I think bitcoin would be better off with a very low price but a very high value. Moving the decimal place would help that.
Settings > Options > Display > Unit to show amounts in > µBTC
Problem solved.
Topic: Is it possible that bitcoin will become unaffordable to use for micropayments? - page 2. (Read 14230 times)
August 10, 2012, 03:32:42 PM
Settings > Options > Display > Unit to show amounts in > µBTC
Problem solved.
August 10, 2012, 11:59:17 AM
FYI, at the protocol level, there are only Satoshis, no bitcoins. So moving the decimal place is a simple client-side update. You'll confuse other people, but it's your choice if you want your client to tell you that you have 10 times more than you really do.
You can do that now... mBTC or even µBTC. Makes me feel better about my balance.
Seriously, to those of you who think "21 million isn't enough", or "micropayments will be too expensive", I suggest you start thinking in terms of µBTC1 as equal to $1. That puts (unless I've miscounted somewhere) the satoshi at parity with the US cent, and since transaction fees are adjustable down to a single satoshi, and completely voluntary, there's nothing to worry about.
You keep bring up this moving the zero nonsense. It would change anything also it will NEVER (I don't mean unlikely I mean NEVER) happen as it is a hard fork on a unnecessary change.
Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
+1. Moving the decimal place doesn't change anything that isn't already easily handled by people familiar with the metric system. And it would seriously futz with the data types in the client. Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
You keep bring up this moving the zero nonsense. It would change anything also it will NEVER (I don't mean unlikely I mean NEVER) happen as it is a hard fork on a unnecessary change.
Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
It wouldn't require a hard fork. Just make the change on the client front-ends. 1 BTC = 10 BTC on the client-side display. No one would know the difference besides the programmers.Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
I think bitcoin would be better off with a very low price but a very high value. Moving the decimal place would help that.
August 06, 2012, 03:31:52 AM
Transaction fees may need to go up in the long run to maintain network hashing power.
Just to make sure it is clear how it works. If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.
Yes the block chain still generates fine. But people may start feeling insecure if it's getting a lot easier for some entity to launch 51% attack. Thus the network would be under pressure to raise transaction fees to increase hashrate.
Even if people don't think 51% attack would become real, I think if there is a competing altercurrency gaining hashrate users may start migrating to that currency so there is going to be market pressure for bitcoin to raise transaction fee so as to maintain its lead in hashrate.
so far ,alt currencys have all been crap
the usual complaint about bitcoin is that the first miners got hundreds of thousands of coins almost for free
(milllions of dollars worth at todays rates )
people making alt currencys want to get that position for themselves but i dont think it will happen
August 05, 2012, 09:11:58 PM
Transaction fees may need to go up in the long run to maintain network hashing power.
Just to make sure it is clear how it works. If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.
Yes the block chain still generates fine. But people may start feeling insecure if it's getting a lot easier for some entity to launch 51% attack. Thus the network would be under pressure to raise transaction fees to increase hashrate.
Even if people don't think 51% attack would become real, I think if there is a competing altercurrency gaining hashrate users may start migrating to that currency so there is going to be market pressure for bitcoin to raise transaction fee so as to maintain its lead in hashrate.
August 04, 2012, 08:43:53 PM
Transaction fees may need to go up in the long run to maintain network hashing power.
Just to make sure it is clear how it works. If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.
And when it does, difficulty will go down to match it. No worries.
August 04, 2012, 08:25:34 PM
Transaction fees may need to go up in the long run to maintain network hashing power.
Just to make sure it is clear how it works. If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.
August 04, 2012, 06:01:21 PM
Transaction fees may need to go up in the long run to maintain network hashing power.
But micropayment is a non-issue since if there is a need to reduce fees for micropayment then there would be micropayment processors forming in the marketplace. You don't have to do micropayments within bitcoin network natively.
But micropayment is a non-issue since if there is a need to reduce fees for micropayment then there would be micropayment processors forming in the marketplace. You don't have to do micropayments within bitcoin network natively.
July 29, 2012, 03:23:48 PM
FYI, at the protocol level, there are only Satoshis, no bitcoins. So moving the decimal place is a simple client-side update. You'll confuse other people, but it's your choice if you want your client to tell you that you have 10 times more than you really do.
You can do that now... mBTC or even µBTC. Makes me feel better about my balance.
Seriously, to those of you who think "21 million isn't enough", or "micropayments will be too expensive", I suggest you start thinking in terms of µBTC1 as equal to $1. That puts (unless I've miscounted somewhere) the satoshi at parity with the US cent, and since transaction fees are adjustable down to a single satoshi, and completely voluntary, there's nothing to worry about.
July 29, 2012, 02:53:04 PM
FYI, at the protocol level, there are only Satoshis, no bitcoins. So moving the decimal place is a simple client-side update. You'll confuse other people, but it's your choice if you want your client to tell you that you have 10 times more than you really do.
July 29, 2012, 10:10:21 AM
Regarding transaction fees, right now the fee is pretty reasonable at the price of a bitcoin... But if transaction fees go up (more sites like SatoshiDice flooding the network?) and the price of a bitcoin goes up (eventually, to like $100+ theoretically), then the transaction fees might get really high. To send a BTC right now, you might pay like 0.0005 BTC I think, doesn't seem like much, but what if you wanted to send someone a really small integer, like 0.0005, you would pay like double in fees. If a BTC is trading for $1000, that makes 0.0005 tx fee cost $0.50... That's not much either, but you pay that on tiny transactions. Sometimes I go to send a BTC, and I guess if there are multiple small bitcoin addresses that it needs to send from, and I pay a 0.01 fee. If the network gets very congested and the BTC price goes up (like it's destined to do), won't it be unaffordable to send small amounts of money?
This is exactly how credit cards work.
Someones stores get screwed because people pay for gum with a credit card.
Some stores make it so you have to spend over $5 or more USD in order to use a CC/DC to purchase, so that the processing fee doesn't eat as much into their profit.
In my opinion, it is a non-issue.
July 28, 2012, 07:08:27 PM
At $0.02 per tx and VISA sized network we are talking about $2.5B in revenue for miners. More than enough to support the costs of the network.
Any idea what is the current revenue for miners?
Well if we ignore transaction fees (and they are very small).
50 BTC per block * 6 blocks per hour * 24 hours per day * 365 days = ~2.63M BTC @ ~$9 ea = ~$24 mil annually.
July 28, 2012, 06:32:05 PM
At $0.02 per tx and VISA sized network we are talking about $2.5B in revenue for miners. More than enough to support the costs of the network.
Any idea what is the current revenue for miners?
July 28, 2012, 06:22:53 PM
Bitcoin, as it was originally designed and currently operating, cannot scale to the same level as other well known payment processors (i.e. Paypal and Visa) while keeping transaction fees relatively cheep.
I get what you are saying I just happen to disagree with you. At $0.02 per tx and VISA sized network we are talking about $2.5B in revenue for miners. More than enough to support the costs of the network. CC fees are high not because of tx volume they are high because there is a cartel of players who artificially keep the fees high. There is free market because of artificial barriers to entry. In Bitcoin mining no such artificial barriers exist. If fees are too high more miners will join, and if fees are too low miners will leave.
Quote
1) Block propagation: The bigger the block the higher the risk of it being orphaned. TX fees will have to out weigh that risk.
They will. Currently fees are so low and block subsidy so high it distorts the risk vs reward dynamic.
Quote
2) Block chain growth. Hopefully miners feel the duty of being full validating nodes and the only way to do this is with the
full block chain not pruned. As soon as you begin pruning, you start relying on miners to be honest and can no longer
rely 100% on math and cryptography. This would be a negative to bitcoin if the full validating nodes become too centralized.
full block chain not pruned. As soon as you begin pruning, you start relying on miners to be honest and can no longer
rely 100% on math and cryptography. This would be a negative to bitcoin if the full validating nodes become too centralized.
That is false. You don't need an unpruned blockchain in order to mine. There is no security risk from using a pruned blockchain. Pruned transactions are "dead ends" they will never (not in a year not in a trillion years) ever be involved in a future transactions. The merkle tree structure allows trust-less verification of pruned blocks.
July 28, 2012, 06:07:19 PM
You keep bring up this moving the zero nonsense. It would change anything also it will NEVER (I don't mean unlikely I mean NEVER) happen as it is a hard fork on a unnecessary change.
Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
+1. Moving the decimal place doesn't change anything that isn't already easily handled by people familiar with the metric system. And it would seriously futz with the data types in the client. Bitcoin can handle micro transactions just fine. The scenarios describe above are talking about years (maybe decades) down the line. Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens". Hardly walled, more like picket fences.
July 28, 2012, 02:56:39 PM
July 27, 2012, 11:06:59 AM
allten both of your posts are false. No reason to jump from one fallacy to another. Can Bitcoin be free forever and for 100% of transactions? No. Obviously not the network has a real cost. The idea that Bitcoin has to be expensive is equally wrong.
Two examples:
PayPal scale network:
The Bitcoin network reaches 50 tps (roughly PayPal sized); that is roughly 1.58 billion transactions per year. At an avg tx fee of $0.01 USD that would generate ~$16 million in revenue for miners. Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today. Risk determines return on capital. Lets assume miners are willing to accept a 10% ROI and that hardware costs makes up 80% of lifetime mining costs. That puts the network hardware cost at ~$200 million. Remember it is the cost of the network (not hashrate) that determines security.
VISA scale network:
The Bitcoin network reaches 4000 tps (roughly VISA sized); that is roughly 130 billion transactions per year. At an avg tx fee of $0.02 USD (higher utility given Bitcoin is now as popular as VISA) that would generate ~$2.5 billion in revenue for miners. Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today. Risk determines return on capital. Lets assume miners are willing to accept a 7% ROI and that hardware costs makes up 80% of lifetime mining costs. That puts the network hardware cost at ~$30 billion. Remember it is the cost of the network (not hashrate) that determines security.
While $0.01 or $0.02 isn't "free" (remember that was just the hypothetical average cost, some tx would still be free) it is hardly "high cost". The idea that Bitcoin can only scale under high transaction cost is simply FUD.
Lets compare that to some other payment networks:
Money Order - $0.50 to $1.00
Cashier's Check - $5.00 to $10.00
GreenDot MoneyPak - $5.00 (instant, limited deposit options max of $500)
ACH - ~$0.20 per tx (3-5 days)
Bank Wire - ~$10.00 (4-5 hours)
WU - 4% to 10% (10 to 30 minutes)
Credit Cards - $0.30 + 3% (seconds chargeback risk for 120 days)
Credit Cards (micropayment) - $0.05 + 5% (seconds chargeback risk for 120 days)
mPESA - 5% to 15% (instant)
Bitcoin - $0.00 to $0.02 per tx (instant to hours depending on risk profile)
Yup Bitcoin is horribly expensive at $0.00 to $0.02 per tx.
Two examples:
PayPal scale network:
The Bitcoin network reaches 50 tps (roughly PayPal sized); that is roughly 1.58 billion transactions per year. At an avg tx fee of $0.01 USD that would generate ~$16 million in revenue for miners. Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today. Risk determines return on capital. Lets assume miners are willing to accept a 10% ROI and that hardware costs makes up 80% of lifetime mining costs. That puts the network hardware cost at ~$200 million. Remember it is the cost of the network (not hashrate) that determines security.
VISA scale network:
The Bitcoin network reaches 4000 tps (roughly VISA sized); that is roughly 130 billion transactions per year. At an avg tx fee of $0.02 USD (higher utility given Bitcoin is now as popular as VISA) that would generate ~$2.5 billion in revenue for miners. Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today. Risk determines return on capital. Lets assume miners are willing to accept a 7% ROI and that hardware costs makes up 80% of lifetime mining costs. That puts the network hardware cost at ~$30 billion. Remember it is the cost of the network (not hashrate) that determines security.
While $0.01 or $0.02 isn't "free" (remember that was just the hypothetical average cost, some tx would still be free) it is hardly "high cost". The idea that Bitcoin can only scale under high transaction cost is simply FUD.
Lets compare that to some other payment networks:
Money Order - $0.50 to $1.00
Cashier's Check - $5.00 to $10.00
GreenDot MoneyPak - $5.00 (instant, limited deposit options max of $500)
ACH - ~$0.20 per tx (3-5 days)
Bank Wire - ~$10.00 (4-5 hours)
WU - 4% to 10% (10 to 30 minutes)
Credit Cards - $0.30 + 3% (seconds chargeback risk for 120 days)
Credit Cards (micropayment) - $0.05 + 5% (seconds chargeback risk for 120 days)
mPESA - 5% to 15% (instant)
Bitcoin - $0.00 to $0.02 per tx (instant to hours depending on risk profile)
Yup Bitcoin is horribly expensive at $0.00 to $0.02 per tx.
July 27, 2012, 10:34:30 AM
So bitcoin for micro-transactions in the future is a no go unless you stay within a walled garden. I thought bitcoin was all about being open and zero transaction fees. Those are two of its biggest sellers. Cut them out too early and slow down bitcoin adoption. The whole bitcoin market capitalisation is still under $100Million yet they sound expensive to buy at nearly $10 each and too expensive to transfer for frequent open micro transactions. Revalue bitcoin once it's spent twelve months plateaued over $10 to 210,000,000 coins from 21,000,000 and revalue everyone's wallet by *10 keeping the transaction fee at BTC0.0005. Plus keep doing that until the bitcoin market-cap is worth trillions of dollars and they are mainstream worldwide. So take this bitcoins are worth $100 each and a transfer costs $0.50 yet the whole market-cap is only $1Billion. Sounds like bitcoin would be getting too big for its boots when you look at how many dollars are in circulation in bills and coins. Plus those in circulation as bills and coins are only the tip of the ice-berg.
Your right about the way bitcoin was advertised: literally free transaction fees. That has really annoyed me the more I learn about the technical aspects of bitcoin. It was not designed to be scalable or cheap and I think that is ok because services can be built on top of it that are scalable and are cheap. Stephen Gornick did a great job at pointing this out.
Bitcoin is high power money!
July 27, 2012, 10:22:31 AM
Is it possible that bitcoin will become unaffordable to use for micro payments?
Yes! and it should be.
Remember, it's tx fees that are supposed to carry the mining operation forward in the years to come.
If everyone expects the tx fess to be dirt cheap the the original design of bitcoin will have to be abandoned in one form or another.
Also, Bitcoin isn't scalable and I believe it shouldn't be. Bitcoin should be considered as "high power money" not a payment processor for the masses.
a micro payment system needs to be built on top of bitcoin, but not change it.
Yes! and it should be.
Remember, it's tx fees that are supposed to carry the mining operation forward in the years to come.
If everyone expects the tx fess to be dirt cheap the the original design of bitcoin will have to be abandoned in one form or another.
Also, Bitcoin isn't scalable and I believe it shouldn't be. Bitcoin should be considered as "high power money" not a payment processor for the masses.
a micro payment system needs to be built on top of bitcoin, but not change it.
July 27, 2012, 02:39:55 AM
I thought bitcoin was all about being open and zero transaction fees.
Open yes. Zero fees. No.
Though to most retailers, for instance, who pay $0.15 per-transactions plus 3%, a fee in the range of a U.S. penny is the same as free.
Now, if there is someone who really wishes to support the ability for zero-fee transations make sure your miner has a connection to the node listed in the Free Transaction Relay Policy wiki page:
- http://en.bitcoin.it/wiki/Free_transaction_relay_policy
With that, any transaction -- fee paid or not, microtransaction or not, can be included in the next block that miner solves.
July 26, 2012, 11:05:54 PM
I would say "low transaction fees" although remember it is very likely free tx will remain viable for a long time. It won't be realtime but if you are willing to wait hours or days I am sure someone will include it for free. Still low/free can be very very low. If Bitcoin scaled to PayPal sized network (~50tps) that would be roughly 1.5 billions transactions per year. If avg fee was $0.01 USD it would be the cheapest payment platform by far and would still generate ~$15 mil a year to fund miners and protect the network.
Miners dont have much choice to refuse tranactions yet if they want the population to use bitcoin ,nobody is going to wait a few days on transaction
(if transactions are not processed ,all the coins will be worth zero )
if free transactions are not processed people will pay a small fee. Possibly the cost of tx will make bitcoin transactions less desired, but otoh perhaps it will raise demand as people need coins to pay the fees.
15M plus whatever coins are worth in that scenario times the subsidy.
Jump to: