What will transaction fees be like once no more BTC can be mined?

Amph

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Quote from: Denker on May 16, 2016, 03:56:25 AM

Quote from: Amph on May 16, 2016, 03:49:18 AM

they will certainly hold the same value as the total coin mined per day right now, otherwise miners would lose money, so let's assume this is true

we would end up with 3600 x 450 = $1.6M, so fee will range from 1M to 1.6M, at least 1M in value, to allow miner to not drop the mining scene

and since only 50 btc of fee can be mined each day, you have that 1 btc should be valued around $20k

I don't know why but I don't get that part.Could you explain that please?
Why is it only possible to mine 50 btc of fee each day?

50 bitcoin is the average fee that miners are making currently, it may be bigger in the future or lower, it depend on the number of transactions

TastyChillySauce00

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the fee will probably be the same only the value of bitcoin to dollar increased, so,actually fee will get higher maybe about 2x in dollar,and still the same in bitcoin
or those miners will get away from bitcoin and mine another altcoin, who knows?

justspare

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I think that the transaction fees would be pretty high but it is really nothing for you to be worried about. It is only going to happen in about 120 years, so yeah.....

Jasad

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Quote from: ProfessionalGoogler on May 15, 2016, 01:04:31 PM

Will they be high?

Once no more bitcoin can be mined,bitcoin transaction will become high,just like another currency,for example paypal,they put high fee because paypal can getting from miner,its just like another currency. that my opinion. but if bitcoin amount still normal,i think fee of transaction will keep on low amount.

lolxxxx

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I don't think that there will be any effect on transaction fees it will be on us to put or not to put the fees.
But yes if the price of bitcoin at that time is 1k$ then 0.0001 will have larger value . Like now at current price 0.0001 has the value of 0.004+ $ . So the transaction fees will remain same only the value changes . We all know we only need some fees to get the transaction confirmed . We can send transaction without fees too.

julian071

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Quote from: yayayo on May 15, 2016, 08:43:19 PM

Quote from: julian071 on May 15, 2016, 04:24:33 PM

BTC being totally transparent, you can just calculate:

If the miners want to make the same amount they do today, at a price of 500$/BTC it would work out like this:

1 block (25 bitcoins) created every 10 minutes -> for each minute, 2.5 bitcoins are created X $500/bitcoin = $1250/minute.
So every minute $1250 in fees needs to come from transactions (instead of the block rewards today).
Using 5 transactions/sec as maximum speed (with current block size), 300 transactions each minute.
$1250/300 transactions = $4,16 per transaction.

Of course this changes as the metrics change:
2x higher BTC price -> 2x higher fees
2x more transactions per block -> 1/2 fees

Are you sure it's that easy? Clearly the metrics you state do influence transaction fees. But there are also a number of other factors that make calculation a bit more complicated or outright impossible.

For example, one has to consider investment costs in hardware and the efficiency of the hardware. Also cost of electricity is important. I think as we head into the future, efficiency will improve further on all fronts due to increased competition - that might even include use of heat generated by miners for industrial purposes. Therefore I expect that the cost per transaction will increase far less than a simple calculation based on number of transactions, reward, and blocksize might suggest.

(Btw. I think that 2x higher BTC price leads to half the fees in BTC and the same fees in fiat.)

ya.ya.yo!

No, of course it's not that easy, I mostly want to help to get this discussion started. Most complicating thing is the relation between mining costs, difficulty and bitcoin price. You can write pages full of theories about it, and knowing how that relation works might make you understand what will happen to the price after the halving. I for one agree with r0ach who says that the mining ecosystem works as a decentralised exchange.

Denker

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Quote from: Amph on May 16, 2016, 03:49:18 AM

they will certainly hold the same value as the total coin mined per day right now, otherwise miners would lose money, so let's assume this is true

we would end up with 3600 x 450 = $1.6M, so fee will range from 1M to 1.6M, at least 1M in value, to allow miner to not drop the mining scene

and since only 50 btc of fee can be mined each day, you have that 1 btc should be valued around $20k

I don't know why but I don't get that part.Could you explain that please?
Why is it only possible to mine 50 btc of fee each day?

Cyaren

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I doubt it will increase from the current levels. When there is no more practical BTC that can be mined, the bitcoin price will be high. And therefore if the recommended transaction fee is too high, it'll cost too much for people to send small amounts of bitcoin.

The miners should make around the same in terms of purchasing value from the transaction fees though.

Amph

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they will certainly hold the same value as the total coin mined per day right now, otherwise miners would lose money, so let's assume this is true

we would end up with 3600 x 450 = $1.6M, so fee will range from 1M to 1.6M, at least 1M in value, to allow miner to not drop the mining scene

and since only 50 btc of fee can be mined each day, you have that 1 btc should be valued around $20k

odolvlobo

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Quote from: ProfessionalGoogler on May 15, 2016, 01:04:31 PM

Will they be high?

Users want low fees. Miners want fees that are high enough to cover costs. The fees will depend on many things including (but not limited to), the number of transactions, the maximum block size, and the marginal cost of including a transaction in a block. They could drop to as low as 1 satoshi.

Ideally, total fees per block will be extremely high (whether due to a high fee per transaction or high transaction volume) because the integrity of Bitcoin depends on it. If the block reward is low enough, then there may be an economic incentive for someone mount a 51% attack.

This points to a flaw in the Bitcoin security model: There is no direct incentive anyone to protect the integrity of Bitcoin. It is a "tragedy of the commons" problem. A user pays enough to motivate a miner to add their transaction to a block, but not necessarily enough to discourage someone from mounting a 51% attack.

lumeire

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Quote from: electronicash on May 15, 2016, 08:55:57 PM

Fees i think would be adjusted and I think they will do this after halving to balance and keep the miners mining. Or else it would be the start of bitcoin to gradually stop and may be replaced by newer and sophisticate coin. There are good alternatives anyway and so the path of btc depends to the devs where they'd had to solve issues for the future.

I don't think it needs to be adjusted manually to fit the miners, in fact the fees market already adjusts for itself. We're seeing fees higher than they were a few years ago, because the number of transactions exploded and each wants to be processed faster over the other. In a few more years, we'll probably see around ~0.001BTC more or less of fees just to get the transaction processed in the first hour.

Edwardard

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It is a very nice question. but i dont think mining will be stopped soon. maybe after we die there could be such problems but not now. so dont think about it.

OrangeSeller

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I am also wondering about the price of the bitcoin when the the last bitcoin have been mined and there is no more bitcoin mining. I think the fee will be higher then now.
but the truth is it will never happen in early future. bitcoin will always mine as same.

ProfessionalGoogler

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Quote from: Hirose UK on May 15, 2016, 09:34:48 PM

Quote from: ProfessionalGoogler on May 15, 2016, 01:04:31 PM

Will they be high?

wow, you think too far. there are still much bitcoins available to be mined, and I don't think it will be complete mined in the next fifty years. even if no bitcoins are available to be mined, the fees still depend on the price.

I think you're too worried about that.

Not "worried" about anything but more for curiosity.

MicroGuy

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Quote from: ProfessionalGoogler on May 15, 2016, 01:04:31 PM

Will they be high?

By that time I doubt we'll still be using PoW so it's very difficult to predict how the forks will play out.

If the consensus decision making process can somehow be "restored and maintained", I feel whatever the solution it is likely to be fair.

~~

Hirose UK

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Quote from: ProfessionalGoogler on May 15, 2016, 01:04:31 PM

Will they be high?

wow, you think too far. there are still much bitcoins available to be mined, and I don't think it will be complete mined in the next fifty years. even if no bitcoins are available to be mined, the fees still depend on the price.

I think you're too worried about that.

electronicash

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Fees i think would be adjusted and I think they will do this after halving to balance and keep the miners mining. Or else it would be the start of bitcoin to gradually stop and may be replaced by newer and sophisticate coin. There are good alternatives anyway and so the path of btc depends to the devs where they'd had to solve issues for the future.

maokoto

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Quote from: julian071 on May 15, 2016, 04:24:33 PM

BTC being totally transparent, you can just calculate:

If the miners want to make the same amount they do today, at a price of 500$/BTC it would work out like this:

1 block (25 bitcoins) created every 10 minutes -> for each minute, 2.5 bitcoins are created X $500/bitcoin = $1250/minute.
So every minute $1250 in fees needs to come from transactions (instead of the block rewards today).
Using 5 transactions/sec as maximum speed (with current block size), 300 transactions each minute.
$1250/300 transactions = $4,16 per transaction.

Of course this changes as the metrics change:
2x higher BTC price -> 2x higher fees
2x more transactions per block -> 1/2 fees

Good math, and the results are not bad either. 4.16 per transaction does tno seem to high if we compare with bank transfers.

yayayo

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Quote from: julian071 on May 15, 2016, 04:24:33 PM

BTC being totally transparent, you can just calculate:

If the miners want to make the same amount they do today, at a price of 500$/BTC it would work out like this:

1 block (25 bitcoins) created every 10 minutes -> for each minute, 2.5 bitcoins are created X $500/bitcoin = $1250/minute.
So every minute $1250 in fees needs to come from transactions (instead of the block rewards today).
Using 5 transactions/sec as maximum speed (with current block size), 300 transactions each minute.
$1250/300 transactions = $4,16 per transaction.

Of course this changes as the metrics change:
2x higher BTC price -> 2x higher fees
2x more transactions per block -> 1/2 fees

Are you sure it's that easy? Clearly the metrics you state do influence transaction fees. But there are also a number of other factors that make calculation a bit more complicated or outright impossible.

For example, one has to consider investment costs in hardware and the efficiency of the hardware. Also cost of electricity is important. I think as we head into the future, efficiency will improve further on all fronts due to increased competition - that might even include use of heat generated by miners for industrial purposes. Therefore I expect that the cost per transaction will increase far less than a simple calculation based on number of transactions, reward, and blocksize might suggest.

(Btw. I think that 2x higher BTC price leads to half the fees in BTC and the same fees in fiat.)

ya.ya.yo!

btcjoin14

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That won't be for a long time and it will probably increase a bit. Most of use won't even be alive when the last block is mined. They most likely will be proportionate according to bitcoins price.

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