of the day, the "fees" amount to maybe 10-15% of the total block reward that a miner will get... and only when fees are REALLY high. Currently, block rewards are around 12.52 BTC to 12.7 BTC... so the total fees per block are currently only between 0.02 and 0.2 BTC! Which is a reward "bonus" of maybe 1 to 1.5% at the moment over the 12.5 BTC.
So, the seconds you waste trying to calculate the "perfect" block, are the seconds that your competitors are using to generate hundreds of thousands of hashes to be that much closer to the 12.5 BTC reward.
When we reach a point where fees paid greatly outweighs the base block reward, it might be more beneficial to calculate "perfect" blocks.
After reading the post made by the two of you, if i'm correct. I believe you guys are still saying the samething but I don't understand what you meant when you said "not the perfect "
What i mean with "not the perfect" is like my mentioned example, the miner could gain 1300 satoshis, but he will only gain 1200 because he will make the greedy chose (the options 3 and 4, which are the transactions with the best satoshi/byte).
Other good example: imagine if the miner included all transactions with the best sat/byte but there is still a 200 bytes of space in the block, and the next transactions of the best sat/byte is one with 201 bytes and 20sat/byte and after this there is other with 199 bytes and 19sat/byte, in most of cases the miner will not include more transactions, even existing space for the one with 19sat/byte. This is the reason why your simple and small transaction with 1input, 1 output and 1sat/byte is not confirmed so easy. But why they do this ? First reason is that its very hard to make this experiment with every transaction and second its because if they start to include these "poor" transactions, people will not be incentived to increase their fees.
Note: the miner can chose the transactions of their block, so some companies can do a "profitable" chose, while the most will make only the greedy chose.
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I don't agree with what you said cause the act of selecting transaction with high fee was some thing which was confirmed by a lot of people on this forum. Can explain why transaction with low fee get stuck for 2weeks or more while people that send bitcoin with high fee get theirs confirmed as soon as possible?
Im not saying that the miners will not chose the transactions with the best fees, Im trying to say that the chose of this transactions could not give the optimal profit for the miners, anyway they still select in this way. For an example:
there is only 4 transactions available to mine:
1) 300 kbytes with 300 sat of fee (1sat/kbyte)
2) 500 kbytes with 600 sat of fee (1.2sat/kbyte)
3) 600 kbytes with 800 sat of fee (1.33sat/kbyte)
4) 200 kbytes with 400 sat of fee (2sat/kbyte)
The miner will chose the options 4 and 3 (400+800=1200sat) while the optimal chose will be the options 1, 2 and 4 (300+600+400=1300sat). But they cant do this calcule for every block so they chose only the ones with the higher sat/byte (wwhich gives a good value, but not the perfect).
I don't agree with what you said cause the act of selecting transaction with high fee was some thing which was confirmed by a lot of people on this forum. Can explain why transaction with low fee get stuck for 2weeks or more while people that send bitcoin with high fee get theirs confirmed as soon as possible?
Im not saying that the miners will not chose the transactions with the best fees, Im trying to say that the chose of this transactions could not give the optimal profit for the miners, anyway they still select in this way. For an example:
there is only 4 transactions available to mine:
1) 300 kbytes with 300 sat of fee (1sat/kbyte)
2) 500 kbytes with 600 sat of fee (1.2sat/kbyte)
3) 600 kbytes with 800 sat of fee (1.33sat/kbyte)
4) 200 kbytes with 400 sat of fee (2sat/kbyte)
The miner will chose the options 4 and 3 (400+800=1200sat) while the optimal chose will be the options 1, 2 and 4 (300+600+400=1300sat). But they cant do this calcule for every block so they chose only the ones with the higher sat/byte (which gives a good value, but not the perfect).
These lead people to paying high transaction fee in other to attract the miners to their transaction because the higher the transaction fee the more the gain or block reward of the miner.
This is not always truth, as said before, selecing only the transactions with the best sat/byte is not always the optimal set of transactions for a better profit (see about the knapsack problem), but the calcule of this optimal set may be very expensive (its a NP-complete problem) and the miners only follows this rules to make this selection faster and ncentive higher fees from the users.
These lead people to paying high transaction fee in other to attract the miners to their transaction because the higher the transaction fee the more the gain or block reward of the miner.
This is not always truth, as said before, selecing only the transactions with the best sat/byte is not always the optimal set of transactions for a better profit (see about the knapsack problem), but the calcule of this optimal set may be very expensive (its a NP-complete problem) and the miners only follows this rules to make this selection faster and ncentive higher fees from the users.
The high traffic of bitcoin users was the main thing that cause the high expense of bitcoin transactions fee because a block were generated every 10minutes and a block can only contains about 2,000 transactions. Meanwhile, we have 200,000 or more transactions waiting for the chance to enter into a block to be considered official or confirmed. These lead people to paying high transaction fee in other to attract the miners to their transaction because the higher the transaction fee the more the gain or block reward of the miner.
As has been conversed, it is not the amount of transaction but the inputs and outputs, you can always send to yourself in the wallet and combine the inputs to lessen. Most people do not worry or think much about this, Bitcoin fees are high now as there are miners that do not solve low value blocks and so the fees are pushed higher and higher, just to even get in the next 15 blocks, let alone more.
The more the blocks chosen, the transaction fees are low. The less blocks are chosen, the fees are bit high.
Blocks don't get 'chosen'.
Blocks get mined. With an average of 6 blocks per hour.
Fees are dependend on how many transactions are waiting to get confirmed and how much user are willing to pay for a faster transaction.
Sometimes the confirmation time is affected by the size of a transaction. A small transaction with a low Sat per byte fee is more likely to get confirmed than a larger transaction with the same Sat per byte fee as it can be used to fill a block. Say a 200byte transaction can be used to fill empty space more than a 20kbyte transaction (as a block may already be full by the time the mining node considers that transaction).
The more the blocks chosen, the transaction fees are low. The less blocks are chosen, the fees are bit high.
Blocks don't get 'chosen'.
Blocks get mined. With an average of 6 blocks per hour.
Fees are dependend on how many transactions are waiting to get confirmed and how much user are willing to pay for a faster transaction.
But the minimum fee does not cross more than a dollar.
The minimum fee to get a transaction confirmed within a reasonable timeframe was way above 1$ in december.
This depends 1) on the amount of transactions and 2) on the $-value of BTC.
Better use wallets with Segwit upgrades. Segwit address do consume less transaction fees. The more the blocks chosen, the transaction fees are low. The less blocks are chosen, the fees are bit high. But the minimum fee does not cross more than a dollar.
Over time, and after sending a lot of payments, you will soon realize that the highest bitcoin transactions are not necessarily the ones with the highest fees. Newly minted coins can be sent with an extremely low transaction fee as there is little history to be transferred, whereas a small volume transaction with a lot of in/outs can be quite expensive to send in relative terms. Either way, this isn't such an issue as the transaction fees have dropped drastically, making even large (in size) transactions cheap to send.
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