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The transaction fee is added to the Coinbase subsidy (block reward) by the miner, based on total fees contributed by the transactions within the block itself. This way, transactions don't have to send the fees to the miner directly.
Block Reward = (Base block reward + tx fees)
Block Reward = (Base block reward + tx fees)
Hello everyone! Since mining isn’t that popular anymore I’m curious is BTC mining still profitable?
I’ve really many equipment since I was mining ETH back in 2021 but when it changed from PoW to PoS I’m not sure about its profitability..I mean only 3% APR and much more money to invest now. So, do you recommend to stick to BTC mining or switch to staking? I saw crazy APRs like 150% but not sure about it
Based on the ending part of your post, I am also curious to ask if you are already mining bitcoin? If yes, then you ought to have know if it is still profitable or not.But personally based on my own research, mining bitcoin as a solo miner isn't profitable anymore, I am not a miner, I have never mined bitcoin before, all I am saying here and now is based on information I read online.
The best way to be profitable in bitcoin mining at the moment is to join big mining farms, where the job of finding a block will be distributed to alot of people in the farm, making success more easier to achieve, because according to what I read, it's as good as impossible for a solo miner to find a block on his or her own - what ever finding a block means though 😁 - sorry, I have zero knowledge when it comes to the technicalities of bitcoin.
Finding (mining) a block is basically like solving a mathematical puzzle. This collective effort by the network helps secure the system from manipulation.
The short answer is yes, but only at scale. Otherwise, companies couldn't sustain mining efforts over time.
When Bitcoin's price goes down, profits go down, causing older (less efficient) hardware to be turned off. As a result, the difficulty decreases, making Bitcoin mining less demanding (and therefore more rewarding). Hash power comes back when the incentive returns and, the cycle repeats.
Sure, if you have cheap electricity, you can run NiceHash, which gives you Bitcoin for renting out your GPU's hash-power to other mining algorithms. But that's about as close as the average individual can get.
When Bitcoin's price goes down, profits go down, causing older (less efficient) hardware to be turned off. As a result, the difficulty decreases, making Bitcoin mining less demanding (and therefore more rewarding). Hash power comes back when the incentive returns and, the cycle repeats.
Sure, if you have cheap electricity, you can run NiceHash, which gives you Bitcoin for renting out your GPU's hash-power to other mining algorithms. But that's about as close as the average individual can get.
It seems Bitcoin Core has embraced the digital gold narrative, which fails to achieve the original goal of P2P electronic cash. Do these developers really know better?
So how would you propose change which allow decentralization, high TPS (transaction per seconds) and low fee at same time?
"I suspect we need a better incentive for users to run nodes instead of relying solely on altruism"
Bitcoin or Bitcoin core has not embraced the "digital gold narrative". Bitcoin has been consistent from when it was created till now, the narrative came about due to features in the network that has always been present. Bitcoin is also not a global solution to economic downturn.
I'm not certain what question you're asking at the end, but this is not a technical question, you can move it to Beginner's & Help board
I'm not certain what question you're asking at the end, but this is not a technical question, you can move it to Beginner's & Help board
I'm asking why Bitcoin hasn't been scaled to a point where it can be used more widely, which involves technicalities with the Blockchain design. Whether or not the technology could help offer a better alternative to the status-quo certainly is a matter of both technical and subjective debate.
With global markets headed towards an economic downturn once again, I'm reminded of why Bitcoin was created in the first place... centralized financial institutions cannot be trusted.
But as the fiat currencies like the dollar continue to deteriorate in value, it's becoming increasingly clear we need a real alternative.
It seems Bitcoin Core has embraced the digital gold narrative, which fails to achieve the original goal of P2P electronic cash. Do these developers really know better?
But as the fiat currencies like the dollar continue to deteriorate in value, it's becoming increasingly clear we need a real alternative.
It seems Bitcoin Core has embraced the digital gold narrative, which fails to achieve the original goal of P2P electronic cash. Do these developers really know better?
What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
High network fees will force people to leave their coins on centralized exchanges and/or centralized wallet providers (also known as custodians). But I wouldn't worry about this, since fees are not meant to stay high forever. At some point, they will decline back to considerable levels. As of now, network fees are cheap again. I'm certain developers are continuously working on scaling the Blockchain to help prevent fees from spiraling out of control. A quick solution would be to introduce "fractional satoshis" for cheaper transfers.
No matter what big exchanges or institutions try to do, they won't be able to buy all of BTC's circulating supply because some people will resort to self-custody. That small percentage makes a difference. Hopefully, Bitcoin stays decentralized and censorship-resistant for generations.
Are exorbitant fees not a form of censorship, insofar as they restrict smaller transactions from being recorded on-chain?
What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
Basically, in most cases we know that trading with Bitcoin is very convenient, and it is possible very fast. However, small traders face many problems due to Bitcoin's sometimes excessive transaction free. Although we are currently successful in doing transactions with very low freebies, there are times when the number of Bitcoin transactions increases significantly. This is mainly due to the pressure of Bitcoin transactions which require high transaction fees, when you deposit your funds on an exchange or transfer from there to anywhere your fees are slightly higher. However, even if it is for a temporary period, the payment system will later become accurate and complete with lower transaction fees. So no need to stress about it if you wait a BTC transaction fees will definitely come down, and currently Bitcoin transaction fees are very low.So then
is the whole point of Bitcoin now trading for local currency on exchange, not p2p transactions?
I believe there will eventually be some solutions to increasing Bitcoin fee, bitcoin is evolving as we have the BIP, and it looking at the history there is always improvement like how the community implemented SegWit. For what I know the recent increase in transaction fee is because the Bitcoin Ordinals trend, and if the community think the fee is getting ridiculous, there will be some solution to limit or even ban Bitcoin transaction.
One of the reason why most people believe in Bitcoin is because it is decentralized, so the one who take the decision on how Bitcoin grow and evolve is the community no the Big Company.
One of the reason why most people believe in Bitcoin is because it is decentralized, so the one who take the decision on how Bitcoin grow and evolve is the community no the Big Company.
Even though it is considered by some circles to be a new innovation in blockchain technology, what we feel is that it is just uncomfortable. That's right, as you said above, if we look closely since April 2023, there has been an increase in the cost of printing Bitcoin Ordinal which has increased by up to 700% and this is also one of the triggers for increasing costs besides network congestion. .
Of course, those who make small transactions will really feel it, but even so, as task users we can only be smart, if you really want to make transactions with small fees, try setting a medium or low fee, but the risk will take a long time. process, especially when the network is busy because miners always prioritize those who charge large fees. when the transaction is made.
Ordinals are just a new way of identifying individual satoshis on-chain. Using this method people self-assign special attributes to individual units of bitcoin, making NFTs. Of course, as the network caters to increasingly high-profile clientele, Bitcoin is naturally conducive maintaining this sort of 'art'. (despite the cost)
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So this whole issue is a restatement of 'should we scale blocksize?'
My goal was to draw attention to securely scaling Bitcoin's L1 by any means possible. Otherwise, it'll just be like gold sitting in a vault. (Not very exciting)Quote
SegWit2x was shot down. BCH market price has tanked. BSV has tanked. Though I think that is market recognition.
This is more of an indication that the market values general protocol consensus over force-fed bigger blocks. 2015 was a different time.
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I argued with LK on this - that there must be some g(x) where block size gets bigger as the internet gets faster and HD space gets cheaper, which it has since 2010.
I have a 12 TB raid10 array. Just 10TB would suffice to store nearly 2 decades of 10MB Bitcoin blocks. Mining does become more game-able as block propagation time increases, however.
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Satoshi's initial idea was to scale block size.
Perhaps, but this approach is not an indefinite solution.
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It is clear that all the high TPS and super cheap coins run into L1 centralization issues, but normies don't get this; they just want to hear TPS high and cheap.
PoS can be a real POS
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EOS is a demonstration where you could not keep up with the rate of increase of the blocks and so end up with centralization.
EOS=POS
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DAGs may offer some solution, but I have yet to see a convincing proof.
DAGS help tremendously with transaction serialization speed,since they forego a requirement of linear order present in typical blockchains. The problem arises when determining final order over these transaction sets, as the DAG can become fragmented in widely-distributed networks. See the Crystal Whitepaper for how this can be potentially addressed with Bitcoin-NG design.
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The 1MB size does ensure that decentralization is high, but reaches a crunch point where miners see fees drop off.
Smaller blocks do not necessarily mean greater decentralization. There are, for example, socioeconomic implications of smaller blocks which render more power to exchanges/mining pools.
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At some point, the block size should increase, and there is some g(x).
Where this is up for question, but when BTC does increase this, it risks losing the narrative to BCH or some other scheme, as BTC has committed to 1MB.
Where this is up for question, but when BTC does increase this, it risks losing the narrative to BCH or some other scheme, as BTC has committed to 1MB.
I struggle to believe that a technical setting entails Bitcoin's entire narrative. Bitcoin is more about overall consensus. There are things which should really never change, such as the cryptographic functions themselves (barring necessity) and the coin supply schedule.
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Luke Jr actually advocated for 1/2 MB blocks, which is why I said fine, but what is your g(x)?
He's a real hoot
What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
You are missing things together but let's de-concatenate your questions and discuss them one after the other.
When large institutional investors use Bitcoin blockchain to make transactions, it will lead to more unconfirmed transaction in the mempool waiting for miners to mine them or include them into the next block and in the case where the mempool get congested, the institutional investors and everyother that make transactions will have to pay a higher fees before their transaction can get included into the next available block for transaction to be go comfirm.
There is no way this makes the transaction to be centralized, transaction on blockchain can never be centralized but if the institutional investors make use of centralized exchanges to trade it still doesn't make bitcoin centralize. The bitcoin centralization and power lies between the miners, the node and the Bitcoin protocol. This is impossible and can't be done to Bitcoin.
What if the exchange also runs a mining pool
The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If one were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.
Tx fees spiked again, but it had been low for sometime now. I don't know if it is ordinals or fomo buying that is causing the congestion in the network, but right now tx fee is ~ 80 sats/vbyte as i type this, which is very high. During periods of high tx fee, i don't recommend that people buy through dca, you would be paying too much in fees if you are buying at different intervals, so it is better to buy less frequently and much more in amount for each purchase.But if you defer actual coin acquisition to less frequent intervals, you average less purchasing power over time anyhow, as price tends to rise steadily.
Hello all,
Thank you for your thoughtful feedback and insights
Exciting times as we approach ATHs. However, I notice that fees always go up a lot when the price is more volatile. Naturally, people are more inclined to keep their coins on exchanges during these periods, which is obviously not a good thing.
The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.
Thank you for your thoughtful feedback and insights
Exciting times as we approach ATHs. However, I notice that fees always go up a lot when the price is more volatile. Naturally, people are more inclined to keep their coins on exchanges during these periods, which is obviously not a good thing.
The most recent block averaged 60sat/vB, equating to roughly $5.50 for a single input/output transaction. If were to DCA into self-custody at $100 intervals, they're paying (at least) 5.5% to transaction fees atm.
It's February 26, 2024, and Bitcoin fees are high again. Didn't satoshi say we should always allow a certain number of free transactions? What good is a cryptocurrency for the un-banked that costs more than a bank to use?
Why is the present status quo acceptable?
Why is the present status quo acceptable?
ill ask again
anyone else think that the next node release should measure fees in bumps of 1sat per 10byte(100sat/kb)
instead of 5sat per byte(5000sat/kb) bump default, especially when entering the year of the next halving cycle/ATH year
where by if a 226byte tx was
266sat(1sat/byte) then 1356sat (6sat/byte) then 2486sat(11sat/byte) defaults
but instead were starting from
23sat(1sat/10byte) 46sat(2sat/10byte) 68sat(3sat/10byte)
anyone else think that the next node release should measure fees in bumps of 1sat per 10byte(100sat/kb)
instead of 5sat per byte(5000sat/kb) bump default, especially when entering the year of the next halving cycle/ATH year
where by if a 226byte tx was
266sat(1sat/byte) then 1356sat (6sat/byte) then 2486sat(11sat/byte) defaults
but instead were starting from
23sat(1sat/10byte) 46sat(2sat/10byte) 68sat(3sat/10byte)
Sure, it sounds reasonable to me for base fee to adjust in order to reflect increasingly valuable satoshis.
In fact, your account makes me think... what if devs conspire to keep base fee high in exchange for kickbacks from miners?
they dont get kickback from miners, because if they could they would have in last 15 years..
their kickback is make bitcoin expensive and annoying to promote the sandbox unfinished subnetworks that facilitate middlemen fee's for routed payments between institutions that sponsor them
(look into river financial hosting alot of the LN liquidity and sponsoring core devs as one of many examples, DCG previously)
this sounds like it could be an equally big issue of developer incentive misalignment
The main problem when sending bitcoin with difference kinds of wallet are excessive Bitcoin fees, for small transaction will get difficult choose they have paid over $3 to $5 and some time could be large amount of fees have to sent. I think sending small fund of bitcoin as transaction is not friendly for user want to sent little amount of bitcoin but worth for huge amount of bitcoin.
Get possibilities increasing large fees bitcoin transaction in the future when bitcoin raise to higher price make small fund transaction not really worth when adopting bitcoin as payment transaction. Get exceptional if have or support with lightening network without take any fees transaction yet and likely is most worth way for sending bitcoin.
Get possibilities increasing large fees bitcoin transaction in the future when bitcoin raise to higher price make small fund transaction not really worth when adopting bitcoin as payment transaction. Get exceptional if have or support with lightening network without take any fees transaction yet and likely is most worth way for sending bitcoin.
I agree, I'm sorry that the bitcoin experience hasn't been better.
As many of the members above have said, if Bitcoin fees go up and it happens for a very long time, the first thing the devs do is find a way out so that Bitcoin fees go down again. The ups and downs in Bitcoin fees won't happen forever, maybe only for a few days. Improvisations will continue to be made, updates will also continue to be made to improve the system in the Bitcoin Blockchain so that it is able to process more transactions and at low costs.
bitcoin devs knew of the exploit that would allow junk into the blockchain in 2016 when they were designing changes to bitcoin.. they ignored the problem
bitcoin devs knew of the exploit when it started to be abused in 2023(ordinals).. they ignored the problem
bitcoin since 2016 has multiplied from $1k to $70k yet they didnt put in fee bump, dust, fee rate changes to effectivelly allow fee's to even be 10x less to stay within reasonable range
instead they changed fee bump from 1sat/byte(1000sat/kb) to 5sat/byte (5000sat/kb) in 2017
they should have in those years changed to 100sat/kb(1sat/10byte)
so if you are waiting for devs to do something. you have already been waiting 7 years.. so.. when?
ill ask again
anyone else think that the next node release should measure fees in bumps of 1sat per 10byte(100sat/kb)
instead of 5sat per byte(5000sat/kb) bump default, especially when entering the year of the next halving cycle/ATH year
where by if a 226byte tx was
266sat(1sat/byte) then 1356sat (6sat/byte) then 2486sat(11sat/byte) defaults
but instead were starting from
23sat(1sat/10byte) 46sat(2sat/10byte) 68sat(3sat/10byte)
Sure, it sounds reasonable to me for base fee to adjust in order to reflect increasingly valuable satoshis.
In fact, your account makes me think... what if devs conspire to keep base fee high in exchange for kickbacks from miners?
What if we wanted to give 100sat to every one of the 5.3B networked people on the planet and jumpstart a new global economy? I guess we couldn't, at least not with Bitcoin as is... that should be the goal tho