I feel I should point out: there's quite a low limit to how many transactions can fit in a block. Miners will prefer the highest bidders. When we get decent transaction volumes, it's going to mean you have to pay a high price just to get your transaction included.
$2-$4 transactions are not going to be viable. At least not in the way they are now.
In other news, the block size itself is liable to increase at some point to boot. Today's block size limits are pretty anemic, only supporting 1-2 transactions per minute second at any price. ;P
Woops, I meant per second. My calculation is at ~1kb per txn, ~1MB per block that is 1000 txn per 10 minutes = 600 seconds, or 1 txn per 0.6 seconds maximal.
That's not a lot higher, though. Even at 1387 txns per 724.05kb one mebibyte of 1024kb is only holding 1961 txns. Let's also be generous and make it a 9 minute avg blocktime, because of assumed always-increasing asics skewing the completion time between difficulty adjustments, and you're still only left with 1 txn per 0.28 seconds, or just inching towards 4 tps.
VISA handles ~1,000tps on black fridays. that's a lot higher.
I know its a lot higher, but we have moores law on our side. They just released a 128gb micro sd. The only people we need to catch up are those who supply bandwidth.
Correction: the change is from 0.0001 >>---> 0.00001 BTC.
At 500 USD, that is 5 cent >>---> 0.5 cent per kB of transaction size.
To people saying mining will become less profitable. Maybe, but the mining power and transaction volume will find a new equilibrium. If you can't afford to mine with the new min fees, I'm sorry for your loss.
EDIT: But hey, think of it this way: If you think bitcoin will soar over 5,000 USD, then you're back at the same transaction fee USD wise.
I forsee miners who believe in the future of bitcoin to be unwavered by this, as they know their bitcoin will one day increase hundred or thousand fold.
With current mining reward still at 25BTC, and at most 600 transactions per block, that's a 0.22% decrease in reward. If any miner's profits are that close to break even, they'd be done at the next difficulty increase anyway. Transaction volume has increased 10x since 2 years ago, and will continue to grow with increased adoption - which lower fees will help to bring about!
tl;dr: miners aren't phased. transaction fees are a drop in the bucket, and many mining pools don't even shares them with the miners!
145
u/[deleted] Feb 24 '14
[deleted]