5 ms·

Pardon my ignorance, but where's the "bite" of posting this now? Is it so that transferring bitcoin now costs more than $0.01? And the amount being transferred

by pen2l 9y ago

Pardon my ignorance, but where's the "bite" of posting this now? Is it so that transferring bitcoin now costs more than $0.01? And the amount being transferred is subject to some consideration? (if so, by whom? and in what way?)

ufo 9y ago
Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now. https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/n-transactions https://blockchain.info/charts/n-transactions
- pen2l 9y ago
  Wow I did not know that. I must confess that I have been only superficially involved with BTC, but I've gotta say, what you've just said: Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now. combined with BTC price continuing to go up, this just spells bubble to me. One user up above said: "If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee" My question is: is there any end in sight where transaction costs might come down? Because otherwise BTC is totally unusable as a currency. I think folks who are really invested in BTC (like the Winklewoss brothers who have holdings above a bil value (in essence, illiquid, as holdings of that amount tend to be) might work to make transactions low using whatever new technology thereby making it a viable monetary platform, otherwise I don't see this thing as not failing spectacularly sometime in the future.
  - ufo 9y ago
    The main cause of high transaction costs is that the demand for transactions has reached the limit for what the bitcoin network can handle (currently 1MB of global transaction data per 10 minutes). There is no general consensus as to how to solve this though and the community is split between "big blockers" and "small blockers". Big blockers believe that it should possible to solve this problem directly, by increasing the block size limit. "Small blockers" argue that this is not a suitable solution in the long term because the block size would need to grow to gigabytes per minute to compete with existing payment networks and that would be technically challenging and politically undesirable (since only a handful of well-connected nodes would be able to handle all that traffic). The promised solution, according to the small blockers, is to add extra layers to the bitcoin network, with things such as the Lightning Network. Regular folk would clear their transactions through payment processors and only these payment processors would still use the original bitcoin network. Big blockers complain that these second-layer solutions are not truly decentralized and do not conform to the original ideals of bitcoin. They also point out that there are lots of unsolved problems and technical challenges for these second layer solutions, which have been constantly "just around the corner" for a long time...
- Sir_Substance 9y ago
  >They are around $50 per transaction now. Pending transactions with anything above 140 satoshis per byte are currently clearing, as you can see here: https://jochen-hoenicke.de/queue/#2d https://jochen-hoenicke.de/queue/#2d The average bitcoin transaction is around 250 bytes, which means transaction fees in the area of 0.00025BTC and up are clearing in half an hour or less. That's about $4. Lets keep the hyperbole to a minimum, please? P.S. As you can see by mousing over that chart a bit, there /are/ a lot of people paying as much as $50 for a transaction. These people are sometimes morons, but more likely they are transacting on exchanges where they have to use predefined fees instead of setting them themselves. This is why it's important to use your own wallet instead of a web wallet. It lets you control these kinds of things. P.P.S If you set those charts to 6 months you'll see some interesting patterns start to show up. Speculation on what's causing them is left as an exercise for the reader.
  - skydv 9y ago
    hm, so things are not so bad after all, but there is no solution in sight to make tx cost under 1$ right?
    - tromp 9y ago
      Increased use of segwit txs would help to clear the tx backlog. They carry less "weight" and therefor more of them can be packed into a block (which is limited by weight now).
    - Sir_Substance 9y ago
      More segwit use would improve the situation for everyone, but the major exchanges are dragging their feet on adopting it. There's a lot of politics involved. Some people have vested interests in generating a fee based panic. I don't know the full picture though.
      - skydv 9y ago
        there was a comment on reddit It's what bitcoin core developers prefer. They don't want segwit to bloat the blocksize before lightning is ready.
gizmo686 9y ago
This is the subject of the article. Last I checked, current market rates are about $30 for a typical transaction. To happen, transactions must be included in a fixed size block in the global block chain. Currently, there is not enough room per block, so space is auctioned off on a per byte basis. The size of a transaction is not related to the number of bitcoins involved, but the number of "utxo" involved. Essentially, if Alice sends you 1BTC and Bob sends you 1BTC, you do not simply have 2BTC, you have 2 utxo's each worth 1BTC. If you want to send more than 1.5BTC in a single transaction, you will need to include both utxo's, which will increase the size and therefore the fee. In contrast, if Carol sent you 2BTC in a single transaction, you can then send 1.5BTC at the same cost as 1BTC because only 1 utxo is involved. In a world with sufficeint space in a block, you could still need fees because the miners might decide to leave empty space instead of includeing free-rider transactions. This does not actually save them money, but if they control a non-trivial amount of the hashrate, it could encourage people to increase there fees in order to decrease their confirmation time (especially if all the major miners do this).
- naveen99 9y ago
  Change address would also take some space
- x3n0ph3n3 9y ago
  The vast majority of the compute time is finding the nonce that produces the output hash with the appropriate number of leading zeros. The transaction merkle tree output is an input to that calculation and transactions only need to be computed once per block. The rest of the time is generating hashes with random nonces.
wyldfire 9y ago
Bitcoin is a victim of its own success. Double-whammy: the exchange rate is now higher and people are executing more transactions. If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee (or your transaction will be queued until activity is low enough that no one else's fees outbid yours). The community is considering several approaches to mitigate the problem and the different approaches have exposed the distinct underlying motivations of miners, merchants, exchanges and customers/users.

by pen2l 9y ago

ufo 9y ago

Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now. https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/n-transactions https://blockchain.info/charts/n-transactions

pen2l 9y ago
Wow I did not know that. I must confess that I have been only superficially involved with BTC, but I've gotta say, what you've just said: Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now. combined with BTC price continuing to go up, this just spells bubble to me. One user up above said: "If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee" My question is: is there any end in sight where transaction costs might come down? Because otherwise BTC is totally unusable as a currency. I think folks who are really invested in BTC (like the Winklewoss brothers who have holdings above a bil value (in essence, illiquid, as holdings of that amount tend to be) might work to make transactions low using whatever new technology thereby making it a viable monetary platform, otherwise I don't see this thing as not failing spectacularly sometime in the future.
- ufo 9y ago
  The main cause of high transaction costs is that the demand for transactions has reached the limit for what the bitcoin network can handle (currently 1MB of global transaction data per 10 minutes). There is no general consensus as to how to solve this though and the community is split between "big blockers" and "small blockers". Big blockers believe that it should possible to solve this problem directly, by increasing the block size limit. "Small blockers" argue that this is not a suitable solution in the long term because the block size would need to grow to gigabytes per minute to compete with existing payment networks and that would be technically challenging and politically undesirable (since only a handful of well-connected nodes would be able to handle all that traffic). The promised solution, according to the small blockers, is to add extra layers to the bitcoin network, with things such as the Lightning Network. Regular folk would clear their transactions through payment processors and only these payment processors would still use the original bitcoin network. Big blockers complain that these second-layer solutions are not truly decentralized and do not conform to the original ideals of bitcoin. They also point out that there are lots of unsolved problems and technical challenges for these second layer solutions, which have been constantly "just around the corner" for a long time...
Sir_Substance 9y ago
>They are around $50 per transaction now. Pending transactions with anything above 140 satoshis per byte are currently clearing, as you can see here: https://jochen-hoenicke.de/queue/#2d https://jochen-hoenicke.de/queue/#2d The average bitcoin transaction is around 250 bytes, which means transaction fees in the area of 0.00025BTC and up are clearing in half an hour or less. That's about $4. Lets keep the hyperbole to a minimum, please? P.S. As you can see by mousing over that chart a bit, there /are/ a lot of people paying as much as $50 for a transaction. These people are sometimes morons, but more likely they are transacting on exchanges where they have to use predefined fees instead of setting them themselves. This is why it's important to use your own wallet instead of a web wallet. It lets you control these kinds of things. P.P.S If you set those charts to 6 months you'll see some interesting patterns start to show up. Speculation on what's causing them is left as an exercise for the reader.
- skydv 9y ago
  hm, so things are not so bad after all, but there is no solution in sight to make tx cost under 1$ right?
  - tromp 9y ago
    Increased use of segwit txs would help to clear the tx backlog. They carry less "weight" and therefor more of them can be packed into a block (which is limited by weight now).
  - Sir_Substance 9y ago
    More segwit use would improve the situation for everyone, but the major exchanges are dragging their feet on adopting it. There's a lot of politics involved. Some people have vested interests in generating a fee based panic. I don't know the full picture though.
    - skydv 9y ago
      there was a comment on reddit It's what bitcoin core developers prefer. They don't want segwit to bloat the blocksize before lightning is ready.

gizmo686 9y ago

This is the subject of the article. Last I checked, current market rates are about $30 for a typical transaction. To happen, transactions must be included in a fixed size block in the global block chain. Currently, there is not enough room per block, so space is auctioned off on a per byte basis. The size of a transaction is not related to the number of bitcoins involved, but the number of "utxo" involved. Essentially, if Alice sends you 1BTC and Bob sends you 1BTC, you do not simply have 2BTC, you have 2 utxo's each worth 1BTC. If you want to send more than 1.5BTC in a single transaction, you will need to include both utxo's, which will increase the size and therefore the fee. In contrast, if Carol sent you 2BTC in a single transaction, you can then send 1.5BTC at the same cost as 1BTC because only 1 utxo is involved. In a world with sufficeint space in a block, you could still need fees because the miners might decide to leave empty space instead of includeing free-rider transactions. This does not actually save them money, but if they control a non-trivial amount of the hashrate, it could encourage people to increase there fees in order to decrease their confirmation time (especially if all the major miners do this).

naveen99 9y ago
Change address would also take some space
x3n0ph3n3 9y ago
The vast majority of the compute time is finding the nonce that produces the output hash with the appropriate number of leading zeros. The transaction merkle tree output is an input to that calculation and transactions only need to be computed once per block. The rest of the time is generating hashes with random nonces.

wyldfire 9y ago

Bitcoin is a victim of its own success. Double-whammy: the exchange rate is now higher and people are executing more transactions. If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee (or your transaction will be queued until activity is low enough that no one else's fees outbid yours). The community is considering several approaches to mitigate the problem and the different approaches have exposed the distinct underlying motivations of miners, merchants, exchanges and customers/users.