3 ms·

The default fee is currently very small (0.01 BTC) per transaction. Compare that with credit card fees of $0.35 + 2.5% per transaction, and you will see the dra

The default fee is currently very small (0.01 BTC) per transaction. Compare that with credit card fees of $0.35 + 2.5% per transaction, and you will see the draw of Bitcoin for large businesses with lots of credit card transactions. The transaction fee mechanism is a helpful free market tool that gives more freedom to Bitcoin spenders: for low-importance transactions, the spender may choose to save on fees at the expense of a long, uncertain confirmation time. Of course the miners have no obligation to anyone, and at this point in the game, block rewards are high enough that transaction fees do not really factor into the decision on the transactions to include in the block. As block rewards shrink, transaction fees will become the miners' main source of income, so fee-less transactions will take much longer to be confirmed.

Nursie 14y ago
Sure, there are low and/or optional fees. However these will likely increase in practical terms in the long run. Whether they ever increase to the level of credit card fees, for a fast transaction, is unknown. This is still not 'no transaction fees and taxes in the least'. I would anticipate that if it ever gets wider traction we'll start seeing attempts to tax commerce in Bitcoin , just like real money. Bitcoin income should probably already be declared in many countries.
- rprasad 14y ago
  Bitcoin transactions are taxable in both the U.S. and Europe, regardless of whether Bitcoin is a currency or asset. Not reporting Bitcoin transactions is income tax fraud. In the U.S., at least, that potentially means that the statute of limitations for when the IRS can go after you for back taxes and penalties never expires.
narcissus 14y ago
Out of curiosity, what would be a motivation for not including a non-fee-paying transaction in the block that you are trying to generate? I mean, theoretically, for each transaction that you are including in the block, the longer it would take to hash the block with the appropriate nonce (I believe that's what the 'extra random number' is called?), but is that the only reason for not including them? ie. the less transactions, the less time it takes to test each nonce? I seem to understand the basics of BTC... it's the deeper, sometimes less technical, concepts that trip me up.

Nursie 14y ago

Sure, there are low and/or optional fees. However these will likely increase in practical terms in the long run. Whether they ever increase to the level of credit card fees, for a fast transaction, is unknown. This is still not 'no transaction fees and taxes in the least'. I would anticipate that if it ever gets wider traction we'll start seeing attempts to tax commerce in Bitcoin , just like real money. Bitcoin income should probably already be declared in many countries.

rprasad 14y ago
Bitcoin transactions are taxable in both the U.S. and Europe, regardless of whether Bitcoin is a currency or asset. Not reporting Bitcoin transactions is income tax fraud. In the U.S., at least, that potentially means that the statute of limitations for when the IRS can go after you for back taxes and penalties never expires.

narcissus 14y ago

Out of curiosity, what would be a motivation for not including a non-fee-paying transaction in the block that you are trying to generate? I mean, theoretically, for each transaction that you are including in the block, the longer it would take to hash the block with the appropriate nonce (I believe that's what the 'extra random number' is called?), but is that the only reason for not including them? ie. the less transactions, the less time it takes to test each nonce? I seem to understand the basics of BTC... it's the deeper, sometimes less technical, concepts that trip me up.