where does transaction fees go to - page 2.

shyich03

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Quote from: Kprawn on November 14, 2016, 01:11:05 PM

There are two rewards going to miners to reward them for their hashing power they are using to process your transactions. The one is the

miners reward and the other the fees. I always compare this to the waiters in a restaurant. The miners reward, is the waiters's salary and the

fees are the tips. In future the miners reward will fall away and the fees will be the only reward. ^smile^ So, pay your tips, it's actually not as

much as you might think... a few cents. Grin

that's clear and simple, Thanks!

so fees are basically money for miners, and miners earn that money by putting in the computing power that makes this cryptography works. And the tip size is completely irrelevant to the transaction size. no matter how much money you are sending, the more tips you pay, the faster the transaction will be confirmed, in general.

deisik

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Quote from: thejaytiesto on November 14, 2016, 01:16:12 PM

Once all the bitcoins are mined in 2140, it's usual that newbies question where will be the transactions fees go at... well it will continue the same as it is now, but the miners will only get the fees, they will not get the generated coins. There is an ongoing discussion about how by 2140 there will not be enough incentive for miners to keep mining because of that... I would like to know more.

There are a few factors which could help miners remain profitable by the time when the future halvings bring the rewards to nothing. First, if Bitcoin price increases manyfold, the miners profits may actually increase in fiat terms even despite the reward being halved with each halving iteration. This is exactly what happened with this year halving. Miners reward dropped from 25 down to 12.5 bitcoins, but since the Bitcoin price increased more than three times within the period of just one year, 12.5 bitcoins now cost more in dollars than 25 bitcoins were worth over a year ago. And second, if Bitcoin gets worldwide traction and its userbase expands exponentially, the number of transactions processed will increase in similar manner. Since miners earn on almost every transaction they include in the block they find, the fees they get may also grow dramatically, thereby totally offsetting the lack of mining rewards...

As you can see, it all primarily depends on two factors, i.e. Bitcoin price and Bitcoin adoption

7788bitcoin

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Just like what others have explained, the fees go to the miners.

This is one of the reasons why some miners do not want the block size to increase so soon- the most crowded the blocks, the higher the fee because people will need to pay more if they want their transactions to be accepted sooner.

tertius993

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Quote from: Carlsen on November 14, 2016, 01:57:21 PM

Quote from: thejaytiesto on November 14, 2016, 01:16:12 PM

Once all the bitcoins are mined in 2140, it's usual that newbies question where will be the transactions fees go at... well it will continue the same as it is now, but the miners will only get the fees, they will not get the generated coins. There is an ongoing discussion about how by 2140 there will not be enough incentive for miners to keep mining because of that... I would like to know more.

question: how do you want to give the miner a fee for mining, when all the blocks are already mined?
Mining means putting a transaction in a new block where it stays forever. The first miner who does that earns the fee and 12.5 btc at the moment.
From all I understand about the way bitcoin works, I must assume the following thing: after all blocks are mined, bitcoin is kind of dead.
Or am I wrong there?

You are wrong.

He did not say all the "blocks" we're mined, but all the Bitcoins, by which he means that all 21 million bitcoins will have been generated. Blocks will continue to be created, one every 10 minutes, in order that transactions can continue to be made and confirmed and the network will continue.

The difference is that there will be no coinbase reward of new Bitcoins, instead miners will earn only the transaction fees.

(This all assumes that Bitcoin actually lasts 'til then of course.)

chesatochi

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Miners needs an incentive to validate the transactions on the network, they want some money from they operations. The materials and the electricity is pretty expensive, without the miners, no network will exist.

In the future, most of the money will come from the transaction fee, so right now every 10 minutes, 12.5 new Bitcoins become available on the network.

Carlsen

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Quote from: thejaytiesto on November 14, 2016, 01:16:12 PM

Once all the bitcoins are mined in 2140, it's usual that newbies question where will be the transactions fees go at... well it will continue the same as it is now, but the miners will only get the fees, they will not get the generated coins. There is an ongoing discussion about how by 2140 there will not be enough incentive for miners to keep mining because of that... I would like to know more.

question: how do you want to give the miner a fee for mining, when all the blocks are already mined?
Mining means putting a transaction in a new block where it stays forever. The first miner who does that earns the fee and 12.5 btc at the moment.
From all I understand about the way bitcoin works, I must assume the following thing: after all blocks are mined, bitcoin is kind of dead.
Or am I wrong there?

U2

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I used to be indecisive, but now I'm not sure...

Quote from: shyich03 on November 14, 2016, 11:23:48 AM

i thought a big part of bitcoin is that theres no fees whatsoever, but I have realized theres a transaction fee section on my blockchain wallet. Also, I have heard people saying they can put more "gas fee" to make the transaction confirmed faster. How does that work?

thanks

First of all, there are fees. They go toward miners who mine a block and receive 12.5btc + all fees in the transactions within that they accept into that block. If your fee isn't high enough they may not include your transaction for a while (or never if it's very very low).

The higher the fee the faster it will confirm as a rule of thumb but you really don't need to go nuts with the fee. It's about 100-130 satoshi / byte right now.

thejaytiesto

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Once all the bitcoins are mined in 2140, it's usual that newbies question where will be the transactions fees go at... well it will continue the same as it is now, but the miners will only get the fees, they will not get the generated coins. There is an ongoing discussion about how by 2140 there will not be enough incentive for miners to keep mining because of that... I would like to know more.

Kprawn

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There are two rewards going to miners to reward them for their hashing power they are using to process your transactions. The one is the

miners reward and the other the fees. I always compare this to the waiters in a restaurant. The miners reward, is the waiters's salary and the

fees are the tips. In future the miners reward will fall away and the fees will be the only reward. ^smile^ So, pay your tips, it's actually not as

much as you might think... a few cents. Grin

Ayers

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yes there is no fee if you decide so but it will take much longer especially now that there are a heavy congestion on the blockchain due to the block limit, recommended is 10-30k iwas never asked to pay more but i don't do big transaction either, and fee yes go to the miner and it will be their income in the future, so fee will be always bigger

lol3c

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Quote from: shyich03 on November 14, 2016, 11:23:48 AM

i thought a big part of bitcoin is that theres no fees whatsoever, but I have realized theres a transaction fee section on my blockchain wallet. Also, I have heard people saying they can put more "gas fee" to make the transaction confirmed faster. How does that work?

thanks

The miners of course. They work to earn money from fees and from the block. As long as you charge the fee, the miners will include your transaction into their block. And here is the miners' rule: The higher the fees, the easier the transactions finish because the priority of choosing is transactions which have high fees. So if you do not or pay a very tiny fee, your transactions can take ages to finish

BingoDog

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Always use fees that are recommended otherwise you may have problems with confirmation. It could take a very long time or not be confirmed at all. Seems like fees are the some kind of "bribe" for the miners but that is how the things are working. Fees are not good choice to make savings.

mrkevio

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You don't need to listen to the wallet and choose the exact amount they say you should. I have done transactions with over 0.001 in fees which scared me, so I tried one with 0.0001 set manually. It worked but it's being confirmed after a longer time. If you need to have a fast transaction, go for the recommended one. If you don't - go for 0.0001. Fees are being paid to miners so they can include your transaction in the respective block.

buwaytress

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To help you understand why fees are charged: just think of the fee as a miner's fee... payment for their troubles to confirm your transactions on the blockchain.

That said, fees are still considered to be at your discretion.

It used to be common place for transactions with zero fees, but most (if not all?) networks now impose a minimum fee - depending on your wallet, you can still set your fee size manually. The common wisdom is that a higher fee is likelier to result in quicker confirmations. Personally, I never have had an urgent transaction so I send a fee that's just enough for a medium priority transaction - it still arrives within 3-6 hours I find.

I haven't found a way to send an absolute zero fee transaction, so cannot test if it is still possible!

xdrpx

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Transactions fees are voluntary and it's the wish of the transactor on whether or not to include a transaction fee or not for the miner. For every block that a miner mines and if your transaction is a part of that block and if you'd like the miner to confirm your transaction quicker, you'd want to pay a minimum transaction fee at that time for that block. You can have a look here to find the most reliable fee to pay to make your payments go through quicker and to send them to the recipient faster: https://bitcoinfees.21.co/

When there are a lot of transactions happening or when the blocks are nearing full capacity, then it's desirable to make a payment with a larger fee to get that processed quicker, or it may take even days or weeks to process if a lesser fee or no fee is included. By paying fees to miners you help keep them incentivized for the large investments that they make for the Bitcoin mining hardwares and equipments. Also, almost always the Bitcoin fees are quite low and negligible to pay.

longbob72

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For a transaction to get a confirmation, it needs to be included in a block by miners. Miners takes the fees of all the transactions that they included in their block. Setting your fee higher will make miners more likely to include your transaction in their block.

shyich03

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i thought a big part of bitcoin is that theres no fees whatsoever, but I have realized theres a transaction fee section on my blockchain wallet. Also, I have heard people saying they can put more "gas fee" to make the transaction confirmed faster. How does that work?

thanks

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