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User Info Bitscam And Other Extraordinary Insanities; entered at 2017-12-06 14:49:17
Posts: 4
Registered: 2010-11-02 Dallas, TX

BTC does have a voluntary transaction fee built into the transaction logic. The way I understand it, miners can set a minimum transaction fee for which they are willing to work for in addition to being awarded BTC for confirming a block. Recently, people have had to start adding a nominal fee to their transactions or risk not being picked up by a miner for several hours as several of the bigger miners are upping their minimum transaction fees from zero. Transaction fees are still a small part of the revenue to miners, but each time the BTC award is ratcheted down as the coin limit is approached, the transaction fee dynamic (aka ponzi scheme dynamic) will become more apparent. The creators of BTC added in transaction fees because even they knew that eventually the mining of new coins would not be sufficient incentive to operate the network.

BTC advocates claim they are competing against the likes of Visa and other financial institutions and have lauded the (artificially low) transaction fees as a sign of success. Obviously once you add in the cost of incremental BTC awarded to each confirmed block, the transaction fees for BTC are much higher than any other payment system. Other BTC advocates claim BTC is merely the "wealth layer" of cryptos and high frequency transactions will be consummated by other coins in the "transaction layer"; as such, "wealth layer" transactions have little need for low fees and quick confirmation and so therefore the current system is fine. I still think this will all catch up with BTC eventually (other coins might make this work, but I don't think it will be BTC).

The last subject that I would like to bring up is the increasing size of the blockchain. Eventually, it will be several TB large and will encourage the consolidation of miners into a location that is geographically small as to facilitate the constant re-downloading of a multi-TB sized block chain among the miners. This location will most likely be in China, and will contribute to BTC getting close to the 51% problem (if a single miner controls 51% of mining capacity, they can unilaterally control the market).
2017-12-06 14:49:17