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No, it's not far cheaper - it just has a different way to compensate its processing costs. In fact, without even considering Coinbase fees, it's still more than

by kolev 13y ago

No, it's not far cheaper - it just has a different way to compensate its processing costs. In fact, without even considering Coinbase fees, it's still more than credit cards: https://blockchain.info/charts/cost-per-transaction-percent https://blockchain.info/charts/cost-per-transaction-percent

drcode 13y ago
That's misleading: A lot of those transactions are microtransactions (not possible at all with credit cards) so of course the % will look elevated.
- kolev 13y ago
  Dwolla has free micropayments (up to $10). Amazon offers special pricing for micropayments (5% + $.05) and so does PayPal (although it requires a separate account). If BTC price goes too high, the dollar costs of Bitcoin transaction fees will get pretty high as well. Anyway, here's an interesting article to read: http://www.bloomberg.com/news/2014-01-02/bitcoin-is-an-expensive-way-to-pay-for-stuff.html http://www.bloomberg.com/news/2014-01-02/bitcoin-is-an-expen...
  - drcode 13y ago
    Like others, you seem to be assuming that bitcoin is static and not being improved and that transaction fees won't be lower with continued technological improvements.
wdewind 13y ago
Can you explain that graph? I have no idea what I'm looking at. Where are these fees going?
- bri3d 13y ago
  Bitcoin miners. Simplistically: Each transaction can optionally include a fee as an incentive for Bitcoin miners to include the transaction in the block they're calculating. Right now, blocks can produce new "mined" Bitcoins, so the reference implementation doesn't frequently add a fee as the incentive to calculate a block is still quite high. As the "mining" (new Bitcoin creation) rate declines to zero, fees will become more important as an incentive to continue calculating new blocks. https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees has a complete explanation of the current reference implementation of fees.

by kolev 13y ago

drcode 13y ago

That's misleading: A lot of those transactions are microtransactions (not possible at all with credit cards) so of course the % will look elevated.

kolev 13y ago
Dwolla has free micropayments (up to $10). Amazon offers special pricing for micropayments (5% + $.05) and so does PayPal (although it requires a separate account). If BTC price goes too high, the dollar costs of Bitcoin transaction fees will get pretty high as well. Anyway, here's an interesting article to read: http://www.bloomberg.com/news/2014-01-02/bitcoin-is-an-expensive-way-to-pay-for-stuff.html http://www.bloomberg.com/news/2014-01-02/bitcoin-is-an-expen...
- drcode 13y ago
  Like others, you seem to be assuming that bitcoin is static and not being improved and that transaction fees won't be lower with continued technological improvements.

wdewind 13y ago

Can you explain that graph? I have no idea what I'm looking at. Where are these fees going?

bri3d 13y ago
Bitcoin miners. Simplistically: Each transaction can optionally include a fee as an incentive for Bitcoin miners to include the transaction in the block they're calculating. Right now, blocks can produce new "mined" Bitcoins, so the reference implementation doesn't frequently add a fee as the incentive to calculate a block is still quite high. As the "mining" (new Bitcoin creation) rate declines to zero, fees will become more important as an incentive to continue calculating new blocks. https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees has a complete explanation of the current reference implementation of fees.