Topic: Why do some people pay illogically high fees for transactions? (Read 452 times)

Who wouldn't get a headache from such high transaction fees that you will do with bitcoin if you only took out $40 in bitcoin last week, all you have left is less than 50% of the amount you took out in size of fees.

        That's why what others did who didn't have much need to withdraw bitcoin was to wait for the situation to subside and others who were in a situation of need had no choice and still made a transaction even though the fees were almost unfair if we look at the experiences of others.

Those are really insane fees and I would never do such stupidity while transacting. I mean I am checking the fees at least twice and thrice before broadcasting from the wallet. Most of the wallets are showing the fees clearly in vbyte and you can even see the fee previews (e.g. mycelium). It clearly gives you multiple options such as priority, economic, normal, regular with the fees based on them.

I really don’t understand how one could miss that process and just finish the broadcasting. I have literally closed the wallet if I am not sure about the fees or bitcoin address that I copied.

It seem careless handling of the wallet.

If you try to explain, I'll carefully listen. But why don't you think that such a small block size is not going to be destructive for bitcoin? I have a small online shop where I sell things that cost 20-70 Euro/USD. People rarely pay with bitcoin, they prefer to pay with Dash and Litecoin.
Let's say I want to buy Samsung OEM Wired Headset Headphones that costs $7. I'll have to pay $9/vB, so, I have no other choice but to use Ripple or Dash or Bitcoin Cash or Litecoin or any other coin that offers low transaction fees.

And today, if I am a millionaire and just want to have some fun, I can make tens of thousands of bitcoin transactions and clog the network in exchange of some money. It doesn't even require millions to have some fun today, just 4 bitcoin is enough to spend in transactions and clog it.

New York.
In the IT field, just about anyone who does regular work on PCs / servers for their job has a shelf of old drives.

The problem is that brand new, newer model, sealed in a box a 1 TB 7200 RPM drive OR a 2 TB 5400 RPM drive are $50 with a 2 year warranty.
(Local retail, you can find them a bit cheaper online)

As I said above a 1 TB Samsung SSD is $60 a 2TB is $120 / generic brands are $10 to $15 less. (Retail or online are about the same)

So a few year old out of warranty 1TB spinning drive really has $0 residual value.
Sure if you are close you can swing by and pick one up. But if you have to send me $10 to $15 ship it to you, you might as well to to Amazon and get one of these:
https://www.amazon.com/Seagate-Enterprise-Capacity-3-5-Inch-ST1000NM0033/dp/B00A47FPL8
Yes it's an older model, but it's new and only $31 shipped with a 5 year warranty.

Which is how just about every tech out there has 'that shelf with the drives'
And when it gets full, they e-waste out @ $0.50 a lb  https://www.arrowscrap.com/prices

Which goes back to the point I was making, there are a bunch of reasons for the full mempool, AND a bunch of reasons why larger block sizes may not be the best solution. This is not the thread to discuss it, but saying that storage costs are the reason not to increase block size is not a valid reason anymore.

Because I'll bet you just about anything you want that in a few years, that shelf of 1TB drives I have is going to be filled with 2 and 4 TB drives that have $0 residual value.
Late 2019 I got rid of all the spinning 256GB and 512GB drives that were on that shelf. The cycle keeps repeating.....

-Dave

It is hard to explain that halfing will become destructive to btc.

but here goes.

reward ——-fee————-price
50btc.   ——-0.05————0 to maybe 12 bucks
25btc ———0.1—————80 to 1300
12.5 ———- 0.1 to 2 ———400 to 19000
6.25 ————0.1 to 2 ——— 3000 to 69000


look at reward to fee ratios

maybe 1000 to 1 when price was 0 to 12 bucks
maybe   250 to 1 when price was 80 to 1300 bucks
maybe  125 to to some times 6 to 1 when price was 400 to 19000
maybe 62 to some times 3 to 1 when price was 3000 to 69000

the ½ ing is causing a clear reward to fee ratio issue this issue is yet to be solved.

project
2024 maybe 3 to 2 ratio reward to fees when fees go high
2028 maybe 1.5 to 2 ratio reward to fees
2032. maybe .75 to 2 ratio reward to fees

with more and more incentive for large pools to clog the blocks.

remember they mine the blocks and they keep the fees.

so if they flood the blocks with crap 💩 they are not paying full price.


they grab the fees. that they paid to jack the fees and they grab everyone elses fees that have to pay to move coin.

Dave whare are you from , I need a 1TB Drive , how you got so many?
The transaction was probably a mistake ,or fixed fee withdrawal.

Don't hesitate, some people will do it to support bitcoin and run node, but in the end there is nothing to be forced into it. I don't run bitcoin node, while I do support bitcoin - so this should be based on each user's preference.

The high fee of transactions bitcoin allows some people to use altcoin as an alternative solution to make transactions, but I don't think this will hinder bitcoin adoption because these transaction fees also fluctuate all the time.

Indeed, halving could lead to lower profits for miners as they receive less reward per block mined. However, on the other hand, it could also lead to lower inflation and increased confidence in bitcoin as an asset. There is a view that halving could lead to an increase in the price of bitcoin, as a reduced number of new coins in circulation could lead to an increased demand for existing coins. However, this is no guarantee of a price increase and depends on many other factors.

High transaction fees may indeed encourage people to use altcoins for transactions, which could have a negative impact on the acceptance of bitcoin as a means of payment. However, it should be remembered that bitcoin also has other advantages, such as security, decentralisation and durability. Moreover, bitcoin transaction fees are not constant and can fluctuate depending on the demand on the network.

If people spend tens of dollars in every transaction fees, will they really hesitate to buy a cheap brand new 4TB HDD for $40?
Also, do we live in 2010 or 2016? Technology is advancing, things are getting affordable, so I don't see the problem in increased storage. By the way, you can use HDD instead of SSD and your costs will dramatically decrease. To be honest, people who run bitcoin node, do so because they support bitcoin and want something truly decentralized, $50 can't push them to change their mind. And even if new person wants to run node, most likely storage won't be an issue, there are a lot of people who have terabytes of storage on personal computers.

Halving lowers the profit for miners but that doesn't mean that halving is unnecessary. When profit becomes lower but the support remains the same or increases, price increases too. You completely ignore the fact that high transaction fee is something that pushes a lot of people to use altcoins for transactions. This affects the bitcoin and its adoption very negatively.

It would nominally cost more. At this point you need a 1TB drive to hold the blockchain. So if we jumped to 4mb blocks that were always 100% full then it's still going to take 2 years to fill it up. The gold standard of consumer SSD is still Samsung. A 1TB drive is $60 a 2TB drive is $120 not a dramatic difference when factoring in the cost of the rest of the system.

Used spinning drives in the 1TB ans 2TB range are just about free, if not free in most parts of the world. They are really just scrap at this point so if you are going for used from that side, it's not a big deal.

Seriously, I just took about 50 1TB spinning drives to the ewaste recycling place because I could not GIVE them away. I had them on freecycle and craigslist and they just sat there.

I still have more, but the shelf was full.

Not saying that the block size should be increased, just that it will drive up costs is not a good argument in 2023.

-Dave

BCH has 8MB blocksize while BTC has 1MB. If you increase blocksize, considering all the blocks will be filled, it will cost more to run a node which will create less interest in running a full node. The more nodes you have, the more decentralized network it is. Since a node has no monetary gain, people wouldn't voluntarily spend a lot of money to run a node.

Apart from that, it will lower the profit for miners too if I understand correctly. If the profit becomes lower for the miner, the number of miners will be decreased, and again, as philipma1957 said, will be easier to manipulate the fee. Maybe with fewer miners than right now we have, you may see no more 1sat/byte tx because it will be easier to manipulate the fee.

Try reading-
Title: Dynamically Controlled Bitcoin Block Size Max Cap
Title: Consensus based block size retargeting algorithm

So, if I make 20,000 transaction offline with 0.001 sat/vB, roughly $30 and then broadcast all of 20,000 transactions immediately once I connect online, does that mean that I'm able to abuse the tx fees? Yes, I'll lose 4 Bitcoin in fees but if we assume that one block takes 2000 transaction and one block is mined every ten minutes, I'm capable to ruin the party for everyone for 2 hours, right?

And why isn't there unity to fork bitcoin and increase the block size? There was a Bitcoin Cash fork from Bitmain, that owns Antpool and BTC.com, with aim to increase block size and get rid of stuck transactions, however, people here hate BCH and don't support it, what's the reason?

that thread is a bit old but still has value.

I have been so busy mining  and to explain in full detail about how some of those ideas and other ideas can be used to explain how fees can be twisted and distorted would take me weeks to do the thread. To give some explanations of the lack of balance in the fee structure and how we stand today. vs 2014 or 2016 or 2018 or 2020.

Bottom line is the fee setup is subject to attack at little or no cost if any major pool gets involved in the attack.

I am a small commercial miner maybe 160kwatts  of gear which is a drop in the bucket.

But if you have 100 megawatts and work with a large pool  with a few other big mines you can really do a whole lot to move fees from 0.15 btc a block last year to 1.50 btc a block now. I do think this is happening now.

But I also think it means we are about to see a large btc price increase. As this super sized blocks seem to happen in the beginning of bull runs.

Yeah, this is one the reason I can think of too because I almost did the same mistake 2 days ago when I was making a transaction. The other one is those people who are in a hurry to make the transaction, they will pay as long as it goes in quickly. The former is what happened to me.
The default in using the Mycelium application became 137sat/byte and I almost clicked the send button before I realize how much the fees are. The normal fees were just 20-30 sat/byte weeks ago and I had been doing it without any issue. I also tried finding out why there's heavy traffic, but I cannot find the answers anywhere.

Thank you very much for linking that explanation. So, is that the reason why we can't make a bitcoin fork and increase the block size? Since it requires adoption by every active, significant full node and definitely Antpool and btc.com won't support it and this is a deal breaker here, right? But at the same time Antpool was one that made a btc fork and increased block size, then called it Bitcoin Cash but simultaneously, people don't support bitcoin cash. It's a little bit strange.

first off you don't understand miners at all if you need to ask that question.

I have a thread that explains how major pool operators can jack fees up and still make money do in.

You need to have control of 30% of the network to do the manipulation I explained in the thread.

https://bitcointalksearch.org/topic/why-all-miners-need-to-mine-on-a-pool-that-pays-them-the-tx-fees-2634505

Now why a person is willing to pay the fees you found I don't know.

I do know why these fees are fairly high and will continue to be high.

BTC has a flawed fee setup that can be manipulated.

Yeah, exchanges charge high but actually don't send transactions with high fees and on different post people were quoting me that exchanges raise tx fees. For me, the high exchange fees for bitcoin withdrawals with actually low transaction fees make it very expensive, slow and unwanted process to use bitcoin for frequent transactions. Things are manageable when you use your own wallet but sometimes when I expect to receive one confirmation in 20-30 minutes, someone comes out of nowhere and starts to send transactions with 2000 sat/vB, raising fees for everyone and then I receive bitcoins lately.

Yesterday I was checking transactions in mined blocks and I don't know what to think but people really pay high fees for no reason. You'll often see two type of people who pay the highest transaction fees: One are those who spend more than one bitcoin and another part are the ones who spend more in fees than in transaction.

That's true when we're talking about P2SH address (which has prefix 3...). But address input on all transaction which mentioned by @Synchronice use either P2WPKH (bc1q...) or P2TR (bc1p...) though.


Probably no. While exchange intentionally charge high withdraw fee towards it's user, they only spend fraction of it to pay Bitcoin on-chain transaction fee.

This is the first time I've seen that the transaction fee using bitcoin is high around the 38.88$ charge. It's really quite majestic. How did this happen?

      I remembered, on an exchange platform when I was supposed to make a transaction withdrawal in Bitcoin, I noticed that the fee was high, although it is not like this 38$ which is really expensive, it seems to be around 5-6$ if I'm not mistaken, but when I checked with another exchange, their fee was around 3$.

But here it is different? Couldn't it also use an exchange so the transaction fee is a bit expensive?

It's got to be some automated software that was created pre-2014 or similar, where the monetary value of the fees did not matter so much as they do today. Not necessarily an exchange, but could be a script for any website, really.


The only way to tell whether the wallet is indeed making Segwit-enabled transactions is to see whether there is a witness data in the raw transaction hex.