Pardon my ignorance, but where's the "bite" of posting this now?
Is it so that transferring bitcoin now costs more than $0.01? And the amount being transferred is subject to some consideration? (if so, by whom? and in what way?)
Is it so that transferring bitcoin now costs more than $0.01? And the amount being transferred is subject to some consideration? (if so, by whom? and in what way?)
Last I checked, current market rates are about $30 for a typical transaction.
To happen, transactions must be included in a fixed size block in the global block chain. Currently, there is not enough room per block, so space is auctioned off on a per byte basis. The size of a transaction is not related to the number of bitcoins involved, but the number of "utxo" involved. Essentially, if Alice sends you 1BTC and Bob sends you 1BTC, you do not simply have 2BTC, you have 2 utxo's each worth 1BTC. If you want to send more than 1.5BTC in a single transaction, you will need to include both utxo's, which will increase the size and therefore the fee. In contrast, if Carol sent you 2BTC in a single transaction, you can then send 1.5BTC at the same cost as 1BTC because only 1 utxo is involved.
In a world with sufficeint space in a block, you could still need fees because the miners might decide to leave empty space instead of includeing free-rider transactions. This does not actually save them money, but if they control a non-trivial amount of the hashrate, it could encourage people to increase there fees in order to decrease their confirmation time (especially if all the major miners do this).
Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now.
One user up above said: "If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee"
My question is: is there any end in sight where transaction costs might come down? Because otherwise BTC is totally unusable as a currency.
I think folks who are really invested in BTC (like the Winklewoss brothers who have holdings above a bil value (in essence, illiquid, as holdings of that amount tend to be) might work to make transactions low using whatever new technology thereby making it a viable monetary platform, otherwise I don't see this thing as not failing spectacularly sometime in the future.
Big blockers believe that it should possible to solve this problem directly, by increasing the block size limit. "Small blockers" argue that this is not a suitable solution in the long term because the block size would need to grow to gigabytes per minute to compete with existing payment networks and that would be technically challenging and politically undesirable (since only a handful of well-connected nodes would be able to handle all that traffic).
The promised solution, according to the small blockers, is to add extra layers to the bitcoin network, with things such as the Lightning Network. Regular folk would clear their transactions through payment processors and only these payment processors would still use the original bitcoin network. Big blockers complain that these second-layer solutions are not truly decentralized and do not conform to the original ideals of bitcoin. They also point out that there are lots of unsolved problems and technical challenges for these second layer solutions, which have been constantly "just around the corner" for a long time...
Pending transactions with anything above 140 satoshis per byte are currently clearing, as you can see here:
https://jochen-hoenicke.de/queue/#2d
The average bitcoin transaction is around 250 bytes, which means transaction fees in the area of 0.00025BTC and up are clearing in half an hour or less. That's about $4.
Lets keep the hyperbole to a minimum, please?
P.S. As you can see by mousing over that chart a bit, there /are/ a lot of people paying as much as $50 for a transaction. These people are sometimes morons, but more likely they are transacting on exchanges where they have to use predefined fees instead of setting them themselves. This is why it's important to use your own wallet instead of a web wallet. It lets you control these kinds of things.
P.P.S If you set those charts to 6 months you'll see some interesting patterns start to show up. Speculation on what's causing them is left as an exercise for the reader.
There's a lot of politics involved. Some people have vested interests in generating a fee based panic. I don't know the full picture though.
It's what bitcoin core developers prefer. They don't want segwit to bloat the blocksize before lightning is ready.
The community is considering several approaches to mitigate the problem and the different approaches have exposed the distinct underlying motivations of miners, merchants, exchanges and customers/users.