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Showing 14 of 14 results by cianuro
No, miners don't pay transaction fees. They GET PAID the transaction fees from the transactions in the block they hash/verify.
My point is, when transaction fees are the ONLY incentive to mine (and that will happen eventually as a certainty) the total sum of the transaction fees must match the cost of mining the block they were included in. If the block costs more to mine than the value of the transaction fees in a block, miners (most) will shut down. At least so many will shut down that the network becomes insecure and Bitcoin will die.
Currently, at the existing transaction per block limit, that would mean that a fee of $1.5-$2 would have to be paid for EVERY transaction to be added to the blockchain. Alternatively, the functional or "real" value of BTC should be ten times higher to compete with an average alternative payment processor. That is of course if you look at BTC from a purely transactional and transfer point of view.
So, I'm looking for ideas as to what the ecosystem as a whole will see as a solution to this. Either Bitcoin finds mainstream adoption and the price increases to at least match the cost of mining or the blocksize will have to increase to accommodate more transactions with a lower fee. Perhaps a bit of both.
Either way, if either are to happen, Bitcoin will need to find mainstream adoption before the block reward becomes less than the cost of mining. I think I read that Satoshi said that Bitcoin would be everywhere or nowhere in 20 years and this might be what he meant. 20 years is 5 halvings of the reward. We're almost 2/5s of the way there.
Of course, I may be way off here, this is all hypothetical
My point is, when transaction fees are the ONLY incentive to mine (and that will happen eventually as a certainty) the total sum of the transaction fees must match the cost of mining the block they were included in. If the block costs more to mine than the value of the transaction fees in a block, miners (most) will shut down. At least so many will shut down that the network becomes insecure and Bitcoin will die.
Currently, at the existing transaction per block limit, that would mean that a fee of $1.5-$2 would have to be paid for EVERY transaction to be added to the blockchain. Alternatively, the functional or "real" value of BTC should be ten times higher to compete with an average alternative payment processor. That is of course if you look at BTC from a purely transactional and transfer point of view.
So, I'm looking for ideas as to what the ecosystem as a whole will see as a solution to this. Either Bitcoin finds mainstream adoption and the price increases to at least match the cost of mining or the blocksize will have to increase to accommodate more transactions with a lower fee. Perhaps a bit of both.
Either way, if either are to happen, Bitcoin will need to find mainstream adoption before the block reward becomes less than the cost of mining. I think I read that Satoshi said that Bitcoin would be everywhere or nowhere in 20 years and this might be what he meant. 20 years is 5 halvings of the reward. We're almost 2/5s of the way there.
Of course, I may be way off here, this is all hypothetical
Hi guys.
This has probably been discussed already but for the life of me, I cannot figure a search term to use that filters out irrelevant stuff.
Anyway, the latest block size debate has had me thinking about various inevitabilities.
What happens, specifically to the price of Bitcoin and transaction fees when the block reward drops to a negligible amount?
Let's assume tomorrow is the day that the block reward drops to 0.00001 BTC. Now, the entire mining process has to be subsidized by transaction fees. So far, so good. This was by design. However, at (I assume) 4000 transactions per block currently (I could be way off but let's go with that for now), that would mean that at today's BTC exchange rate, for miners to break even, transaction fees would need to be close to the same as the block reward for miners to bother. Let's keep it even, that would mean, at $300 per Bitcoin, the average transaction fee would have to be $1.87.
Current fiat reward for miners operating at close to break even: 25 btc* 300 usd =7500 usd
Transaction fees required for the same mining power to run the network: 7500 usd/4000 trx = 1.87 usd
Now I'm making some serious assumptions here, I get that. But at today's exchange rate/Bitcoin value, that puts Bitcoin out of business in terms of being an affordable way to make everyday transactions, especially micropayments. Granted, for larger sums, this doesn't seem like a big TX fee at all.
Now I know that block size is mutable so does this mean it's inevitable? Or does it mean that the price of BTC will have to rise to at least the cost to mine a block divided by the transactions per block multiplied by the exchange rate to be worthwhile? Doesn't this then mean that the value of Bitcoin outside it's functional value, is then ultimately determined by the block size which markets ultimately don't have control of?
Would love for someone to clear this up for me. I'm obviously missing something. For the sake of explanation, it would be good to assume that we live in a world 40 years from now where there is either no block reward or that it's so negligible that the block reward could be considered a cup of coffee. Does BTC fiat price increase to meet the collective cost of actually hashing the transaction block or does the total block transaction fee value determine it?
Would love to get some input here to help me understand. If this has been discussed before, Apologies. I'd appreciate if you could link me to the previous discussion.
This has probably been discussed already but for the life of me, I cannot figure a search term to use that filters out irrelevant stuff.
Anyway, the latest block size debate has had me thinking about various inevitabilities.
What happens, specifically to the price of Bitcoin and transaction fees when the block reward drops to a negligible amount?
Let's assume tomorrow is the day that the block reward drops to 0.00001 BTC. Now, the entire mining process has to be subsidized by transaction fees. So far, so good. This was by design. However, at (I assume) 4000 transactions per block currently (I could be way off but let's go with that for now), that would mean that at today's BTC exchange rate, for miners to break even, transaction fees would need to be close to the same as the block reward for miners to bother. Let's keep it even, that would mean, at $300 per Bitcoin, the average transaction fee would have to be $1.87.
Current fiat reward for miners operating at close to break even: 25 btc* 300 usd =7500 usd
Transaction fees required for the same mining power to run the network: 7500 usd/4000 trx = 1.87 usd
Now I'm making some serious assumptions here, I get that. But at today's exchange rate/Bitcoin value, that puts Bitcoin out of business in terms of being an affordable way to make everyday transactions, especially micropayments. Granted, for larger sums, this doesn't seem like a big TX fee at all.
Now I know that block size is mutable so does this mean it's inevitable? Or does it mean that the price of BTC will have to rise to at least the cost to mine a block divided by the transactions per block multiplied by the exchange rate to be worthwhile? Doesn't this then mean that the value of Bitcoin outside it's functional value, is then ultimately determined by the block size which markets ultimately don't have control of?
Would love for someone to clear this up for me. I'm obviously missing something. For the sake of explanation, it would be good to assume that we live in a world 40 years from now where there is either no block reward or that it's so negligible that the block reward could be considered a cup of coffee. Does BTC fiat price increase to meet the collective cost of actually hashing the transaction block or does the total block transaction fee value determine it?
Would love to get some input here to help me understand. If this has been discussed before, Apologies. I'd appreciate if you could link me to the previous discussion.
You can't really. I'm in the gold farming and bot business and we are under constant DDOS with additional pile-ons when someone in China wants us offline for a bit. Thing is, our DDOS is only in the 5 to 15 gbps range. I saw that the attack on one of the mtgox servers peaked at 38 gbps. That is a lot of traffic to mitigate - I'm impressed that they manage to still provide a service.
All they can do is try to have redundant servers and tons of bandwidth.
38 gbps, that's incredible. We regularly deal with 8-10. We use dosarrest and it's like it's not even happening. Amazing service. Recommended to us by rackspace when they couldn't help us. Expensive, but if you're a regular target, worth it.
Hi Patrick, we'll be having a (free to attend) conference at University of Limerick on May 25th that will feature a panel discussion on Bitcoin. It could be a good place to learn more and you'll be very welcome - http://3dcamp.barcamp.ie
Just signed up. Hope to be there.
A few weeks back, I made a small test lodgement ~100 and it was smooth as hell.
This week, I went for a rather more complicated lodgement and significantly higher amount.
The transaction was super smooth. Again. I had my bitcoins within 48 hours of sending the funds initially.
Nejc was super helpful and the support was amazing. I'd highly recommend BitStamp to anyone.
This week, I went for a rather more complicated lodgement and significantly higher amount.
The transaction was super smooth. Again. I had my bitcoins within 48 hours of sending the funds initially.
Nejc was super helpful and the support was amazing. I'd highly recommend BitStamp to anyone.
I'd like to be whitelisted.
I'm not Satoshi.
I've read and understood (most of) his paper (http://bitcoin.org/bitcoin.pdf)
I have a degree in computer science.
I have a verified account on MtGox and Bitcoin-Central.
If I was a troll, I'd probably have something more creative to say here
I'm not Satoshi.
I've read and understood (most of) his paper (http://bitcoin.org/bitcoin.pdf)
I have a degree in computer science.
I have a verified account on MtGox and Bitcoin-Central.
If I was a troll, I'd probably have something more creative to say here
I agree. There's plenty of ways to weed out trolls. Forcing posts like this is just annoying.
What about forcing new users to pay 0.1BTC on signup and it gets refunded after 10 or so posts if they're not banned for spamming/trolling?
What about forcing new users to pay 0.1BTC on signup and it gets refunded after 10 or so posts if they're not banned for spamming/trolling?
Would be it a little on the conspiracy theory side of things to suggest that the ASIC "developers" were simply seeding propaganda to keep the difficulty/competition down while waiting for block halving day?