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why are transaction costs so high? I thought one of the selling points was that the transaction cost is negligible because miners main incentive comes from mining new bitcoins?
Earlier quoted context omitted.
but you could set transaction fee to 20 cents, it would just take much longer to get confirmed?
No, because your fee is constantly competing to get into the block against future fees as miners sort the mempool by satoshi/byte to fill up the block. Check out the asymptote: https://estimatefee.com/
It's for the same reason that no one wanted to touch zimbabwe dollar back in 2007, if the value of the medium of exchange differs from breakfast to lunch it's not really a good medium of exchange. Doesn't matter if value is appreciating or depreciating, currency needs to have a reasonably stable value to be useful.
The volatility alone wouldn't be a huge problem if the transactions were quick, apart from having to constantly re-price the goods (not a big deal with an automated system selling digital downloads, even though it is a real PITA for the accounting afterwards!). However, getting the transaction confirmed can take many hours at the times of high demand and then it still fails because thanks to the volatility, the trans…
People have been saying that for years. It serves purposes other than buying and selling goods, and in fact almost no one uses it to buy things.
why are transaction costs so high? I thought one of the selling points was that the transaction cost is negligible because miners main incentive comes from mining new bitcoins?
Earlier quoted context omitted.
It seems like the main issue is transaction fees are close to $20, so even simple operations like refunding users for a incorrect or incomplete transaction is infeasible.
The "$20 transaction fee" was an absolute top, and when that happened it was the single most congested the bitcoin network has ever been. It's nowhere near that right now. The total cost for your "median" transaction right now (at 226 bytes) is about $4.30 USD (at 150 sat/byte). Even if you double that to 300 sat/byte you are still at ~$9. Edit: I'm not saying even $4 fees are okay, just pointing out that it's not $2…
With Bitcoin it seems fees are both ridiculously high, plus I can't even tell what I am going to be charged?
Earlier quoted context omitted.
The "$20 transaction fee" was an absolute top, and when that happened it was the single most congested the bitcoin network has ever been. It's nowhere near that right now. The total cost for your "median" transaction right now (at 226 bytes) is about $4.30 USD (at 150 sat/byte). Even if you double that to 300 sat/byte you are still at ~$9. Edit: I'm not saying even $4 fees are okay, just pointing out that it's not $2…
When did $4.30 transaction fees become even close to acceptable. I thought high TX fees was one of the things Bitcoin was purported to solve.
Earlier quoted context omitted.
but you could set transaction fee to 20 cents, it would just take much longer to get confirmed?
Kind of, if you set it too low it might never get confirmed at all, but for the most part you can set fees pretty damn low if you are willing to wait for confirmation.
That's where traditional electronic payments have a huge edge -- instant, incredibly cheap guaranteed verification.
Thanks
Earlier quoted context omitted.
The volatility alone wouldn't be a huge problem if the transactions were quick, apart from having to constantly re-price the goods (not a big deal with an automated system selling digital downloads, even though it is a real PITA for the accounting afterwards!). However, getting the transaction confirmed can take many hours at the times of high demand and then it still fails because thanks to the volatility, the trans…
> I think this is what will ultimately bring Bitcoin down People have been saying that for years. It serves purposes other than buying and selling goods, and in fact almost no one uses it to buy things.
$20 transaction fee. Bitcoin for small payments is dead.
Here's a recent transaction with a $2 fee: https://blockchain.info/tx/704b0c6c19c8cfe1d16093552d5196a8f... For that $2 a transaction is forever recorded on thousands of nodes in a worldwide consensus network, secured by a huge number of miners. Blockchains are not going to scale to visa level numbers of transactions without huge blocks and de facto centralization. The reasonable alternative is a second transaction la…