With the current transaction fees. transactions worth 1 USD are still ideal with bitcoin. It's the lower ones that pose a problem, which is solved by those paying them withholding until a minimum threshold is reached, which can still be $1.
All non-bitcoin microtransactions now do this. Google Adsense, Affiliate Commissions, even bitcoin pool mining. They don't send each and every small bit on-chain. They collect them off-chain, and eventually send a lump sum to you.
Offchain services or internal accounting for whatever service you are using, as long as there are no transaction fees, can send microtransactions with almost no problems. I'd still put a minimum amount though.
The new gambling sites are an example. They allow you to bet 1 satoshi. But you never see that on the block chain. (Either you cash out after a session, or you busted to zero, but that's another topic.)
Topic: Miner's fee a barrier to mass adoption (Read 4380 times)
When the btc will be all mined the tx fee will keep the network up 
You might be right although I claim Poe's law as my defense. I have seen too many times people legitimately claiming Bitcoin needs/should work for microtransactions and if it doesn't then it will fail.
The OP is right the fees are ridiculous, it essentially makes microtransactions impossible
Since bitcoin's entire purpose was to make microtransactions possible...
Not true.
Quote
Bitcoin: A Peer-to-Peer Electronic Cash System
Satoshi Nakamoto
[email protected]
www.bitcoin.org
Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. ...
Satoshi Nakamoto
[email protected]
www.bitcoin.org
Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. ...
I see payments (transactions) but not micro.
Also it depends on the definition of microtransactions. If you mean sub $1 tx Bitcoin works fine. If you sub $0.01 tx then Bitcoin will never be viable. No public ledger system will. Any system has a per transaction cost and it is somewhat dubious to try and build a global model which works for sub cent transactions.
Current fee is 0.1 mBTC or about 1.5 US cents. A company selling a $1 digital good generally finds current payment systems to be incompatible.
Credit card: $0.30 + 3% = $0.33 fee or 33% of gross.
Bitcoin: $0.015 fee or 1.5% of gross.
Yeah looks pretty good for micro transactions.
I think your sarcasm detector is off.
Bitcoin is easier to process than cash, and cheaper than paypal and credit cards for the merchant.
Bitcoin is also cheaper than cash. Most business account charge for cash deposits beyond a token amount. Usually something like 0.5%. Larger businesses needing armored car service are looking at costs approaching 1%. Throw in potential losses for counterfeiting (or detection equipment cost/time) and sure it is cheaper than Credit cards but despite consumer perception cash isn't "free" for the merchant (on anything larger than a hobbyist scale). Ever wonder why when using a debit card most stores will give you cash back and they don't charge a fee for it (unlike say an ATM)? Simple they don't charge because it improves their bottom line by ~1% or so for every dollar a customer takes in cashback.
The OP is right the fees are ridiculous, it essentially makes microtransactions impossible
Since bitcoin's entire purpose was to make microtransactions possible...
Not true.
Quote
Bitcoin: A Peer-to-Peer Electronic Cash System
Satoshi Nakamoto
[email protected]
www.bitcoin.org
Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. ...
Satoshi Nakamoto
[email protected]
www.bitcoin.org
Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. ...
I see payments (transactions) but not micro.
Also it depends on the definition of microtransactions. If you mean sub $1 tx Bitcoin works fine. If you sub $0.01 tx then Bitcoin will never be viable. No public ledger system will. Any system has a per transaction cost and it is somewhat dubious to try and build a global model which works for sub cent transactions.
Current fee is 0.1 mBTC or about 1.5 US cents. A company selling a $1 digital good generally finds current payment systems to be incompatible.
Credit card: $0.30 + 3% = $0.33 fee or 33% of gross.
Bitcoin: $0.015 fee or 1.5% of gross.
Yeah looks pretty good for micro transactions.
Everything we pay for includes fees - the price of every item we buy is the sum of the effort needed to process that item plus any profit the merchant wishes to take from the sale.
When you pay with cash, the merchant has already priced in the effort required to process that cash into the price of the merchandise.
Bitcoin is easier to process than cash, and cheaper than paypal and credit cards for the merchant.
So next time you pay with Bitcoin ask the merchant if he wouldn't mind giving you a penny discount on the price since you are saving him so much time and effort- though he may point out that the time it takes him to answer this question and process your discount costs him more than one penny.
When you pay with cash, the merchant has already priced in the effort required to process that cash into the price of the merchandise.
Bitcoin is easier to process than cash, and cheaper than paypal and credit cards for the merchant.
So next time you pay with Bitcoin ask the merchant if he wouldn't mind giving you a penny discount on the price since you are saving him so much time and effort- though he may point out that the time it takes him to answer this question and process your discount costs him more than one penny.
The OP is right the fees are ridiculous, it essentially makes microtransactions impossible
Since bitcoin's entire purpose was to make microtransactions possible...
The OP is right the fees are ridiculous, it essentially makes microtransactions impossible
The way fee's work are being redesigned by Gavin at the moment. I would expect and hope that they will be lower in future. The biggest problem at the moment is they don't float. If the BTC/USD exchange rate doubles, effective fees double as well.
I think the nodes don't know if the other nodes hold the full blockchain or not, just that they got a transaction forwarded to them. It's up to the node to inspect the transaction to see if it's legit.
Also, nodes don't mine. Miners do the work of confirming. Of course, miners probably run full nodes (they have to, I believe.)
Also, nodes don't mine. Miners do the work of confirming. Of course, miners probably run full nodes (they have to, I believe.)
don't know, am no IT / technician. Just thought it could be a solution?
But ... qt builds a node, so first notize of tx happens instantly only in qt, couldn't this be a proof?
But ... qt builds a node, so first notize of tx happens instantly only in qt, couldn't this be a proof?
How would the network know that I sent a transaction using QT? There isn't a protocol for it now and any client can pretend to be the reference client, and the miners ... ... would not have any incentive to process transactions without a fee if they are low priority.
The current fee of 0.0001 is about less than 2 US cents.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
The solution is to have a fee of about $1-5 per transaction. Thus about 0.01 at todays rate. You want to get all the bastards like satoshi dice from spamming the chain. What you do is you have 3-4 major exchanges acting as wallets for petty cash. You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there. From there you just buy and sell and the exchange get a small amount of additional revenue. If the site goes broke or skips town you lose your $100. However, they have the incentive to stay with their fee.
These exchanges could even use a common wallet thus everyone would be using the same wallet. Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers. This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin. This is actually already being done today in many ways.
Higher fees is the solution not the problem. If you buy a $20,000 car or house, a $5 fee is not a problem. You might even want to use a wallet for that for a paper trail and proof you paid.
This will cut of some usabilities of bitcoin, so I think its a bad idea.
Why not reward those using the qt with free transactions? This would be an incentive to store the allday-growing blockchain and could be the foundation of micropayment-services
You know, if we do business, I could care less about what fee you paid, as long as your transaction confirms. I'll accept most deals below a few hundred bitcoins on one confirmation, but usually it ends up taking a few more because of time delays and banking and preparing whatever it was that you bought.
So, let's say bitcoin is worth $1,000,000. To send a hundred satoshis, is it still going to cost me many hundreds of times that much in transaction fees? Off-chain only for transactions < $50,000? 
obviously the fee isn't something that's going to remain static
also, individual pools/miners can change it if they like, just as i've changed it from ed: 0.0001 to 0.0005. if it was worth $1,000,000, i'd adjust it to much less
the main point is to keep spam like horse staple battery from being kept in your tx pool
So, let's say bitcoin is worth $1,000,000. To send a hundred satoshis, is it still going to cost me many hundreds of times that much in transaction fees? Off-chain only for transactions < $50,000?
Can bitcoin handle a million transactions a second?
I thought I saw a post 'round hereabouts that indicated that the peak transaction volume seen by the Visa network was on the order of 25,000 transactions a second. I took it to be a statement from true knowledge, though I did not verify this for myself.
I guess my point is that it would seem that bitcoin will not have to handle a million transactions a second even if it should become the standard worldwide currency of retail trade - at least for a generation or so.
Of course, I _could_ be repeating the claim of a charlatan.
The current fee of 0.0001 is about less than 2 US cents.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
The solution is to have a fee of about $1-5 per transaction. Thus about 0.01 at todays rate. You want to get all the bastards like satoshi dice from spamming the chain. What you do is you have 3-4 major exchanges acting as wallets for petty cash. You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there. From there you just buy and sell and the exchange get a small amount of additional revenue. If the site goes broke or skips town you lose your $100. However, they have the incentive to stay with their fee.
These exchanges could even use a common wallet thus everyone would be using the same wallet. Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers. This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin. This is actually already being done today in many ways.
Higher fees is the solution not the problem. If you buy a $20,000 car or house, a $5 fee is not a problem.
Congratulations you just invented banking. When 3 or 4 clearing houses handle 90% of transactions it will be no different than banks today. Bank fees don't HAVE to be high. Credit Cards don't HAVE to cost 3%. They are high because the banks WANT to profit on the backs of their users.
No you are not forced to use the clearing houses. There are no fees and anyone can set-up their own system. It also is not banking as banking involves loans. It is a simple means to get the transactions off the blockchain. Can bitcoin handle a million transactions a second? Any clearinghouse charging more than 0.5% fee will not be used.
The current fee of 0.0001 is about less than 2 US cents.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
Merchants don't need to insist on a fee. But merchants will insist on a confirmation.
The solution is to have a fee of about $1-5 per transaction. Thus about 0.01 at todays rate. You want to get all the bastards like satoshi dice from spamming the chain. What you do is you have 3-4 major exchanges acting as wallets for petty cash. You would need no confirmation and pay like 0.5% fee to them for every transaction. Thus you put a bitcoin on the exchange for .01 fee thus you have $200 in value on there. From there you just buy and sell and the exchange get a small amount of additional revenue. If the site goes broke or skips town you lose your $100. However, they have the incentive to stay with their fee.
These exchanges could even use a common wallet thus everyone would be using the same wallet. Sort of like cirrus networks. Everything would be full reserve so you would not have to be worried about them using your money for loans to losers. This main wallet would only have an extremely small amount of bitcoin there and would be sent as needed to fill the needs of merchants that want to cash out into real bitcoin. This is actually already being done today in many ways.
Higher fees is the solution not the problem. If you buy a $20,000 car or house, a $5 fee is not a problem.
Congratulations you just invented banking. When 3 or 4 clearing houses handle 90% of transactions it will be no different than banks today. Bank fees don't HAVE to be high. Credit Cards don't HAVE to cost 3%. They are high because the banks WANT to profit on the backs of their users.
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