Topic: Why have the fees so drastically dropped ? - page 2. (Read 709 times)

If that was true why not call them mining hubs? Do you have any evidence to support the claim?


I think you are not quite aware of what constitutes and bank.

https://en.oxforddictionaries.com/definition/bank


An open channel is not a deposit. Lightning Nodes are not free to invest coins in open channels. Lightning Nodes do not make loans or exchange currency. Claiming that running a Lightning Node makes you a bank is disingenuous. But you already know that. That's why you do it.

Well all the ones with more than 20 channels open, you know ran by the miners because only they have the hardware, skills and BTC to run
these banker hubs and past history shows just how much we can trust these miners.

if it charges transactions fees and interest on the BTC to keep the ledger open, it's a bank

A decentralised network is by definition a hub and spoke architecture. I remember from your previous posts that you make a point of referring to 'banking hubs'. Can you tell me which hub on the Lightning Network is owned and operated by a bank?

$55 just to process 250 bytes of data is what has killed bitcoin and no one will trust the development team or the miners
ever again for this reason.

ETH didn't go down this route when they had a mad rush due to crypto-kitties and a lot of people who have educated themselves
about Bitcoin can see that the lightning network is both off-block and consists of banking hubs so I think it's game over myself and
the charts appear to agree with me but we will see.

I jumped out mostly at $18k due to fees being so high and warned people to put a stop-loss on at $10k so my track record is quite in-tacked
when it comes to looking in a crystal ball.

The btc price drop is the major reason due to which their is sudden fall even in the fees. Another reason may be due to lightning network as many have shifted to that and thus we have less jam now days on the block chain. Even many users are staying away due to fall in price and they feel it will fall further.

From user to user it dropped indeed. I think segwit was a major cause. But most of the exchanges still keep 0.001 BTC to withdraw your purchased BTC. Which is simply greedy! Coinbase is still not available worldwide, I'm using dsx.uk to buy BTC with fiat and have to pay that outrageous fees.

Over the past few years, bitcoin has been growing so transaction fees have increased. I think this is what managers want, the increased transaction fees will benefit the bitcoin trade. However, the transaction fee has been reduced sharply
So, why do the fees dive? The simple answer is that currently the user is making fewer transactions. In December, there were about 400,000 transactions per day, while bitcoin today had only 200,000 transactions, according to data from Blockchain.info. This will affect the purchasing power of bitcoin and their price will decrease.

why did you not change to LTC or XRP in exchange and then transfer out with that?

Right around New Years I had one transaction stuck unconfirmed for two weeks.  It was sent by an exchange, where they squeezed in many inputs (large file).  At the time an average fee was around $450 for my tx - I tried to pay for accelerated service, they wanted ~ $6,000 to do that.  It was a joke - a feeding frenzy...

Got scammed by a couple guys from this forum...sad human behavior...

Really makes you wonder just how many spam transactions there were during the time where it was costing $20-$25 to send bitcoin’s.

The miners do not set the fees. You set the fee you pay for each transaction you send, or the software client or online service you are using does so. If you pay too small a fee then your transaction will not make it onto the blockchain. But the fees put into each transaction are 100% set by the party sending the transaction (either you or the software you are using), 0% by the miner.

Some miners are suspected of having manipulated the market by spam attacks that force the rest of us to jack up our fees in order to make successful transactions. That's one way that miners can manipulate the market, and it's pretty clear it was done last year when fees were running much higher. Another is by mining empty or near-empty blocks when there is no valid reason for doing so. So miners can try to manipulate or influence the fee market, but they have no direct control over the fees set by users.

Even I am so curious to know about the reason. You see that when the price was increasing the fees increased considerably and even people were using btc too much as the transactions were too high. But now if you see prices have gone down and so are the number of transactions? It realy is too dubious. Really looks like a fees scam. Can it possibly have any connection with the LN? Miners know that LN will surely cut their share from between so they might be ready to lower the fees a bit in order to continue normal btc protocol so they could earn more?

SegWit itself didn't reduce the fees.
SegWit 'restructures' transactions and introduced a new unit (weight - instead of size).
Due to this changes the size of a transactions is lower compared to non-segwit tx's, resulting in lower fees.

You seem to missunderstand the term 'fee'.
There is just one fee. It is the transaction fee (which is required to get your TX included into a block, depending on the mempool).
This fee is also often called 'miner fee'. It is just another term for the transaction fee. Those are not two independent fees.

I think BTC tx fees reached ~40$ in December simply because the price of BTC was increasing insanely and new purchasers didn't care how much they'd have to pay for a tx, as they were buying large amounts and time was the priority. Now, as the price has dropped the agiotage has toned down and tx fees came back to standard.

In which wallet you are seeing the fees for the transaction is 40 sat/byte From the time price started dropping from that time onwards we will find the cheap transaction fees in online wallet as well. There are many people mentioned that mempool seems completely low after it bro.

Still desktop wallet have 100 percent segwit implementation are able to go with the cheap fees to make the transaction. After segregated witness we seeing fees has been dropped and miner fee also reduced.

So will 5 sat/byte, and often 1 sat/byte is even enough. I wouldn't call 40 sat/byte "low", you're highly overpaying if you pay that much.

I want to add 3 possible reasons to bob123's list:
1. Fees went up so much because wallets with "automatic fees" were competing against eachother. They all tried to outbid others, which resulted in higher fees, while we were all still waiting. I've seen many threads where people complain their 400-600 sat/byte transaction was still unconfirmed after a very long time!
The "recommended fee" was quickly not high enough anymore, because all transactions after yours would have a higher fee.
I've also seen Bittrex pay thousands of dollars in fee, up to 5 times higher than needed at that moment, to prevent their transaction from getting stuck.
Back to your original question: it actually took quite a while for my Mycelium wallet to lower the recommended fee. It felt like it was waiting for other wallets to lower fees too.

2. At the peak of fees and Bitcoin price, miners were taking $40 million per day in block reward and fees out of the Bitcoin ecosystem. That drain of money needed a huge inflow of new capital to be sustained, and that clearly ended (at least for now). If less money flows into Bitcoin, there's also less available to spend on fees.

3. Blocks aren't full. Even though at least one mining pool rejects transactions with less than 5 sat/byte fee, there's no need to pay a high fee if you don't have to compete against other Bitcoin users.

One of the major reason which I feel is that the transfer which was happening at that time due to high price has now being drastically being dropped. So the network congestion has dropped immensely. Also many of the users have now shifted to lightning network due to which the load has now shifted a bit form here and thus resulting in a lower fees now.

SegWit with it's bigger {more efficient} Block size, makes it more expensive for spammers to spam the network. Less spam,

will decrease miners fees for the rest of the people. The MemPool is also virtually empty now, so this makes spamming even

more difficult now. Yes, the transactions has also decreased since then, so that also contributed to the current situation. 

Quite possibly the spam attack. The change in the transaction volume was too drastic for me to consider it not to be partially due to someone spamming it up. Of course, it was pretty popular then.[1]
I definitely have my reservations that major miners didn't have this idea. It's a pretty feasible method if they do control majority of the hashrate and hold large farms. They can easily create the impression that high fees are needed without actually losing much money. However, with the generally lower volumes, its effectiveness is much lower.
[1] https://jochen-hoenicke.de/queue/#0,1y

There are quite some points which played a part in contributing to the dramatic fee rise:

• Transaction spam
  As you already mentioned, the spam which was going on in the 3rd quarter of 2017 heavily pushed the prices up. Fortunately this has stopped.
• More daily average user
  The amount of user which actively use bitcoin daily dropped compared to the 3rd quarter 2017.
• No transaction batching
  Some exchanges did not batch their transactions. They instead sent 1 transaction per withdrawal. This has been changed lately.
• No segwit adoption
  The majority of the exchanges did not have segwit implemented yet. Some already have done that. The segwit integration into core also had lead to an inreasing amount of segwit transactions
  and therefore to lower fees.

Because of all these points (and changes done) the fees have significantly dropped compared to december 2017.
Scaling is a huge task. And it is going to be achieved slowly.