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I've made a Bitcoin tipping service for reddit: https://news.bitcoin.com/bitcoin-tipping-reddit-minitip/

Currently users pay a flat 0.1 mBTC miner's fee to tip others since it's done entirely on-chain (which is a big deterrence from using the service). I had a thought though.

What if I made tips from user-to-user pay 0 transaction fees and make them available for withdrawal even at 0 confirmations?

The way the service works is that a user deposits say 5000 bits (5 mBTC) to a custodial address. This deposit appears in their balance after 1 confirmation.

So my thinking is, now that the amount in the balance is confirmed, the custodial account can send portions of that balance as tips to recipients who need not fear double-spends since the tips are not being sent directly from the sender's account.

The only issue I can see is that tips never get confirmed due to 0 fees, so I wanted to clarify. Is it possible that the transaction is never confirmed if the fee is 0?

Thanks

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Yes. It is possible that a transaction is never confirmed, even if it does pay a fee. Transactions that pay more fee take precedence, and after a while your old unconfirmed transaction will drop out of the mempool.

Edit: This answer originally stated that older transactions get prioritized, but that behavior is no longer active on the network.

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    The prioritization of older transactions is no longer done by most miners: see en.bitcoin.it/wiki/Transaction_fees#Priority_transactions. And in the current market environment, there are many more fee-paying transactions than will fit in each block, so there is no reason for a miner to include one with zero fee. – Nate Eldredge Mar 30 '17 at 16:09
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It's not only possible but extremely likely that transactions with zero fee will never confirm. Unlike what blues says in their answer, priority based selection was disabled by default in Bitcoin Core 0.12.0, so older transactions are probably not prioritized at all anymore (at least if miners use software based on Bitcoin Core 0.12.0 or younger, which we can't really tell).

I'm afraid that your proposal appears economically infeasible and will struggle with exactly the same challenges that made changetip give up their business.

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