Topic: How will raising transaction fees avoid block size limit problems? (Read 812 times)

I think there needs to be a network rule that allows increasing fees.  If you re-send a transaction but with a higher fee, it should propagate.

Spam could be kept under control by requiring the new fee to be 2X the old fee.

Remember Bitcoin is in BETA.  All developers have expressed ideas for how to build a fee market place however it needs to be built.  Since most tx can be sent with no fee and until recently the min mandatory fee was a rounding error most development time has been spent solving other issues.  

The min fee was never intended to subsidize mining.  The SOLE purpose of the min mandatory fee is to prevent spam/DOS attacks on the network.  Remember high priority tx are not required to pay the min mandatory fee.  So obviously a network of all high priority tx would net miners exactly 0 BTC.  Voluntary fees will replace the block subsidy as it declines.  You can't force miners to include any tx in a block, you can't verify if miners are processing tx first in, first out.  Bitcoin was never intended and is incapable of working that way.

Users are free to include a fee of any amount (including nothing).
Miners are free to include tx they choose in a block.
The fee economy meets in the middle.

Obviously for a fee economy to work and the client to be able to provide the user with useful information the following needs to be known:
a) all tx waiting for a block and their fees (all full nodes should have a copy of the memory pool)
b) historical record of recent prior blocks (tx included, tx excluded, size of block, average fee, etc).
c) (optional) fee policies of major miners (possibly passed out of band)

With that information a client could give the user a recommendation:
0.0001 BTC for 95% chance to be included in the next 24 hours (144 blocks)
0.0020 BTC for 95% chance to be included in the next hour (6 blocks)
0.0050 BTC for 95% chance to be included in the next 10 minutes (1 block)

Well the issue with SD isnt so much that bitcoin cant handle it, its that it will consume all resources no matter how many resources we have.


Which i hope doesnt end up being the case. How is a user supposed to know how much to add to remain 'competitive'? If anything we use tx fees to cut down on spam and then just work off a first come first serve basis for legitimate users, who have a minimum tx fee to help subsidize the cost of mining as the block reward goes down.

Ok I see.  And I agree that Satoshi Dice is an idiotic waste of block space, but if Bitcoin can't handle Satoshi Dice, then we can wave goodbye to the idea of Bitcoin ever competing with Paypal or being widely accepted in stores, restaurants, and other places which would be doing small transactions.  It seems to me that with the way things are now, we will be limited to using Bitcoin as a store of value and a means of transferring money. 

Well blocks are currently <25% full due to a limit to prevent a blockchain split until a super majority is on version 0.8.1.    Higher fees won't magically make more space available in the block but it will reduce using that space for idiotic things (like making 10,0000 tx to Satoshi Dice for an average of $0.12 each in order to gamble on blockchain vs. deposting funds gamble until you lose it all or win big and then cash out).

When people talk about the tx fee rising we aren't talking about the min mandatory fee (which is designed to prevent spam attacks on the network) but rather competition will require users to pay more to get included in a block.

These are obviously some very exciting times for Bitcoin.  I get excited every day just thinking about the potential of it all and what it could do to change the world.  People that I thought would never use Bitcoin are now coming to me for help on how to get started, which I think is a very good sign for Bitcoin as a whole.  And I have every bit of confidence in Bitcoin and the people that help keep it together, but all this time there has been just one thing lingering in the back of my mind that worries the crap out of me, and that is the block size limit.  Briefly looking around on this side of the forum, I see many great ideas on how to combat the problem, but it feels like time is running out and this problem needs to be solved before we have widespread adoption by everyone and their cat...  Which seems to be coming sooner than we can imagine, hello curve on a log chart!  It seems like a lot of people are dismissing the problem saying "oh its ok, we'll just raise transaction fees so transactions will still be completed."  I'll admit, my technical knowledge of Bitcoin isn't as as solid as it could be, so it would be nice if you guys could answer some of the questions I have. 

First off, how would higher transaction fees do anything to help the situation?  If transactions are simply being backed up and having to wait to be tacked on to the next block, while higher fee transactions are being completed, wouldn't this just create and ever growing string of non confirmed transactions?  So if everyone raises their transaction fees in order to avoid having to wait a year to get a confirmation, wouldn't that require transaction fees to be constantly raised in order to get priority over everyone else that is paying lower fees?  And surely, raising fees could only be a temporary fix at best, right? 

Maybe I am uninformed on the topic, but I just have the nagging feeling that we might not solve this problem before its too late, since people don't realize how quickly it could smack us in the face.