Quote from: DeathAndTaxes on January 11, 2012, 02:39:16 AM

Quote from: SgtSpike on January 11, 2012, 02:32:44 AM

Quote from: ring2ding on January 11, 2012, 02:11:54 AM

I don't know. I don't think I have enough math skills to figure this out lol. Has the genious who came up with this figured out how to solve Q1?

Absolutely depends on transaction volume. If the price of 1 BTC is $2.50, and there are no block rewards, and there are 25 transactions per block on average, then I figure a transaction fee of $0.50/transaction will still provide around 1 TH/s of hashing power, which I believe would be sufficient to secure the network if the entire currency is worth $50M. I calculated this all out in another thread, but that's the result.

I don't think $0.50/transaction is an unreasonable cost to pay - it's still a heck of a lot cheaper than a wire transfer. And that's basing it off of today's transaction numbers. 5-10 years down the road, when the block reward really starts getting small, we may have a lot more transaction volume. If we had 2500 transactions per block, we could still maintain around 4 TH/s per dollar price of BTC, and drop transaction costs to around $0.05/transaction.

The yet-to-be-determined factor is how much hashing power we actually need to secure the network. In my opinion, 1 TH/s is plenty enough to secure the network with each BTC worth $2.50, but the goal should be linear growth in hashing power relative to price from there. So 10 TH/s if each BTC is worth $25, etc. Once we figure out that factor, then some hard numbers can be calculated for transaction fees based on current transaction volume to reach a target hashing goal.

The current rules make that impossible.

Nobody would pay $0.25. Nobody. They would pay the absolute minimum to get the transaction processed which is closer to 1 satoshi. It will require protocol rule changes to build a functional fee economy.

Oh I absolutely agree. I'm sure the transaction fee rules will be changed as we get closer to the time where they are needed though. Right now, transaction fees are purely experimental. They aren't necessary at all.