Transaction Cost Problem | Bitcointalksearch.org

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Quote from: pawanjain on December 12, 2017, 08:05:30 AM

The current satoshis needed per byte to make a normal transaction successful is around 293 which give around $10 for an average transaction.
The high fee is an issue which everybody is pissed of. Bitcoin is not meant for any micro payments at the moment. Although it will be done in the future with the help of the lightning network it is just a waste of money to spend high fees on micro transactions. It is better to avoid small transactions and just hold the BTC until the lightning network is fully established. The development is going with a successful testing recently. I think people should stand together and join hands towards the development of BTC. Why should just a small group of people do all the hardwork and let the other enjoy it's benefits.

Is there any ETA to this on when the lightning network implement this fast confirmation.

jnano

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Quote from: DannyHamilton on December 17, 2017, 04:55:51 PM

Which is why trivial calculations that claim Bitcoin is wasteful, or that try to assign a "cost" to processing bitcoin transactions, can be so frustrating.

Because calculating the running costs of Bitcoin is relatively trivial, even if there's no known data to compare it against, still, instinctively, in absolute terms it seems wasteful. I think this notion is going to remain until someone does an energy/resource consumption analysis on the "competitors", and that analysis ends up finding they are equivalent or worse.

fortuneogo

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Bitcoin unlike physical cash is decentralized so over time it adds more value unlike same amount of cash just put away without investing it. But the cost of transaction should be be cut down based on value of the transaction.

DannyHamilton

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Quote from: jnano on December 17, 2017, 03:12:55 PM

I would still be interested to know the related costs, but calculating that is far from trivial.

Which is why trivial calculations that claim Bitcoin is wasteful, or that try to assign a "cost" to processing bitcoin transactions, can be so frustrating.

jnano

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You have to choose what to compare to.

DannyHamilton's comparison to physical money (vaults, armored cars, production costs...) isn't a good match either. The scope of traditional money and its related services and uses is much larger than Bitcoin. I would still be interested to know the related costs, but calculating that is far from trivial.

AGD

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Keeper of the Private Key

Quote from: jnano on December 17, 2017, 01:44:12 PM

Quote from: AGD on December 17, 2017, 05:01:51 AM

This is a great misconception about Bitcoin, that a lot of people are suffering. I think this should be a sticky here and on bitcoin.org, also because I am tired to explain this over and over again.

But have you seen anywhere hard data on the cost of using "tangible money"? I can't completely rule it out, but neither am I convinced it's true.
And again, Bitcoin is currently more comparable to credit card companies than physical money.

Your comparsion is pretty weak. Creditcard Companies are centralized and Bitcoin is decentralized. Your "tangible money" is guaranteed to lose value over time and Bitcoin will most likely raise in value, because of the demand for a secure, personal and decentralized store of value.
As Danny Hamilton explained, the current world wide banking system is wasting A LOT more energy, than the Bitcoin network. If you don't believe it, start calculating.

jnano

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Quote from: AGD on December 17, 2017, 05:01:51 AM

This is a great misconception about Bitcoin, that a lot of people are suffering. I think this should be a sticky here and on bitcoin.org, also because I am tired to explain this over and over again.

But have you seen anywhere hard data on the cost of using "tangible money"? I can't completely rule it out, but neither am I convinced it's true.
And again, Bitcoin is currently more comparable to credit card companies than physical money.

malikusama

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Bitcoin network is now congested due the high demand of bitcoin this year and especially in these past two months. DannyHamilton is straight to the point about this congestion, this is totally realistic and common thing that whenever the demand is increased too high while the resources are still on the same level (limited) then the price tends to increase rapidly.

DZRCoins

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Quote from: drwhobox on December 15, 2017, 01:41:26 PM

The block is too small to cover a lot of transactions but still more and more transactions with higher fees goes in the blockchain = increase of regular speed for fees.
there is a thing called the lightning network which is something that may speed up the transaction speed and lower the fees I think they are using smart contract.

Bitcoin is not really for small transactions at this moment. i think that as time goes the higher and higher fee.

Could someone point me to a good document with explanation how will lightning network work? I've read some official docs, but looks like it's a deep alfa project and we won't have it soon. Did I miss something?

AGD

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Keeper of the Private Key

Quote from: DannyHamilton on December 14, 2017, 02:35:15 PM

Quote from: jnano on December 14, 2017, 02:26:40 PM

Quote from: DannyHamilton on December 14, 2017, 10:43:43 AM

Then to be intellectually honest about it, at a minimum, you need to also use:
Total number of blocks in the blockchain: 499273 (as I'm typing this)

Okay, so you did mean in the more philosophical sense. In that case, the problem with the current system versus traditional ones is that maintaining the historical ledger has high continuous power requirements. And potentially the requirements increase over time, although they might plateau at some point.

And how does that compare to the costs of operating all the banking buildings in the world? All the banking employees? All the vaults, safes, and armored cars? All the payment processing systems? The production of all the currency? All the forces necessary to protect, regulate, and enforce that system?

This is my point.

People are looking at the entire cost of everything necessary to keep the bitcoin system running, and dividing it by the number of transactions in a single block. That is not a reasonable way to do it if you want to compare to the "traditional system".

This is a great misconception about Bitcoin, that a lot of people are suffering. I think this should be a sticky here and on bitcoin.org, also because I am tired to explain this over and over again.

JTEN18

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Quote from: Joyalice on December 15, 2017, 05:40:12 PM

The transaction cost is not a problem for the moment. People invest in bitcoins because it's the king of the cryptos not because they will be able to buy things with bitcoin or because they want to share money. They have bitcoin because it's an investment. Like gold or silver. I think that later with the work of the team transcations will be cheaper and faster.

If there is already many exchanges/ miners to confirm our transaction it could be possible that we will have a cheap transaction fee. Of course we are encountering high fee now because we have high value of bitcoin so the rate or the basis also goes up as well us it was also depending on the number of volumes of the exchanges.

Joyalice

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The transaction cost is not a problem for the moment. People invest in bitcoins because it's the king of the cryptos not because they will be able to buy things with bitcoin or because they want to share money. They have bitcoin because it's an investment. Like gold or silver. I think that later with the work of the team transcations will be cheaper and faster.

Capable123

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The issue with forcing low transaction fees is it will make the network prone to 51% attack. Why? As we all know, there is a finite number of coins. Once all coins are mined, the only financial benefit to miners will be transaction fees. If you force low fees, then it won’t be beneficial for miners to keep running, many would stop - it wouldn’t make sense if you’re losing money. If the mining pool is decreased then the likelihood of a 51% attack increases substantially.

Additionally, regardless is the cost of running the LN to reduce fees. The LN just doesn’t seem practical to me. I actually experienced a real world example of how this would work. I had the option to put away $5,000 to spend solely on health care related purchases, however, this required me to put the money in a separate account to use strictly with a small subset of items. This is how the LN is built, you would need to store say $100 in the Channel with your coffee shop, and only use that money for that merchant. Something I’m certainly less included to due when it’s micro purchases, yet alone health care purchases.

Stedsm

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Quote from: drwhobox on December 15, 2017, 01:41:26 PM

The block is too small to cover a lot of transactions but still more and more transactions with higher fees goes in the blockchain = increase of regular speed for fees.
there is a thing called the lightning network which is something that may speed up the transaction speed and lower the fees I think they are using smart contract.

Bitcoin is not really for small transactions at this moment. i think that as time goes the higher and higher fee.

I doubt that the fee will remain higher all the time, because there are developers who may urge the miners to stop their monopolies and start taking low-fee transactions into the block (Someone please correct me here if I'm wrong) as I think that pools have the ability to choose what fee/byte transactions they are interested in involving into their block. Just as the price is breaking records, so are there the unconfirmed transactions. This debate is not going to end anytime soon, but I believe that as the miners came up with and agreed to SegWit, they will possibly hear to the concerns and help out the community if they are interested for the better of Bitcoins.

P.S.: To those thinking of doing micro-transactions, try to use exchanges and sell your coins for alts and then sell those alts to traders as it will save you a lot of fee. I recently sold my BTC and bought QTUM, sold QTUM to a mediator who sold them to a trader and gave me the money. I saved more than $13 as fee on this transaction as the fee I was being asked to pay was 0.001 BTC, and when I sold QTUM and sent it to the escrow's address, it charged me only 1k satoshis, see the difference.

drwhobox

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- hello doctor who box

The block is too small to cover a lot of transactions but still more and more transactions with higher fees goes in the blockchain = increase of regular speed for fees.
there is a thing called the lightning network which is something that may speed up the transaction speed and lower the fees I think they are using smart contract.

Bitcoin is not really for small transactions at this moment. i think that as time goes the higher and higher fee.

lucianus_luciferus

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nothing is lost if you don't lose yourself

how about we make the transaction fee a fixed percentage of the transaction value? like 1% Grin

jksmds

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There is a simple solution to High transaction fee.

Just create a Tether like coin for BTC, like BTCS.

Exchange 10000 BTCS with BTC. Each BTCS would be always be worth of 10000 Satoshi.
Whatever amount of BTCS issued, maintain a public wallet, with exact equivalent value to BTC.

People will do micro transactions in BTCS. This will reduce load on BTC, and make it faster too.

TechPriest

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Finis coronat opus

Quote from: dogandogru on December 14, 2017, 05:01:51 PM

Currently Transaction fees is about 323sat/byte which is too high to make transaction.
Lightning network is the only solution to this problem, it helps you make Scalable, Instant Bitcoin/Blockchain Transactions.

LN don't do "instant blockchain transcations". 'Cause it works out "blockchain". Only genesis (open channel) and final (closing channel) transactions will be written into blockchain.

dogandogru

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Currently Transaction fees is about 323sat/byte which is too high to make transaction.
Lightning network is the only solution to this problem, it helps you make Scalable, Instant Bitcoin/Blockchain Transactions.

jnano

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I do not know. It would be interesting to find out, assuming someone has ever attempted to estimate it.

Traditional banking with clerks and all that indeed seems wasteful, though they are transitioning more and more to the internet. But the scope of traditional banking is currently wider than what Bitcoin does.

But I agree with what started this thread: transactions costs are too high. And I mean the baseline network fees, not even talking about the artificially high fees of exchanges and web wallets.

Topic: Transaction Cost Problem (Read 883 times)