Let's lower bitcoin transaction fees - 26 cents is too much

[Windowly]

One of the aspects that attracted me to bitcoin was the fact that there are almost no fees.

But I was just looking at Blocktrail's optimal fee calculation and they say that you need around 26 US cents (0.00057565 BTC) to have a 75 percent chance of getting in the first block. For a low priority transaction 14 US cents (0.00029540 BTC) is needed.

These numbers seem a bit high. I've had no problem getting confirmed quickly with 0.0001 BTC transaction fee and recently I have had loads of transactions confirmed with no fees, so it is still possible. However even a fee of 0.0001 BTC (at 4 cents) will be 8 cents when the price of bitcoin doubles. Then will the optimal feel be 50 cents?

A lot of other ways of moving money around (Venmo, Wepay, Apple Pay, etc) are not half as powerful as bitcoin, but they are cheaper. None of the systems mentioned involve any fee for the user.

Now I use purse.io and fold app to get discounts. I use bitcoin for international remittance because it is cheaper than the alternatives. Even though I love bitcoin, if each transaction will cost 50 cents I will want to use Venmo or Wepay instead.

Andreas Antonopoulos mentions often how bitcoin will help the unbanked and the poor in third world countries in Asia, Africa and Latin America. But in a lot of the places I've lived, 10-50 cents can buy one a meal. Will people living in those kind of situations really want to fork out 50 cents just to get the transaction confirmed in a timely manner?

[arnoudk]

I completely agree with you.

I live in a third world country with absolutely terrible internet connectivity (when compared to pretty much everywhere else). It is slow, expensive and unreliable. It is all part of the fun of living in Belize.

I'll tell you this much: I don't think there are many local people here who are going to use bitcoin for peer to peer payments with the current transaction price. They are going to use paper, not only because they trust it more and because they understand the value of the belize dollar - but also because it is free to transfer from person to person. Velocity of money is extremely high here - when someone gets paid at the end of the day, 9 times out of 10 the money will be gone before bedtime. Everything is cash, I don't even have a local bank account here and I never miss it. I pay my rent, electricity, internet, water, car insurance, taxes... everything in cash. When they need to send money to the other side of the country, then bitcoin would be useful. When sending money abroad, in this part of the world, it may be the single best solution for the unbanked part of the population. But none of that matters, because they are not going to get on board at the moment, because it is not a useful currency for daily transactions.

If you remove the on-ramp, you break the system. These transaction fees, these block size limitations, are barriers to entry.

Nobody here (ok, me) is going to have a copy of the entire blockchain on their computer. Most people here do not own a computer, they own a cellphone and (surprisingly often) a smart phone. They are not going to care how big the blockchain is, because they are not going to be interacting with it directly. SPV wallets are the solution they need. They are going to care how cheap the transfer is (preferably free) and how quickly they can spend it (preferably immediately). If it is not cheap, and not fast, then it is inferior to a piece of paper from their perspective.

Come on, western world! Get out of your ivory tower. Don't pretend that you want bitcoin to succeed in the third world by crippling the characteristics that make it blossom here (free, fast, reliable, predictable) and emphasizing the characteristics that nobody here cares about (size of a block nobody is ever going to see here).

[scotty321]

This is absolutely way too high. An acceptable fee should be 2 cents or less. Even 2 cents is too expensive. The reason these fees are so ridiculously & unacceptably high right now is because the block size is being artifically constrained by the evil group of core developers who are paid off by Blockstream, the governments, and the banks. We need to fix the block size issue by putting control of the Bitcoin protocol back into the hands of the good, honest, moral, and ethical developers.

[FreeBitcoinTalk]

i use only https://xapo.com online wallet, no fees

[_Mr_E]

Don't worry, soon blockstream will be here to save us with the lightning network!! /s

[arnoudk]

Don't worry, soon blockstream will be here to save us with the lightning network!! /s

I know you are kidding, but Blockstream is not the problem. No single entity, no matter how many core developers they employ or support, can ever be the problem. Users of bitcoin must learn that they are the ones who are in charge. Blockstream has no power, except what we as a community give them.

We all have a choice. We choose with the type of wallet that we run. We choose by writing our wallet providers, wallet developers and exchanges and informing them that we would like them to support BIP101 (or whatever it is you support yourself). You find miners and inform them that you would like them to support BIP101.

Remember, everyone earns money by supporting the user base. No one earns money by supporting a few developers. They have no power!

We should stop asking for permission, and we should start acting like free men. Bitcoin is a free currency, it is time that we - each one of us individually - started acting like it.

If you want to support BIP101, please run either a Bitcoin XT node, or run a modified version of core with the BIP101 patch applied. Running Bitcoin XT is the most visible support, as that is measured on xtnodes.com (and other places). Ensure that you have opened the incoming ports. If and when the miners switch over, they will want to know that there is a network that supports them. If nothing else, we have the power to create this network.

Let's show the world what we want.

[Windowly]

Don't worry, soon blockstream will be here to save us with the lightning network!! /s

Hehe. This guy over at reddit had some great thoughts on the lightning network:

nLocktimed transactions are not Bitcoin transactions until they post to a block and get confirmations. Likewise a zero-conf is not a Bitcoin transaction until it gets confirmation. Nor is a Lightning transaction a Bitcoin transaction until you settle the channel and the settlement is confirmed in a block and you have spendable Bitcoin in your Bitcoin wallet that can be respent in a new transaction on the Bitcoin main chain.
You know how we always tell people "Bitcoin that are not in your wallet with keys that you control are not your Bitcoin?"

That applies in all of these cases. All of these things are expectations or promises of future transactions. They are IOUs. They are not Bitcoin transactions until they are posted into a block and confirmed on the network.

That said of course there are different levels of abstraction and different degrees of separation. Obviously we should be able to say that a pending zero-conf transaction is moreso a Bitcoin transaction than, say, a transaction of Bitcoin on Coinbase between two users.
This is interesting because in the case of the Coinbase transaction, even though no on-chain Bitcoin transaction has occurred, from the users perspective, Bitcoin have been transacted. Whereas in the case of a pending zero-conf, a true Bitcoin transaction has clearly been initiated, but from the users perspective, nothing has transacted yet.

I point this out just to illustrate that just because users have exchanged Bitcoin does not mean that a "Bitcoin transaction" has occurred. I would not consider an off chain transaction to be a Bitcoin transaction since when it completes nothing has moved on the blockchain.
Likewise when a Lightning transaction occurs, nothing moves on the blockchain. So, I do not consider it a Bitcoin transaction.

The bold is my emphasis.

[LiteCoinGuy]

transactions should not cost more than 3-5 cents within the next 10 years in my view. we need adoption. miners are okay with that too because they want a growing ecosystem, they dont want high fees (atm), they want the block reward.