Fee, schmee... Why are we worried about fees right now when the block rewards
will be high for a decade?
Topic: help me understand the fee market (Read 573 times)
legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
now let talk about what an amzing payment system bitcoin would be if a 20$ payment had a 1$ fee associated with it.
Blockchain is a settlement system, similar to Fedwire. Try to send $20 through Fedwire and see how much they charge you
the answer is they wouldn't
miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So Basically all of those arguments saying that the miners would drive up the fees to be ridiculously high are unfounded.miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
for BIP100 or any BIP that wants to up the limit in anyway, fees should stay very low.
for BIP000 ( do nothing ) fee will go up to the point where using bitcoin will be expensive enough to stop poeple from using it. ( maybe years down the road when block limit is at like 32MBs we can think of this method as reasonable.)
the answer is they wouldn't
miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So Basically all of those arguments saying that the miners would drive up the fees to be ridiculously high are unfounded.miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So is this actually your solution for the block size debate? Let's leave the 1MB cap for the moment and let's play with the fees, or to say, let's increase the fees as needed. And this is fine with me, I think that even a fee of 0.0005 or even a fee of 0.001 BTC isn't amazingly big, if you send let's say $1,000 worth of Bitcoin, it's nothing to pay 0.001 or $0.23.
But what happens then if we get so many users on board that they are all ready to pay 0.0005 but there is no room for 1MB block? I guess everybody will agree and raise block size at this moment, like you said to 8MB. But what happens when even this 8MB becomes too small?
Or are we really far, far away from this point?
The cap would go up again. I thought that he meant something like BIP 100 where miners could vote to increase or decrease the block size limit. They would just keep the limit at a point that the fees go up enough to be profitable, but then they can vote to increase the size so that people still use Bitcoin.But what happens then if we get so many users on board that they are all ready to pay 0.0005 but there is no room for 1MB block? I guess everybody will agree and raise block size at this moment, like you said to 8MB. But what happens when even this 8MB becomes too small?
Or are we really far, far away from this point?
Fck altcoins.
If you don't wanna pay the high fees required to maintain the Bitcoin network the alternatives are lightning, other payment channels or off-chain methods. In fact if you can't pay for it you most likely don't actually need it that bad enough
Clearly you don't know much about economics. Sure there will be those hardcore fanatics that will stick with Bitcoin no matter what, but for the general populace, if fees go to high, they will go with the next best alternative. While Bitcoin dominates the market, there is still competition, and with just one screw up like ridiculously high fees, people will most likely ditch Bitcoin for an altcoin because it is in their self-interest to pay lower fees. If you don't wanna pay the high fees required to maintain the Bitcoin network the alternatives are lightning, other payment channels or off-chain methods. In fact if you can't pay for it you most likely don't actually need it that bad enough
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
Fck altcoins.
If you don't wanna pay the high fees required to maintain the Bitcoin network the alternatives are lightning, other payment channels or off-chain methods. In fact if you can't pay for it you most likely don't actually need it that bad enough
right if you can't use bitcoin because its expensive use something else... troll much?
anyway...
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
the answer is they wouldn't
miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So is this actually your solution for the block size debate? Let's leave the 1MB cap for the moment and let's play with the fees, or to say, let's increase the fees as needed. And this is fine with me, I think that even a fee of 0.0005 or even a fee of 0.001 BTC isn't amazingly big, if you send let's say $1,000 worth of Bitcoin, it's nothing to pay 0.001 or $0.23.
But what happens then if we get so many users on board that they are all ready to pay 0.0005 but there is no room for 1MB block? I guess everybody will agree and raise block size at this moment, like you said to 8MB. But what happens when even this 8MB becomes too small?
Or are we really far, far away from this point?
i think a fee of over 10cents is pushing it.
10cents * 1MB worth of TX = ~2BTC
thats not a bad miners fee... but fee is useless if the system doesn't work well
if we could make it so free TX are always possible but really slow, everyone would pay a small fee, and we can still say it cost nothing to use bitcoin.
i think that where block limit always needs to be, it needs to be high enough so if you pay a tiny fee your pretty much guaranteed to get you TX processed, and low enough so that if you pay no fee your likely to wait a few blocks because there isn't any room for free TXs in every block.
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
Fck altcoins.
If you don't wanna pay the high fees required to maintain the Bitcoin network the alternatives are lightning, other payment channels or off-chain methods. In fact if you can't pay for it you most likely don't actually need it that bad enough
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
the answer is they wouldn't
miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So is this actually your solution for the block size debate? Let's leave the 1MB cap for the moment and let's play with the fees, or to say, let's increase the fees as needed. And this is fine with me, I think that even a fee of 0.0005 or even a fee of 0.001 BTC isn't amazingly big, if you send let's say $1,000 worth of Bitcoin, it's nothing to pay 0.001 or $0.23.
But what happens then if we get so many users on board that they are all ready to pay 0.0005 but there is no room for 1MB block? I guess everybody will agree and raise block size at this moment, like you said to 8MB. But what happens when even this 8MB becomes too small?
Or are we really far, far away from this point?
now let talk about what an amzing payment system bitcoin would be if a 20$ payment had a 1$ fee associated with it.
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
the answer is they wouldn't
miners would find a good balance so that bitcoin TX remain low cost, because in the end the fee they collect aren't valuable if bitcoin isn't valuable, and bitcoin isn't valuable if it's expensive to use it, or less valuable. miners would bump the limit up to what the avg miner can comfortably handle probably ~8MB, and then maybe they would collectively refuse to bump the limit any future, and fee would start going up because 8MB blocks are being filled ( wouldn't that be nice if bitcoin had 8X more traffic then it has today) and then because 8MB of tx with a 0.0005BTC fee = 16BTC in fees pre block ( 8MB / avg tx size 250 bytes *0.001BTC fee) suddenly mining is very profitable, more poeple join, poeple that can comfortably handle 8MB block get knocked out and the limit rises again. or something!?
you can't argue that bitcoin is somehow more valuable if it can't do micropayment so dont try brg444
So I have been following the recent block size limit discussions going on and one thing I noticed is that people say we shouldn't raise blocks to allow a fee market to develop. Another is that BIP 100 allows miners to continue to lower the block size limit in order to force a fee market.
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
From what I understand, the idea is that once there are enough transactions to fill blocks up completely and have a backlog, resulting in some transactions not being confirmed in the next block. Then, in order to get into the next block, transactions will begin to have higher fees.
While this might be good to increase fees slightly, I don't understand why people say that small block sizes will force a super competitive fee market. Wouldn't people just ditch Bitcoin and go to some other altcoin (like litecoin) instead of paying ridiculous fees? Why would miners (in the case of BIP 100) lower the block size limit to increase fees if it drives away people thus decreasing their earnings?
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