Topic: Some business/developers misunderstand how bitcoin fees works (Read 269 times)
If you're having a business, it's better to make use of the lightning network and also understand the way bitcoin mempool works, making use if an exchange is as if you're a businessman but doesn't understand the trick im business because some of these exchanges will be making money from you with transaction fees and they know the way they make the manipulations for their own benefits without you knowing, this makes it very important that we realized that they are also out for business.
November 07, 2023, 11:37:33 PM
It's indeed frustrating to see some businesses or developers misunderstanding how Bitcoin fees work, even during low congestion periods on the mempool. Sending excessive fees doesn't make miners work faster. The miners have their own pace.
While some entities may have the resources to spend excessive fees without concern, their main goal should be profit maximization. This problem can be caused by poor fee estimators in some cases, but in others, it's a result of poor developer or business policies.
In any case, when you need to make a Replace-By-Fee (RBF) or Full RBF transaction, you only need to increment your fee by 1 sat/vB, not by hundreds. -
While some entities may have the resources to spend excessive fees without concern, their main goal should be profit maximization. This problem can be caused by poor fee estimators in some cases, but in others, it's a result of poor developer or business policies.
In any case, when you need to make a Replace-By-Fee (RBF) or Full RBF transaction, you only need to increment your fee by 1 sat/vB, not by hundreds. -
It is a summarize? It said exactly what I said, just paraphrased and maybe rewritten by chatgpt...
November 07, 2023, 11:21:19 PM
It's indeed frustrating to see some businesses or developers misunderstanding how Bitcoin fees work, even during low congestion periods on the mempool. Sending excessive fees doesn't make miners work faster. The miners have their own pace.
While some entities may have the resources to spend excessive fees without concern, their main goal should be profit maximization. This problem can be caused by poor fee estimators in some cases, but in others, it's a result of poor developer or business policies.
In any case, when you need to make a Replace-By-Fee (RBF) or Full RBF transaction, you only need to increment your fee by 1 sat/vB, not by hundreds. -
While some entities may have the resources to spend excessive fees without concern, their main goal should be profit maximization. This problem can be caused by poor fee estimators in some cases, but in others, it's a result of poor developer or business policies.
In any case, when you need to make a Replace-By-Fee (RBF) or Full RBF transaction, you only need to increment your fee by 1 sat/vB, not by hundreds. -
You can still maximize your transaction chance to get confirmation but with increments like 1.1 sat/vbyte or 2.1 sat/vbyte which can make bigger difference than 1 sat/vbyte or 2 sat/vbyte as chance will be bigger and you can still save more satoshi.
Without knowing how the transactions that are labeled on most graphs with 1-2 sat/b look you might achieve nothing.
Imagine you bump your tx to be 2.1 and not 2 and in reality, 98% of them are over 2.3sat/b, so your tx when confirmed might end in the same block as the round 2sat/b fee.
Bitcoin transactions are calculated in blocks and not time, so when you pay a higher feerate you are asking for it to be confirmed in the next block or next 2 blocks and not in the next minute.
Paying 300sat/b versus 100sat/b will not get you any advantage, that's what OP is saying. The chances of a 100sat/b tx right now to not get confirmed in the next block is close to zero, in two blocks it would have to be something a full order of magnitude more out of the ordinary.
Things like this:
https://mempool.space/tx/a3f4bfe2dbbf55f39f923375b6486614e739b50390f776a101653666772ff158
are just stupid.
miners are just asic devices that hash a blockheaders hash.. thats it.
miners do not even know what transactions are included in the merkletree that makes up part of the blockheader and its hash
they dont have hard drives to store the blockchain, nor node software to receive unconfirmed transactions to sort choose from....
mining POOLS however are the managers and its the POOLS that decide.. and miners connected to the pools dont get to ask/request/decide what transactions go into a block.. only the pool manager does
just like the community of asic miners cant tell a pool to not include all the transactions of json junk of brc and the ordinal meme image junk
miners do not even know what transactions are included in the merkletree that makes up part of the blockheader and its hash
they dont have hard drives to store the blockchain, nor node software to receive unconfirmed transactions to sort choose from....
mining POOLS however are the managers and its the POOLS that decide.. and miners connected to the pools dont get to ask/request/decide what transactions go into a block.. only the pool manager does
just like the community of asic miners cant tell a pool to not include all the transactions of json junk of brc and the ordinal meme image junk
This days there is low congestion on the mempool, and that is good for users tha want to consolidate their utxos, recently some 3 sat/vB transactions has been accepted in some blocks
Anyway regardless this low fee hours, there are some poor managed exchanges or entities that looks they don't know what are they doing or how the fees works on the bitcoin mining process
looks like they think that if they keep sending more fees the miner is going to mine faster or something like that. AND THAT IS NOT TRUE.
The miner actually don't care how much fee you pay they are going to mine at their same speed proof of that is that the ~19.82 Bitcoin fee stay almost 7 minutes on mempool before being mined:
I know that those entities have enough to throw away hundreds of sat/vB without care about of it, but Is not their main goal to maximize their profit?
I think that this problem is generated by a poor fee estimator in some cases, but in others i think that it is a problem of a really bad developer or business policies.
But in any case, if you need to make a RBF or a FullRBF Transaction you only need to increment your Fee by 1 sat/vB, not by hundreds:
Just to put an example of it, for more you only need to go to the rbf page of the mempool.space page: https://mempool.space/rbf
In this post i only want to express my discomfort with all those developers and poor automated entities/business
What do you think about this?
Is there some developer working for those organizations that can explaint why they do that?
Anyway regardless this low fee hours, there are some poor managed exchanges or entities that looks they don't know what are they doing or how the fees works on the bitcoin mining process
looks like they think that if they keep sending more fees the miner is going to mine faster or something like that. AND THAT IS NOT TRUE.
The miner actually don't care how much fee you pay they are going to mine at their same speed proof of that is that the ~19.82 Bitcoin fee stay almost 7 minutes on mempool before being mined:
Quote
Broadcasted on 10 Sep 2023 5:02:56
Quote
Mined on September 10, 2023 5:10:01
Almost 7 minutes on mempoolI know that those entities have enough to throw away hundreds of sat/vB without care about of it, but Is not their main goal to maximize their profit?
I think that this problem is generated by a poor fee estimator in some cases, but in others i think that it is a problem of a really bad developer or business policies.
But in any case, if you need to make a RBF or a FullRBF Transaction you only need to increment your Fee by 1 sat/vB, not by hundreds:
Just to put an example of it, for more you only need to go to the rbf page of the mempool.space page: https://mempool.space/rbf
In this post i only want to express my discomfort with all those developers and poor automated entities/business
What do you think about this?
Is there some developer working for those organizations that can explaint why they do that?
As long as I know, miners are able to arrange transactions in the order they want without any bependece on the fee, however, ingeneral, there is a rule that "the more the fee - the faster the transaction goes". So, I think, fast transactions with small fee amounts are the result of random transaction queuing by miners. So, in general, the presence of such transactions in the memepool are actually an exception rather than a systematic feature.
the question still remains.. who says that people should be forced to pay a minimum of 1sat/byte increments
Is not their main goal to maximize their profit?
I know that miners prefer transactions with higher fees, so a bigger bump can help make our transaction stand out when the network is busy. This can be important if we need quick processing.
But instead to replace a Transacction with an increment of 100 sat/vB or any other exorbitant amount why not only 5 or 10 sat/vB
the question still remains.. who says that people should be forced to pay a minimum of 1sat/byte increments
if everyone today decided that 1sat/decabyte was a thing. then a 226byte tx would be 23sat instead of 226sat starting point, where the competition for priority can start from a lower spend amount
and eventually we can move to 1 sat/kbyte were all transactions under 1kb are just 1 sat starting point but where a 226byte tx gets more priority than a 408byte tx because pools would rather have 4x tx's of 226 paying a total of 4 sat combined for the 1kbyte space. rather then 2x of 408 where the pool only gets 2sat for the 1kb space .. rather than 1tx of nearly 1kb paying just 1sat total for 1kb space
we need to move away from the centralised wallets that have default fee estimation code. and start to make wallets or use wallets that allow custom fee formulae. especially ones that are not designed to pump a fee war and instead attempt to make things better for users while still punishing the bloaters
if everyone today decided that 1sat/decabyte was a thing. then a 226byte tx would be 23sat instead of 226sat starting point, where the competition for priority can start from a lower spend amount
and eventually we can move to 1 sat/kbyte were all transactions under 1kb are just 1 sat starting point but where a 226byte tx gets more priority than a 408byte tx because pools would rather have 4x tx's of 226 paying a total of 4 sat combined for the 1kbyte space. rather then 2x of 408 where the pool only gets 2sat for the 1kb space .. rather than 1tx of nearly 1kb paying just 1sat total for 1kb space
we need to move away from the centralised wallets that have default fee estimation code. and start to make wallets or use wallets that allow custom fee formulae. especially ones that are not designed to pump a fee war and instead attempt to make things better for users while still punishing the bloaters
Ok, I see where the misunderstanding is between us. Yes I totally agree with you in that example that you provide.
But the first time that i mention this:
It was exclusively for a RBF or FullRBF option, this is to replace a transaction that is actually in mempool, in this case if you already send a 1 sat/vB and you want to change the destination address for another address you need to send at least a new transaction with the new address and a minimum fee of 2 sat/vB, so each time that you want to make some change you need to increment you previous fee by 1sat/vB MORE.
I already tested it, if you send less fee, the transaction is going to be rejected with some error like this:
That is why I added a picture of some random transaction at that time, that transaction increments the fee like 100 sat/vB more than the previous amount. But only one sat/vB will be enough.
So again my question:
Is there some developer working for those organizations that can explaint why they do that?
But the first time that i mention this:
But in any case, if you need to make a RBF or a FullRBF Transaction you only need to increment your Fee by 1 sat/vB, not by hundreds:
It was exclusively for a RBF or FullRBF option, this is to replace a transaction that is actually in mempool, in this case if you already send a 1 sat/vB and you want to change the destination address for another address you need to send at least a new transaction with the new address and a minimum fee of 2 sat/vB, so each time that you want to make some change you need to increment you previous fee by 1sat/vB MORE.
I already tested it, if you send less fee, the transaction is going to be rejected with some error like this:
Quote
insufficient fee, rejecting replacement XXXXXXX; new feerate 0.00001000 BTC/kvB <= old feerate 0.00001276 BTC/kvB
That is why I added a picture of some random transaction at that time, that transaction increments the fee like 100 sat/vB more than the previous amount. But only one sat/vB will be enough.
So again my question:
Is there some developer working for those organizations that can explaint why they do that?
saving is like this:
if 1sat is 215 by your own example and 1.03 is 220sat
compared to default whole sat increments where 2sat would be 430sat not 220sat
so by incrementing at small amounts of .03 instead of moving to whole increment of 2sat/byte you would save 210sat
again
215byte at 1sat/byte = 215sat
215byte at 2sat/byte = 430sat
vs
215byte at 1.03sat/byte = 220sat
430-220=210sat saving by using 1.03sat/byte instead of 2sat/byte
subsat increments are cheaper then wholesat increments
if 1sat is 215 by your own example and 1.03 is 220sat
compared to default whole sat increments where 2sat would be 430sat not 220sat
so by incrementing at small amounts of .03 instead of moving to whole increment of 2sat/byte you would save 210sat
again
215byte at 1sat/byte = 215sat
215byte at 2sat/byte = 430sat
vs
215byte at 1.03sat/byte = 220sat
430-220=210sat saving by using 1.03sat/byte instead of 2sat/byte
subsat increments are cheaper then wholesat increments
as chance will be bigger and you can still save more satoshi.
What? Noo that is not true if you increment the more feee like 1.1 sat/vB insteat 1.0 sat/vB you don't save more satoshi, actually in that way you are going to spent more satoshis simple math like 1.0 < 1.1
It's not really free to customize the increments of the fee because in Static option, you don't have an option to increase the decimal point, you can only choose from 1 sat/vbyte to 300 sat/vbyte. The only way to customize the decimal point is you're using ETA or Mempool option.
That depend of your software wallet if they give you te opcion to specify the exact amount of sat to be send and also the exact amount of sat to be use as fee you can increment by any decimal point value like:
First image at 1.0 sat/vB fee is 215 sat
Second image at 1.03 sat/vB fee is 220 sat
@OcTradism where is the saving here?
You can still maximize your transaction chance to get confirmation but with increments like 1.1 sat/vbyte or 2.1 sat/vbyte which can make bigger difference than 1 sat/vbyte or 2 sat/vbyte as chance will be bigger and you can still save more satoshi.
It's not really free to customize the increments of the fee because in Static option, you don't have an option to increase the decimal point, you can only choose from 1 sat/vbyte to 300 sat/vbyte. The only way to customize the decimal point is you're using ETA or Mempool option.
here is the thing though...
1sat/byte is not actually the minimum where by a lean 226byte tx starts at 226sat minimum
people can choose 1sat/decabyte where a 226byte tx is ~23decabyte thus a min tx is 23sat
people can choose 1sat/hectobyte where a 226byte tx is ~3hectobyte thus a min tx is 3sat
people can choose 1sat/kilobyte where a 226byte tx is ~1kilobyte thus a min tx is 1sat
where the priority competition could start at these new lower measures rather then starting at 226sat for a lean tx
the problem is although the protocol understands 1sat/kb.. the software wallets people use defaults to begin counting from a 1sat/byte stance. and count up in whole numbers of sat/byte thus because majority of people are just mindless drones to whatever wallet defaults exist they only start priority bidding from this higher point
1sat/byte is not actually the minimum where by a lean 226byte tx starts at 226sat minimum
people can choose 1sat/decabyte where a 226byte tx is ~23decabyte thus a min tx is 23sat
people can choose 1sat/hectobyte where a 226byte tx is ~3hectobyte thus a min tx is 3sat
people can choose 1sat/kilobyte where a 226byte tx is ~1kilobyte thus a min tx is 1sat
where the priority competition could start at these new lower measures rather then starting at 226sat for a lean tx
the problem is although the protocol understands 1sat/kb.. the software wallets people use defaults to begin counting from a 1sat/byte stance. and count up in whole numbers of sat/byte thus because majority of people are just mindless drones to whatever wallet defaults exist they only start priority bidding from this higher point
I'm looking for any reason why the transaction fees drop but I can't find anything.
I think that the ordinal-spam stop or slowdown their activities... i am not sure about it.Yep, this is exactly the case. There is a popular BRC-20 token called "SATS" that just recently minted out, meaning there is no more of them to be claimed. And after that happened we witnessed a sharp dropoff in transaction fees:
Whats ridiculous is the vast, vast majority of BRC-20 transaction have been mints. People just mint the token into existence and then sit on it, never transferring it anywhere. The real winner here is the inscription services that people pay to mint the tokens on their behalf (otherwise you need your own full node to do inscriptions).
I think that this problem is generated by a poor fee estimator in some cases, but in others i think that it is a problem of a really bad developer or business policies.
Bitcoin transaction fee estimators give you estimations that are not 100% in accuracy. Basically, estimations are not exact numbers for actual things and with instinct of mempools which can be changed very quickly by on-chain demands, you have to consider carefully from estimations and recommended fee rates, then decide what is a fee rate you want to use.If fee rate recommended is small different than what best fee rate you check manually, I think it is good enough.
Quote
But in any case, if you need to make a RBF or a FullRBF Transaction you only need to increment your Fee by 1 sat/vB
You can still maximize your transaction chance to get confirmation but with increments like 1.1 sat/vbyte or 2.1 sat/vbyte which can make bigger difference than 1 sat/vbyte or 2 sat/vbyte as chance will be bigger and you can still save more satoshi. Bitcoin transactions are calculated in blocks and not time, so when you pay a higher feerate you are asking for it to be confirmed in the next block or next 2 blocks
Agree, but high rate should mean atleast one or two sat/vB more than the expected according to some fee stimators, not hundreds sat/vB more...
and not in the next minute.
That is exactly my point, miners don't care if you pay 1 sat/vB more or 100 sat/vB more they are going to keep mining to the same speed. This mean that miners aren't goint to increment their mining power just because somebody is incrementing its fee with the rbf feature.
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I'm looking for any reason why the transaction fees drop but I can't find anything.
I think that the ordinal-spam stop or slowdown their activities... i am not sure about it.That's the first thing I thought of, and it seems most likely, as we have had a full mempool for many months, but I remember that there was a small drop in July and then it went up again. In any case, the drop now is considerable, and let's hope that the spammers of the ordinals get tired of it.
This days there is low congestion on the mempool, and that is good for users tha want to consolidate their utxos, recently some 3 sat/vB transactions has been accepted in some blocks
Anyway regardless this low fee hours, there are some poor managed exchanges or entities that looks they don't know what are they doing or how the fees works on the bitcoin mining process
looks like they think that if they keep sending more fees the miner is going to mine faster or something like that. AND THAT IS NOT TRUE.
The miner actually don't care how much fee you pay they are going to mine at their same speed proof of that is that the ~19.82 Bitcoin fee stay almost 7 minutes on mempool before being mined:
Anyway regardless this low fee hours, there are some poor managed exchanges or entities that looks they don't know what are they doing or how the fees works on the bitcoin mining process
looks like they think that if they keep sending more fees the miner is going to mine faster or something like that. AND THAT IS NOT TRUE.
The miner actually don't care how much fee you pay they are going to mine at their same speed proof of that is that the ~19.82 Bitcoin fee stay almost 7 minutes on mempool before being mined:
I know that those entities have enough to throw away hundreds of sat/vB without care about of it, but Is not their main goal to maximize their profit?
I as a private individual have sometimes committed that sin. Send a transaction that I was in a hurry to get confirmed, a couple of hours at most, and instead of sending it with an adjusted fee to make RBF if necessary later, I simply overpaid for the fee and had it confirmed in the next block. But as you rightly say, companies should minimise costs and one aspect where they can do that easily is this. What I don't understand, though, is that you are giving as an example a transaction that was clearly by mistake that the miner returned and you yourself echoed it.
Anyway regardless this low fee hours, there are some poor managed exchanges or entities that looks they don't know what are they doing or how the fees works on the bitcoin mining process
There is some speculation that some exchanges use this medium to make some profits. They put a very high estimate on the exchange dashboard, but send the transaction with something much lower than that and pocket the rest of the fees paid In many exchanges you cannot ascertain when they actually send the Bitcoin out and do not get any txid to monitor it on.
The miner actually don't care how much fee you pay they are going to mine at their same speed proof of that is that the ~19.82 Bitcoin fee stay almost 7 minutes on mempool before being mined:
Miners do care.This happened probably because the next block took 7 minutes to be confirmed.
Bitcoin transactions are calculated in blocks and not time, so when you pay a higher feerate you are asking for it to be confirmed in the next block or next 2 blocks and not in the next minute.
I'm looking for any reason why the transaction fees drop but I can't find anything.
I think that the ordinal-spam stop or slowdown their activities... i am not sure about it.If this topic is pointed to the miners about fees miners don't have full control about the fees.
I know that miners doesn't control the fees, those depends only and exclusively of the users of the network, how much they want to pay to get a transaction mined.
This post is only about:
In this post i only want to express my discomfort with all those developers and poor automated entities/business
What do you think about this?
Is there some developer working for those organizations that can explaint why they do that?
What do you think about this?
Is there some developer working for those organizations that can explaint why they do that?
September 30, 2023, 11:41:30 PM
I'm looking for any reason why the transaction fees drop but I can't find anything.
The only thing that I notice is the massive drop in transactions these days according to Blockchain transaction counts chart.
It seems that people are no longer panicked from recent FUD events or is there another reason?
If this topic is pointed to the miners about fees miners don't have full control about the fees. The transaction fees suggested by mempool.space are based on network congestion and it is just an estimation not so accurate, by default mining pools prioritize transactions with high fees to give incentives to their miners.
Only mining pools have full control of what transactions they would like to add on the block they mine not their miners(except for individual or solo miner with big mining farms.)
The only thing that I notice is the massive drop in transactions these days according to Blockchain transaction counts chart.
It seems that people are no longer panicked from recent FUD events or is there another reason?
If this topic is pointed to the miners about fees miners don't have full control about the fees. The transaction fees suggested by mempool.space are based on network congestion and it is just an estimation not so accurate, by default mining pools prioritize transactions with high fees to give incentives to their miners.
Only mining pools have full control of what transactions they would like to add on the block they mine not their miners(except for individual or solo miner with big mining farms.)
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