Topic: How to give btc users no transaction fees. - page 6. (Read 1240 times)

So then you run in to a scenario where there are a handful of fee paying transactions, but the combined total fee of all these transactions is less than the difference in block reward for mining a no-fee block. Miners are now incentivized to ignore the fee paying transactions and mine zero fee transactions instead, no one who wants a confirmation will pay a fee, and the fee paying transactions get stuck until they are dropped or someone RBFs an astronomical fee to overcome the deficit.

Users would still pay fees to prioritize themselves over other transactions. The only thing that would change would be when the mempool is empty, people would pay 0 instead of 1 sat/vbyte, which would only change the total fees paid by a few mBTC at most.

So you want an infinite supply of coins then? I think this is part of an ongoing discussion on how to solve the incentive issue when the block rewards are emptied, but I don't think a lot of people would agree with this. Scarcity is one of Bitcoin's selling points so removing it doesn't make sense.

Users pay fees based on their transaction weight and the "competition" for the block space not based on USD price of bitcoin.

These aren't solutions. For starters the miners don't rely on the fees, they are getting paid more than enough with the block reward and will continue earning more money as price keeps going up. Also as I said the fees aren't set based on what the block reward is, it is based on the competition for the block space.

That makes bitcoin unusable for everyone.

Introduction

Casual bitcoin users should have a way to get a free transaction every now and then. In fact, every user should have that privilege. That would help them to understand how to create transactions and they could experiment with very small amounts first so that they didn't make a big mistake and give all their funds to someone mistakenly.

Now there are problems with doing something like that. One of them is that people would try and abuse the privilege. So it's not so trivial to come up with something that would stop that. Also, miners rely on fees to some extent so they need to be incentivized to mine no-fee transactions as well. Otherwise, the whole thing wouldn't work.

Miner incentive

Pay miners a block reward which is competitive with what they would get if they mined a normal block that contained transactions that paid fees. But only if the entire block is filled with no-fee transactions. I would tend to favor a constant block reward that doesn't decrease with time for this purpose, thus ensuring that miners might even put a premium on mining no-fee transactions.


Also having a list of rules that free transactions must follow in order to be able to pay no transaction fee would be a necessary thing.

Consensus Rules

Rule #1: Reject no-fee transactions that have a high number of vouts.

Regarding rule #1, this number could be something that changes with the state of the network or it might be some fixed hard-coded number like anything greater than "two".

Rule #2: Reject no-fee transactions that have any of their inputs that are too recent.

Someone that recently got sent money shouldn't need to be sending it out immediately. If that's not the case, they can pay a fee to do it.

Rule #3: Reject no-fee transactions if the sender got a no-fee transaction in the recent past.

They don't need to be able to send no-fee transactions all the time, just every now and then.

Rule #4: Reject no-fee transactions that have a high number of vins with one potential exception which is that if they are consolidating their utxos and sending them straight back to the same address with no change address (that might possibly be allowed, not sure).

A high number of vins in general indicates some type of business or power user. But in order to help reduce the size of the utxo set, it might be beneficial to allow people to do a no-fee transaction to consolidate their utxos.

Rule #5: Require some amount of proof of work to submit a no-fee transaction.

That way people won't waste the network's time in submitting transactions that just get rejected without wasting some of their own resources.

Rule #6: Reject no-fee transactions where the output size of any of the last n transaction IDs leading up to it is larger than m for any of the inputs.

That way someone can't send a large batch of transactions to 500 different addresses and then try and get free transactions from each individual address until they use each individual address a certain amount first.

Rule #7: Reject no-fee transactions where any one of the outputs gets send to an address that has recently received a no-fee transaction.

This would indicate someone is a business of some type.


Outlook

The outlook for bitcoin's future as far as transaction fees are concerned is that they are likely to get higher. Since the block rewards are decreasing, miners must get their income from higher transaction fees. This does not benefit bitcoin users though. In fact, it could make bitcoin be unusable for someone that just wants to use bitcoin to transfer small amounts of money. That has already happened to some degree but it's likely to get much worse unless something is done to alleviate the issue.

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