Quote from: tvbcof on October 25, 2014, 06:32:35 AM

Quote from: bitnanigans on October 25, 2014, 06:13:01 AM

I think raising the fees for scalability would be too much. For a fee of 0.02, imagine if 1 Bitcoin was worth $1000. That would result in a fee of $20 for any transaction, regardless of how much is being sent! That's not very ideal. I think what can be done is to support a larger number transactions per block. More transactions processed = more fees collected.

Indeed, even if no more mining rigs were built between now and 2040-ish it would require very large transaction fees just to keep the existing rigs powered up unless BTC valuations expand by a bunch. And if the miners cannot make a dime helping Bitcoin then we better hope and pray that they cannot do so by harming it either. Of course 'hope and prayer' are often fairly ineffective engineering strategies.

Transaction fees only exists for 2 reasons currently;

1. To prevent massive blockchain spam
2. To keep the miners going after block reward is either extremely low or non existent

If no more miners would be build it would actually be more profitable for current miners because the difficulty would stop increasing exponentially, current miners would be celebrating on the streets since they will keep making the same amount of bitcoins per month.

On the counterpart, old mining equipment simply goes into retirement when they become obsolete (too slow, too much power draw, etc)

I don't see the average consumer dealing with sidechains and everything. If we remove the limit of 7tps soon, we might be in time to prevent massive transaction fees when the next price/transaction spike happens. In the end Bitcoin is advertised as a low fee system, if each transaction starts costing dollars personally I would loose interest.

Also creating sidechains would destroy Bitcoin when the block reward gets extremely low or when we stop having block rewards, since miners on the main chain would either stop mining since the transaction fee is so low (making the network extremely insecure), or make transactions on the main chain insupportably expensive to maintain their mining.

In order to prevent high transaction fees we need to increase blocksize and remove the 7tps limit. It appears that the majority of community is in "pro" of this so it should be done quickly to prevent the inevitable high transaction fee explosion. When transaction fees become important hopefully miners will make their fees by high volume of transactions (all at a low fee).

Example:

Bitcoin high frequency trading:

47,000 tps (around the peak rate of VISA) = 28,200,000 transactions per ~10 minute block

Fee of 0.000000017 = 5 bitcoins per block transactions reward for miners. Easily sustaining the network at a high price. If Bitcoin is going to be a global cash system we'd probably have hundreds of thousands of transactions per second. But having more transactions per second than VISA is a good initial.

High transaction fees:

7 tps limit:

5 bitcoins (transaction reward) / 4200 (tranactions per block) = 0.001190 transaction fee. Way too high for the consumer paying his hamburger at a restaurant.

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Combining pruning + near no limit of transactions = low transactions fee.

Why artificially limit a open concept market? The market will take care of the fee, we shouldn't impose limits on it except to prevent massive blockchain spam or otherwise malicious activities.