Impressive. But if they had transferred it over Ethereum, with a modest 4 gwei gas price, it would have cost $0.015 and gotten first conf in about 50 secs. Or they could have splurged for next block and ~12-14 sec conf which would have been about $.07. https://t.co/Y8m8QyU1lU
This transaction was a lot more 'complex' than the vast majority of transactions. Let's not overthink the word complex though.
It appears as if Binance could have paid $3.75 for an almost guaranteed confirmation in the next block.
Most users will still pay about 6 cents for next block confirmation right now and through most of 2018 besides the madness in January and early February.
Permissionless. People theorycraft about calling their bank for a free wire. If you're able to do that, you've already done many, many things beforehand for multiple institutions to grant you the ability to transfer over $600M. You sought permission. You don't need to ask permission with BTC.
TL_JmanCrypto God | VEN: 174 QC | CC: 46 QC | WTC: 16 QC 4 months ago
It’s the low end of transactions not the high end that cost so much. $3 coffee is always a good barometer.
Unfortunately you, like many others are misinformed about how both banks and BTC work. Which is totally OK, because crypto is all still relatively new really.
I’ll try to explain what I mean and hope this helps clear up a few misconceptions.
Banks would charge far more than $7 for moving the same sum of $600m.
Also, BTC doesn’t charge $7 fees for all transactions, the fee is based on the size (not value) and the person sending BTC can choose the speed/priority which means choice to pay less (banks don’t give you a choice).
Banks provide below market rates for foreign exchange transactions (about -2%). BTC doesn’t charge more for sending across boarders.
Businesses can take payments using BTC for just a couple of cents. Lightening network allows thousands of smaller transactions to happen super quickly and just as cheaply.
Not forgetting that banks charge businesses monthly fees, transactions fees, paying in fees, and also around 2% for processing purchases by card. All these costs are eventually passed onto customers as part of the prices they charge for goods and services (so you do pay in the end).
You have 100s of low fee coins (either because of low usage or low fees by design). The point is that you're not going to use any of them to store $600M, therefore you replace transaction fee with an exchange fee (and more steps along the way that could go wrong)
Thing is, there are no such thing as 'moving funds between you own accounts' in bitcoin. Its all just addresses. You can, of course, have a 'bank' that keeps all money of all customers on one address, and keeps tabs on who owns how much, then you could possibly expect transferring between such customer accounts for free (or not for free, since banks have to earn their buck too)
Hmmm you obviously know nothing about banking. There’s no way you’d be able to immediately transfer out $600 million from any bank. They would most likely not have that amount immediately on reserve to pay out for a single customer.
Money stored in a bank ceases to be “your” money when deposited. In the $600m example, not only would they not be able to do it instantly, but you’d be filing one hell of a lot of paperwork on what you intended to do with it.
Thank you for your comments. I have a better understanding. I just hope the fees from last year don’t return and I don’t think they will with the info you provided and seeing Segwit increase as well as Lightning being developed and hopefully operational by 2019.
> just hope the fees from last year don’t return and I don’t think they will with the info you provided and seeing Segwit increase as well as Lightning being developed and hopefully operational by 2019.
If fees don't return (eventually) to those levels, then the security of the chain will be compromised. Fees are what pay miners as the mining reward gets smaller and smaller.
It is fees which guarantee Bitcoins monetary policy, and therefore scarcity and value. If you are hoping that fees on-chain stay low forever, then you have misunderstood Bitcoin and are going to be a prime target for someone to scam you into buying 'the next bitcoin' with 'transactions per second, low fees, instant, cheap' buzzwords.
Transaction fees are currently about 1% of the mining reward (https://fork.lol/reward/feepct), and this will eventually be 100% of the reward, so to ensure sufficient hashrate, you better hope for sufficient fees.
You either pay through inflation, or through fees. I want sound money, and as such, acknowledge that people using the blockchain will have to pay for said security through transaction fees.
Not forever... in 2120 when block reward stops, they can have fees. Now they can get their block rewards. The block reward is significantly higher than any fee. Let’s not worry about 100 years from now when we won’t be here...only saying that in relation to bitcoin not global warming or nuclear war. If we survive 100 years, my great great grandchildren should pay fees and hopefully they will be the ones collecting. For now, miners should focus on block rewards. One step at a time.
If fees return to those levels as you stated you hope, there won’t be a useful currency to the average person. Why send $3 to someone if fees are $25?! (Venmo can do that).
No one will use it and adoption drops. I can’t comprehend your mindset wanting high fees while we still have large inflation in block rewards. Fees can be dealt with further down the line. But if you want high fees, set your Trezor to the max. You’ll be first in line.
Plus off chain (Lightning) fees will be significantly lower than any on-chain transaction. Options are coming.
Not at all. Bitcoin needs to scale soon. Time to put up or shut up. They have the smartest minds working on scalability.
Otherwise it’ll fade away for a decade which maybe a good thing while the devs build cause it can’t be sustained in its current state. 20 years to develop a technology, yet we still trust and give them the benefit of the doubt.
Without adoption, there is no technology just great minds being wasted. Support the devs no matter the frustration.
It's possible, or uses another hosted wallet service that charges customers high fees to make revenue.
It's the bad/dark side of Bitcoin. A lot of new users do not understand or do not go through the process of truly owning Bitcoin and keeping private keys.
If we all use centralized exchanges/wallets, it's not too different from our traditional banking system.
First of all, use this bear market. educate yourself, to give the answer next time ! try to help people like u/KalEll66 !
Knowledge is power, and by understanding how bitcoin transactions work you are a millenium ahead of all the people around you.
So lets go:
Transaction fees are calculated by how big they are, now how much money is in them.
Look at this site:
as you can see, the median transaction size is around 226bytes.
The fastest and cheapest fee to get into the next block is around 14satoshi per byte, so 3164 satoshis fee for our median transaction. This is around 0.17USD right now.
If you dont need a confirmation in the next block this can go way lower.
(as low as 1-2 satoshi per byte, easy)
So the above mentioned binance transaction was around 5981byte, so way, WAY larger then your average transaction. this is because it probably is thousands of smaller transactions put together into one wich makes it larger.
This is the reason for the 7 dollar fee, since you still have to pay the tx fee per byte.
So your 4 dollar transaction wont cost you 7 dollar, because it probably is way way way smaller then the big binance transactions.
I hope you got it, and i hope you bookmark the site. you can check there if your wallet is overcharging you in fees at any given moment you want to transact.
Thanks for clarifying. I just remember last year, sending $8 to a friend being charged $25 fee from Coinbase. I know Coinbase implemented Segwit now so hopefully that won’t happen again.
Had this changed recently? I made a $250 usd transaction about a year ago, and it cost me $20 to move the coins from localbitcoin to my wallet, and another $20 to make the final transaction. I gave up on it as a means of exchange after that. It seemed more like gold, a good store of value, but not something you but stuff with.
I've paid anywhere from less than 2 cents to 15 cents for next block transactions since about the middle of February. What happened Nov 2017 to the end of January 2018 has seemed to create a long lasting impression that bitcoin transactions are always huge. An assload of network upgrade adoption and exchange tranaction batching techniques have occured since then.
I'm fine with 2 cent on-chain transactions right now. If they approach 30 cents, I'll fund an even larger lightning channel. Lightning has been working great for me. Instant, practically 0confirmation transactions that cost a penny of a penny.
Localbitcoin is a third party charging you fees for their service - that’s not the BTC transaction fee and you don’t need to use them (you can use some exchanges to purchase any amount of BTC without paying fees by placing stop orders, look into it).
The other fee is the transaction fee, there has been a lot of development over the last 12 months that have improved this with Segwit being the most significant.
Last year you probably paid over the odds for a couple of reasons - (1) you didn’t know you could choose your fee by selecting a priority/speed of transaction. (2) Segwit wasn’t an option back then. (3) You transferred during the crazy bull run that saw networks overly busy and miners able to charge higher fees.
Good news is now (1) you know (2) Segwit exists (3) the networks and exchanges have significantly increased capacity since last year and you can choose to transact when it’s quieter.
BTC is still pretty far off being ideal for being used for smaller everyday transactions but there’s loads of improvements coming (Lightning Network being the most exciting for me) and more credible 3rd party solutions than ever before (Bakt for me is really interesting, although not a favourite of many die hard BTC fans).
Hope that’s useful...
The whole point of BTC is that it’s different to traditional banking.
With all new stuff, it’s best to read the instructions first otherwise you might end up thinking something doesn’t work just because you don’t understand how it works.
Worse still, you could end up giving other people the impression something doesn’t work just because you don understand it properly.
With BTC there are loads of resources online to help people do their own research.
For this specific misunderstanding about high transaction fees, I’ve found the following video that should help you avoid paying too high fees again....
In addition, my favourite go to channel for truly understanding BTC is here.....
Hope you have time to check these out and trust you will find them useful.
Segwit matters so much. Without Segwit bitcoin is just a 1mb block size crypto with the best devs.
It’s going on the right direction again. I hope it is sustained: