Topic: The deflationary problem - page 3. (Read 32501 times)

They don't need "Total Information Transparency", they just need enough information to make a reasonable (not necessarily perfect) decision.

The market for fees doesn't exist yet, practically speaking.  We have no tools to collect and distribute the necessary information.  Mostly, this is because bitcoin is still young.  It wasn't born fully formed; we still have work to do.

Allowing fees to float in relation to transaction value was a very wise decision.  Setting a fixed percentage, even as just a floor, is impossible at best, and grotesquely disfiguring at worst.

Why do you assume that all market participants are ignorant of the functioning of the network?

Hmm.. I mean Children in the sense that they are not informed about all the facts. Is that not a requirement for a free market to work correctly ? Total Information Transparency ? Which requires them to understand the information..

The Children don't know if they eat all those sweets they will damage their bodies, get fat, rot teeth etc etc.. If they did - they'd think twice about it. And 'happily' choose to only eat a few.

People want to have fast transactions. Miners want to have fees. Where these two desires interact, is where the market finds the proper transaction fee. People are not children, and thinking that they are is what has gotten this world into the state it is in. Central planning always fails.

PEOPLE are the children.. in a nice way..

No, not really. Unless, of course, you assume that miners are children.

Hmm.. Forgive me, but is that not the same as this..

We let Children into a room full of sweets. They will eat as many sweets as they can before they are sick. They won't eat more than that, as they will be feeling ill, and won't want any more.. The Market will find a balance.

Yes this is true, but where is it said that this is the BEST AND ONLY way.. ?

People  do NOT understand the complexities of bitcoin TXNs. They just want to send their money. IF they were perfectly informed about the PRO's and CONs maybe most would choose to pay. But they will not be perfectly informed.

When asked if you could transmit your coins for free, OR pay a tiny TXN fee and help the network be more secure, how many will pick the former over the latter ? I can imagine that MOST people will go for the free option, of course..

Whereas if they weren't given a choice, and told that they had to pay 0.1% fee, MOST wouldn't bat an eyelid.. and say, That's fine.

It just seems that we are giving a choice were the NON-Obvious choice , pay a small fee, has very little against it and WILL make an ENORMOUS difference to the health of the network.

I can see how this goes against the whole FREE-MARKET thing, but don't people need to be BETTER informed, which they WON'T be, to make a GOOD decision ? Could that be the problem..?

Sorry to keep harping on about this, but many FREE-MARKETs have crashed because people are not mathematical objects, that don't have to behave rationally. They're human after all.. 

 

Okay.

That's the idea.  The market finds a balance.  There is no other way.

I have to disagree..

I think it is simply NOT reasonable to expect the network to deal with FREE and/or very low tXn fees for really large txns...

I know we can leave it up to the miners and they will come up with a value that meets their demands and the demands of the users, but that will not be as secure as the users want it, and it won't be as many fees as the miners want. It'll be somewhere in the middle..

If the protocol said, it's 0.1%. full stop. The miners get a nice fraction, that always grows proportionally, as the usage of the network grows. They will be paid well, and the network will be VERY secure.

I am not interested in arguing over 1/1000 of a percent. I want to give it to the miners and have a secure network.

All I know is that right now, the fees are NOWHERE near enough to pay for the miners.. https://blockchain.info/charts/network-deficit

And they will have to go up.. A LOT.


This is true, but only if we find that there is a disparity in the txn amounts in the blocks.. I don't know what the ratio is, but the mathematician inside me reckons that in a global economy they would be pretty standard on average.. But I don't know..

(Throwing a few ideas out here..)

What if we find the 0.1% txn fees are always high enough to make mining worthwhile ? Or maybe the network difficulty needs to be a bit more dynamic in nature.. OR maybe the difficulty could be in some way linked to the txn amout of the block.. hmm.. maybe not..

What i'm saying is there may be other solutions - with the eventual GOAL being - Happy Well-Payed Miner / Secure Network.




 

I don't believe so - I think the idea of limiting it by size is past it's time and will soon be modified and/or removed entirely. At the very least we need to be able to process transactions on a level that competes with some large private payment network (like visa). Honestly I'd like to see the rate of block creation increase by an order of magnitude and the block reward decrease accordingly (as a start) that would at least put us much closer to where we need to be.

Yup, not until 2140: https://en.bitcoin.it/wiki/Controlled_supply#Projected_Bitcoins_Long_Term

Of course, block fees will only be one satoshi for four years prior. Bottom line, there will be plenty of time for the market to discover the right price for a transaction.

Bitcoin generation does not end in 2040

There IS a minimum transaction fee, it's just optional for the miners to accept or not.  Some will certainly not accept free transactions eventually, others will accept free transactions that are paid off network.  The on-network transaction fees are the "retail" method of paying for the network.  There are a number of likely off-network methods of paying for miners to run the network.  This is not a tragedy of the commons scenario.  Free transactions should always be possible, let the market decide if they are viable, not the code.

Concerning miners and mining fees & end of bitcoin generation (mining) with regard to mining income and its continuation:

At such a point in the future, 2040, when bitcoin generation ends, before this time tbh. A majority of businesses and organisations (governments, etc) would be using bitcoin. For a business/corporation, etc, it is in their interest to make a speedier transaction, especially when they are competing against each other.

Part of this speedier transaction will be to include transaction fees with their price models (for whatever they are doing with btc). Seeing as how  at this time (assuming the global adoption of btc) there would be a massive amount of businesses using btc, the amount of transaction fees getting thrown at the miners will be stupidly enormous compared to now. Though keep in mind there will obviously be more miners/mining power at this time.

Basically - the need for speedier transactions because of competitive businesses will ensure a healthy amount of transaction fees that will go to miners. Indeed, businesses may even make it part of their model to publicly state (well, it would be transparent anyway) the amount that they pay in mining fees, thus allowing the customer to know how fast their holiday/car/house/burger/etc will go through.

Also meaning some potential attacker could choose a time with less mining going on to stage his attack (chain only as strong as weakest link as in network only as strong as it is at times with lowest hashrate). So I think I'm against a transaction-amount dependant fee.

So the incentive for someone sending money to include a high transaction fee is not "to secure the network" but to "ensure a speedy transaction". Transacters are competing for scarce space in blocks. However "block space" is not the same resource (in view of miners) as "hashing power".

So is it true that we basically have to "artificially" limit the available block size to ensure miners will receive high enough fees?

If they sometimes have more, then they don't always have the same incentive.

If the incentive is sometimes much more than average, then mining will sometimes be more than average. That means it will sometimes be much less, meaning a very long time waiting for a block.

Hmm.. not if there is a minimum txn fee..

The MINIMUM TXN fee would be the same as bitcoins. The miners would always have the same incentive or MORE.. if 0.1% was more than that txn fee.

A miner will have a tough choice. If he has room, it will be very tempting to include an "underpriced" transaction. If he doesn't, he's just leaving money on the table and doubtless some other miner will grab it.

What will probably happen is that people who need timely transactions will pay the full to ensure the highest percentage of miners will include their transactions. People who aren't in a hurry will pay a much lower fee and wait until a miner who would rather have the fee than not is willing to include it.

I don't think the "percentage of the transaction" fee scheme is a good idea. If you do that, you may have miners who only mine when there are high-value transactions available, choosing to save electricity costs otherwise. That will lead to bursty block creation. That would be a huge problem, an obvious disaster, for a coin that had CPU friendly mining, it's less of a problem with Bitcoin. But I still think it's bad enough to make that kind of fee system a bad idea.

That's EXACTLY what will happen.

That's why I'd like it built into any new protocols.. 0.1%.

Isn't there a "tragedy of the commons" problem involved here, though?

While everyone using bitcoin will want the blockchain to be as secure as possible, maybe "the mass of people" on average will be too selfish to pay a high enough fee?

FWIW, I agree. But the market should decide exactly how much, not the programers.