Future fees of legacy addresses | Bitcointalksearch.org

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Quote from: chenille on May 08, 2019, 11:52:34 AM

Quote from: RapTarX on May 07, 2019, 10:57:42 PM

Quote from: CryptopreneurBrainboss on May 06, 2019, 01:37:31 PM

Are you forgetting miners did mine even when bitcoin had zero value.

Don't miner gets reward too? Transaction fee is not the only reward. Not everyone but the successful miner gets block reward too. At the beginning, who mined bitcoin was out of interest on peer to peer currency or they could have guessed the current price then.

Right, miners are getting block rewards (currently 12.5 BTC) plus the transaction fees of all tx included in the block. BTC.com gives a very good overview, where you can see block raward + tx fees: https://btc.com/block

when bitcoin had (near) zero value, miners need minimal efforts and equipments to mine too
so I agree with both of you, transaction fee is not the main reward for miners now or then
^[1] mining process is adding/confirming new transaction records to blockchain and introducing new coins to the system
since the beginning miners are doing it for obtaining new coins and at the same time protecting network integrity
they aim for block rewards, and transaction fees are just added incentives for them
they can, if they want to, create a new block without including new transactions except its own coinbase transaction

[1] Mining https://en.bitcoin.it/wiki/Mining

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Quote from: cestmoi on May 05, 2019, 07:47:34 PM

So my question is the following :
If I load some legacy addresses (paper wallet for example or vanity addresses ) with some low amount of crypto ( $50 to $100).
(They are going to be birthday presents for family members in 5 to 10 years).

When they will want to redeem the coins to a segwit or LN compatible wallet, what kind of fees are we expecting?
Can we expect tx fees to always stay in the $0.1 to $3 forever or are they going to follow BTC price and become (in USD) astronomically high?

Transaction fee is picked by you, not the other way around. A wallet might suggest a fee based on current network traffic, so that you won't have to wait too long, but that is up to you.

You can ignore the wallet suggestion and force it use the lowest fee, currently 1sat/B. Such thing would do if you don't mind waiting hours or days depending, for the transaction to complete.

If you are going to make the paper wallets yourself, there is no reason not to make them segwit already. In fact you should make them native segwit.

Also do not try to see it in USD, because the price of bitcoin might be different in a few years. a few ¢ today maybe a couple of $ tomorrow.

LN I'm not sure what the situation would be...

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chenille!

Quote from: RapTarX on May 07, 2019, 10:57:42 PM

Quote from: CryptopreneurBrainboss on May 06, 2019, 01:37:31 PM

Are you forgetting miners did mine even when bitcoin had zero value.

Don't miner gets reward too? Transaction fee is not the only reward. Not everyone but the successful miner gets block reward too. At the beginning, who mined bitcoin was out of interest on peer to peer currency or they could have guessed the current price then.

Right, miners are getting block rewards (currently 12.5 BTC) plus the transaction fees of all tx included in the block. BTC.com gives a very good overview, where you can see block raward + tx fees: https://btc.com/block

Most miners are mining in different pools and the rewards are redirected to the successful pool of each block.

jademaxsuy

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Op you should not problem the future regarding with future fees of legacy addresses.

Why? there could be more legacy addresses that will be added and having different forms of segwits to which it could be lower fees than the current legacy addresses. For now, I advised that you should ask your friends, relatives, and family to use the same segwit as to what you have now so that you can save transaction fees in the future of transferring bitcoin from one wallet to another wallet.

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Quote from: CryptopreneurBrainboss on May 06, 2019, 01:37:31 PM

Are you forgetting miners did mine even when bitcoin had zero value.

Don't miner gets reward too? Transaction fee is not the only reward. Not everyone but the successful miner gets block reward too. At the beginning, who mined bitcoin was out of interest on peer to peer currency or they could have guessed the current price then.

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Quote from: cestmoi on May 05, 2019, 07:47:34 PM

Fees are about 1 $ ( 0.00018BTC) now.
~
Can we expect tx fees to always stay in the $0.1 to $3 forever or are they going to follow BTC price and become (in USD) astronomically high?

Quote from: nc50lc on May 05, 2019, 10:28:08 PM

If your relatives are not in a hurry, they can set the lowest possible fee for "within-a-week" transaction, say: from 1sat/byte (today) to <100sat/byte (Dec2017). [historical data]

200bytes ∙ 1sat/bytes = 0.00000200BTC Transaction Fee
200bytes ∙ 100sat/bytes = 0.00020000BTC Transaction Fee

We'll never know the price of Bitcoin at the time and 20,000 Satoshi might be around $10 or $100.

just like nc50lc explained above, the $ value of your transaction fee will depend on 2 factors,
the mempool size which drives fee per byte to increase and BTC price at the time
so @cestmoi I suggest you start thinking of bitcoin transaction fee in bitcoin (satoshi) term
the $ fee value would be proportional to the transaction size and bitcoin price
one thing to avoid is sending your unconsolidated bitcoin at the time network is heavily congested

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Quote from: jmolmo on May 06, 2019, 09:13:12 AM

if fees are too low, nobody would miner.

Are you forgetting miners did mine even when bitcoin had zero value. No matter how low the fee gets we'll still have dedicated miners who have the best interest of bitcoin succeeding at heart and might even mine for free. And also those miner who have accumulated so much bitcoin that they worth mind mining for pennies just to keep the dream alive. Bitcoin will still be mined irrespective of how low the fee gets.

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In my opinion, it will always reach a equilibrium, like the fox and rabbits population simulation.

If fees are too much, nobody will use cryptos, and that's it.

if fees are too low, nobody would miner.

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If people only care about low fees there are many other altcoins that people can use. Even the one that people hate, BCH, I know don't hate me.....

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Quote from: tranthidung on May 06, 2019, 04:55:47 AM

However, it seems that you forgot at least one thing: electricity cost. Who knows how high electricity cost will be in the future? This factor will considerably affect on bitcoin transaction fees and rewards to miners. In real-life, inflation might change, so no one knows. Of course, once again, I agree that it won't much higher than current fess. Maybe somewhere around $5 to $10.

Electricity cost is much more related to the location (legislation, government incentives, natural resources, etc) and they will have a bigger effect in Bitcoin prices, not in transaction costs , in my point of view

It costs something like 3k USD to mine one Bitcoin in China (it's close to that value, based on electricity costs). If this price raises to about 10-20k, it will have an impact on bitcoin prices
. But theoretically it will not have that same impact on fees.

Halving will work like that. Even if electricity costs don't change, when halving occurs it will double the Bitcoin mining costs, but will not necessarily double transaction fees.

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Quote from: bitmover on May 06, 2019, 02:49:17 AM

Even if BTC price goes 10-100x, fees will stay lower than $1, because that's enough to reward miners.

I agree that in the future, transaction fees on bitcoin network might not increase significantly, because after the terrible rises of bitcoin transaction fees in late of 2017 and thousands of transaction congested for days, it seems that by now we have better technical solutions, and we might see better improvements in the future. It is basics to adapt and survive in crypto selection. If bitcoin can not adapt to maintain low transaction fees, it will get troubles.

However, it seems that you forgot at least one thing: electricity cost. Who knows how high electricity cost will be in the future? This factor will considerably affect on bitcoin transaction fees and rewards to miners. In real-life, inflation might change, so no one knows. Of course, once again, I agree that it won't much higher than current fess. Maybe somewhere around $5 to $10.

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If you have long term planning then I suggest you the consolidate the smaller inputs now when fees are lower.

It will be really interesting to see how the network will able to sustain itself when block rewards will be diminished and transactions fees will be going to the main source of the income for miners.

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It will be a pain in the future if more people use bitcoin the fees will increase high but there are some alternative solution about this that is why they release segwit addresses to reduce the transaction size and faster transaction than the legacy wallet.

LN is another solution but you still need to send a transaction to the main blockchain in order to send it to another wallet.

Why would you choose legacy wallet you can start using segwit instead to pay a lower fee?

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I wouldn't worry about fees in long term.
Imo they will stay lower than $1 and most of times lower than 0.3, with very few exceptions during price peaks.

Even if BTC price goes 10-100x, fees will stay lower than $1, because that's enough to reward miners.

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Quote from: cestmoi on May 05, 2019, 10:42:08 PM

Quote from: nc50lc on May 05, 2019, 10:28:08 PM

-snip-
It depends on the timing since based from the history, mempool congestion didn't occurred for over a year or even a quarter.
Example is December 2017, even if the average tx fee was high, it doesn't stayed that way for too long.

-snip-
I'll try to make single input bench32 paper wallet as much as possible

First of all, please remove the quote since it contains wrong computation (sry about that).

Next, SegWit is all about "Fitting more Transactions in a block" than dramatically affecting the fee (just a small percentage).
The maximum weight unit a block can handle is 4mb, a legacy address has a weight of 4WU per 1byte while a SegWit address has 1WU per 1byte.
So, more SegWit, more tx in a block.

It's all about: if more people are using SegWit, there will be more transactions that can be processed per day thus minimizing mempool congestion scenarios like December2017.
So it might not happen again if more and more people are switching to SegWit.

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Quote from: nc50lc on May 05, 2019, 10:28:08 PM

If it's from a paper wallet,~snip~

It depends on the timing since based from the history, mempool congestion didn't occurred for over a year or even a quarter.
Example is December 2017, even if the average tx fee was high, it doesn't stayed that way for too long.

Many thanks for the answer and the figures + examples.
I'll try to make single input bench32 paper wallet as much as possible

Quote from: nc50lc on May 05, 2019, 10:28:08 PM

Quote from: cestmoi

local rule: no sig spammer
thanks

You can't set a local rule if your thread wasn't self-moderated Wink

I know, but eh, it worked. Only quality answers (so far )
Wink

Edited at request of nc50lc

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Quote from: cestmoi on May 05, 2019, 07:47:34 PM

So my question is the following :
If I load some legacy addresses (paper wallet for example or vanity addresses ) with some low amount of crypto ( $50 to $100).
(They are going to be birthday presents for family members in 5 to 10 years).

When they will want to redeem the coins to a segwit or LN compatible wallet, what kind of fees are we expecting?
Can we expect tx fees to always stay in the $0.1 to $3 forever or are they going to follow BTC price and become (in USD) astronomically high?

If it's from a paper wallet, means that it will come up with a "one input - one output transaction" with the average size of 200bytes = 800WU (weight).
If your relatives are not in a hurry, they can set the lowest possible fee for "within-a-week" transaction, say: from 1sat/byte (today) to <100sat/byte (Dec2017). [historical data]

200bytes ∙ 1sat/bytes = 0.00000200BTC Transaction Fee
200bytes ∙ 100sat/bytes = 0.00020000BTC Transaction Fee

We'll never know the price of Bitcoin at the time and 20,000 Satoshi might be around $10 or $100.

It depends on the timing since based from the history, mempool congestion didn't occurred for over a year or even a quarter.
Example is December 2017, even if the average tx fee was high, it doesn't stayed that way for too long.

Quote from: cestmoi

local rule: no sig spammer
thanks

You can't set a local rule if your thread wasn't self-moderated Wink

-edit: wrong numbers, I used SegWit and multiplied the weight to the /byte fee as an example-

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I have done a little bit of research and while i have know https://www.bitaddress.org/ for many many years i didn't know https://segwitaddress.org

I guess this solves my issues, I'll just do long term Segwit storage

I will wait for fees to go low and will reconcile my small inputs

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Quote from: cestmoi on May 05, 2019, 09:02:54 PM

ETFbitcoin, your answer was fantastic, I hope CryptopreneurBrainboss or someone else send you one smerit for your message

Yes his reply was, I have always been a fan of how him and others on Development & Technical Discussion Board construct their replies, i occasionally visit the board to add to my knowledge. I appreciate quality question related threads when I see one which yours is one of and I'm also out of smerits and noticed you already have 0.5smerits so just sent you another 0.5smerits you now have 1 smerits to merit him.

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Quote from: cestmoi on May 05, 2019, 07:47:34 PM

If I load some legacy addresses (paper wallet for example or vanity addresses ) with some low amount of crypto ( $50 to $100).
(They are going to be birthday presents for family members in 5 to 10 years).

When they will want to redeem the coins to a segwit or LN compatible wallet, what kind of fees are we expecting?
Can we expect tx fees to always stay in the $0.1 to $3 forever or are they going to follow BTC price and become (in USD) astronomically high?

Very interesting question. I think considering past events that we can refer to, there is high possibility that you would need to wait for non-bubble time for spending this money. In other words to wait for time when there is low amount of Bitcoin transactions in network because then fees are low.
In bubble time fees could be as high as $10 but after bubble it would be $0.1 so 100 times less.

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