Topic: Is there any chance the fee will rise to replace block subsidy? - page 3. (Read 5660 times)

Although you ask a legitimate question, your argument does not prove this conclusion.

Estimates will be easier to make once it becomes clear where transaction volume is going and how much volume is handled by the bitcoin blockchain itself vs. how much is being moved to something like the lightning network.

You really think that the fess will go up that high? Do you have any quotes from anyone or any links to websites saying this?

Yeah they will probably make the fee higher. Hopefully not to high or it may ruin Bitcoin completely. And who here really wants to pay more fees?

Probably. It's happened before. Probably will increase to about 0.0005 for average txes, not much. Or at most, 0.001 satoshi. That will more than cover the lost btc.

What i'm really scared for is when 2140 comes. If bitcoin is widely adopted, the price will be huge. But will the tx fee be 1+ plus bitcoin? Not that's a scary thought.

At each reward halving, to keep the miners running with same incentive, either the bitcoin price need to double or the fee income per block would compensate for the loss of the block subsidy, but it seems that the fee per block is impossible to rise in near future:

Currently the fee income per block is around 0.5 bitcoin, very little comparing with the block subsidy. So the only thing works to keep the miner's incentive is to raise the bitcoin price by 100%, otherwise miners will shutdown their operation due to unable to profit, resulting in weak security

In general, there is an extra delay when including one transaction, and that delay will increase the risk of a block being orphaned thus lose the whole block subsidy and fee income altogether. If you include 2000 transactions today (1MB block), that will add up to 1 minute delay when broadcasting to the whole network, which is about 5% risk of being orphaned (not precisely calculated from Poisson distribution, just an example, 10 minutes delay means the block will have a 50% chance of being orphaned), so 5%x25btc=1.25 btc is the cost of 1MB, divided by 2000 transactions, you get 0.000625 btc fee per transaction, which is a fee that is accepted by all the miners today, means the real cost is lower

If the cpu/network speed doubles at next reward halving, then each block can include double amount of transaction at the same opportunity cost, e.g. 4000 transactions for 5% risk of being orphaned. However, the block subsidy is 12.5 coins by then, 5%x25btc=0.625 btc will be the cost of 2MB, divided by 4000 transactions, that is 0.00015625 fee per transaction

So the fee per transaction will be cut to 1/4 at next reward halving, if bitcoin price doubled, then it means the fee is getting 1/2 cheaper for end user. If bitcoin price quadrupled, then the fee costs the same as today

Following this route, when block subsidy is cut by half, the fee per block will also be cut by half, with double amount of transaction capacity, resulting in 1/4 of the btc fee per transaction. It seems that the fee per block will stay small relative to block subsidy in foreseeable future, unless there is a fee market driven by limited transaction capacity

It is possible that during a bubble next year, the transaction per 10 minutes raised to 8000, then they will be competing for 2000 transactions per block, causing a rise in the fee dramatically. But that is a situation much more difficult to analyze, since they will also reduce the transaction frequency and even use clearing based services to avoid high fee

And this is the case that you directly use blockchain to do transaction, if you use clearing based solutions then the fee can be 0 for end user, and the real traffic on blockchain might grow even slower

So, as long as bitcoin scales well, the fee income for miners will never be able to rise to replace block subsidy