Assuming all Bitcoins had been discovered and fees were paid in US dollars (please ignore the obvious problems), what would an appropriate fee be? Would it depend on the size of the transaction? How would it scale?
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What kind of fees? For what kind of service? If you are asking about the transaction processing fee, you can see how much they are now, and convert that to USD using the current exchange rate. And of course, if they had to be paid in dollars the obvious practical problems would make it vastly more expensive, so what point is there is ignoring these problems?– ThiloCommented Mar 20, 2012 at 2:03
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As for how much the transaction fee will turn out to be: bitcoin.stackexchange.com/questions/876/…– ThiloCommented Mar 20, 2012 at 2:06
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1 Answer
Instead of asking what would be the fees if they were paid in US dollars, I think you meant to ask "what will be the purchasing power of the transaction fees, measured in today's US dollars".
There's some discussion of this at How much will transaction fees eventually be? but the short answer is that nobody knows. Left to their own devices the fees will be close to 0, which is a problem. No consensus has been achieved on how to fix the problem. Personally I think the goal should be fees on the order of 0.1% + 1 cent.
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1I'm not sure the optimal fee should be even measured in percentages. Since the work being done does not correlate to the size of the tx, perhaps the fee should be flat. Commented Mar 20, 2012 at 8:23
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1@ripper234: By the same logic there shouldn't be a fee per transaction because the work doesn't correlate with the number of transactions (beyond a negligible degree). It's a completely artificial construct designed to incentivize miners to secure the network while not being too hard on senders. It stands to reason that senders of large amounts would be ok with paying a larger absolute fee. In other words, the supply side is unbounded, so pricing should be based on the demand side (for a target total fees paid). Commented Mar 20, 2012 at 10:57
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A technical possibility to reach the target equilibrium (approximately) is to set a hardcoded limit on both the data size of a block and the total bitcoins transferred. This way senders will compete on quota for both number of transactions and number of bitcoins (necessitating a larger fee for large transfers). Commented Mar 20, 2012 at 10:57
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Assuming the market is competitive, there will always be miners willing to process transactions for their cost + some marginal profit. I can imagine a miner that charges a flat fee being profitable. The truth is ... we just don't know these details yet, as we have discussed on a few threads over at the forum. Commented Mar 20, 2012 at 15:07
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@ripper234: As I said the cost is not in including transactions, it's in calculating hashes. Adding a transaction has a cost close to 0. Competition exists only within the protocol-dictated limits which are arbitrary and artificial. If a limit on total bitcoins sent per block is placed (which I think should), then a miner charging a flat fee will not be competitive. Commented Mar 20, 2012 at 16:03