Finding a solution for those two problems may not be necessary for mass adoption. Bitcoin is not well suited for face-to-face transactions because you have to wait for a confirmation. It is not also suited for small transactions where a few cents matters. That's just the reality. It doesn't mean that bitcoin is not useful to anyone.
Some merchants do zero-confirmation transactions..... the last bitpay invoice I paid cleared the second I sent, so I'm sure it was zero-confirmation. I wonder what the percentage rate of zero-confirmation transactions that are received and then rejected by the blockchain? Anyone know? 
Topic: Miner's fee a barrier to mass adoption - page 3. (Read 4380 times)
Fees are everywhere. You buy some groceries and you pay with your Visa, and Visa will collect a fee (paid by the merchant). And you paid first to get the Visa card. Paypal is quite successful and it charges much higher fees than BTC.
Maybe it would help if we hide the fee. Let's say you buy something for 10BTC, and you will pay that amount but the invoice will show that you've paid 9.995 for the product and a 0.005 fee. The software could work like this, instead of adding the fee, it could deduct it from the sum to send.
The only trouble is that the fee can vary according to the weight of the transaction. This could be a serious issue if your BTC has some dust in it.
Maybe it would help if we hide the fee. Let's say you buy something for 10BTC, and you will pay that amount but the invoice will show that you've paid 9.995 for the product and a 0.005 fee. The software could work like this, instead of adding the fee, it could deduct it from the sum to send.
The only trouble is that the fee can vary according to the weight of the transaction. This could be a serious issue if your BTC has some dust in it.
Danny, if there is a way for the fee to be added, via the technology, so that when I send the BTC I cannot choose to not add the fee, then I will be happy to stand corrected.
Read about:
"Child-pays-for-parent"
and
"replace-by-fee"
with Blockchain.info unconfirmed transactions get cancelled after 24 hours.
This is not true. It is not possible to "cancel" a transaction after you send it. You can stop broadcasting it and hope that all the existing peers will drop it from their memory pools, but the receiver can continue to re-broadcast it forever without your permission.
Zero confirmations is definitely not instant under these circumstances. Zero confirmations simply means that the transaction may go through, and with no miner's fee paid there is a good chance it won't.
This doesn't sound any different than a credit card or PayPal transaction?
Bitcoin is still in its infancy. There is SO MUCH more development and innovation that will come in the future.
You are basing your opinion on the only ways you are aware of currently to make bitcoin based transactions. I think if you come back here and re-read your thoughts in 10 years, you will be surprised and perhaps feel a bit foolish.
Imagine internet users in the early days (when TCP/IP was less than 5 years old) trying to picture what the internet would be like today.
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.
Emphasis mine. Why did everyone skip over the answer? Merchants could give a rats ass about the fee, a big fee, little fee, whatever. They just need to know that the network accepted the transaction, be it 6 or even just 1 confirmation. How many sites do you see that accept 0 confirmations and let you get something out of them with the chance of your OP scenario?
... Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
That's the simplest and easiest way. The price of the good/service already "includes" the tx fee and the buyer won't know the difference. Just like it is now ... nothing changes.
Danny, if there is a way for the fee to be added, via the technology, so that when I send the BTC I cannot choose to not add the fee, then I will be happy to stand corrected. I know that with blockchain.info I can choose not to add it. It is entirely up to me, and if I say no, then it doesn't happen. The person receiving the BTC has no say in it. Maybe I am wrong, but I don't think that I am. They can choose to not give me what I paid for until confirmation, but that is all.
Also, with Blockchain.info unconfirmed transactions get cancelled after 24 hours.
Thus, if I were to use that wallet to buy something at a store I could not pay the fee and I *might* get a free lunch.
Zero confirmations is definitely not instant under these circumstances. Zero confirmations simply means that the transaction may go through, and with no miner's fee paid there is a good chance it won't.
Also, with Blockchain.info unconfirmed transactions get cancelled after 24 hours.
Thus, if I were to use that wallet to buy something at a store I could not pay the fee and I *might* get a free lunch.
Zero confirmations is definitely not instant under these circumstances. Zero confirmations simply means that the transaction may go through, and with no miner's fee paid there is a good chance it won't.
there is no way . . . for a seller to "add the fee" automatically to the purchase.
This is not true.
True, he can add the fee to the total cost, but the person receiving the BTC cannot "force" the fee to be paid via the technology.
This depends on how the eventual implementation in the POS is handled.
Thus, the sender could simply not pay it.
This depends also on how the eventual implementation in the POS is handled.
Remember, the transaction gets returned to the wallet if confirmation doesn't take place in 24 hours.
This is not true.
I don't really see Bitcoin transactions as "instant" and impossible to "charge back" as described.
0 confirmation transactions are "instant".
Transactions with confirmations are "impossible to charge back".
The merchant will have to decide what their fraud risk is and how much risk they will accept. Solutions beyond the protocol are possible to increase usability (just like there are additional layers beyond TCP/IP for your internet usage).
Confirmation is necessary, and sometimes it won't happen. You don't have your BTC until the transaction is confirmed. You can forget most businesses taking BTC under these circumstances.
And yet they accept credit cards and PayPal under these circumstances. I think you have a very flawed understanding of what businesses are willing to accept in the interest of increasing profits.
Is there a way for the merchant to "force" the fee to be paid?
Yes.
As for the psychology of "paying the fee," it doesn't matter that we already pay fees to use credit and debit cards. They are currently hidden. It is all in the mind, I admit, but Americans wholeheartedly hate the idea of adding a few cents. Debit/Credit "feels free" and that is what matters.
And bitcoin transactions can be handled that way as well.
The problem, as I understand it, is that the purchaser can choose to pay or not pay the fee. It is done on the "senders" end. Thus, there is no way that I can see for a seller to "add the fee" automatically to the purchase. True, he can add the fee to the total cost, but the person receiving the BTC cannot "force" the fee to be paid via the technology. Thus, the sender could simply not pay it.
Verification that the fee was paid seems difficult in busy environments with lots of sales ringing up. Remember, the transaction gets returned to the wallet if confirmation doesn't take place in 24 hours.
Any type of instant gratification purchase (grocery store, coffee shop, fast food) would be very vulnerable under these circumstances.
I don't really see Bitcoin transactions as "instant" and impossible to "charge back" as described. Confirmation is necessary, and sometimes it won't happen. You don't have your BTC until the transaction is confirmed. You can forget most businesses taking BTC under these circumstances.
Is there a way for the merchant to "force" the fee to be paid?
As for the psychology of "paying the fee," it doesn't matter that we already pay fees to use credit and debit cards. They are currently hidden. It is all in the mind, I admit, but Americans wholeheartedly hate the idea of adding a few cents. Debit/Credit "feels free" and that is what matters.
Verification that the fee was paid seems difficult in busy environments with lots of sales ringing up. Remember, the transaction gets returned to the wallet if confirmation doesn't take place in 24 hours.
Any type of instant gratification purchase (grocery store, coffee shop, fast food) would be very vulnerable under these circumstances.
I don't really see Bitcoin transactions as "instant" and impossible to "charge back" as described. Confirmation is necessary, and sometimes it won't happen. You don't have your BTC until the transaction is confirmed. You can forget most businesses taking BTC under these circumstances.
Is there a way for the merchant to "force" the fee to be paid?
As for the psychology of "paying the fee," it doesn't matter that we already pay fees to use credit and debit cards. They are currently hidden. It is all in the mind, I admit, but Americans wholeheartedly hate the idea of adding a few cents. Debit/Credit "feels free" and that is what matters.
I don't see the fee as a barrier at all. The payment systems just need to reflect the total to the user so there aren't any surprises. Either the fee shows up in the running total just like tax or shipping would. Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
but the whole idea of bitcoin is to be different.
merchants dont want to fill in paperwork to get merchant accounts with card providors. if the FIAT side of converting bitcoin to fiat requires AMLKYC then thats still paperwork
merchants dont want fee's that eat into profits, so i do see fee's as a problem, but as long as they continue to represent pennies, it wont be a massive problem, just an irritating one
You pay a fee when you use a credit card, albeit you don't see it, it is usually factored in by the merchant. Cheaper prices for Bitcoin (enough to cover the fee), could easily be used, similarly to cheaper prices when paying with cash.
However, you imply a great point: Show a discount to the customer if they pay with bitcoin vs a credit card. This could be something as simple as "Pay with bitcoin and save another 2%."
I don't see the fee as a barrier at all. The payment systems just need to reflect the total to the user so there aren't any surprises. Either the fee shows up in the running total just like tax or shipping would. Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
but the whole idea of bitcoin is to be different.
merchants dont want to fill in paperwork to get merchant accounts with card providors. if the FIAT side of converting bitcoin to fiat requires AMLKYC then thats still paperwork
merchants dont want fee's that eat into profits, so i do see fee's as a problem, but as long as they continue to represent pennies, it wont be a massive problem, just an irritating one
You pay a fee when you use a credit card, albeit you don't see it, it is usually factored in by the merchant. Cheaper prices for Bitcoin (enough to cover the fee), could easily be used, similarly to cheaper prices when paying with cash.
I don't see the fee as a barrier at all. The payment systems just need to reflect the total to the user so there aren't any surprises. Either the fee shows up in the running total just like tax or shipping would. Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
but the whole idea of bitcoin is to be different.
merchants dont want to fill in paperwork to get merchant accounts with card providors. if the FIAT side of converting bitcoin to fiat requires AMLKYC then thats still paperwork
merchants dont want fee's that eat into profits, so i do see fee's as a problem, but as long as they continue to represent pennies, it wont be a massive problem, just an irritating one
Then it will get interesting.
Very! Both because it will be interesting to see what happens to the fees at that time, AND because it will be interesting to see how widespread bitcoin use will have to be to generate enough transactions every day to completely fill 144 blocks.
The fee will be a token amount until the block size limit is reached and people start competing for space in a block. Then it will get interesting.
I don't see the fee as a barrier at all. The payment systems just need to reflect the total to the user so there aren't any surprises. Either the fee shows up in the running total just like tax or shipping would. Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
but the whole idea of bitcoin is to be different.
merchants dont want to fill in paperwork to get merchant accounts with card providors. if the FIAT side of converting bitcoin to fiat requires AMLKYC then thats still paperwork
merchants dont want fee's that eat into profits, so i do see fee's as a problem, but as long as they continue to represent pennies, it wont be a massive problem, just an irritating one
I don't see the fee as a barrier at all. The payment systems just need to reflect the total to the user so there aren't any surprises. Either the fee shows up in the running total just like tax or shipping would. Or the merchant eats the fee by subtracting it from the transaction amount. My guess is that it will evolve to the merchant eating the fee since that is how other payment systems work now.
As BTC appreciates in value why would you be concerned about a few cents?
We are very fortunate to be living now to see this BTC event.
that is the mindset of the longterm investor. the OP is thinking interms of instant payment merchants that were initially promised "virtually fee free"We are very fortunate to be living now to see this BTC event.
i personally i find the fee system a bit of an unrequired feature for atleast a decade or two. the block 'reward' is more then enough... for now
but as long as GavinA keeps decreasing the amount of satoshi's the fee is, when releasing updates for the bitcoin-QT dependant on price, like he has done over the last couple years. and every other third party program follows, so that fee's remain pennies. i see no massive problem just little irritations at a nearly flawless system
As BTC appreciates in value why would you be concerned about a few cents?
We are very fortunate to be living now to see this BTC event.
We are very fortunate to be living now to see this BTC event.
First and foremost, Bitcoin transactions are irreversible. Unlike purchases with Paypal and credit card, Bitcoin transactions are forever one-way tickets, so merchants are completely able to avoid the hassle by the name 'chargeback'. If you don't pay a fee, the only thing we know is it may take a while for your transaction to get confirmed. We don't know how long your transaction can get confirmed if no fee is paid. The only problem that merchants and retailers may face taking payments in Bitcoin is what Bitcoin creators defined as 'double-spend'. 'Double-spend' in some circumstances may happen but it can easily be avoided too.
Transaction fee is and will never be an issue for Bitcoin in the sense that merchants may be willing to take that part for their buyers. After all, Paypal and credit card companies all require expensive fees too. Why do people still use Paypal and plastic cards every day? and who pays the fees when you use them?
Transaction fee is and will never be an issue for Bitcoin in the sense that merchants may be willing to take that part for their buyers. After all, Paypal and credit card companies all require expensive fees too. Why do people still use Paypal and plastic cards every day? and who pays the fees when you use them?
I know, I know, you're completely right, what Banks take for insurances, for overdrawing etc. is obscene and a lot more than bitcoin fees. Also the bitcoin-network is a lot more effective than the banking-network ... but don't underestimate the fact, that (european) banks did find a way to get their consumer the feeling they don't pay fees for everyday-using money.
You already pay a fee to use your current banking system, it is just hidden (and for this reason can be much larger in without you noticing).
If you have ever: paid for a product from your bank (insurance, 'premium' account etc) then this is subsidising your fees. Not to mention, if you have ever had any kind of penalty fee (late repayment of credit, 'charge' for using abroad etc etc) then again these kind of things cover your transaction fees.
Do you really think that banks just operate to provide you with a free service? Get real.
Only the most concientious of consumers can operate a high street bank without incurring any fees, by never going overdrawn or using any other services other than current accounts/deposits never incur any additional fees, but this is still OK for the bank, as this usually means that you have enough money deposited there that they are able to gamble with it and make money off you that way.
In reality, bitcoin payments should have the ability to be much more transparent (you can see your fee) and at the same time be much cheaper for most people:
For example, my UK bank charges £6 per day if you go overdrawn. I once went overdrawn (they had decreased my overdraft limit without telling me) and was overdrawn until I saw my next statement; 16 days that was, thats a £96 fine right there.
For comparison, that would have paid for over 8000 bitcoin transactions, and that is a single (albeit admittidly large) 'fee'.
A 'normal' £25 fee would still 'pay for' about 2000 BTC transactions.
Oh yeah, try sending >10,000£ from one country to another using the fiat system and take a look at the charges; that would still cost the flat block inclusion fee in bitcoin (amount does not matter)
If you have ever: paid for a product from your bank (insurance, 'premium' account etc) then this is subsidising your fees. Not to mention, if you have ever had any kind of penalty fee (late repayment of credit, 'charge' for using abroad etc etc) then again these kind of things cover your transaction fees.
Do you really think that banks just operate to provide you with a free service? Get real.
Only the most concientious of consumers can operate a high street bank without incurring any fees, by never going overdrawn or using any other services other than current accounts/deposits never incur any additional fees, but this is still OK for the bank, as this usually means that you have enough money deposited there that they are able to gamble with it and make money off you that way.
In reality, bitcoin payments should have the ability to be much more transparent (you can see your fee) and at the same time be much cheaper for most people:
For example, my UK bank charges £6 per day if you go overdrawn. I once went overdrawn (they had decreased my overdraft limit without telling me) and was overdrawn until I saw my next statement; 16 days that was, thats a £96 fine right there.
For comparison, that would have paid for over 8000 bitcoin transactions, and that is a single (albeit admittidly large) 'fee'.
A 'normal' £25 fee would still 'pay for' about 2000 BTC transactions.
Oh yeah, try sending >10,000£ from one country to another using the fiat system and take a look at the charges; that would still cost the flat block inclusion fee in bitcoin (amount does not matter)
Jump to: