Topic: Future fees of legacy addresses (Read 448 times)

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

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

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...

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.

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.

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.

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

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.

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.

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.....

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.

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.

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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.

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.

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?

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.

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.

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




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


Edited at request of nc50lc

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.

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

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

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

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.

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.

Thank you both for those two very good answers
I only have 1 smerit left, i'll give it to CryptopreneurBrainboss as he has a lower rank and was first to answer.

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


Cheers

Actually that depends on the transaction structure itself (total input, total output, script size, etc.). But on some cases, it's true.


It's hardly predictable (especially we're talking few years in future), there are few important parameter/variable :
1. Transaction size. Upcoming technology such as Schnorr Signature will reduce transaction size on transaction with more an input.
2. Minimum transaction fees allowed to be broadcasted. Currently it's 1 sat/byte, but there are plans to reduce it.
3. Maximum block size
4. Average transaction per second (TPS)
5. Total unconfirmed transaction

But obviously it will be higher than redeem/spend coins from SegWit address.

Permit me to speak from a general point of view, the rise of the price of transfer fee is cause by the network users competing within themselves on who's transaction will be confirmed first by the miners as a result they increase their transfer fee to attract the miners to choose theirs over others from the huge queue of transactions lined up which must have been caused by the increase of bitcoin network users. And due to the steady increase of the numbers of bitcoin network users over the years, due to the success of the price of bitcoin and other factors, we're likely to experience high transfer fee from legacy address that's why we're encourage to use segwit address and LN for now until better solutions are developed.

So for your 5-10yrs period, based on the current situation, my answer is yes the trx fee will increase but hopefully before then, a better solution must have been developed.

Hi,

I have a simple question regarding the tx fees.

Fees are about 1 $ ( 0.00018BTC) now.
They have been higher ( 0.0039btc in December 2017) and lower in the past.
And of course, it depends on the "weight" of the Tx in Byte
the weight of tx issued by 1xxx addresses is heavier than tx issues by Bench32 addresses (3xx or bcxxx), right ?
With segwit the tx fees are reduced by 40% (found online).

So when a segwit address send coins to a segwit or a legacy (1xxxxx) the fees are low.

However then, when a legacy address wants to send the coins to another legacy or segwit, the tx are higher.

This is all good by me today, but what about in 5 years?

Today we still have a BTC relatively low in price ( $5.8k).
Which mean that if I want to store $58 in BTC I get about 0.01BTC on my paper wallet.



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?

Thanks for the help

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local rule: no sig spammer
thanks

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