* [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader [not found] <CADZB0_ZgDMhVgCUh2PTAPDL7k_W8QGt_HLYdkwv_qQ5xEMn8HA@mail.gmail.com> @ 2015-07-29 14:09 ` Vali Zero 2015-07-29 17:47 ` Raystonn . 0 siblings, 1 reply; 21+ messages in thread From: Vali Zero @ 2015-07-29 14:09 UTC (permalink / raw) To: bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 3419 bytes --] I am disappointed that you did not understand my point of view. Let me rephrase it for you, People tipping, buying 0.99$ products and gamblers that need Bitcoin transactions *more* than the rest of the people will afford the fees that establish the equilibrium between demand and supply of Bitcoin transactions. The people are free to use they money for whatever they like, but you should understand that Bitcoin transactions are not free. I was merely attempting to point out that spammers and gamblers would be the first ones that would go away. They would be free to spam or gamble, but they would have to pay for it. When a category of users would get priced out because of the fee market, they would be free to use any altcoin they want. Please understand that not everyone will leave. The more important players will remain, those that need it the most. The other players are free to use whatever altcoin they wish. În Miercuri, 29 Iulie 2015 16:47:57, Angel Leon <gubatron@gmail•com> a scris: "the gamblers and perhaps people transacting very low amounts. The people that actually need Bitcoin would remain." so people tipping, buying $0.99 products, and gamblers actually don't need Bitcoin. Who are you to say what people need to use money for?This statement goes against the freedom of decentralization and financial freedom Bitcoin should be able to provide. It's an open network and it will be used as most users see fit, and that requires a blocksize increase wether you like it or not, it's simple physics, other time wait times will become unbearable for those not willing to pay the high fees, if people leave, then it only mean bitcoins isn't useful, and if bitcoin isn't useful, it's worthless. http://twitter.com/gubatron On Wed, Jul 29, 2015 at 9:27 AM, Vali Zero via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: Hello, I have been reading an argument saying that paying higher fees would scare Bitcoin users and they would stop using it, preferring bank transfers or other payment methods. This does not make sense for me. If some users leave, then demand for bitcoin transactions goes down and so do the fees. The others remain. Fee market means that an equilibrium is found between the demand for bitcoin transactions and the available supply (given by the block size). The fee is the price that finds this equilibrium. If a fee market starts to exist, the first ones to leave are the spammers, probably followed by the gamblers and perhaps people transacting very low amounts. The people that actually need Bitcoin would remain. Please allow this fee market to form... In the absence of a functioning fee market, I will refuse to run Bitcoin code that increases the block size and will do my best to tell everyone I know not to upgrade towards running such code. If Bitcoin succombs to the free stuff army, I will sell all the coins and leave. Nothing is for free. I apologize for any exagerations, but I just felt strongly towards expressing my opinion here. I'm only a local Bitcoin trader, computer engineer, with a reasonable understanding of free markets. And I'm running only one full node. Kind regards, Valentin _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists•linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev [-- Attachment #2: Type: text/html, Size: 7686 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-29 14:09 ` [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader Vali Zero @ 2015-07-29 17:47 ` Raystonn . 2015-07-29 22:54 ` s7r 0 siblings, 1 reply; 21+ messages in thread From: Raystonn . @ 2015-07-29 17:47 UTC (permalink / raw) To: Vali Zero, bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 4791 bytes --] > When a category of users would get priced out because of the fee market, they would be free to use any altcoin they want. I believe that pretty well sums up where we’re headed if transaction rate is artificially limited, whether that be by maximum block size limit or something else. A fee market will necessarily include more than just Bitcoin. The reality is it’s very easy to trade value across different blockchains, and thus a fee market will bleed value from Bitcoin and give it to alternative blockchains. If Bitcoin’s blocks are at maximum capacity, people will exchange for something that allows them to transact with a lesser fee, then make the desired payment. This adds value to the alternative blockchain and removes it from Bitcoin. Anyone thinking the fee market can be restrained to Bitcoin alone is mistaken. From: Vali Zero via bitcoin-dev Sent: Wednesday, July 29, 2015 7:09 AM To: bitcoin-dev@lists•linuxfoundation.org Subject: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader I am disappointed that you did not understand my point of view. Let me rephrase it for you, People tipping, buying 0.99$ products and gamblers that need Bitcoin transactions *more* than the rest of the people will afford the fees that establish the equilibrium between demand and supply of Bitcoin transactions. The people are free to use they money for whatever they like, but you should understand that Bitcoin transactions are not free. I was merely attempting to point out that spammers and gamblers would be the first ones that would go away. They would be free to spam or gamble, but they would have to pay for it. When a category of users would get priced out because of the fee market, they would be free to use any altcoin they want. Please understand that not everyone will leave. The more important players will remain, those that need it the most. The other players are free to use whatever altcoin they wish. În Miercuri, 29 Iulie 2015 16:47:57, Angel Leon <gubatron@gmail•com> a scris: "the gamblers and perhaps people transacting very low amounts. The people that actually need Bitcoin would remain." so people tipping, buying $0.99 products, and gamblers actually don't need Bitcoin. Who are you to say what people need to use money for? This statement goes against the freedom of decentralization and financial freedom Bitcoin should be able to provide. It's an open network and it will be used as most users see fit, and that requires a blocksize increase wether you like it or not, it's simple physics, other time wait times will become unbearable for those not willing to pay the high fees, if people leave, then it only mean bitcoins isn't useful, and if bitcoin isn't useful, it's worthless. http://twitter.com/gubatron On Wed, Jul 29, 2015 at 9:27 AM, Vali Zero via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: Hello, I have been reading an argument saying that paying higher fees would scare Bitcoin users and they would stop using it, preferring bank transfers or other payment methods. This does not make sense for me. If some users leave, then demand for bitcoin transactions goes down and so do the fees. The others remain. Fee market means that an equilibrium is found between the demand for bitcoin transactions and the available supply (given by the block size). The fee is the price that finds this equilibrium. If a fee market starts to exist, the first ones to leave are the spammers, probably followed by the gamblers and perhaps people transacting very low amounts. The people that actually need Bitcoin would remain. Please allow this fee market to form... In the absence of a functioning fee market, I will refuse to run Bitcoin code that increases the block size and will do my best to tell everyone I know not to upgrade towards running such code. If Bitcoin succombs to the free stuff army, I will sell all the coins and leave. Nothing is for free. I apologize for any exagerations, but I just felt strongly towards expressing my opinion here. I'm only a local Bitcoin trader, computer engineer, with a reasonable understanding of free markets. And I'm running only one full node. Kind regards, Valentin _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists•linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev -------------------------------------------------------------------------------- _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists•linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev [-- Attachment #2: Type: text/html, Size: 10287 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-29 17:47 ` Raystonn . @ 2015-07-29 22:54 ` s7r 2015-07-30 3:41 ` Ryan Butler 2015-07-30 9:52 ` odinn 0 siblings, 2 replies; 21+ messages in thread From: s7r @ 2015-07-29 22:54 UTC (permalink / raw) To: Raystonn ., Vali Zero, bitcoin-dev We could care less about you selling your bitcoins or moving to something else. What we care more is keeping bitcoin a successful project which offers clear benefits to the world. I agree a fee market is good and needed, and transactions shouldn't be free ever, but users should also be able to transact fast and relatively cheap, as opposite to the competition, or at least with the same costs, so people won't move to something else. The more people use bitcoin, the more demand we have on the market for BTC, the higher BTC/FIAT rate will be, more people will become interested in mining and so on. Bitcoin is not a rich-only-private-club, it's an open, global, decentralized payment network. The less people use it... I guess you figured it out. So we could care less that you will go away in case the fee market won't become absurd or too expensive to use for most users. Having some offchain solution for small transactions would be a good idea, but this doesn't mean we should make small transactions impossible due to absurd fees. On 7/29/2015 8:47 PM, Raystonn . via bitcoin-dev wrote: >> When a category of users would get priced out because of the fee > market, they would be free to use any altcoin they want. > > I believe that pretty well sums up where we’re headed if transaction > rate is artificially limited, whether that be by maximum block size > limit or something else. A fee market will necessarily include more > than just Bitcoin. The reality is it’s very easy to trade value across > different blockchains, and thus a fee market will bleed value from > Bitcoin and give it to alternative blockchains. If Bitcoin’s blocks are > at maximum capacity, people will exchange for something that allows them > to transact with a lesser fee, then make the desired payment. This adds > value to the alternative blockchain and removes it from Bitcoin. > > Anyone thinking the fee market can be restrained to Bitcoin alone is > mistaken. > > > *From:* Vali Zero via bitcoin-dev > <mailto:bitcoin-dev@lists•linuxfoundation.org> > *Sent:* Wednesday, July 29, 2015 7:09 AM > *To:* bitcoin-dev@lists•linuxfoundation.org > <mailto:bitcoin-dev@lists•linuxfoundation.org> > *Subject:* [bitcoin-dev] Răspuns: Personal opinion on the fee market > from a worried local trader > > I am disappointed that you did not understand my point of view. Let me > rephrase it for you, > > People tipping, buying 0.99$ products and gamblers that need Bitcoin > transactions *more* than the rest of the people will afford the fees > that establish the equilibrium between demand and supply of Bitcoin > transactions. The people are free to use they money for whatever they > like, but you should understand that Bitcoin transactions are not free. > > I was merely attempting to point out that spammers and gamblers would be > the first ones that would go away. They would be free to spam or gamble, > but they would have to pay for it. > > When a category of users would get priced out because of the fee market, > they would be free to use any altcoin they want. > > Please understand that not everyone will leave. The more important > players will remain, those that need it the most. The other players are > free to use whatever altcoin they wish. > > > În Miercuri, 29 Iulie 2015 16:47:57, Angel Leon <gubatron@gmail•com> a > scris: > > > "the gamblers and perhaps people transacting very low amounts. The > people that actually need Bitcoin would remain." > > so people tipping, buying $0.99 products, and gamblers actually don't > need Bitcoin. > Who are you to say what people need to use money for? > This statement goes against the freedom of decentralization and > financial freedom Bitcoin should be able to provide. > > It's an open network and it will be used as most users see fit, and that > requires a blocksize increase wether you like it or not, it's simple > physics, other time wait times will become unbearable for those not > willing to pay the high fees, if people leave, then it only mean > bitcoins isn't useful, and if bitcoin isn't useful, it's worthless. > > > > http://twitter.com/gubatron > > On Wed, Jul 29, 2015 at 9:27 AM, Vali Zero via bitcoin-dev > <bitcoin-dev@lists•linuxfoundation.org > <mailto:bitcoin-dev@lists•linuxfoundation.org>> wrote: > > Hello, > > I have been reading an argument saying that paying higher fees would > scare Bitcoin users and they would stop using it, preferring bank > transfers or other payment methods. This does not make sense for me. > If some users leave, then demand for bitcoin transactions goes down > and so do the fees. The others remain. > > Fee market means that an equilibrium is found between the demand for > bitcoin transactions and the available supply (given by the block > size). The fee is the price that finds this equilibrium. > > If a fee market starts to exist, the first ones to leave are the > spammers, probably followed by the gamblers and perhaps people > transacting very low amounts. The people that actually need Bitcoin > would remain. > > Please allow this fee market to form... > > In the absence of a functioning fee market, I will refuse to run > Bitcoin code that increases the block size and will do my best to > tell everyone I know not to upgrade towards running such code. If > Bitcoin succombs to the free stuff army, I will sell all the coins > and leave. Nothing is for free. > > I apologize for any exagerations, but I just felt strongly towards > expressing my opinion here. I'm only a local Bitcoin trader, > computer engineer, with a reasonable understanding of free markets. > And I'm running only one full node. > > Kind regards, > Valentin > > > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists•linuxfoundation.org > <mailto:bitcoin-dev@lists•linuxfoundation.org> > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > > ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-29 22:54 ` s7r @ 2015-07-30 3:41 ` Ryan Butler 2015-07-30 4:00 ` Adam Back 2015-07-30 4:07 ` Jean-Paul Kogelman 2015-07-30 9:52 ` odinn 1 sibling, 2 replies; 21+ messages in thread From: Ryan Butler @ 2015-07-30 3:41 UTC (permalink / raw) To: s7r; +Cc: bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 6873 bytes --] Does an unlimited blocksize imply the lack of a fee market? Isn't every miner able to set their minimum accepted fee or transaction acceptance algorithm? On Jul 29, 2015 5:54 PM, "s7r via bitcoin-dev" < bitcoin-dev@lists•linuxfoundation.org> wrote: > We could care less about you selling your bitcoins or moving to > something else. > > What we care more is keeping bitcoin a successful project which offers > clear benefits to the world. I agree a fee market is good and needed, > and transactions shouldn't be free ever, but users should also be able > to transact fast and relatively cheap, as opposite to the competition, > or at least with the same costs, so people won't move to something else. > > The more people use bitcoin, the more demand we have on the market for > BTC, the higher BTC/FIAT rate will be, more people will become > interested in mining and so on. Bitcoin is not a rich-only-private-club, > it's an open, global, decentralized payment network. The less people use > it... I guess you figured it out. > > So we could care less that you will go away in case the fee market won't > become absurd or too expensive to use for most users. Having some > offchain solution for small transactions would be a good idea, but this > doesn't mean we should make small transactions impossible due to absurd > fees. > > On 7/29/2015 8:47 PM, Raystonn . via bitcoin-dev wrote: > >> When a category of users would get priced out because of the fee > > market, they would be free to use any altcoin they want. > > > > I believe that pretty well sums up where we’re headed if transaction > > rate is artificially limited, whether that be by maximum block size > > limit or something else. A fee market will necessarily include more > > than just Bitcoin. The reality is it’s very easy to trade value across > > different blockchains, and thus a fee market will bleed value from > > Bitcoin and give it to alternative blockchains. If Bitcoin’s blocks are > > at maximum capacity, people will exchange for something that allows them > > to transact with a lesser fee, then make the desired payment. This adds > > value to the alternative blockchain and removes it from Bitcoin. > > > > Anyone thinking the fee market can be restrained to Bitcoin alone is > > mistaken. > > > > > > *From:* Vali Zero via bitcoin-dev > > <mailto:bitcoin-dev@lists•linuxfoundation.org> > > *Sent:* Wednesday, July 29, 2015 7:09 AM > > *To:* bitcoin-dev@lists•linuxfoundation.org > > <mailto:bitcoin-dev@lists•linuxfoundation.org> > > *Subject:* [bitcoin-dev] Răspuns: Personal opinion on the fee market > > from a worried local trader > > > > I am disappointed that you did not understand my point of view. Let me > > rephrase it for you, > > > > People tipping, buying 0.99$ products and gamblers that need Bitcoin > > transactions *more* than the rest of the people will afford the fees > > that establish the equilibrium between demand and supply of Bitcoin > > transactions. The people are free to use they money for whatever they > > like, but you should understand that Bitcoin transactions are not free. > > > > I was merely attempting to point out that spammers and gamblers would be > > the first ones that would go away. They would be free to spam or gamble, > > but they would have to pay for it. > > > > When a category of users would get priced out because of the fee market, > > they would be free to use any altcoin they want. > > > > Please understand that not everyone will leave. The more important > > players will remain, those that need it the most. The other players are > > free to use whatever altcoin they wish. > > > > > > În Miercuri, 29 Iulie 2015 16:47:57, Angel Leon <gubatron@gmail•com> a > > scris: > > > > > > "the gamblers and perhaps people transacting very low amounts. The > > people that actually need Bitcoin would remain." > > > > so people tipping, buying $0.99 products, and gamblers actually don't > > need Bitcoin. > > Who are you to say what people need to use money for? > > This statement goes against the freedom of decentralization and > > financial freedom Bitcoin should be able to provide. > > > > It's an open network and it will be used as most users see fit, and that > > requires a blocksize increase wether you like it or not, it's simple > > physics, other time wait times will become unbearable for those not > > willing to pay the high fees, if people leave, then it only mean > > bitcoins isn't useful, and if bitcoin isn't useful, it's worthless. > > > > > > > > http://twitter.com/gubatron > > > > On Wed, Jul 29, 2015 at 9:27 AM, Vali Zero via bitcoin-dev > > <bitcoin-dev@lists•linuxfoundation.org > > <mailto:bitcoin-dev@lists•linuxfoundation.org>> wrote: > > > > Hello, > > > > I have been reading an argument saying that paying higher fees would > > scare Bitcoin users and they would stop using it, preferring bank > > transfers or other payment methods. This does not make sense for me. > > If some users leave, then demand for bitcoin transactions goes down > > and so do the fees. The others remain. > > > > Fee market means that an equilibrium is found between the demand for > > bitcoin transactions and the available supply (given by the block > > size). The fee is the price that finds this equilibrium. > > > > If a fee market starts to exist, the first ones to leave are the > > spammers, probably followed by the gamblers and perhaps people > > transacting very low amounts. The people that actually need Bitcoin > > would remain. > > > > Please allow this fee market to form... > > > > In the absence of a functioning fee market, I will refuse to run > > Bitcoin code that increases the block size and will do my best to > > tell everyone I know not to upgrade towards running such code. If > > Bitcoin succombs to the free stuff army, I will sell all the coins > > and leave. Nothing is for free. > > > > I apologize for any exagerations, but I just felt strongly towards > > expressing my opinion here. I'm only a local Bitcoin trader, > > computer engineer, with a reasonable understanding of free markets. > > And I'm running only one full node. > > > > Kind regards, > > Valentin > > > > > > _______________________________________________ > > bitcoin-dev mailing list > > bitcoin-dev@lists•linuxfoundation.org > > <mailto:bitcoin-dev@lists•linuxfoundation.org> > > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > > > > > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists•linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > [-- Attachment #2: Type: text/html, Size: 8758 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 3:41 ` Ryan Butler @ 2015-07-30 4:00 ` Adam Back 2015-07-30 4:05 ` Adam Back ` (2 more replies) 2015-07-30 4:07 ` Jean-Paul Kogelman 1 sibling, 3 replies; 21+ messages in thread From: Adam Back @ 2015-07-30 4:00 UTC (permalink / raw) To: Ryan Butler; +Cc: Bitcoin Dev On 29 July 2015 at 20:41, Ryan Butler via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > Does an unlimited blocksize imply the lack of a fee market? Isn't every > miner able to set their minimum accepted fee or transaction acceptance > algorithm? The assumption is that wont work because any miner can break ranks and do so profitably, so to expect otherwise is to expect oligopoly behaviour which is the sort of antithesis of a decentralised mining system. It's in fact a similar argument as to why decentralisation of mining provides policy neutrality: some miner somewhere with some hashrate will process your transaction even if some other miners are by policy deciding not to mine it. It is also similar reason why free transactions are processed today - policies vary and this is good for ensuring many types of transaction get processed. Adam ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 4:00 ` Adam Back @ 2015-07-30 4:05 ` Adam Back 2015-07-30 4:48 ` Ryan Butler 2015-07-30 12:45 ` Ivan Brightly 2 siblings, 0 replies; 21+ messages in thread From: Adam Back @ 2015-07-30 4:05 UTC (permalink / raw) To: Adam Back; +Cc: Bitcoin Dev btw the fact that mining is (or can be) anonymous also makes oligopoly or cartel behaviour likely unstable. Miners can break ranks and process transactions others wish to block, or with lower fees than a cartel would like to charge, without detection. Anonymous mining is a feature and helps ensure policy neutrality. This is all overlaid by the 51% attack - if a coherent cartel arose that could maintain 51% and had enough mutual self-interest to make that stable, they could attack miners bypassing their cartel policies, by orphaning their blocks. This is partly why mining decentralisation is important. Also that is an overt act which is very detectable and could lead to technical counter-measures by the users, who are in ultimately in control of the protocol. So there is some game theory suggesting it would be inadvisable for miners to be overt in cartel attacks. Non overt attacks cant prevent anonymous under cutting of cartel desired fee minimums. Adam On 29 July 2015 at 21:00, Adam Back <adam@cypherspace•org> wrote: > On 29 July 2015 at 20:41, Ryan Butler via bitcoin-dev > <bitcoin-dev@lists•linuxfoundation.org> wrote: >> Does an unlimited blocksize imply the lack of a fee market? Isn't every >> miner able to set their minimum accepted fee or transaction acceptance >> algorithm? > > The assumption is that wont work because any miner can break ranks and > do so profitably, so to expect otherwise is to expect oligopoly > behaviour which is the sort of antithesis of a decentralised mining > system. It's in fact a similar argument as to why decentralisation of > mining provides policy neutrality: some miner somewhere with some > hashrate will process your transaction even if some other miners are > by policy deciding not to mine it. It is also similar reason why free > transactions are processed today - policies vary and this is good for > ensuring many types of transaction get processed. > > Adam ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 4:00 ` Adam Back 2015-07-30 4:05 ` Adam Back @ 2015-07-30 4:48 ` Ryan Butler 2015-07-30 13:14 ` Tom Harding 2015-07-30 12:45 ` Ivan Brightly 2 siblings, 1 reply; 21+ messages in thread From: Ryan Butler @ 2015-07-30 4:48 UTC (permalink / raw) To: Adam Back; +Cc: bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 1801 bytes --] I shouldn't have said unlimited, i should have said a greater blocksize limit such as 8mb. Anyways, why is that the assumption? If a miner can do so, and do so profitably, isn't that just competition? Isn't that what we want? If a miner can mine low transaction fees at a profit then don't they deserve to have their spot? Surely if they do so unprofitably they quickly find themselves out of business? Besides, if a miner mines low fee transactions by breaking rank, how does this affect another miner EXCEPT for the additional blocksize load. I would maintain this is just competition amongst miners gentlemen. And it's a good thing. Right now things are distorted because most income comes from the coinbase, but as transaction fees start to constitute the majority of income this idea seems to have more importance. On Jul 29, 2015 11:00 PM, "Adam Back" <adam@cypherspace•org> wrote: > On 29 July 2015 at 20:41, Ryan Butler via bitcoin-dev > <bitcoin-dev@lists•linuxfoundation.org> wrote: > > Does an unlimited blocksize imply the lack of a fee market? Isn't every > > miner able to set their minimum accepted fee or transaction acceptance > > algorithm? > > The assumption is that wont work because any miner can break ranks and > do so profitably, so to expect otherwise is to expect oligopoly > behaviour which is the sort of antithesis of a decentralised mining > system. It's in fact a similar argument as to why decentralisation of > mining provides policy neutrality: some miner somewhere with some > hashrate will process your transaction even if some other miners are > by policy deciding not to mine it. It is also similar reason why free > transactions are processed today - policies vary and this is good for > ensuring many types of transaction get processed. > > Adam > [-- Attachment #2: Type: text/html, Size: 2246 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 4:48 ` Ryan Butler @ 2015-07-30 13:14 ` Tom Harding 2015-07-30 14:25 ` Dave Hudson 2015-07-30 18:14 ` Jorge Timón 0 siblings, 2 replies; 21+ messages in thread From: Tom Harding @ 2015-07-30 13:14 UTC (permalink / raw) To: bitcoin-dev On 7/29/2015 9:48 PM, Ryan Butler via bitcoin-dev wrote: > > I shouldn't have said unlimited, i should have said a greater > blocksize limit such as 8mb. > > Anyways, why is that the assumption? If a miner can do so, and do so > profitably, isn't that just competition? Isn't that what we want? If > a miner can mine low transaction fees at a profit then don't they > deserve to have their spot? Surely if they do so unprofitably they > quickly find themselves out of business? Besides, if a miner mines > low fee transactions by breaking rank, how does this affect another > miner EXCEPT for the additional blocksize load. I would maintain this > is just competition amongst miners gentlemen. And it's a good thing. > > Right now things are distorted because most income comes from the > coinbase, but as transaction fees start to constitute the majority of > income this idea seems to have more importance. > You're completely correct Ryan. There has been a well functioning fee market since 2011. Average fees have never been zero, despite low-fee transactions being mined, and despite no block size pressure until September 2014. Another empirical fact also needs explaining. Why have average fees *as measured in BTC* risen during the times of highest public interest in bitcoin? This happened without block size pressure, and it is not an exchange rate effect -- these are raw BTC fees: https://blockchain.info/charts/transaction-fees?timespan=all&daysAverageString=7 ... more evidence that conclusively refutes the conjecture that a production quota is necessary for a "functioning fee market." A production quota merely pushes up fees. We have a functioning market, and so far, it shows that wider bitcoin usage is even more effective than a quota at pushing up fees. > On Jul 29, 2015 11:00 PM, "Adam Back" <adam@cypherspace•org > <mailto:adam@cypherspace•org>> wrote: > > > The assumption is that wont work because any miner can break ranks and > do so profitably, so to expect otherwise is to expect oligopoly > behaviour which is the sort of antithesis of a decentralised mining > system. It's in fact a similar argument as to why decentralisation of > mining provides policy neutrality: some miner somewhere with some > hashrate will process your transaction even if some other miners are > by policy deciding not to mine it. It is also similar reason why free > transactions are processed today - policies vary and this is good for > ensuring many types of transaction get processed. > ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 13:14 ` Tom Harding @ 2015-07-30 14:25 ` Dave Hudson 2015-07-30 14:57 ` Tom Harding 2015-07-30 18:14 ` Jorge Timón 1 sibling, 1 reply; 21+ messages in thread From: Dave Hudson @ 2015-07-30 14:25 UTC (permalink / raw) To: Tom Harding; +Cc: bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 2313 bytes --] > On 30 Jul 2015, at 06:14, Tom Harding via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > > Another empirical fact also needs explaining. Why have average fees *as > measured in BTC* risen during the times of highest public interest in > bitcoin? This happened without block size pressure, and it is not an > exchange rate effect -- these are raw BTC fees: > > https://blockchain.info/charts/transaction-fees?timespan=all&daysAverageString=7 <https://blockchain.info/charts/transaction-fees?timespan=all&daysAverageString=7> I've not published any new figures for about 8 months (will try to do that this weekend), but the thing that that chart doesn't show is what's actually happening to fees per transaction. Here's a chart that does: http://hashingit.com/analysis/35-the-future-of-bitcoin-transaction-fees <http://hashingit.com/analysis/35-the-future-of-bitcoin-transaction-fees> The data is also taken from blockchain.info so it's apples-for-apples. It shows that far from a fees going up they spent 3 years dropping. I just ran a new chart and the decline in fees continued until about 8 weeks when the "stress tests" first occurred. Even so, they're still below the level from the end of 2013. By comparison the total transaction volume is up about 2.4x to 2.5x (don't have the exact number). > ... more evidence that conclusively refutes the conjecture that a > production quota is necessary for a "functioning fee market." A > production quota merely pushes up fees. We have a functioning market, > and so far, it shows that wider bitcoin usage is even more effective > than a quota at pushing up fees. I think it's equally easy to argue (from the same data) that wider adoption has actually caused wallet users to become much more effective at fee selection. Miners (as expected, assuming that they hadn't formed a cartel) have continued to accept whatever fees are available, no matter how small. Only where there has been an element of scarcity have we actually seen miners do anything but take whatever is offered. Clearly history is not an accurate indicator of what might happen in the future, but it seems difficult to argue that there has been any sort of fee market emerge to date (other than as a result of scarcity during the stress tests). [-- Attachment #2: Type: text/html, Size: 9701 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 14:25 ` Dave Hudson @ 2015-07-30 14:57 ` Tom Harding 0 siblings, 0 replies; 21+ messages in thread From: Tom Harding @ 2015-07-30 14:57 UTC (permalink / raw) To: Dave Hudson; +Cc: bitcoin-dev Yes. So far, the transaction count factor has completely dominated the per-tx fee factor. This fact should be of great interest to miners. On 7/30/2015 7:25 AM, Dave Hudson wrote: > >> On 30 Jul 2015, at 06:14, Tom Harding via bitcoin-dev >> <bitcoin-dev@lists•linuxfoundation.org >> <mailto:bitcoin-dev@lists•linuxfoundation.org>> wrote: >> >> Another empirical fact also needs explaining. Why have average fees *as >> measured in BTC* risen during the times of highest public interest in >> bitcoin? This happened without block size pressure, and it is not an >> exchange rate effect -- these are raw BTC fees: >> >> https://blockchain.info/charts/transaction-fees?timespan=all&daysAverageString=7 > > I've not published any new figures for about 8 months (will try to do > that this weekend), but the thing that that chart doesn't show is > what's actually happening to fees per transaction. Here's a chart that > does: http://hashingit.com/analysis/35-the-future-of-bitcoin-transaction-fees > > The data is also taken from blockchain.info so it's apples-for-apples. > It shows that far from a fees going up they spent 3 years dropping. I > just ran a new chart and the decline in fees continued until about 8 > weeks when the "stress tests" first occurred. Even so, they're still > below the level from the end of 2013. By comparison the total > transaction volume is up about 2.4x to 2.5x (don't have the exact number). > >> ... more evidence that conclusively refutes the conjecture that a >> production quota is necessary for a "functioning fee market." A >> production quota merely pushes up fees. We have a functioning market, >> and so far, it shows that wider bitcoin usage is even more effective >> than a quota at pushing up fees. > > I think it's equally easy to argue (from the same data) that wider > adoption has actually caused wallet users to become much more > effective at fee selection. Miners (as expected, assuming that they > hadn't formed a cartel) have continued to accept whatever fees are > available, no matter how small. Only where there has been an element > of scarcity have we actually seen miners do anything but take whatever > is offered. > > Clearly history is not an accurate indicator of what might happen in > the future, but it seems difficult to argue that there has been any > sort of fee market emerge to date (other than as a result of scarcity > during the stress tests). > ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 13:14 ` Tom Harding 2015-07-30 14:25 ` Dave Hudson @ 2015-07-30 18:14 ` Jorge Timón 2015-07-30 18:16 ` Jorge Timón 2015-07-30 20:53 ` Tom Harding 1 sibling, 2 replies; 21+ messages in thread From: Jorge Timón @ 2015-07-30 18:14 UTC (permalink / raw) To: Tom Harding; +Cc: Bitcoin Dev On Thu, Jul 30, 2015 at 3:14 PM, Tom Harding via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > On 7/29/2015 9:48 PM, Ryan Butler via bitcoin-dev wrote: > ... more evidence that conclusively refutes the conjecture that a > production quota is necessary for a "functioning fee market." A > production quota merely pushes up fees. We have a functioning market, > and so far, it shows that wider bitcoin usage is even more effective > than a quota at pushing up fees. The blocksize limit (your "production quota") is necessary for decentralization, not for having a functioning fee market. But I have the hope that hitting the limit would help with getting rid of all that special-case or at least would encourage miners to implement their own policies. If we can agree that hitting the limit will JUST cause higher fees and not bitcoin to fail, puppies to die or the sky to turn purple I think that's a great step forward in this debate. From that perspective, hitting the limit is not something terribly bad (as said, I think it can even have positive consequences; for example, higher fees may be just what is needed for more scalable solutions [like payment channels] to be adopted by bitcoin companies). Hitting the limit may produce a more healthy market, but it is true that a market for fast confirmations already exists. Unless we want to completely get rid of the blocksize limit (which I would consider another debate entirely), we will eventually hit the limit anyway. Why not now so that we can make sure the software is completely compatible with having a limit? Why we can hit the limit eventually but not now? (As said, unless you think the limit should be completely removed forever). ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 18:14 ` Jorge Timón @ 2015-07-30 18:16 ` Jorge Timón 2015-07-30 20:53 ` Tom Harding 1 sibling, 0 replies; 21+ messages in thread From: Jorge Timón @ 2015-07-30 18:16 UTC (permalink / raw) To: Tom Harding; +Cc: Bitcoin Dev s/all that special-case/s/all that special-case policy code for free transactions/ ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 18:14 ` Jorge Timón 2015-07-30 18:16 ` Jorge Timón @ 2015-07-30 20:53 ` Tom Harding 2015-07-31 1:21 ` Jorge Timón 1 sibling, 1 reply; 21+ messages in thread From: Tom Harding @ 2015-07-30 20:53 UTC (permalink / raw) To: Jorge Timón; +Cc: Bitcoin Dev On 7/30/2015 11:14 AM, Jorge Timón wrote: > The blocksize limit (your "production quota") is necessary for > decentralization, not for having a functioning fee market. > If we can agree that hitting the limit will JUST cause higher fees and > not bitcoin to fail, puppies to die or the sky to turn purple I think > that's a great step forward in this debate. It's interesting how people see things differently. I think your first statement above represents a great step forward in the debate. Unlike Adam Back, you state that a block size limit is not necessary to create a functioning fee market. As to your second statement, unfortunately for immediate harmonious relations, I was merely separating out the elevated fee market concern, not at all saying it is the only or even the biggest concern with limited capacity. Alan Reiner, Ryan X. Charles and others have eloquently explained how restrictive a 1MB limit is, even with "layer 2". What's missing from the decentralization dialog is a quantitative measure of decentralization. Why not slam users with higher fees now, if we accept that they may be necessary someday? For the same reasons you don't ask a child, age 5, to work in a factory. ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 20:53 ` Tom Harding @ 2015-07-31 1:21 ` Jorge Timón 2015-07-31 1:29 ` Jorge Timón 2015-07-31 9:56 ` Thomas Zander 0 siblings, 2 replies; 21+ messages in thread From: Jorge Timón @ 2015-07-31 1:21 UTC (permalink / raw) To: Tom Harding; +Cc: Bitcoin Dev On Thu, Jul 30, 2015 at 10:53 PM, Tom Harding <tomh@thinlink•com> wrote: > On 7/30/2015 11:14 AM, Jorge Timón wrote: >> The blocksize limit (your "production quota") is necessary for >> decentralization, not for having a functioning fee market. > >> If we can agree that hitting the limit will JUST cause higher fees and >> not bitcoin to fail, puppies to die or the sky to turn purple I think >> that's a great step forward in this debate. > > It's interesting how people see things differently. I think your first > statement above represents a great step forward in the debate. Unlike > Adam Back, you state that a block size limit is not necessary to create > a functioning fee market. Yes, Adam Back and I some times see things differently, and that's fine. Many times, we realize later that we're saying the same thing with different words and we're just discussing about terminology. That's not an exclusive problem we have, it's a universal communication problem. That's why math (which is nothing but a language) was invented: to never discuss about terminology, to force any used concept to be defined beforehand. Sorry for the distraction, but I think this is one of those times. Whether "hitting the limit" is "necessary" (I bet he never said "strictly necessary") or just "helpful" is not very relevant. I think Adam and I agree that hitting the limit wouldn't be bad, but actually good for an young and immature market like bitcoin fees. Apart from the dubious time-preference premium (dubious because in most cases is just wallet's defaults and not users in a hurry), transactions are basically free if you are willing to wait (and apparently not that much). If I was a miner and you want me to include your transaction for free, you're asking me to give you money, which I would prefer to do directly if you are a friend or a non-profit organization that I like or whatever rather than giving you money through bitcoin fee discounts. By including your transaction, I'm increasing the probability of my mined block being orphaned and you're not willing to give me even a single satoshi in exchange. Today, in practice, one satoshi fee and no fee at all are treated exactly the same by most (maybe all?) miners, which if you ask me, I find very ~~unfair~~ economically absurd. Are all miners just stupid? Not necessarily, they just don't care about fees or transactions at all. Who is to blame? Certainly not the value chosen for the block size limit, it's clearly the subsidy's fault: subsidy is all miners care about (by the way, that's also the illness behind the SPV-mining symptom). I am very worried about excessive mining subsidies (if you knew how worried the freicoin community was [and still is] about this problem, even if freicoin probably has one of the lowest mining subsidies out there [currently and perpetually annual 5% of the monetary base]...). And I think that "hitting the limit" is not a catastrophe at all, but rather an opportunity to motivate miners to start caring more about transactions and fees (in proportion to what they care about). And if the limit is increased later and fees fall again, that's fine, because miners' will already be more prepared for the next time we "hit the limit". Anyway, maybe that hope is irrelevant, but what I'm convinced about is that rising non-fast-confirmation mining fees above zero is not a bad thing. > As to your second statement, unfortunately for immediate harmonious > relations, I was merely separating out the elevated fee market concern, > not at all saying it is the only or even the biggest concern with > limited capacity. Alan Reiner, Ryan X. Charles and others have > eloquently explained how restrictive a 1MB limit is, even with "layer 2". To be honest, I've only followed those were assuming the worse case for optimization: bitcoin global monetary monopoly. If I remember correctly, they were aiming for something around 170 MB, but in any case, any value for the constant is completely arbitrary to me at this point, including 1 MB. I'm deeply offended when I feel included in the "1MBers group" because I don't feel like that at all. To be honest, I have no idea what the correct value should be, all I know it's a trade-off in a monotonic function: f(blocksize) = decentralization > What's missing from the decentralization dialog is a quantitative > measure of decentralization. You are completely right: there's no defined measurable unit for "decentralization" ("p2pness", whatever bitcoin has that wasn't possible before pow-based distributed consensus). And I'm afraid we will never have such a measurable unit. Maybe the best definition of the property we're trying to capture is just "the opposite of centralization", assuming centralization is easier to define. The best we have now are pool percentages, number of nodes, subsidy/fee ratio (as said, this influences things like SPV mining) How all that gets to...? g(many unrelated matrics) = centralization I don't really think anybody knows, but no matter what your interpretation of some Japanese-named dude on the internet's words (aka bitcoin sacred history) are, if you think 3 validating nodes is enough for a "p2p" monetary network. It is very possible that decentralization(blocksize) = decentralization(blocksize+1) for many values of blocksize, but I think the burden of the proof that decentralization(current_blocksize) ~= decentralization(current_blocksize+1) is on those who propose ++current_blocksize. But I think ANY metric for centralization would be welcomed right now. In fact, it doesn't need to be a function of blocksize, it can be a function of maxBlockSigops or maybe even maxBlockInputs or maxBlockOuputs. But if we don't want to have any consensus limit to centralization bitcoin has already fail (and doesn't need expensive proof of work). > Why not slam users with higher fees now, if we accept that they may be > necessary someday? For the same reasons you don't ask a child, age 5, to > work in a factory. It is a certainty that fees will be necessary someday: bitcoin's seigniorage is limited to 21 M to subsidize mining, and we know that won't last forever. Expensive proof of work (that centralized systems lack) must be paid for somehow. Who's child am I asking to work in a factory? I feel I'm missing something there. ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-31 1:21 ` Jorge Timón @ 2015-07-31 1:29 ` Jorge Timón 2015-07-31 9:56 ` Thomas Zander 1 sibling, 0 replies; 21+ messages in thread From: Jorge Timón @ 2015-07-31 1:29 UTC (permalink / raw) To: Tom Harding; +Cc: Bitcoin Dev I'm re-reading and I have many spelling errors, sorry. On Fri, Jul 31, 2015 at 3:21 AM, Jorge Timón <jtimon@jtimon•cc> wrote: > On Thu, Jul 30, 2015 at 10:53 PM, Tom Harding <tomh@thinlink•com> wrote: >> On 7/30/2015 11:14 AM, Jorge Timón wrote: >>> The blocksize limit (your "production quota") is necessary for >>> decentralization, not for having a functioning fee market. >> >>> If we can agree that hitting the limit will JUST cause higher fees and >>> not bitcoin to fail, puppies to die or the sky to turn purple I think >>> that's a great step forward in this debate. >> >> It's interesting how people see things differently. I think your first >> statement above represents a great step forward in the debate. Unlike >> Adam Back, you state that a block size limit is not necessary to create >> a functioning fee market. > > Yes, Adam Back and I some times see things differently, and that's fine. > Many times, we realize later that we're saying the same thing with > different words and we're just discussing about terminology. That's > not an exclusive problem we have, it's a universal communication > problem. That's why math (which is nothing but a language) was > invented: to never discuss about terminology, to force any used > concept to be defined beforehand. > Sorry for the distraction, but I think this is one of those times. > Whether "hitting the limit" is "necessary" (I bet he never said > "strictly necessary") or just "helpful" is not very relevant. I think > Adam and I agree that hitting the limit wouldn't be bad, but actually > good for an young and immature market like bitcoin fees. > Apart from the dubious time-preference premium (dubious because in > most cases is just wallet's defaults and not users in a hurry), > transactions are basically free if you are willing to wait (and > apparently not that much). > > If I was a miner and you want me to include your transaction for free, > you're asking me to give you money, which I would prefer to do > directly if you are a friend or a non-profit organization that I like > or whatever rather than giving you money through bitcoin fee > discounts. > By including your transaction, I'm increasing the probability of my > mined block being orphaned and you're not willing to give me even a > single satoshi in exchange. > Today, in practice, one satoshi fee and no fee at all are treated > exactly the same by most (maybe all?) miners, which if you ask me, I > find very ~~unfair~~ economically absurd. > > Are all miners just stupid? > Not necessarily, they just don't care about fees or transactions at all. > Who is to blame? Certainly not the value chosen for the block size > limit, it's clearly the subsidy's fault: subsidy is all miners care > about (by the way, that's also the illness behind the SPV-mining > symptom). I am very worried about excessive mining subsidies (if you > knew how worried the freicoin community was [and still is] about this > problem, even if freicoin probably has one of the lowest mining > subsidies out there [currently and perpetually annual 5% of the > monetary base]...). > And I think that "hitting the limit" is not a catastrophe at all, but > rather an opportunity to motivate miners to start caring more about > transactions and fees (in proportion to what they care about). > And if the limit is increased later and fees fall again, that's fine, > because miners' will already be more prepared for the next time we > "hit the limit". > Anyway, maybe that hope is irrelevant, but what I'm convinced about is > that rising non-fast-confirmation mining fees above zero is not a bad > thing. > >> As to your second statement, unfortunately for immediate harmonious >> relations, I was merely separating out the elevated fee market concern, >> not at all saying it is the only or even the biggest concern with >> limited capacity. Alan Reiner, Ryan X. Charles and others have >> eloquently explained how restrictive a 1MB limit is, even with "layer 2". > > To be honest, I've only followed those were assuming the worse case > for optimization: bitcoin global monetary monopoly. > If I remember correctly, they were aiming for something around 170 MB, > but in any case, any value for the constant is completely arbitrary to > me at this point, including 1 MB. I'm deeply offended when I feel > included in the "1MBers group" because I don't feel like that at all. > To be honest, I have no idea what the correct value should be, all I > know it's a trade-off in a monotonic function: > > f(blocksize) = decentralization > >> What's missing from the decentralization dialog is a quantitative >> measure of decentralization. > > You are completely right: there's no defined measurable unit for > "decentralization" ("p2pness", whatever bitcoin has that wasn't > possible before pow-based distributed consensus). > And I'm afraid we will never have such a measurable unit. Maybe the > best definition of the property we're trying to capture is just "the > opposite of centralization", assuming centralization is easier to > define. > The best we have now are pool percentages, number of nodes, > subsidy/fee ratio (as said, this influences things like SPV mining) > How all that gets to...? > > g(many unrelated matrics) = centralization > > I don't really think anybody knows, but no matter what your > interpretation of some Japanese-named dude on the internet's words > (aka bitcoin sacred history) are, if you think 3 validating nodes is > enough for a "p2p" monetary network. > It is very possible that decentralization(blocksize) = > decentralization(blocksize+1) for many values of blocksize, but I > think the burden of the proof that decentralization(current_blocksize) > ~= decentralization(current_blocksize+1) is on those who propose > ++current_blocksize. > But I think ANY metric for centralization would be welcomed right now. > In fact, it doesn't need to be a function of blocksize, it can be a > function of maxBlockSigops or maybe even maxBlockInputs or > maxBlockOuputs. > But if we don't want to have any consensus limit to centralization > bitcoin has already fail (and doesn't need expensive proof of work). > >> Why not slam users with higher fees now, if we accept that they may be >> necessary someday? For the same reasons you don't ask a child, age 5, to >> work in a factory. > > It is a certainty that fees will be necessary someday: bitcoin's > seigniorage is limited to 21 M to subsidize mining, and we know that > won't last forever. Expensive proof of work (that centralized systems > lack) must be paid for somehow. > Who's child am I asking to work in a factory? I feel I'm missing > something there. ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-31 1:21 ` Jorge Timón 2015-07-31 1:29 ` Jorge Timón @ 2015-07-31 9:56 ` Thomas Zander 2015-07-31 12:32 ` Oleg Andreev 1 sibling, 1 reply; 21+ messages in thread From: Thomas Zander @ 2015-07-31 9:56 UTC (permalink / raw) To: Bitcoin Dev On Friday 31. July 2015 03.21.07 Jorge Timón via bitcoin-dev wrote: > If I was a miner and you want me to include your transaction for free, > you're asking me to give you money What? Ask yourself; why do miners include transactions at all? What it the incentive if there really is only less than 0.8% of income to be derived from fees? Miners don't get payed by fees. They won't need to get payed by fees for decades to come. Maybe you want to re-do your math, it seems off. -- Thomas Zander ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-31 9:56 ` Thomas Zander @ 2015-07-31 12:32 ` Oleg Andreev 2015-07-31 15:24 ` Jorge Timón 0 siblings, 1 reply; 21+ messages in thread From: Oleg Andreev @ 2015-07-31 12:32 UTC (permalink / raw) To: Thomas Zander; +Cc: Bitcoin Dev > On 31 Jul 2015, at 11:56, Thomas Zander via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > > On Friday 31. July 2015 03.21.07 Jorge Timón via bitcoin-dev wrote: >> If I was a miner and you want me to include your transaction for free, >> you're asking me to give you money > > What? > > Ask yourself; why do miners include transactions at all? What it the incentive > if there really is only less than 0.8% of income to be derived from fees? > > Miners don't get payed by fees. They won't need to get payed by fees for > decades to come. Maybe you want to re-do your math, it seems off. Fees should be compared not with the total revenue, but with the profit margin. If a miner invested/spends 24 BTC per block and earns 0.25 in fees, then his total profit is 1.25 BTC per block and fees comprise a whopping 20% of the profit. Today I think profit margins are quite high, so fees do not matter much. But it's not hard to imagine that in just a couple of years BTC may appreciate a lot more, attract more investors and even bigger foundries to, say, print chips and mine right at the foundry, thus driving profit margins lower. Fees will begin to matter regardless of the total subsidy. Just some hypothetical calculation. Lets say in 2015 one block costs 5 BTC and fees bring 0.25 BTC. Profit is thus 20.25 BTC and fees comprise 1.2% of that amount. Lets say in late 2016 halving happens, BTC appreciates and resulting competition drives up the cost to 6 BTC (yes, BTC itself is more expensive, but so is the profit too, so increased competition must drive down the profit margin). Now the block brings 6.75 BTC in profit. Fees, if unchanged now make 4% of the total profit. If all goes well, in mid 2020 another halving happens (6.25 BTC/block) and even if the BTC-denominated cost stays the same miner now will earn 0.25 BTC profit from subsidy and fees now can account for 100% of that amount. Of course it's a very rough estimate and most likely to be far from reality, but it shows how fees can begin to matter rather quickly under pressure of separate factors: halving and growing valuation and mining competition. ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-31 12:32 ` Oleg Andreev @ 2015-07-31 15:24 ` Jorge Timón 0 siblings, 0 replies; 21+ messages in thread From: Jorge Timón @ 2015-07-31 15:24 UTC (permalink / raw) To: Oleg Andreev; +Cc: Bitcoin Dev On Fri, Jul 31, 2015 at 11:56 AM, Thomas Zander via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > On Friday 31. July 2015 03.21.07 Jorge Timón via bitcoin-dev wrote: >> If I was a miner and you want me to include your transaction for free, >> you're asking me to give you money > > What? > > Ask yourself; why do miners include transactions at all? What it the incentive > if there really is only less than 0.8% of income to be derived from fees? As a rhetorical exercise, I just asked myself those questions (with other words) in the very post you are replying to. Please, read again. If miners have a cost in including transactions (which they have) but there's no gain, why are miners including free transactions? Is it because they are stupid or because they don't care enough about fees (and thus blindly use whatever default policy that comes with Bitcoin Core)? On Fri, Jul 31, 2015 at 2:32 PM, Oleg Andreev via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > Fees should be compared not with the total revenue, but with the profit margin. You are completely right, this is what matters in the end. To correct myself, what I'm worried about is how low the fees/profits ratio is, fees/total_reward is just an easier-to-calculate approximation when you don't know costs = total_reward - profits. > Of course it's a very rough estimate and most likely to be far from reality, but it shows how fees can begin to matter rather quickly under pressure of separate factors: halving and growing valuation and mining competition. Don't forget a rise in fees paid as another potential factor. That was my whole point: higher fees may help reducing problems related to a low fees/profits ratio. And that's why I don't think a rise in fees is necessarily a bad thing. Let's not forget that we're just talking about market fees for non-urgent transfers rising above zero! There may be a fee market for fast confirmations already, but there's certainly none for non-urgent transfers. In my opinion, rising from zero to anything, it's a great step forwards. I can perfectly understand that maintaining that anything low is good for adoption, but insisting in maintaining it at zero doesn't seem very reasonable to me, given that we know for a fact that is not sustainable in the long term. We don't want business plans to fail because they're relaying on free transactions. We don't want new users to be lied about the real properties of the system. And I'm sure that any ridiculously low value will be so marginally worse for adaption when compared to a plain zero, that I'm not worried about it at all. Users starting to pay SOMETHING for a service they're enjoying and that actually has quite big operational costs (energy-demanding proof of work, currently subsidized by the finite initial seigniorage) it's, by no means, the end of Bitcoin. To me is really more of a start, a tiny first step towards a viable system that doesn't depend on subsidies (with expiration date). ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 4:00 ` Adam Back 2015-07-30 4:05 ` Adam Back 2015-07-30 4:48 ` Ryan Butler @ 2015-07-30 12:45 ` Ivan Brightly 2 siblings, 0 replies; 21+ messages in thread From: Ivan Brightly @ 2015-07-30 12:45 UTC (permalink / raw) To: Adam Back; +Cc: Bitcoin Dev [-- Attachment #1: Type: text/plain, Size: 2091 bytes --] One thing that the below assumption doesn't appear to take into account is user demand for quick confirmations. I haven't fully thought out the game theory on this but here goes: Example: if 75% of hashing power accepts 'medium' fee transactions while 25% is willing to accept low (or any) fee transactions, then a user paying a lower fee wishing to get their transaction included in the next block runs a ~75% chance that their transaction won't be included. Users desiring the most reliably fast confirmations are better off by paying the minimum fee that a majority of miners will accept. Miners breaking ranks and accepting lower fees only affects users who aren't sufficiently interested in quicker confirmations. As long as a majority of miners 'collude', they will likely be able to keep the average fees higher than miners with the lower costs of operations might be willing to accept. On Thu, Jul 30, 2015 at 12:00 AM, Adam Back via bitcoin-dev < bitcoin-dev@lists•linuxfoundation.org> wrote: > On 29 July 2015 at 20:41, Ryan Butler via bitcoin-dev > <bitcoin-dev@lists•linuxfoundation.org> wrote: > > Does an unlimited blocksize imply the lack of a fee market? Isn't every > > miner able to set their minimum accepted fee or transaction acceptance > > algorithm? > > The assumption is that wont work because any miner can break ranks and > do so profitably, so to expect otherwise is to expect oligopoly > behaviour which is the sort of antithesis of a decentralised mining > system. It's in fact a similar argument as to why decentralisation of > mining provides policy neutrality: some miner somewhere with some > hashrate will process your transaction even if some other miners are > by policy deciding not to mine it. It is also similar reason why free > transactions are processed today - policies vary and this is good for > ensuring many types of transaction get processed. > > Adam > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists•linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > [-- Attachment #2: Type: text/html, Size: 2803 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-30 3:41 ` Ryan Butler 2015-07-30 4:00 ` Adam Back @ 2015-07-30 4:07 ` Jean-Paul Kogelman 1 sibling, 0 replies; 21+ messages in thread From: Jean-Paul Kogelman @ 2015-07-30 4:07 UTC (permalink / raw) To: Ryan Butler; +Cc: bitcoin-dev [-- Attachment #1: Type: text/plain, Size: 825 bytes --] > On Jul 29, 2015, at 8:41 PM, Ryan Butler via bitcoin-dev <bitcoin-dev@lists•linuxfoundation.org> wrote: > > Does an unlimited blocksize imply the lack of a fee market? Isn't every miner able to set their minimum accepted fee or transaction acceptance algorithm? > Yes, miners can set this, and giving them more fine grained control over this (with sane defaults) will have a far bigger impact on establishing a proper fee market than depending on capacity (that nobody has any control over). Allowing miners to set up some sort of tiered offering that delays transactions and maybe even have their tiers tie into the exchange rate to keep the costs constant over time. I'm sure something like this has probably already been discussed before and I'm curious what the objections are to such a thing? jp [-- Attachment #2: Type: text/html, Size: 1179 bytes --] ^ permalink raw reply [flat|nested] 21+ messages in thread
* Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader 2015-07-29 22:54 ` s7r 2015-07-30 3:41 ` Ryan Butler @ 2015-07-30 9:52 ` odinn 1 sibling, 0 replies; 21+ messages in thread From: odinn @ 2015-07-30 9:52 UTC (permalink / raw) To: s7r, Raystonn ., Vali Zero, bitcoin-dev -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 Some additional points.... On 07/29/2015 03:54 PM, s7r via bitcoin-dev wrote: > (...) > > The more people use bitcoin, the more demand we have on the market > for BTC, the higher BTC/FIAT rate will be, more people will become > interested in mining and so on. Bitcoin is not a > rich-only-private-club, it's an open, global, decentralized payment > network. The less people use it... I guess you figured it out. Yes. (...) Having some > offchain solution for small transactions would be a good idea, but > this doesn't mean we should make small transactions impossible due > to absurd fees. This is correct also. > > On 7/29/2015 8:47 PM, Raystonn . via bitcoin-dev wrote: >>> When a category of users would get priced out because of the >>> fee >> market, they would be free to use any altcoin they want. >> >> I believe that pretty well sums up where we’re headed if >> transaction rate is artificially limited, whether that be by >> maximum block size limit or something else. A fee market will >> necessarily include more than just Bitcoin. The reality is it’s >> very easy to trade value across different blockchains, and thus a >> fee market will bleed value from Bitcoin and give it to >> alternative blockchains. If Bitcoin’s blocks are at maximum >> capacity, people will exchange for something that allows them to >> transact with a lesser fee, then make the desired payment. This >> adds value to the alternative blockchain and removes it from >> Bitcoin. >> >> Anyone thinking the fee market can be restrained to Bitcoin alone >> is mistaken. >> >> >> *From:* Vali Zero via bitcoin-dev >> <mailto:bitcoin-dev@lists•linuxfoundation.org> *Sent:* Wednesday, >> July 29, 2015 7:09 AM *To:* >> bitcoin-dev@lists•linuxfoundation.org >> <mailto:bitcoin-dev@lists•linuxfoundation.org> *Subject:* >> [bitcoin-dev] Răspuns: Personal opinion on the fee market from a >> worried local trader >> >> I am disappointed that you did not understand my point of view. >> Let me rephrase it for you, >> >> People tipping, buying 0.99$ products and gamblers that need >> Bitcoin transactions *more* than the rest of the people will >> afford the fees that establish the equilibrium between demand and >> supply of Bitcoin transactions. The people are free to use they >> money for whatever they like, but you should understand that >> Bitcoin transactions are not free. >> >> I was merely attempting to point out that spammers and gamblers >> would be the first ones that would go away. They would be free to >> spam or gamble, but they would have to pay for it. >> >> When a category of users would get priced out because of the fee >> market, they would be free to use any altcoin they want. >> >> Please understand that not everyone will leave. The more >> important players will remain, those that need it the most. The >> other players are free to use whatever altcoin they wish. >> >> >> În Miercuri, 29 Iulie 2015 16:47:57, Angel Leon >> <gubatron@gmail•com> a scris: >> >> >> "the gamblers and perhaps people transacting very low amounts. >> The people that actually need Bitcoin would remain." >> >> so people tipping, buying $0.99 products, and gamblers actually >> don't need Bitcoin. Who are you to say what people need to use >> money for? This statement goes against the freedom of >> decentralization and financial freedom Bitcoin should be able to >> provide. >> >> It's an open network and it will be used as most users see fit, >> and that requires a blocksize increase wether you like it or not, >> it's simple physics, other time wait times will become unbearable >> for those not willing to pay the high fees, if people leave, then >> it only mean bitcoins isn't useful, and if bitcoin isn't useful, >> it's worthless. >> >> >> >> http://twitter.com/gubatron >> >> On Wed, Jul 29, 2015 at 9:27 AM, Vali Zero via bitcoin-dev >> <bitcoin-dev@lists•linuxfoundation.org >> <mailto:bitcoin-dev@lists•linuxfoundation.org>> wrote: >> >> Hello, >> >> I have been reading an argument saying that paying higher fees >> would scare Bitcoin users and they would stop using it, >> preferring bank transfers or other payment methods. This does not >> make sense for me. If some users leave, then demand for bitcoin >> transactions goes down and so do the fees. The others remain. >> >> Fee market means that an equilibrium is found between the demand >> for bitcoin transactions and the available supply (given by the >> block size). The fee is the price that finds this equilibrium. >> >> If a fee market starts to exist, the first ones to leave are the >> spammers, probably followed by the gamblers and perhaps people >> transacting very low amounts. The people that actually need >> Bitcoin would remain. >> >> Please allow this fee market to form... >> >> In the absence of a functioning fee market, I will refuse to run >> Bitcoin code that increases the block size and will do my best >> to tell everyone I know not to upgrade towards running such code. >> If Bitcoin succombs to the free stuff army, I will sell all the >> coins and leave. Nothing is for free. >> >> I apologize for any exagerations, but I just felt strongly >> towards expressing my opinion here. I'm only a local Bitcoin >> trader, computer engineer, with a reasonable understanding of >> free markets. And I'm running only one full node. >> >> Kind regards, Valentin >> >> >> _______________________________________________ bitcoin-dev >> mailing list bitcoin-dev@lists•linuxfoundation.org >> <mailto:bitcoin-dev@lists•linuxfoundation.org> >> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev >> >> > _______________________________________________ bitcoin-dev mailing > list bitcoin-dev@lists•linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > - -- http://abis.io ~ "a protocol concept to enable decentralization and expansion of a giving economy, and a new social good" https://keybase.io/odinn -----BEGIN PGP SIGNATURE----- Version: GnuPG v1 iQEcBAEBAgAGBQJVufPFAAoJEGxwq/inSG8CBHUIAKZQaTvJToxGmEXSTckHZ2fX NEVJNbw0oebdpQU6mvYR1hjK4LE/pY+cyfTh98RxQtsIHGJqVghU/kgzP6PSyS9J NYB3HO3iz2l9rBRQCe197wfg1GlY1QhepNFofYj1k1MDIB2QCMUXhUwz7e7wncuc TESDEHH/mUqPOnWBKeEbru7gr0aLn8ltmEHXwDQdlPP9iyXGpt9oGWoP1fBYTRwg r29vW8wCYhKzbS44ovPRilGWnWhxyB/2N5Qb94JkdzWCdr98bBIZQ8eL+w64lEhv 9A8Umiu9B8c6Ch9C1d4c/ircA4MJKSroTfLh8SgkjYtdAnECAJmQ3ZcUGgyGerw= =gCvd -----END PGP SIGNATURE----- ^ permalink raw reply [flat|nested] 21+ messages in thread
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2015-07-29 14:09 ` [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader Vali Zero
2015-07-29 17:47 ` Raystonn .
2015-07-29 22:54 ` s7r
2015-07-30 3:41 ` Ryan Butler
2015-07-30 4:00 ` Adam Back
2015-07-30 4:05 ` Adam Back
2015-07-30 4:48 ` Ryan Butler
2015-07-30 13:14 ` Tom Harding
2015-07-30 14:25 ` Dave Hudson
2015-07-30 14:57 ` Tom Harding
2015-07-30 18:14 ` Jorge Timón
2015-07-30 18:16 ` Jorge Timón
2015-07-30 20:53 ` Tom Harding
2015-07-31 1:21 ` Jorge Timón
2015-07-31 1:29 ` Jorge Timón
2015-07-31 9:56 ` Thomas Zander
2015-07-31 12:32 ` Oleg Andreev
2015-07-31 15:24 ` Jorge Timón
2015-07-30 12:45 ` Ivan Brightly
2015-07-30 4:07 ` Jean-Paul Kogelman
2015-07-30 9:52 ` odinn
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