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The miners only process transactions that have higher and higher fees. This makes lower fee transactions take forever to be processed or never happen at all.

The miners only process transactions that have higher and higher fees. This makes lower fee transactions take forever to be processed or never happen at all. Since bitcoin limits how many transactions that can occur in a set amount of time it creates this awful fee-based backlog. The self-serving and shortsighted bitcoin community has argued and bickered amongst itself so long about how to fix this that it may be too late now.

opportune 9y ago
Is this a conscious decision on behalf of the miners themselves, or is it a result of mining becoming increasingly more difficult?
- JohnJamesRambo 9y ago
  My understanding is that it is fueled by greed and desire for short term gains at the expense of bitcoin health in the long run. The people involved aren't the most admirable folk. For instance, this is the leader of the biggest mining company- https://twitter.com/jihanwu/status/731902686379933697?lang=en https://twitter.com/jihanwu/status/731902686379933697?lang=e... A good contrast is that Vitalik Buterin, one of the founders of Ethereum recently said the gas fees for Ethereum are too high (they were still quite low compared to bitcoin) and the miners voluntarily just lowered the gas fees, which determine the transaction costs. It seems to be a very different community running each currency.
- plokiju 9y ago
  the miners are running software that decides which transactions to include, and I'm sure the software has some logic where it will pick the highest-fee transactions when they can't include them all
- nas 9y ago
  The limit on transactions per second is a function of the block size, currently 1 MB. Based on what the miners say, they would be interested in increasing the block size. Understand that the miners like high fees but they like high bitcoin prices even more. The fees are only a fraction of the block reward. If the system becomes too expensive then the miners will lose a lot more than just some fees. The 1 MB limit is set by the bitcoin software. The software that most everyone runs is developed by a group called the "bitcoin core". That group has mostly been taken over by the company Blockstream (this is my opinion, others would argue the team is diverse and not controlled by any one company). Blockstream's business is based on off-chain transactions (i.e. the Lightning network). It is in Blockstream's interest to get a feature that enables Lighting into the Bitcoin software (SegWit). Miners have been refusing to upgrade. One theory is that SegWit will disable a special optimisation that one of the biggest miners uses (ASCIBoost). In any case, Bitcoin core team refuses to increase the block size and the miners have been refusing to enable SegWit. The SegWit upgrade is a good thing, IMHO, even though it seems like a pretty complicated feature. Having the ability to open "payment channels" and make cheap transactions off the main chain would be great. However, I feel that a block size increase to 2 MB or 4 MB is long overdue. I don't understand all the technology issues so maybe there is some really good reason not to do it. It is clear to me that Satoshi (founder of Bitcoin) and Gavin (previous leader of Bitcoin core group) felt that the block size could be scaled to keep fees low. Both software improvements and hardware/network improvements would progress quickly enough to scale with demand. The current core team does not think so and think off-chain transactions are the only way to scale now.

opportune 9y ago

Is this a conscious decision on behalf of the miners themselves, or is it a result of mining becoming increasingly more difficult?

JohnJamesRambo 9y ago
My understanding is that it is fueled by greed and desire for short term gains at the expense of bitcoin health in the long run. The people involved aren't the most admirable folk. For instance, this is the leader of the biggest mining company- https://twitter.com/jihanwu/status/731902686379933697?lang=en https://twitter.com/jihanwu/status/731902686379933697?lang=e... A good contrast is that Vitalik Buterin, one of the founders of Ethereum recently said the gas fees for Ethereum are too high (they were still quite low compared to bitcoin) and the miners voluntarily just lowered the gas fees, which determine the transaction costs. It seems to be a very different community running each currency.
plokiju 9y ago
the miners are running software that decides which transactions to include, and I'm sure the software has some logic where it will pick the highest-fee transactions when they can't include them all
nas 9y ago
The limit on transactions per second is a function of the block size, currently 1 MB. Based on what the miners say, they would be interested in increasing the block size. Understand that the miners like high fees but they like high bitcoin prices even more. The fees are only a fraction of the block reward. If the system becomes too expensive then the miners will lose a lot more than just some fees. The 1 MB limit is set by the bitcoin software. The software that most everyone runs is developed by a group called the "bitcoin core". That group has mostly been taken over by the company Blockstream (this is my opinion, others would argue the team is diverse and not controlled by any one company). Blockstream's business is based on off-chain transactions (i.e. the Lightning network). It is in Blockstream's interest to get a feature that enables Lighting into the Bitcoin software (SegWit). Miners have been refusing to upgrade. One theory is that SegWit will disable a special optimisation that one of the biggest miners uses (ASCIBoost). In any case, Bitcoin core team refuses to increase the block size and the miners have been refusing to enable SegWit. The SegWit upgrade is a good thing, IMHO, even though it seems like a pretty complicated feature. Having the ability to open "payment channels" and make cheap transactions off the main chain would be great. However, I feel that a block size increase to 2 MB or 4 MB is long overdue. I don't understand all the technology issues so maybe there is some really good reason not to do it. It is clear to me that Satoshi (founder of Bitcoin) and Gavin (previous leader of Bitcoin core group) felt that the block size could be scaled to keep fees low. Both software improvements and hardware/network improvements would progress quickly enough to scale with demand. The current core team does not think so and think off-chain transactions are the only way to scale now.