Please educate newbies that there will be no minimum transaction fee for Bitcoin Cash transactions!
This is terrible news for Litecoin (which I'm invested in and mine), and great news for Bitcoin Cash (which I'm invested in and mine): Charlie Lee is proposing that miners flag the minimum transaction fee in the block headers. People who panic because they think this will lower LTC transaction fees below Bitcoin Cash levels are not getting what this actually means (and can follow my comments on the /litecoin channel on my thoughts on the implications). What this actually means (and what I have left out in my comments in /litecoin) is that any attempt to change the transaction fee scale from Litecoin per byte to kbyte will FAIL on Litecoin. When this will be implemented, Bitcoin Cash will have another advantage over Litecoin. We will have no minimum fee limit for our transactions. If we decide to change from 1sat/byte to 1sat/kbyte, we can just do that. Fees are very low on Bitcoin Cash and they will stay very low on Bitcoin Cash. Bitcoin Core has fee problems, Litecoin has fee problems, Ethereum has fee problems. We don't! edit: one little correction: the core wallet is counting LTC/kb already, so the example should be changing the scale from kb to mb. I was referring to the proposal to change from sat/byte to sat/kbyte. Some additional info to the defenders of a minimum transaction fee to avoid spam attacks: 1) Bitcoin Cash already experienced a spamming attack on the 16th of August 2017 and it wasn't a success. Big blocks are an effective measure to counter spam attacks. The only network that is suffering from Spam attacks seems to be Bitcoin Core. 2)The smallest amount on BCH and LTC is 0.00000001. Why skip 3 digits like Charlie did and set the minimum fee to 0.00001? If you are worried about 0-fee transactions, set the minimum to 0.00000001 and there you go. But don't give any entity the power to dictate and raise that limit.
At the current bitcoin minimum transaction fee of 0.5 cent (low priority) BTC miners would consume 2 million MW-h/yr. Enough electricity supply pa for 400,000 Europeans.
If miners charged a similar 2% transaction fee they would consume more electricity than the whole of Japan. If this electricity was provided by solar panels it would require an area the size of the Bahamas (13,333k km2).
If the security bitcoin miners provide at present was to scale up linearly to Visa's volume miners would consume enough electricity to power Spain (43 million people).
Disregarding transaction fees, if the price of bitcoin rose to $50 before 2014 miners would consume 1,314,000 MW-h/yr, enough to power the Virgin Islands. If the price were to skyrocket to $1000 miners would consume 26,280,000 MW-h/yr, enough to power Ireland.
These figures assume the free market would "balance" itself i.e. competition would increase until mining is only marginally profitable. Visa will process [~$6 trillion](http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDM0NDE0fENoaWxkSUQ9NDUzNTA4fFR5cGU9MQ==&t=1) dollars in 2011. [45.4 billion transactions](http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzM5MjV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1) in 2010. (Elecricty cost $100/Megawatt hour)[http://en.wikipedia.org/wiki/Cost_of_electricity_by_source] ---- (45 billion * 0.0005 * 10) / 100 = 2,250,000 MW-hr ----- (income of miners pa) / price of electricity per MW-hr = MW consumed per year. @ 2% transaction fee (2% of 6 trillion) / 100 = 1,200,000,000 MW ([Japan consumes 963,852,000 MW](http://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption)) @0.5% transaction fee (0.5% of 6 trillion) / 100 = 300,000,000 MW ------ ((USD volume of visa transactions per year / USD volume of bitcoin transactions per year) * (kilowatt hours per gigahash * number of gigiahash * 24 * 365)) ((6 trillion / (419,313 * 10 * 365)) * (0.65 * 13,300 * 24 * 365)) kilowatt hours in megawatt hours = 296,885,620 megawatt hours ----- (price per BTC * BTC mined per day * 365) / Cost per MW-hr (1000 * 7200 * 365) / 100 = 26,280,000 MW-hr
05-24 05:14 - '*transaction fees. Try BCH. / In related news, I walked out of a bar after they said $15 minimum on cards (at $7 / beer), supposedly due to Visa transaction fees. / Either I need to start carrying cash again, or m...' by /u/SolarFlareWebDesign removed from /r/Bitcoin within 125-135min
High transaction fees limit the minimum possible investment into Bitcoin.
A lot of people hearing about Bitcoin for the first time, even now, don't realize that Bitcoins are divisible and think that they must buy a whole Bitcoin to have any sort of investment. I used to get a lot of people to dip their toes in the water by offering to sell them $5, $10, or $20 worth of Bitcoin. With average tx fees now above $5, it doesn't make sense for me to pay a 25% fee to sell someone $20 worth of Bitcoin, and it doesn't make much sense for someone to buy $20 worth of Bitcoin when it will cost them at least 25% in fees to do anything with it. The more demand for cryptocurrency can be padded by allowing virtually anyone in the world to purchase any amount of it, the more resilient the currency will be to groupthink market behavior and to manipulation by large players. As most of the world is now priced out of using Bitcoin, it's essentially being turned into a rich man's speculative toy, rather than something that can appeal to almost anyone. This will result in an inherently unstable system built on shaky foundations. The clock is ticking.
On the importance of understanding Minimum Transaction Fee costs in Bitcoin
After the next halving in June, 2020 a total of 328125BTC will be added to the market per year, that’s a total of approx 27K per month.
This is something that people should be thinking about more. There is much talk of changing PoW, but advancing the halving is of far more importance. Why? The answer is both complex and simple. The root is understanding the importance of Satoshi Pricing, which I don't believe many have contemplated as well as they should. A Satoshi is a 'valueless' unit constraint within Bitcoin, the lowest denominator, and the unit used to translate Bytes of Data into Dollars, or Bitcoin values. 1 Satoshi has been long worth below 1 Penny, but this is changing. Bitcoin Transactions are transmitted in Bytes, 225 Bytes as a standard. One could pay 1 Satoshi to send this transaction (or no Satoshi) but in an optimized blockchain, with Full Blocks, one should pay per Byte, or 225 Satoshi at 1 Sat / Byte - Anything less (such as 5 Sat / 225 Bytes) would get 'factored' out, as miners better optimize algorithms for value. So now we got a minimum value increment of say 225 Satoshi or 450 Satoshi. The difference between these two values at a $10,000 BTC cost is $0.02 - or trivially different. But let's say 1,125 Satoshi is a reasonable target value per transaction (5 Sat / Byte). Now, it's going to get tricky. Most within the space understand Batching is the only path forward for insane transaction volume. Batching meaning each BTC Transaction is to represent 100's (or millions) of IRL Transactions. Now BTC Transactions are limited to 2 Million per week (approximately). Thus, there (effectively) can only be up to 2 million batched + BTC Transactions per week. Batched transactions naturally develop as the BTC fees escalate. The difference between $0.02 to $0.10 is worth little for a correction, but $0.10 to $0.50 is a worthy difference, $0.32 more. Now, you must contemplate Bitcoin Bonus to BTC Fees. The current Bitcoin Bonus per block is 12.5 BTC, or per Week is 12,600 BTC, which can support 2 Mil BTC Transactions. BTC Fees are expected to amount to 22.5 BTC over the week. So Bonuses are 12,600 BTC, and the Fees are 22.5 BTC. So what is likely to happen? Should a monopolistic miner gain disproportionate share of the newly minted Bitcoins, then he can terrorize the BTC network, at a rate of approximately 0.002 of the Bonus reward. Is this a problem? Yes, it is actually a very significant problem. This means that a monopolistic miner could reduce the usefulness of the Bitcoin network, while spending only a very small portion of his revenue to do so, say 1%. Even a mere 1% would drive fees 10x higher than Ideal, and this could be repeated week over week. However, there is a solution, which is Batching. With Batching, the BTC Trans Fee spam becomes a mute point. But what drives batching? A high BTC Price, or Satoshi Price. Specifically to where batching a transaction save you around $0.50 vs using the network regularly. But you can kill two birds with one stone, without changing PoW. What you do is change the Bitcoin bonus from 12.5 BTC to 3.125 BTC immediately (or say by July), from 4% to 1% inflation. This decreases the weekly bonuses from 12,600 to 3,150 while Fees are expected to stay the same, or about 22.5 BTC. Now for a miner to terrorize the network the amount of revenue spent would need to increase from 0.1% to 0.7%. 7x More. Not huge, but enough to become at least, noticeable. However, more importantly, reducing the bonus payouts would drive the price up significantly. At least 4x over a 6 month period. But let's just assume that is the end of it. Now the 1,125 Sats we are expected to pay per transaction increases from $0.08 (@ $10,000 value) to $0.32 / transaction. This difference is sufficient enough to provide a constant force against the public to promote the batching of transactions, at all times. Which is the behavior we want. And this is the real necessity. Without a $20,000 price per Bitcoin, batching will only become popular seasonally. Which will make the Bitcoin network susceptible to monopolistic miner transaction fee spam. By decreasing the bonus payouts, we increase the Bitcoin price, which makes miner payouts approximately the same in terms of real dollars. However, the per BTC transaction fee would rise from a minimum of approximately $0.08 to $0.32, which would be sufficient to drive the advancement of batching. After we begin batching transactions, monopolistic miner fee spam can no longer severely disrupt the bitcoin network. And this will be absolutely critical for the community to realize and solve over the coming months.
More decimals could lower fees by adding range between 0 sat and 1 sat transactions: Current *minimum* fee for 226 bytes (median size) is $0.02, will be $0.04 at $20K etc. Minimum should be sub 1 cent for better fee negotiation and "price discovery". /r/Bitcoin
[uncensored-r/Bitcoin] What is the minimum transaction fee right now?
The following post by omidelf is being replicated because the post has been silently greylisted. The original post can be found(in censored form) at this link: np.reddit.com/ Bitcoin/comments/7m1i43 The original post's content was as follows:
Furthermore, Bitcoin Core will never create transactions smaller than the current minimum relay fee. Finally, a user can set the minimum fee rate for all transactions, which defaults to 1000 satoshis per kB. Note that a typical transaction is 500 bytes. Inclusion in blocks The minimum fee necessary for a transaction to confirm varies over time and arises from the intersection of supply and demand in Bitcoin's free market for block space. On the supply size, Bitcoin has a maximum block size (currently one million vbytes) that limits the maximum amount of transaction data that can be added to a block.. However, Bitcoin blocks are not produced on a fixed schedule ... Tom Davis Business bitcoin,bitcoin fees,bitcoin mining,cryptocurrency To send any payment, Bitcoin requires you to pay a minimum transaction fee. If you pay too low a transaction fee, your transaction might never be confirmed and will become stuck in cyberlimbo.Here you will learn the answer to this common question: 'What is the minimum Bitcoin transaction fee?'... Ethereum Fees vs. Bitcoin Fees: Bitcoin Transaction Fee Comparison. Now, that you know about the minimum transaction fee and minimum relay fee, most of you would like to compare Bitcoin transaction fees with Ethereum fee & Bitcoin cash fees. That’s why I am taking a benchmark of 100-200 USD transferred over these three blockchains to arrive ... On Bitcoin’s blockchain, the transaction fee is decided by the free market forces. Free market forces mean anyone is free to set their own transaction fee and can send transactions. In a way it is good but it has its disadvantages too when you have less space. By less space I mean the blocks of Bitcoin are only as big as 1 MB which means it can take only those many transactions in total. And ...
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