
Bitcoin Core switching from hard-coded to flexible fees in next major release - FatalLogic
https://bitcoinfoundation.org/2014/07/07/floating-fees
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nazgulnarsil
One of two major problems solved. Now they need to fix block sizes before
miners are organized enough and tx fees are high enough to incentivize small
block sizes.

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wcoenen
Smaller block sizes are already advantageous because they propagate faster, so
they have a lower risk of being orphaned. A purely rational miner should only
add a transaction if its transaction fee outweighs the increased orphan risk.

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nazgulnarsil
That is an artifact of the current system, which as Gavin mentions, can
probably be fixed.

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ars
This sounds like a good idea, but won't really change anything since everyone
will have to pay the new fees, and it's just an arms race.

It does not fix this problem:

"and if there are more transactions than will fit they take the highest-fee
transactions first."

So what he's saying is that the bitcoin network can not handle the typical
volume of transactions? So you have to prioritize things?

If it can't do it now, today, when it's small, there is simply no way bitcoin
is going to grow, which is troubling for the future of bitcoin.

The requirement that every transaction is recorded forever is already causing
problem (the block chain is HUGE). And the fees are just a method to try to
reduce the side of the data.

Instead a completely different method should be used: A cleanup cycle where
old blocks are consolidated and discarded. (The miners agree that the new
block is valid, then the old block is no longer needed.)

(Also as a side note bitcoin will never survive past the last mined block.
Miners will not continue to mine just for fees, but the amount of entrenched
hashing power in place by then means that destroying the network will be
trivial for people.)

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imaginenore
> _So what he 's saying is that the bitcoin network can not handle the typical
> volume of transactions? So you have to prioritize things?_

No, it has to do with fighting spam and DoS attacks.

If there's no lower bound for the fee, and there's no prioritization, there's
nothing stopping anybody from sending trillions of transactions to trillions
of addresses non-stop.

> _the block chain is HUGE_

No, it's not. It's 20GB. Many modern games are larger than that.

A 4TB hard drive can be bought for $120. 20GB of that represents the total
cost of $0.60. Oh noes!

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DSMan195276
20GB still isn't something to scoff at if it wants wide-spread adoption. It's
huge when you consider that anybody who wants to attempt to run Bitcoin has to
download all 20GB _just to get things installed_. I have approximately a 1.5MB
download speed. The space on my HD I can live without, but I gave-up trying to
get the bitcoin-qt program to sync after about a week (I ran it mostly non-
stop - I obviously wasn't getting anywhere near 1.5MB down, syncing the block-
chain is slow) and just bought the little bitcoin I wanted straight into an
exchange and then bought the other coins I was planning to buy anyway so I
didn't have to mess with bitcoin myself.

The fact is, in it's current state the huge block-chain makes bitcoin anything
but user-friendly.

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lockes5hadow
You don't have to download the whole block-chain to use bitcoin.

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simcop2387
While true, I don't believe many clients make it easy to do that still.

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tlrobinson
Electrum and MultiBit on the desktop are SPV clients.

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simcop2387
Ah I didn't know about them. I'll have to check them out, I've had annoyances
in the past because i never leave bitcoin-qt open to keep it in sync.

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IgorPartola
Will this change let me have my transactions confirmed faster than currently
possible if I pay higher Tx fees? Similarly, can I pay next to nothing and
have the Tx confirmed eventually?

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gibybo
In principle you can already do this. Whether it works or not depends on the
mining pools though, not necessarily this protocol change (although it may
influence them). Some pools will prioritize transactions with higher fees,
some will prioritize first come first serve after a minimum fee.

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throwaway889
> Some pools will prioritize transactions with higher fees, some will
> prioritize first come first serve after a minimum fee.

Are there really any pools that don't prioritise higher-fee txn?

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zmanian
In proof of work cryptocurrencies, transaction fees will become increasing
important.

Mines need feedback loops with users to ensure that transaction fees are high
enough to avoid congestion in transaction processing.

As the blockreward drops, transaction fees will also need to high enough to
sustain enough economic interest in mining to protect against 50.1% attacks on
the blockchain.

