Topic: Who pays transaction fees - page 2. (Read 6778 times)

Well, you know the rules now.  You won't make that same mistake twice, will you?  Relatively cheap tuition at the University of Life.

1) The merchants would just raise all their prices by 0.03 BTC to ensure they get the right amount of money. But not all fees are 0.03 BTC exactly, so the merchant wouldn't always be paid the same amount for the same product.

2) I send you 0.05 BTC without realising there will be a fee attached, you get 0.04 BTC and a message that 0.01 BTC was deducted for fees. But you needed 0.05 BTC! So now you try to cancel the transaction to reject the fee, but the only way to cancel a transaction is to resend the money back to the address it came from. But then a fee needs to be deducted again. So we both lose out, because I didn't know you wouldn't get as much money as I sent.

Its true I don't understand the protocol as well as I should but it seems to be just a matter of subtracting the fee from the transaction rather then adding it?

Right now to send 10 btc I have to send 10.03 for example

Why cant i send 10 btc and the merchant get 9.97 instead? 

Care to elaborate on why its unworkable?

RE merchant (receiver) paying fees:  not really workable in bitcoin.

RE always pay fees:  it is silly to discourage bitcoin users with fees that are not necessary.  The vast majority of transactions do not need a fee, as the miners receive the block reward for securing these transactions.


It is available today from bitcoin.org.  Isn't that wonderful?

I have been giving some thougt into fees and I think the default behaviour should be:

1) have a fee in EVERY transaction, inversely proportional to the value of the transaction and linearly proportional to its size
2) make .00000001 BTC (the bitcoin atomary unit) the minimum fee

Obviously people will disagree about fees, and a "feeless" or "optional fee" clients will eventually be available, but I think as a starting point this would be much fairer than the current behaviour, which only collects fees from the smallest value transactions.

Its not about being cheap.  I specifically stated that the fees should be paid.  The purpose of this thread is to decide if it makes more sense for the merchant to pay the fees as they do with traditional credit card and other merchant fees or to keep the fees with the customers as it is currently set up.  Or maybe some hybrid of the two where the fees are split between the merchant and the purchaser.

I think it makes more sense for merchants to pay it.  Yes it makes products more expensive. But requiring customers to pay fees would put merchants who accept bitcoins at a huge disadvantage vs credit cards.  If you make the merchants pay the fees, then the customer who is buying isn't automatically going to whip out the visa because there _IS NO FEES_ to the customer if you buy with VISA.  You can explain it to them all day that the cost is more expensive bla bla bla but at the end of the day, people will not think that and will only think that credit cards are better because there is no fee...
 
Think about it.

There still isn't a mandatory fee.  Repeating that there is doesn't make it true.

As far as escaping fees or adding merchants, etc. I have to confess, I'm a capitalist and not a marxist.  I'm not doing this for the Proletariat Masses or for the betterment of society, I'm doing it because I want my computer to make me money while I'm at another job making more money, so I can afford to buy a bigger, newer TV that I don't need.  Fees allow the transactions to process faster, because more people want to make BTC processing transactions as mining winds down.  You can't go to starbucks, pay with bitcoins, and tell the barista "Ok, those BTC should clear in 1-4 hours once there are 120 free confirmations".

As mining produces less coins, and at higher difficulty, processing transactions is where the architecture is headed to make more money.

If you want to buy a server, and let the whole world use all your servers for free to instantly get 1 of the 120 confirmations needed, so be it.  Just convince 119 of your friends to buy servers, and pay for internet, electricity, and hardware out of their own pockets, and process these transactions for the whole Revolution of the Proletariat Masses for free.

I'd say you could get a decent server for about $5k with software, and probably $300 a month for colocation on a fast backbone.

So for you and your friends, about $600k for the hardware and software, about another $300k for someone to set them up, and then $300 a month times 120 is $36,000.  For just under a million you could build an entire network to process free transactions, and for only $36,000 a month plus maintenance and IT staff, you could keep the whole thing running.

I think you're on to something here, and I really appreciate you volunteering all of this.  I'd be willing to help you with the equipment - I can get you servers for 10% above cost, and $100 an hour for remote labor to set it up.

Or, you could pay the fucking 20 cents.

Thanks Jeff.  Just sent you a small tip.  We really do appreciate you guys' work, even if we seem like whiners sometimes    You said you welcome suggestions, so here goes.

* Go back to the optional fees in the earlier client.  If they enter 0 for fee and try to make a low priority transaction, pop up the following message:  "You are about to send a low priority transaction with no transaction fee.  Please be aware that this transaction will take a very long time to go through, and cannot be cancelled.  The transaction is considered low priority because it is such a small amount.  [Button: Cancel Transaction]  [Button: Enter Transaction Anyway]  [Checkbox:  Never Show This Message Again]"  (If they check the box, then, of course, stop popping up the message and henceforth allow feeless transactions without complaint)

As a blogger, I'm eager to welcome micro-donations.  Tiny tips (in the ~1cent range, or even smaller!) would absolutely revolutionize blogging.  Now, as such, I am willing to accept very long confirmation times as a necessary evil.  I think I speak for a lot of bloggers when I say this, and probably many merchants too.  I would even accept confirmation times of an entire year!  Just let my readers send the tiny tips with no fee      

One other thing.  I currently have a 1BTC transaction in my history (first withdrawal from MtGox, for testing) and it has over 700 confirmations and visibly growing.  It was made days ago.  I'm not advocating total communism, but I think at least *some* of that work could have gone toward fee-less transactions...

I take it back, for some reason I had wrong port forwarded to my machine.  Once i fixed it my connection problems went away...

alright i'll give it time, its just aggravating.

Another example


I try to send .05 bitcoins today, first time i click it says i need to pay 0.03 fee
I say no and cancel

2nd time i click it says i need to pay 0.02 fee
I say no and cancel

3rd time i click it says i need to pay 0.01 fee
I say no and cancel

4th time i click it says i need to pay 0.03 fee...

I mean WTF mate.

This is one of the most aggravating things about it for me

That and the fact I can not seem to get more then 0 or 1 connections anymore...

RE microtransactions:  this is a FAQ.  It is even in satoshi's original paper and crypto postings.  Bitcoin was never intended to be a useful microtransaction network.  Bitcoin is not optimal for microtransactions, and probably never will be.

RE fees:  the rapid increase in value caught everyone by surprise.  Months ago, we were dealing with "penny flooding" on the network.  Now, 0.01 BTC is a non-trivial amount.

Right now we are releasing new versions of the software as fast as possible, trying to fight the biggest fires ("triage") impacting users on the network.  We know fees need work, and there are already pull requests trying to deal with this:  https://github.com/bitcoin/bitcoin/pull/289

Longer term, we want the community to participate in a discussion about how to best balance (a) rapidly changing bitcoin value with (b) protecting the network.

Right now most transactions do not require a fee, but the default client requires a fee in a few situations:

1. Transactions smaller than 0.01 BTC
2. Transactions whose byte size larger than the 27k free transaction area (very rare)

So, to answer the question "why not make it easy to ignore fees?" is really unspending is very difficult.  If it's just a checkbox for users, a lot of users will uncheck it, their transactions will not get relayed or confirmed, and their coins are simply lost in limbo: never confirming, and no way[1] to recover.

Losing coins is a horrible user experience, far worse than having to pay 0.0005 BTC.

But we are open to all suggestions about transaction fees.  You just have to understand the "unspend" problem in its entirety, and the support nightmare that goes along with it.

     Jeff




[1] Technically, this is not really true.  You can "unspend" by restoring a wallet backup or some other esoteric means, but this is not something within the reach of your average user.

Ahh, I see, it is a friendly misunderstanding.

In the latest version of the standard Bitcoin client (currently downloadable from the frontpage of bitcoin.org), there is no way to disable the transaction fees.  (They apparently only pop up, though, for microtransactions.  Maybe that is why you did not see them)

Now you know.

I hope you will join me in asking the developers to get rid of this mandatory fee.  As a miner, you'll benefit by Bitcoin catching on for more merchants.  It'll catch on for more merchants if there isn't a mandatory fee.  That's most of the appeal of Bitcoin for merchants: escape from credit card/PayPal fees!

They're not required.

I haven't used them but once since I started mining, and it was to get coins out quicker.

If they're unable to change the text in the box on the standard bitcoin client (as I was) from "0.01" to "0.00" for the transaction fee, they're idiots.  We have no shortage of idiots in here already.

If they can't do the above, what are they doing getting involved with an electronic cryptocurrency for micro-transactions?

I know you're passionate about this belief of yours that it's mandatory, but it's simply not true.

To re-pose your torrent question, imagine how the music industry would be doing if they had caught on to $0.99 per song instead of $20 for a shitty album with one good song on it 10 years ago...

So I guess that's it for microtransactions?

Right now U.S. legislation is on the verge of capping credit card transactions fees at an amount effectively lower than 20 cents.  Imagine my face when bitcoin = more expensive than VISA.

You're right, though.  Imagine what a failure bittorrent would have been if they hadn't required 20 cent transaction fees for every download.

I may be alone in this, but anybody upset about a 20 cent fee on a transaction doesn't interest me in the slightest, either buying from or selling to, with bitcoins.

I want to point out that by having this option available through re-compiling, but not through an options menu, we are effectively placing an unfair tax on users who do not have the skill (or desire) to mess with source code.

If we want Bitcoin to catch on, we can't afford something like this.

Again, the main bitcoin.org client imposes a transaction fee (currently 0.0005 BTC) based on the type of transaction (see above).  You can recompile the code to make your version of the client have zero fee, if you choose (your milage may vary).

Change, in main.h:

To:

The reason is improved acceptance of the client / concept of Bitcoins, not because it's required.  If you don't want to include a fee on a transaction and you're willing to wait, then use a client that doesn't enforce a fee. 

My current version of the official client (under OSX) will allow me to set the transaction fee to 0.00.  However, I believe if I tried to turn-around and send coins I had just received, and was sending a sufficiently small amount, it would deny the transaction without the fee (though I haven't tested this).  Another client may accept it.

This is true, but some of the expected fees are 'soft', and should not force the sender to include them.  If the fee is not paid on a low priority transaction, then the transaction is simply ignored by the miners until it's old enough that it's priority is above the minimum.  I've done this many times when not under time pressure.  This fee must be required by his client for some reason.

Transaction fees are imposed for two reasons:
1)  The "age" of the inputs being used
2)  The amount being sent

Had you just received these funds into an address and then immediately turned around to send them to another address?  Then that requires a fee, especially if the amount is "small".

The mainline code had the minimum transaction fee set to 0.0005 on June 5th:
https://github.com/bitcoin/bitcoin/commit/352b4ea5b924412f3485290123fdf538cfdd8aa8

From Gavin on Transaction fee charges:
https://github.com/bitcoin/bitcoin/issues/170

Actually, fees should not be required, after a while when mining becomes less profitable, less people will mine, thus it becomes cheaper and easier to mine, so once all 21m coins have been distributed, you could just have the client make blocks for free.

So mining would not need to be done by a gpu because there would be no point, and the fee instead of Ƀ is cpu cycles.