Thanks for this detailed information. I had't read that yet if it exists on the wiki.
It is my understanding that there is nothing in protocol that can enforce that calculation and thus that the calculation is merely the recommended behavior for mining?
Some comments...
If it is not enforced by the protocol, it can't be the "fully correct" procedure.
This is discouraging a higher velocity of money V.
M x V = P x Q (a proxy for nominal GDP)
Thus this discourages the size of the GDP Bitcoin can adopt.
Thus the nominal tx fee is always increasing in dollars when BTC is. Yet the ATM debit card transaction fees are in some cases a fix amount, thus eventually Bitcoin becomes more expensive than the existing system.
so how much should I pay for a fast transaction of 5 bitcoins? or even 2 bitcoins at a time because ill be splitting up all of them out of 28 bitcoins. What will my transaction fee be??
The fee is per kB. 0.1 mBTC per kB should be fine for inclusion in the next block. Most tx that are waiting are <0.1mBTC, free, or have unconfirmed outputs. The amount of the tx is irrelivent. 2 BTC or 200,000 BTC what matters is the physical size of the transaction. Most tx are <= 1 kB.
When the finite block size overflows then that can't remain true.
It is my understanding that there is nothing in protocol that can enforce that calculation and thus that the calculation is merely the recommended behavior for mining?
Some comments...
This is a fully correct procedure for determing the fee owed in Bitcoin transaction.
If it is not enforced by the protocol, it can't be the "fully correct" procedure.
* priority is greater than 576. (note that developers use the number 57600000; it's 576 because I used millibitcoins rather than satoshis above)
This is discouraging a higher velocity of money V.
M x V = P x Q (a proxy for nominal GDP)
Thus this discourages the size of the GDP Bitcoin can adopt.
If your transaction is not "free" you had better add a transaction fee. To figure out the transaction fee you need to find the size of your transaction in bytes (see step 1 above), round it up to the next even multiple of a thousand, then multiply the result by 0.1 microbitcoins.
Thus the nominal tx fee is always increasing in dollars when BTC is. Yet the ATM debit card transaction fees are in some cases a fix amount, thus eventually Bitcoin becomes more expensive than the existing system.
so how much should I pay for a fast transaction of 5 bitcoins? or even 2 bitcoins at a time because ill be splitting up all of them out of 28 bitcoins. What will my transaction fee be??The fee is per kB. 0.1 mBTC per kB should be fine for inclusion in the next block. Most tx that are waiting are <0.1mBTC, free, or have unconfirmed outputs. The amount of the tx is irrelivent. 2 BTC or 200,000 BTC what matters is the physical size of the transaction. Most tx are <= 1 kB.
When the finite block size overflows then that can't remain true.