Topic: Who pays transaction fees - page 3. (Read 6778 times)

It could be made a choice (if sender sends without a tx fee, the receiver gets a notice that says you have been sent money from XXX, would you like to add a transaction fee to speed processing?)

It shouldn't be a pop up. Pop ups are annoying and scary and the current wording is confusing. What do you mean i can't send this transaction? If Transaction fee is hard coded, should just show up as transaction fee without ability to adjust it. So the client shows you are sending foo, the fee is bar, total money deducted from your account foo-bar.

Why wouldn't the transaction fee be dependent on amount sent to at least some extent? As mentioned transaction fees offer significant friction for small transactions. It could be a combination of percentage + minimum. If transaction is under XXX and use is not spamming, transaction is free, otherwise it is XXX or the greater of .05%.

I actually think removing all the transaction fees in the client is a bad idea for consumers.  Here's the reason:

If the fee isn't hard coded into the client, then the consumer using the client will probably set it to 0 not understanding how Bitcoins really works.  Those transaction fees are paid to the miners in the block that they are confirming.  Transactions with higher fees are given priority for confirmation over transactions without fees.  So, if the average consumer sets their transaction fee to 0, their transaction will have low priority to be confirmed, they will wait and wait for their transaction to be confirmed and get frustrated with Bitcoins as a result.

Hardcoding the fee allows for those new consumers to actually be handled with some expediency, thus giving them a more positive outcome.

Everyone agrees the fee needed to be lowered when Bitcoins were $30.  Now they're back to $10 again, do we raise it again?  (Obviously not)  We just let the fee be hardcoded at the new 0.005 rate and see how it stabilizes. 

You don't get stability from making lots of changes in a short period of time.

just wait after 100 confirmations

double plus good

Thanks for volunteering.  Keep us abreast on your progress.

Hardcoded fees in the official client is a very bad idea.  In my opinion, the official bitcoin.org client needs to be updated ASAP to get rid of the .01 fee.  It is probably disincentivizing potential adopters.  Here are some things to consider:

* If somebody wants to DDOS the network, they aren't going to be stopped by a CLIENT-SIDE safety like this.  The fee punishes legitimate users and does NOT offer any real additional security.

* If anti-spam client-side safety IS going to be put in, it should simply be in the form of the client refusing to send more than X number of transactions per minute.  This, too, can be ignored by a determined attacker, of course...

* All the pro-bitcoin literature heavily emphasizes the way bitcoins can be broken down to 8 decimal places.  This is totally contradicted by a .01 hardcoded fee.  Sure, the fee will go down, you say...  but the damage is done, people trying the client TODAY are going to be thinking "WTF"

* What is the first thing someone wants to do when they get their first coins?  Give the currency a test drive!  Send .01 bitcoin to a friend or to yourself, just to see how things work.  Having an unexpected fee pop up at this particular time is simply a public-relations catastrophe.

* .01 is absolutely arbitrary.  What, did Satoshi do some multivariable calculus to find the optimal fee and it just HAPPENED to be a power of 10?  Yeah, right.  People see this arbitrary "magic" number and it costs the currency precious legitimacy.

In conclusion:  the automatic hardcoded fees need to be removed with high priority.  They are detrimental to the currency's uptake.  Lowering from .01 hardcoded to .005 hardcoded is a bandaid fix which does not really address the problem.  We need to go back to the earlier behavior of letting the user choose their own optional fee.

The fee will go down. It's left over from when .01 was trivial to block spam. For some reason the drop needed to be phased in.

Remember that there is no Bitcoin company and you are free to get software that communicates with others any way you can. Eventually people will be commissioning custom clients I'm sure.

No, that would mean that you had about ten inputs for each transaction.  That shouldn't be enough to throw you into the 'large transaction' rule.

well i was mining on an old shitting video card where i would get like 0.05 / day  so that represented a few weeks of daily 0.05 /day payments.

I don't know, then.  Either it's a fee schedule imposed by the creator of that client fork, or you had a massive number of inputs.

It was sent from my own client

The fee was not optional, it just wouldn't send it with out it.

I download it from http://bitcoin.bluematt.me/bitcoin-nightly/ubuntu-11.04/ because the regular client will not display on newest ubuntu.

It's not arbitrary, it's just that the sender's client is the one that creates the transaction.  But, under most circumstances, a fee is voluntary.  This permits the costs of processing transactions to be borne in another fashion.  For example, if in a future that Bitcoin is very successful, and you are shopping at (for example) Wal-Mart; it is generally assumed that Wal-Mart is not going to expect you to pay the transaction fee, but the client may or may not be able to respect the vendor's request that the fee be deducted.  It doesn't much matter, though, because it's in the interests of Wal-Mart to have those transactions processed quickly whether there is a fee paid or not; so Wal-Mart has a strong economic encentive to either run their own datacenter to process Bitcoin transactions sent to themselves, or contract this activity out to a professional mining datacenter for the same ends.  Thus, Wal-Mart bears the transaction costs and also keeps any savings (or fees) gained by mining for themselves.  All other consumer or retail businesses have similar encentives, and therefore we can expect that "bitcoin banks" serving business interests will be responsible for processing the free transactions to or from their own clients/customers.

This should not have been required.  Did you send these from your own client?  Did the client ask for a fee, or refuse to send without one?

One could argue that if you carry more physical coins, when you drive to the store, you use slightly more gas, and it takes more gas to go from the store to the bank when they cash out.

good point. and in bitcoin the fee is optional.  but I assume the market will set a price based on supply/demand of transaction processors.

Of course, but they're also born by the seller in lost profits from customers that drop out at the margin.  i admit it's been a long time since econ 101 though.

Who is selling things for 0.001 BTC?  Do you really think the transaction fee would stay at 0.01 if it were $1000 for 1 BTC?

Fancy lawyer latin talk aside, transaction fees even when paid by the seller, are ALWAYS transferred to the buyer, directly or indirectly.  This is economics 101.

this doesn't make much sense. like sales taxes, the cost is shared by both parties due to supply and demand pressures.  the problem with transaction fees is not who pays them, but the inefficiency caused due to foregone transactions (they're never made because fee makes them too expensive).  for example, who would pay anyone 0.001 BTC for a good or service if it required paying add'l 0.01 BTC fee?  and eliminating those transactions causes inefficiency because, presumably, the trade would be pareto optimal (i.e., both sides better are better off after the trade than before it) thereby denying a potential increase in social welfare.

Now, had you taken that 1 BTC, held on to it for another couple of days, and sold it, you would have ended up with 5-15$ profit.  Thus 90 cents is sort of irrelevant at that point.  Or, if you had spent exactly 1 BTC you bought at $18 for something that costs $40 USD, the 5% BTC wouldn't have mattered either.

well I paid $18 for that bitcoin in cold hard cash which included the fees previously mentioned.  Then I paid additional 5% or $0.90 to spend the coin for the purpose of some technical support.  I ended up figuring it out my self but gave the payment for the effort. 

So in dollars, my technical support cost me $18.90 when I promised to pay them $18.00


Did my $18.00 transaction really cost the network $0.90 to process?  I think that is more expensive then visa and mastercard.

How much did you pay for that 1 bitcoin?  And how much did you sell it for?  Did you sell it for more or less than 8.15% above what you paid for it?