Topic: Transaction fees transfer wealth from poor to wealthy - page 2. (Read 4335 times)
I don't know why everyone is assuming transaction fees are low right now. The average transaction fee at the moment is 18 cents.
Yes, it's a lot better than banks. But we do not know if the core programmers are allowing the 3rd world equal access to bitcoin. I'm sure they are not aware of the dangers of a transaction fee when it is a limited-supply currency. This is why gold caused huge problems for farmers in the late 1800's and we tried to switch to silver: by charging interest (or transaction fees), the fixed-supply currency bleeds out of the lower class and into the upper class until there is a lot of deflation in the currency. You might think "great, that means prices go down". No, because it also means the wealthiest get more control of society without working for it because in a fixed-supply currency the percent of the currency you own is the percent of the marketplace you control. They can use this control to take away farm land, and did, thereby reverting society to a feudal-like system via sharecropping. Production then goes down, so prices stay the same and people's purchasing power decreases due to less of the currency. In the case of bitcoin, the 3rd world will its purchasing power in terms of world commodities. After 10 years of 1% of your currency bleeding out like this, you have 10% of your currency gone, giving more control over to the 1st world. In bitcoin's case, the 1% is going to nodes which is not necessarily "the wealthy" except through the shareholders of the companies that own the computer manufacturing equipment and the energy supply, and some of that goes back into the middle class. However, 3rd world countries do not get any of that currency back unless they are on the electronic assembly line and you can imagine the percent they get back is small. So bitcoin is a lot better, but fixed transaction fees are a tax on the poor for the benefit of the large bitcoin holders. You can imagine the top-level people in bitcoin don't want to think about this because they own a lot of bitcoin and don't want to pay a percentage when transacting. The core developers are then governmental tools of the wealthy at the expense of the taxpayer. Yes, it's a lot better, but they can do better.
Your reasoning is "we do not know what the transaction fee will be, therefore it will be a good thing". I would like to see a number. If bitcoin reaches 10% of the world's M2 money supply, 10 Satoshis will be 1 cent, and that's not good for the 3rd world. 1 Satoshi transaction fee will be tolerable.
Your reasoning is "we do not know what the transaction fee will be, therefore it will be a good thing". I would like to see a number. If bitcoin reaches 10% of the world's M2 money supply, 10 Satoshis will be 1 cent, and that's not good for the 3rd world. 1 Satoshi transaction fee will be tolerable.
It was just an example, who knows what the fees and price will be in 10 years?
Anyway 10 cent is still better than 30 dollars. Which is what most banks ask for international wire transfer.
Credit cards get about 5% of every transaction.
Debit cards I don't know but it's likely a high flat amount plus a percentage (like 2 dollars plus 2% or so)
Whatever the fees will be, they will be nearly nothing compared to current payment methods.
Anyway 10 cent is still better than 30 dollars. Which is what most banks ask for international wire transfer.
Credit cards get about 5% of every transaction.
Debit cards I don't know but it's likely a high flat amount plus a percentage (like 2 dollars plus 2% or so)
Whatever the fees will be, they will be nearly nothing compared to current payment methods.
If bitcoins are worth $50,000 at that time then 2 uBTC is $0.10. That's not going to work in the 3rd world for 90% of what people need it for. You are saying the developers are already planning on excluding the poorest 30% of the world's population. There's an issue here that "per transaction" fees do not solve. Maybe it should aim for $0.01 per transaction plus 0.01% of the value.
no, they are saying transaction fees will become a more important incentive for miners to continue mining.
this doesn't necessarily mean that transaction fees need to be higher.
Right now, a miner gets 25 bitcoin in reward and somewhere around 0.05BTC in fees. But a block only holds about 200 or maybe 300 transactions right now, that's not a lot. And some blocks have even less. So the average fee is probably about 0.0002BTC or 200µBTC
However, when bitcoin is several years older and bitcoin rewards are only about say 3BTC, there will likely be many more transactions in a block. Let's say bitcoin is as big as VISA by then, and they make 2,000 transcations per second on average, so per block (10 minutes) they make about 1,200,000 transactions. Since the value of bitcoin is much higher at this point, the transaction fee will be lowered to 2µBTC. Now, 1.2 million times 2µBTC is 2.4BTC so the total reward will be 5BTC per block. Which is lower in bitcoin but might be higher in dollars (since bitcoins are worth more) and on top of that, the transaction fees are lower.
so transaction fees will likely never be nearly as high as credit card fees or wire transfer fees.
also, if you pay 1% of your wealth every year, after 10 years it's still just 1% of your wealth, it doesn't suddenly become 10%
besides, not a single payment system, (wire transfer, debit cards, credit cards, cash deposits/withdrawals at banks, checks, etc.) come even remotely close to the cheap transactions of bitcoin.
this doesn't necessarily mean that transaction fees need to be higher.
Right now, a miner gets 25 bitcoin in reward and somewhere around 0.05BTC in fees. But a block only holds about 200 or maybe 300 transactions right now, that's not a lot. And some blocks have even less. So the average fee is probably about 0.0002BTC or 200µBTC
However, when bitcoin is several years older and bitcoin rewards are only about say 3BTC, there will likely be many more transactions in a block. Let's say bitcoin is as big as VISA by then, and they make 2,000 transcations per second on average, so per block (10 minutes) they make about 1,200,000 transactions. Since the value of bitcoin is much higher at this point, the transaction fee will be lowered to 2µBTC. Now, 1.2 million times 2µBTC is 2.4BTC so the total reward will be 5BTC per block. Which is lower in bitcoin but might be higher in dollars (since bitcoins are worth more) and on top of that, the transaction fees are lower.
so transaction fees will likely never be nearly as high as credit card fees or wire transfer fees.
also, if you pay 1% of your wealth every year, after 10 years it's still just 1% of your wealth, it doesn't suddenly become 10%
besides, not a single payment system, (wire transfer, debit cards, credit cards, cash deposits/withdrawals at banks, checks, etc.) come even remotely close to the cheap transactions of bitcoin.
They are saying there has to be larger transaction fees once the mining profits decrease. "Less than a penny." Let's say things don't turn out very good and it's a penny. The third would might have an average transaction of $1, like buying a kilogram of vegetables in the market with smart phones (I know people with less than $2000 a year income that have a smart phone....it's crucial to their life) and they could end up doing that 5 times a day. OK, that's 365*0.05 = $18 a year, 1% their net worth going to protect the wealth of rich people. After 10 years, 10% of the 3rd world's wealth gone to benefit the rich. If it stays less than 1/10 a penny transaction then I guess it will be OK. But it could still mean high frequency micro-transactions in widespread use (I don't know what the plans are) will deplete wealth from the middle class for the benefit of wealthy hoarders.
seriously? bitcoin tranfer fees are already infinitely low compared to credit cards and banks, how small do you want to make them?
Transaction fees need to be large enough to prevent a 51% attack.** But they shift wealth away from the poor and middle class who spend a higher percentage of their wealth than the wealthy. Even the things the wealthy buy will have a higher value per transaction, but the same transaction fee. So bitcoin will cause the poor to pay to protect and increase the wealth of the wealthy. It polarizes wealth to the wealthy. So transaction fees must be as small as possible, to delay how long it takes to polarize wealth again. Larger and larger investors are buying up bitcoins. They will hold. They will also promote systems to make it easier for the poor and middle class to use so that their wealth can be secure and increasing, over and beyond the benefit of the services they invest in. Bicoiners getting wealthy without working makes common people think it is not trustworthy and will not succeed, but enough wealthy are getting the picture. When bitcoin reaches 10% of the world's money supply, $100,000 per coin, services will be there for the poor and middle class to finally use it. Bitcoin can bring down the banks and provide protection when the financial system fails. But it is not necessarily 100% good for the poor.
So maybe transaction fees should be based at least in part on size of transaction, and even based on how long the coins have been in storage. Imagine large players sending money back and forth because the system is secure. Well a 51% is encouraged based on the large transactions, not the small one. But the security is based on many small transactions. Sure, the node's cost is based on number of transactions. But nodes peacefully agreeing with each other is lowered by the large transactions. So system wide costs is not simply "per transaction".
** note: The sum of transaction fees must be larger than the profit that can be expected from acquiring enough computer resources to be 51% of the node transactions. So a more "efficient" coin does not matter as long as the volume of transactions can easily be handled. If good nodes can more efficiently confirm transactions, then a 51% attack can do it equally more efficiently. An environmentally friendly coin is dubious because the amount of environmentally-costly hardware to secure the network from a 51% attack will increase if the electricity costs decrease. The network's profit must simply be higher than an attacker can profit. Technology is not relevant, as long as a sufficient number of transactions can be handled at a low enough cost relative to the average value of the transactions.
So maybe transaction fees should be based at least in part on size of transaction, and even based on how long the coins have been in storage. Imagine large players sending money back and forth because the system is secure. Well a 51% is encouraged based on the large transactions, not the small one. But the security is based on many small transactions. Sure, the node's cost is based on number of transactions. But nodes peacefully agreeing with each other is lowered by the large transactions. So system wide costs is not simply "per transaction".
** note: The sum of transaction fees must be larger than the profit that can be expected from acquiring enough computer resources to be 51% of the node transactions. So a more "efficient" coin does not matter as long as the volume of transactions can easily be handled. If good nodes can more efficiently confirm transactions, then a 51% attack can do it equally more efficiently. An environmentally friendly coin is dubious because the amount of environmentally-costly hardware to secure the network from a 51% attack will increase if the electricity costs decrease. The network's profit must simply be higher than an attacker can profit. Technology is not relevant, as long as a sufficient number of transactions can be handled at a low enough cost relative to the average value of the transactions.
Jump to: