Author Topic: "High" Transaction Fees  (Read 15043 times)

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Offline VoR0220

Why not just do it like Bitcoin does it and have microtransactions handled by the Wallet? I agree that the fee is a tad high...maybe drop it down to 0.15c? I'm not exactly sure where the answer lies here. One additional stream of revenue IMO is via advertisements.
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Offline Shentist

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i just got a nice idea!

would it be possible for advertiser to pay for the fees or some part of it?

You can choose to run the wallet with business adds and the advertisers could pay for the transactions....maybe a little expensive, but the members are a really good known target group to get your add out.

Offline karnal

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Does anybody here even know what ROI is?


Can't tell if this is rhetorical or not, but it stands for Return on Investment, right?

I think I'd like to see people using Primecoin for micro-transactions.

No, ROI is French for KING

I lol'd :)

Offline bytemaster

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Offline Permie

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk.

Yeah but its even worse for market-makers. On external exchanges, there is zero cost for setting, cancelling and moving orders, only for fills. In comparison, based on my current understanding, moving a single pair of bid/offer spread orders 100 times per day (to adjust to movements in the fair price of the asset) would cost $16 per day (net of cash backs if you're a lifetime member). I'm concerned about the economics of this, especially for privatised bitAsset issuers that wish to support their tokens.

I also need to clarify what happens if a market-maker's wall is chewed at by lots of small orders (usually the case with market-making). Does that mean the market-maker experiences a fixed cost for each small fill? If so, this would give the market-maker a lot less control over cost than on external exchanges, and make it even less economic.

Since it's price takers that have the control over their trade size, and market-makers are providing the efficiency in the market, would it be better to always put the combined fee on the price-taker?

Also, allowing market-makers to place relative orders (that do not need constant changing on the network) would help a lot, though I know there have been past issues raised around the technical implementation of this.

As another consideration, could the following be considered:
- setting a percentage fee on market transactions, consistent with other exchanges
- setting a lower fee on market transactions compared to other token transfers

Apologies if I am misunderstanding the intended application of these higher fees in market exchanges, but the efficient operation of the markets is critical to the entire success of bitShares.

[Xeldal's comments also reflect the same concerns]
(bump)
Could an nlocktime type transaction allow market orders to be changed as many times as desired before being executed and paying the fee?
I agree that market makers need to be encouraged to trade on the DEX as it useful to the wider ecosystem and draws in more capital. How much value can market makers bring to BitShares and is it more than that of a normal user?
If bts profits can be described as (transaction volume*transaction fees) then the value added by market makers in the network should be considered and perhaps reflected in their fee structure.
Are more users attracted to trade on the DEX as a result of efficient market makers and do the transactions generated by these users warrant a discount on market maker transaction fees?
How can a market maker be distinguished from a normal user?

I like EstefanTT's idea of transactions below a certain value are cheaper but 100% is paid to BitShares and 0% to referrers.

How about a Microtransaction account type?
These could be popular with sites like twitch and youtube. The Micro account allows companies to pay for their users transaction fees upfront on their behalf. Users are then referred via this Micro account. The company plans to benefit in other ways by enhancing the user experience of their customers by allowing microtipping. Perhaps this adds value to a UIA they issue or drives traffic to their website or some other benefit that is worth paying the transaction fees for their users upfront.
The Micro account fees could scale depending on how many transactions they want to prepay for. The fee amount can be determined by how much value is added by microtransaction functionality on the BitShares network. Maybe there is a discount on paying for transactions on a Micro account, maybe not.
The value added by BitShares microtransaction support would be factored into the discount for the Micro account.

Edit: This thread seems to answer most of these questions
https://bitsharestalk.org/index.php/topic,16875.0/topicseen.html

Transfer fees will be $0.20 (my proposal)  but that doesn't mean ALL fees for ALL operations are the same.

Market Orders can charge just $0.01 to place and then charge $0.20 when they get matched and be free to cancel. 

Account registration (for cheap names) can be just $0.01.   

I just wanted to throw that out there because many people seem to think there is only one "Transaction Fee", when in reality these are the fees that can be configured now:

Code: [Select]
      uint32_t key_create_fee; ///< the cost to register a public key with the blockchain
      uint32_t account_create_fee; ///< the cost to register the cheapest non-free account
      uint32_t account_len8_fee;
      uint32_t account_len7_fee;
      uint32_t account_len6_fee;
      uint32_t account_len5_fee;
      uint32_t account_len4_fee;
      uint32_t account_len3_fee;
      uint32_t account_len2_fee;
      uint32_t account_premium_fee;  ///< accounts with premium names; i.e. @ref is_cheap_name returns false
      uint32_t account_whitelist_fee; ///< the fee to whitelist an account
      uint32_t delegate_create_fee; ///< fixed fee for registering as a delegate; used to discourage frivioulous delegates
      uint32_t witness_withdraw_pay_fee; ///< fee for withdrawing witness pay
      uint32_t transfer_fee; ///< fee for transferring some asset
      uint32_t limit_order_fee; ///< fee for placing a limit order in the markets
      uint32_t short_order_fee; ///< fee for placing a short order in the markets
      uint32_t publish_feed_fee; ///< fee for publishing a price feed
      uint32_t asset_create_fee; ///< the cost to register the cheapest asset
      uint32_t asset_update_fee; ///< the cost to modify a registered asset
      uint32_t asset_issue_fee; ///< the cost to modify a registered asset
      uint32_t asset_fund_fee_pool_fee; ///< the cost to add funds to an asset's fee pool
      uint32_t asset_settle_fee; ///< the cost to trigger a forced settlement of a market-issued asset
      uint32_t market_fee; ///< a percentage charged on market orders
      uint32_t transaction_fee; ///< a base price for every transaction
      uint32_t data_fee; ///< a price per 1024 bytes of user data
      uint32_t signature_fee; ///< a surcharge on transactions with more than 2 signatures.
      uint32_t global_parameters_update_fee; ///< the cost to update the global parameters
      uint32_t membership_annual_fee; ///< the annual cost of a membership subscription
      uint32_t membership_lifetime_fee; ///< the cost to upgrade to a lifetime member
      uint32_t withdraw_permission_update_fee; ///< the cost to create/update a withdraw permission
      uint32_t create_bond_offer_fee;
      uint32_t cancel_bond_offer_fee;
      uint32_t accept_bond_offer_fee;
      uint32_t claim_bond_collateral_fee;
      uint32_t file_storage_fee_per_day; ///< the cost of leasing a file with 2^16 bytes for 1 day
      uint32_t vesting_balance_create_fee;
      uint32_t vesting_balance_withdraw_fee;
      uint32_t global_settle_fee;
      uint32_t worker_create_fee; ///< the cost to create a new worker
      uint32_t worker_delete_fee; ///< the cost to delete a worker

« Last Edit: June 11, 2015, 11:40:20 pm by Permie »
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Offline Ander

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Does anybody here even know what ROI is?

Aye. This is the one thing I dew know. Rare Oral Infection. Tha commoners get it often in Winterfell.

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Offline starspirit

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk.

Yeah but its even worse for market-makers. On external exchanges, there is zero cost for setting, cancelling and moving orders, only for fills. In comparison, based on my current understanding, moving a single pair of bid/offer spread orders 100 times per day (to adjust to movements in the fair price of the asset) would cost $16 per day (net of cash backs if you're a lifetime member). I'm concerned about the economics of this, especially for privatised bitAsset issuers that wish to support their tokens.

I also need to clarify what happens if a market-maker's wall is chewed at by lots of small orders (usually the case with market-making). Does that mean the market-maker experiences a fixed cost for each small fill? If so, this would give the market-maker a lot less control over cost than on external exchanges, and make it even less economic.

Since it's price takers that have the control over their trade size, and market-makers are providing the efficiency in the market, would it be better to always put the combined fee on the price-taker?

Also, allowing market-makers to place relative orders (that do not need constant changing on the network) would help a lot, though I know there have been past issues raised around the technical implementation of this.

As another consideration, could the following be considered:
- setting a percentage fee on market transactions, consistent with other exchanges
- setting a lower fee on market transactions compared to other token transfers

Apologies if I am misunderstanding the intended application of these higher fees in market exchanges, but the efficient operation of the markets is critical to the entire success of bitShares.

[Xeldal's comments also reflect the same concerns]
(bump)

Offline EstefanTT

Micro transactions seem to be the only market BitShares 2.0 can't absorb.

As I see it, it gonna be a big market in the future with advertising, online game, tips,  online shops selling images or data contents, ...

It's also easier to get a new BitShares users via a gaming plateform or any micro paiments system (because it's fun) that find a person looking for an alternative to his traditional banking system.

If we can deal with 180 000 TPS right now and 1M if needed in the future. Is that impossible to charge 0.01$ for any purchase inferior to 1$? Splitting it between the referrer and the reserve fund or if it's more economical for the system the whole 0.01 to the reserve fund.

If it absorb half of the TPS we can process it would represent about 900$/day. Is it less than theses transactions would cost to the system ?
« Last Edit: June 11, 2015, 03:08:40 pm by EstefanTT »
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Offline Jon Snow

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Does anybody here even know what ROI is?

Aye. This is the one thing I dew know. Rare Oral Infection. Tha commoners get it often in Winterfell.

Offline tonyk

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Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Tuck Fheman

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Does anybody here even know what ROI is?

Rate of Insolvency?

merockstar

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Does anybody here even know what ROI is?


Can't tell if this is rhetorical or not, but it stands for Return on Investment, right?

I think I'd like to see people using Primecoin for micro-transactions.

No, ROI is French for KING

MDR  +5%

Offline onceuponatime

Does anybody here even know what ROI is?


Can't tell if this is rhetorical or not, but it stands for Return on Investment, right?

I think I'd like to see people using Primecoin for micro-transactions.

No, ROI is French for KING

merockstar

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Does anybody here even know what ROI is?


Can't tell if this is rhetorical or not, but it stands for Return on Investment, right?

I think I'd like to see people using Primecoin for micro-transactions.

Offline Method-X

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if technical possible we should introduce "relativ" orders.

what does i mean?

i could place an order with the properties "buy bitUSD 0.2% above the feed price"
the market maker just needs to place his order 1 time and not multiple times.

 +5% I'm pretty sure this was talked about previously but there is a technical issue holding its implementation back.

Offline Shentist

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if technical possible we should introduce "relativ" orders.

what does i mean?

i could place an order with the properties "buy bitUSD 0.2% above the feed price"
the market maker just needs to place his order 1 time and not multiple times.

Offline starspirit

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk.

Yeah but its even worse for market-makers. On external exchanges, there is zero cost for setting, cancelling and moving orders, only for fills. In comparison, based on my current understanding, moving a single pair of bid/offer spread orders 100 times per day (to adjust to movements in the fair price of the asset) would cost $16 per day (net of cash backs if you're a lifetime member). I'm concerned about the economics of this, especially for privatised bitAsset issuers that wish to support their tokens.

I also need to clarify what happens if a market-maker's wall is chewed at by lots of small orders (usually the case with market-making). Does that mean the market-maker experiences a fixed cost for each small fill? If so, this would give the market-maker a lot less control over cost than on external exchanges, and make it even less economic.

Since it's price takers that have the control over their trade size, and market-makers are providing the efficiency in the market, would it be better to always put the combined fee on the price-taker?

Also, allowing market-makers to place relative orders (that do not need constant changing on the network) would help a lot, though I know there have been past issues raised around the technical implementation of this.

As another consideration, could the following be considered:
- setting a percentage fee on market transactions, consistent with other exchanges
- setting a lower fee on market transactions compared to other token transfers

Apologies if I am misunderstanding the intended application of these higher fees in market exchanges, but the efficient operation of the markets is critical to the entire success of bitShares.

[Xeldal's comments also reflect the same concerns]

Xeldal

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

Im interested in this also.  As far as I can tell, it would be outrageously expensive.  Its already expensive even at 0.1 BTS.  You'd spend $40 easy on each market you tried to make, using the same strategies. You'd have to adopt a different, much more conservative approach.  Spreads would widen, liquidity would be hampered.  Without either relative orders or auto-routing its not looking very attractive.

Could orders be a different transactions class with filled orders taking the fee?

What happens when there are smart contracts, is every instruction going to have a flat $0.20 fee?

I gather that there is a separate fee, for example; to send encrypted messages; defined by the number of bytes, yes?  And instructions to create a UIA have seperate fees as well.  So separate classes of transactions/instructions are common.

Quote
And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

I think the fee will be the same, always $0.20 paid by the sender, regardless of member class.  Paid members simply get a portion of that back.


Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk. 

The fee on centralized exchanges is only for completed trades.  BitShares charges a fee just to place the order, and then again to cancel it..  In a typical market you might change your order 500 to 1000 times in a day.

Offline merivercap

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk. 
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Offline starspirit

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

My understanding is that the fee itself is not different.  The difference is where the fee goes.  Lifetime members receive 80% of the fees they pay back as loyalty rewards, similar to how many credit card reward programs operate.  Subscription members get 50% of their fees, and basic users don't get anything back.  Subscription and basic have some of their fees diverted to their recruiters, and everything else goes to back to the network pool out of circulation.
Got it, thanks Trog.
Now still the question on efficient operation of markets.....

Offline Troglodactyl

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

My understanding is that the fee itself is not different.  The difference is where the fee goes.  Lifetime members receive 80% of the fees they pay back as loyalty rewards, similar to how many credit card reward programs operate.  Subscription members get 50% of their fees, and basic users don't get anything back.  Subscription and basic have some of their fees diverted to their recruiters, and everything else goes to back to the network pool out of circulation.

Offline merivercap

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Has NOBODY here ever used Paypal??!! You guys who just use crypto are spoiled! :)

https://www.paypal.com/al/cgi-bin/webscr?cmd=_display-receiving-fees-outside

The transaction fees are $0.30 + % depending on if you are using your paypal balance or your credit card etc.

Paypal will allow you to eat the transaction charge if it's going to a friend or family member.. but if its going to a merchant for a product or service.. the only choice is to pass it on to the merchant.

I could have bought a house with the fees I have paid to paypal over the years.. merchants expect the same.. BitShares even in its highest fee is still +33% LESS!

I think if this whole thing really becomes an issue.. I think a similar approach to having 'Merchant' user account class could help direct the fees with more control for the end user.

Just a thought.

Paypal makes money from service fees similar to the traditional banking/credit card system.  For person to person transactions there are no fees.  Most non-merchant users did not notice any fees transferring money back and forth between each other.  As you mentioned there was some change later in its history when Paypal started asking users if the transaction was to 'friends/family' or for 'products/services'.  They would charge for the latter, but not the former.   It's not that the sender 'eats' the transaction charge.  Paypal just does not charge anything.
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Offline starspirit

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I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Offline BunkerChainLabs-DataSecurityNode

Has NOBODY here ever used Paypal??!! You guys who just use crypto are spoiled! :)

https://www.paypal.com/al/cgi-bin/webscr?cmd=_display-receiving-fees-outside

The transaction fees are $0.30 + % depending on if you are using your paypal balance or your credit card etc.

Paypal will allow you to eat the transaction charge if it's going to a friend or family member.. but if its going to a merchant for a product or service.. the only choice is to pass it on to the merchant.

I could have bought a house with the fees I have paid to paypal over the years.. merchants expect the same.. BitShares even in its highest fee is still +33% LESS!

I think if this whole thing really becomes an issue.. I think a similar approach to having 'Merchant' user account class could help direct the fees with more control for the end user.

Just a thought.
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Offline merivercap

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Ok... lets see some estimates:  how many total "micropayments" need to be made before the cost of implementing support for them is covered?

What does the cost of implementing support mean?

I'm fine with not being focused too much on low transaction fees in general as a business.   However for micropayments I wouldn't look too much on the cost side, but the value side of a network effect. 

1) Global developing population is: ~6 Billion out of 7 Billion Total World Population (Over 75% have mobile phone access)
http://www.prb.org/Publications/Datasheets/2012/world-population-data-sheet/fact-sheet-world-population.aspx
http://www.pcmag.com/article2/0,2817,2407335,00.asp

2) # of Online Content Generators: As of April, Tumblr has 227 million blog accounts
http://www.statista.com/statistics/256235/total-cumulative-number-of-tumblr-blogs/

3) Total iTunes downloads since inception to 2013: 25 billion
http://www.digitalmusicnews.com/permalink/2013/02/06/cannibalization
"According to IFPI stats, paid downloads traditionally represent about 1/20th of broader downloads (the rest being illegally obtained). Which means there at least half-a-trillion downloads waiting for or entering a cloud-enabled reincarnation"

Also there is a case to be made that a 'free' strategy and minimizing friction as low as possible can work very well.  Facebook, LinkedIn, Twitter, Pinterest, Paypal etc were essentially free in their growth phases. 

Anyways I think the 20 cent general fee is fine, but it would be great to lower transaction fees (maybe 1 cent?)  for anything less than $1 (or other small amount) would accommodate a lot of attractive sectors.
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Offline Pheonike

Its just like here in the US.  When you use a debit card you pay the fee. When you use a credit card the merchant pays the fee.

Offline monsterer

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.
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 I am starting to think that this system might actually work...

The merchant just knows that when he post "gadget A" for $2.23 bitUSD he will actually be receiving $2.03. So it is easy for him to adjust the price the other way around - I want 2.05bitUSD for this item so I must post 2.25 bitUSD as a price.[what I need net plus the max fee]

 It is trivial for the client of the buyer to convert the 'Send $2.23 at the highest possible fee' to the amount needed to be send with the actual fee for this send-from account. In other words, in the client the default sent amount will be "Inputted Amount - max fee + actual fee"

[edit]
A step further for ease of transition will be the 'sender's' client to even display - "Send $2.23;  Cash-back/Refund $0.16".

« Last Edit: June 10, 2015, 07:07:35 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline profitofthegods

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In the user interface, when the user says they want to send $100, the transaction that it will create will be a send $99 and pay $1 fee.  The receiver will see "receive $100 and pay $1".   

How do you pay for anything at a store if you always send less than the amount you specify?

However, if you provide an option to do both, you will confuse users. IMO better to stick to the original method.

How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Offline monsterer

In the user interface, when the user says they want to send $100, the transaction that it will create will be a send $99 and pay $1 fee.  The receiver will see "receive $100 and pay $1".   

How do you pay for anything at a store if you always send less than the amount you specify?

However, if you provide an option to do both, you will confuse users. IMO better to stick to the original method.
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Offline clayop

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as for micro transactions:

wouldn't it be possible to charge a % fee for payments under 20 BTS? on the other hand, people could spam the chain to save fees...

or give basic users 1 TX under 20 BTS for 1BTS fee per month?


IMO, micropayment should be applied only to *SmartCoins* not to BTS.
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Offline CLains

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maybe we should have a separate thread to brainstorm microtransactions, just to make sure we're not missing out on anything

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Implement ACCT between Qora and Bitshares, then use Qora for micropayments, because its cheap and the transaction fee is low?  :)

 +5% +5% +5%  ;D

Offline fav

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as for micro transactions:

wouldn't it be possible to charge a % fee for payments under 20 BTS? on the other hand, people could spam the chain to save fees...

or give basic users 1 TX under 20 BTS for 1BTS fee per month?

OR

Implement ACCT between Qora and Bitshares, then use Qora for micropayments, because its cheap and the transaction fee is low?  :)

Offline Ander

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Implement ACCT between Qora and Bitshares, then use Qora for micropayments, because its cheap and the transaction fee is low?  :)
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Offline clayop

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If I sent to a basic account that has a balance of 20 bitUSD ,100 times 1 cent, will I empty his account?

Sent from my ALCATEL ONE TOUCH 997D

No... "sender still pays". 

Look at it this way, if a merchant requests payment of $100 there are several options:

User sends $100 and merchant receives $99
User sends $101 and merchant receives $100

All that really matters is if the merchant is willing to accept $99 after fees as payment equal to $100. 

In the user interface, when the user says they want to send $100, the transaction that it will create will be a send $99 and pay $1 fee.  The receiver will see "receive $100 and pay $1".   

So simply by changing how we interpret the input and display the output we can change the appearance of who is paying the fee.    This is all MasterCard and VISA are doing.

Can user choose including fee in the payment or not?
Sometimes receivers ask exact amount of payment (e.g. $12.34) and the current method seems to be inconvenient for this purpose (how much do I have to send including fee? 12.35123???)
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Offline bytemaster

If I sent to a basic account that has a balance of 20 bitUSD ,100 times 1 cent, will I empty his account?

Sent from my ALCATEL ONE TOUCH 997D

No... "sender still pays". 

Look at it this way, if a merchant requests payment of $100 there are several options:

User sends $100 and merchant receives $99
User sends $101 and merchant receives $100

All that really matters is if the merchant is willing to accept $99 after fees as payment equal to $100. 

In the user interface, when the user says they want to send $100, the transaction that it will create will be a send $99 and pay $1 fee.  The receiver will see "receive $100 and pay $1".   

So simply by changing how we interpret the input and display the output we can change the appearance of who is paying the fee.    This is all MasterCard and VISA are doing.





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Offline liondani

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If I sent to a basic account that has a balance of 20 bitUSD ,100 times 1 cent, will I empty his account?

Sent from my ALCATEL ONE TOUCH 997D


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Ok... lets see some estimates:  how many total "micropayments" need to be made before the cost of implementing support for them is covered?

The total might be less than zero, if the value gained exceeds the cost. 

If it means scrapping the referral program then i think the cost goes through the roof and possibly no conceivable amount of micro transactions would cover the cost.

What is the value gained by supporting?
What do we lose by not supporting?


There are certainly applications for micro-transactions.  If we don't have them, we can't support those applications.
That's a loss.

I suppose someone who expects to receive more than 625 micro-transactions, as a lifetime member, would (after the 625th tx) at least be on par with Bitcoin @ $0.04 per tx.  I think this may be a significant barrier though.

is $0.10 even considered 'micro'?  How does bitcoin support sub 4 cent transactions? no fee and pray?

Maybe micro services just need to be centralized offchain, or use some other blockchain that's cheaper.  or a cheap/slow/efficient bitshares sidechain w/ smart contracts to pool and release over thresholds.    BitShares-Micro. IDK

Offline bytemaster

Ok... lets see some estimates:  how many total "micropayments" need to be made before the cost of implementing support for them is covered?

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Offline cass

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Micropayments are very expensive for the network to process, especially when competing against real financial use cases.
i would love if you can explain in a new post what does this really mean!

me too, as i think, the micropayment sector is an important feature!  +5%
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Apple is something completely different and surreal. It attracted millions of users on their second phase, because they sold a mp3 player with big storage. The good thing about it is that it did not look like a big hard drive, was "easy" to use and locked them into iTunes. Those locked in users were later on (with more money) marketing lure into the other iThings.  Saying so the iPod with a touch screen was a good innovation.

Back to costs, if I want to send some tokens to 200,000  (>1 cent value) to users that will cost a fortune, and they won't be happy if they have to pay for it. My idea was to reward for usage of an application.

Now available.  The exact same thing we sold you last year, but now 10% smaller and available in gold.

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Offline puppies

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Not mentioned, but we plan on showing the receiver of the funds paying the fee rather than the sender.   So it will work just like paypal.

If that means I can buy something online without paying a transaction fee then

 +5% +5% +5% +5% +5%

That's a game-changer to me


Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

paypal 0 fees? that's news to me

Merchants pay fees. Transferring balances between currencies incurs a fee. But spending money when shopping online from a regular account does not incur any fees. Same with debit cards - yes there are high fees, but the consumer never sees anything about them. To the card holder, making a purchase is free.

I have no problem with fees being paid, I just think it should be the merchant and not the consumer who pays them.

Why?

If you mistated, and meant to say, I think merchants should pay the fee in regards to bitshares because that is what they are used to, and I have a vested interest in ensuring that bitshares gains market share, then I fully understand and retract my statement. 

If you honestly believe that merchants should pay the fees, then I must press on.  Why?  You do realize that the consumer always actually pays the fee.  Although in most cases the fee is socialized and thus subsidized by those paying with a less costly mechanism.

As someone that sees tens of thousands of dollars wasted away on a monthly basis paying visa and mastercard, while we literally (I do know what that word means) pay less to have an armored truck with armed men show up three times a week to remove excess cash, I may have a slightly different view. 

I have great respect for businesses that offer a cash discount. 

Also.  Fuck American Express.

Also.  Fuck Discover.

Also there aint no such thing as a free lunch.
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Offline Shentist

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Micropayments are very expensive for the network to process, especially when competing against real financial use cases.

i would love if you can explain in a new post what does this really mean!

for example: 100.000 Transaction per second - for me as a user i undestand that we can transfer in a day

100.000 x 60 x 60 x 24 = 8.640.000.000 transactions per day

what is the problem to make the transactions cheaper? I don't get it,

so, maybe the question is - what is a micropayment? maybe we should set a floor for the transaction amount like minimum transfer is xxx BTS
« Last Edit: June 10, 2015, 05:39:09 am by Shentist »

Offline betax

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Micropayments are very expensive for the network to process, especially when competing against real financial use cases.

Micropayments:  the reason why Dogecoin has a purpose.

I think focusing on value instead of cost is a good idea so I think 20 cents may be fine, but can we just make it one cent for anything below $1?  Micro-transactions are important for 1) the billions in developing nations 2) tipping & online content generators 3) music listeners.  I think we get a much greater network effect if we accommodate people in those areas.

FYI Dwolla dropped it's 25 cent charge: http://blog.dwolla.com/free-bank-transfers/
Not that I think that's a good strategy, but it's interesting.

 +5% +5% even paypal, ebay etc have different plans for micropayments.

edit: and of course market making will be very expensive, even @ 0.04 I ran on the DEX at the beginning a market maker and had 1000s of transactions.
« Last Edit: June 10, 2015, 05:00:43 am by betax »
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Offline merivercap

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Micropayments are very expensive for the network to process, especially when competing against real financial use cases.

Micropayments:  the reason why Dogecoin has a purpose.

I think focusing on value instead of cost is a good idea so I think 20 cents may be fine, but can we just make it one cent for anything below $1?  Micro-transactions are important for 1) the billions in developing nations 2) tipping & online content generators 3) music listeners.  I think we get a much greater network effect if we accommodate people in those areas.

FYI Dwolla dropped it's 25 cent charge: http://blog.dwolla.com/free-bank-transfers/
Not that I think that's a good strategy, but it's interesting.
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Offline Ander

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Micropayments are very expensive for the network to process, especially when competing against real financial use cases.

Micropayments:  the reason why Dogecoin has a purpose.
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Offline starspirit

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Would somebody mind clarifying the following costs of market-making?

i) Managing liquidity walls:

If I'm making a market in an asset, what is the cost each time I move the bid and offer walls with changes in the fair value of the asset? Assuming I've paid to be a lifetime member, is that $0.16 (2 walls x 2 orders, 1 cancel and 1 open)? So if I moved the walls 100 times a day, that's around $16 per day? And two walls on each side would be $32 etc?

ii) Filled Trades:

How much does the market-maker pay on each filled trade where they are the price maker? What if their new order happens to hit another open order in the market and they are the price-taker? Would each of these also be $0.04 irrespective of the fill size?

Thanks.

Offline bytemaster

You are comparing to Bitcoin, but things like BitUSD will never appeal to users of Bitcoin and shouldn't be trying to appeal to Bitcoin users. BitUSD should be an alternative to things like Paypal where the consumer doesn't pay any fee at all.

Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

Is it not possible to re-balance some of the fees towards merchants instead of consumers, eg by finding some way to force merchant checkouts accepting BitAssets to issue a pending transaction which is free to approve or deny and placing all the fees on issuing the transaction and none on approving or denying it, (as I suggested here: https://bitsharestalk.org/index.php/topic,16794.msg214909.html#msg214909)?

Not mentioned, but we plan on showing the receiver of the funds paying the fee rather than the sender.   So it will work just like paypal.

So the fee will be subtracted from the balance sent, rather than added on? This would make sense, and then the wallet could dsplay the fee as having been paid by the receiver.

It is purely a User Interface issue.   On the wire it still looks the same. 
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Offline CryptoPrometheus

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You are comparing to Bitcoin, but things like BitUSD will never appeal to users of Bitcoin and shouldn't be trying to appeal to Bitcoin users. BitUSD should be an alternative to things like Paypal where the consumer doesn't pay any fee at all.

Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

Is it not possible to re-balance some of the fees towards merchants instead of consumers, eg by finding some way to force merchant checkouts accepting BitAssets to issue a pending transaction which is free to approve or deny and placing all the fees on issuing the transaction and none on approving or denying it, (as I suggested here: https://bitsharestalk.org/index.php/topic,16794.msg214909.html#msg214909)?

Not mentioned, but we plan on showing the receiver of the funds paying the fee rather than the sender.   So it will work just like paypal.

So the fee will be subtracted from the balance sent, rather than added on? This would make sense, and then the wallet could dsplay the fee as having been paid by the receiver.
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Offline bytemaster

Micropayments are very expensive for the network to process, especially when competing against real financial use cases.

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Offline EstefanTT

I didn't understand first and I beleived that a newcomer with a free account should have to pay 0.20$ on transactions. This would have discourage a lot of users used to small crypto payments with low fees and slow down mass adoption. Although I'm not 100% sure of it, I think I was mistaken.

It seems that is the receiver of the money (the marchant) who is going to pay the fees. If I don't get it wrong, if he have a life account, he will be paying 0.04$ on every transaction which seems reasonable.

Someone could confirm I understood it well ?

For any kind of purchase superior to 0.50$, these fees are acceptable.

I think that the referral program is very well thought. It seems perfect to get BitShares viral quickly and efficiently.

But what is it going to happenned with UIA using for tipping or very small purchase (>0.15$) ?

I'm just giving mi opinion to help the community to have more food for thought.

I think maybe , the ref. prog. lacks of one more kind of account.

Is it impossible to have a special kind of account exclusively for micro paiment ? (I'm not giving a solution, just ideas)
Maybe an account for mechant who are dealing with a lot of micro paiments or tips.
It would help us to bring this part of the market in BitShares and not having some useless Altcoin with insanely high quantity of coin having this role.

It seem that I'm not the only one worried about loosing the hability to realise micro paiments with reasonable fees.



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Offline betax

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The good thing about it is that it did not look like a big hard drive, was "easy" to use and locked them into iTunes.

That is what I said :), well that wheel thingy was not very user friendly with lots of songs. So if it is expensive and easy to use BitShares will win lots of users, not a bad logic (no kidding).
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Offline Pheonike

Don't forget, apple had clearly superior product that average person could understand.

Offline betax

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Apple is something completely different and surreal. It attracted millions of users on their second phase, because they sold a mp3 player with big storage. The good thing about it is that it did not look like a big hard drive, was "easy" to use and locked them into iTunes. Those locked in users were later on (with more money) marketing lure into the other iThings.  Saying so the iPod with a touch screen was a good innovation.

Back to costs, if I want to send some tokens to 200,000  (>1 cent value) to users that will cost a fortune, and they won't be happy if they have to pay for it. My idea was to reward for usage of an application.
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free to play is a fucked up business and I sincerely hope it goes down with all those companies sooner rather than later.

in terms of TX fees, it was already stated that it will be possible for like merchants to pay the tx fee for the buyer. (paypal model)

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I have seen quite a few posts concerned about the "high" transaction fees.  I want to provide some perspective to show how these "fees" are actually quite "low".

1.  When dealing with a non-stable crypto-currency the "fee" of $0.04 is the least interesting part of the cost.  And only applies when the two parties are both willing to remain "long" on BTC.  Everyone who is simply using BTC as a payment vehicle rather than a speculative investment sees a fee equal to  2 * spread + volatility risk + 2*market fee + transfer fee.   In other words, the "cost" to transfer 1000 stable dollars via BTC or any other crypto-token is easily 1-3% or about $10 to $30. 

2.  Imagine Lemonade cost just $0.01 in materials.   Imagine there was one lemonade stand that charged $0.02 and could barely cover the cost of the table (aka server).   The creators of this lemonade hope that low prices will help them dominate the beverage market.    Now imagine an Ice Tea vendor opens up down the street with materials that cost $0.01.   This Ice Tea vendor decides to charge $0.20 for a drink and offers its customers an opportunity to earn money by referring friends and coming up with creative advertising.    Customers see an offer for $.20 and compare it to the Coke they are use to paying $0.40 for and conclude "what a deal", "tastes great, less fattening, half price!".   The value of a refreshing drink is easily worth $0.40 and now they can get it for $0.20.   So they switch to Ice Tea and happily pay $0.20.   Ice Tea goes viral and gains the network effect while Lemonade waits and hopes people will discover their service.

The thing to remember is that lower prices isn't always better.  We provide a huge value to our users every time they make a transfer and while they are holding their money on the blockchain.  The customers also benefit from the referral program because it means a large and growing network.    So the customers must ask which they would rather have low transaction fees with poor network effect or high fees with larger network.   Time and again the market has shown that customers are willing to pay more to be part of a larger network.

Just look at Apple. Apple never had the low prices yet they manage to make the most money as a company.
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Offline Shentist

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i also consider the transaction fees for the basic account a problem!

why we not learn from "free-to-play"?

they are more successful on the mobile market then traditional games. Sure you could play the games without paying everything, but enough people want to pay and upgrade. I want this nice skin, i want this EXP booth, i want this badge etc. We can learn a lot from them.

so i would suggest some changes

a)the reciever of a transaction will pay the transaction and not the sender

1. basic account - 20 cent for recieving funds, 0 for sending funds

business/member accounts (needed for traders or merchants)

2. no lifetime member they have to pay yearly, but the amount they spend would bring the recieving transaction costs down
- features we can charge fees
  • relativ order
  • UIA creation
  • special names
  • business accounts

To prefend for transaction spaming we could set a minimum amount to transfer to the amount of a basic account cost (20 cent)

Not much will change for the referral system because the members has always to pay, but the basic users will not see many fees, because the normal user will not get us much funds as he spends.

Lets assume i transfer my whole bankaccount in the future into bitshares

i am a "basic" account holder

I got 1 payment each month from my employer - 20 cent
but
i send out 30-40 transaction a month for rent, food, clothes, books, travel etc.

if i trade i spend 20 cent each order i get executed it is fine with me because i just spend 1 a month for my rent

sometimes i travel, some merchants accept bitUSD, but if not i convert them into a other bitAsset and has to pay 20 cent

--much simpler and easier for the normal joe!

--the merchant account

- they got a lot of transactions a month so the need to upgrade to "gold/lifetime" membership for 500 USD a year. But this is fine they have 1000 recieving transactions a month and the got 12.000 buy orders for a transaction costs of 0.41 bitUSD Cent - beat this VISA!!!!

- thre trading account

- I am BOB the trader and i upgradet my basic account to "gold" because i have over 500 trades a month. I pay for every transaction a little less then 8 cent". This is really cheap and i got a decentralized, account no one can rob me"

So, i hope some ideas are doable in some way, because i think we should not take the fees from the basic account. It is not worth it!

Offline Pheonike


Then how about a decreasing fee based on usage.

001-100 fee 0.20$
201-500 fee 0.15$
501-5000 ...

Offline bytemaster

What about micro transactions? could that be a percentage? and bulk transactions, for example I want to send UIA tokens to many users in one transaction?

Cost is linear with the number of accounts touched; therefore, price is also linear.
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Offline bytemaster


How about the Amazon Prime model. Pay a membership fee once per year and never pay a fee anything else that year.

That would allow you to spam the network for a one time fee.   
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Offline Pheonike


How about the Amazon Prime model. Pay a membership fee once per year and never pay a fee anything else that year.

Offline betax

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What about micro transactions? could that be a percentage? and bulk transactions, for example I want to send UIA tokens to many users in one transaction?
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Offline tonyk

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Thinking out loud here.


How about having 1 mo. subscription (maybe in place of the 1y membership if this makes the system to heavy).

Pay $5 monthly subscription, get up to 300 transaction in the next 30 days with NO transaction fee.[Not eligible for referral pay of any kind]

If all 300 transactions are used the fee ends up being $0.016 good deal for them, but most people will end up with probably 10-50 transaction in an average month.

?
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline EstefanTT

If I understand well, the receiver of the funds will be charged.
What happen if the sender have a free account (0.20$ fee) and the receiver have a life account (O.O4$) ? Who will be paying the fee and which amount.

My concern is that high fees paied by the owner of a  free account might seem unappealing for someone who principally use crypto currency for small purchases online (less than 1$).
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Offline profitofthegods

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Not mentioned, but we plan on showing the receiver of the funds paying the fee rather than the sender.   So it will work just like paypal.

If that means I can buy something online without paying a transaction fee then

 +5% +5% +5% +5% +5%

That's a game-changer to me


Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

paypal 0 fees? that's news to me

Merchants pay fees. Transferring balances between currencies incurs a fee. But spending money when shopping online from a regular account does not incur any fees. Same with debit cards - yes there are high fees, but the consumer never sees anything about them. To the card holder, making a purchase is free.

I have no problem with fees being paid, I just think it should be the merchant and not the consumer who pays them.

Offline cass

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. People use what others recommend.

Exactly and in parallel it builds trust and increase credibility and reputation ..
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Offline cass

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Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

everytime when i've used paypal i had to pay fees.. not on paypal site .. but on merchant site for using PP service - at least 1-3 € per transaction! Themeforst as an example .. but endless more are doing it in this way..
Correct me if i'm wrong here..
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Offline Method-X

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 +5% I can confirm bytemaster understands exactly why referral programs work. People use what others recommend. They don't actively seek out the cheapest system.

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Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

paypal 0 fees? that's news to me

Offline bytemaster

You are comparing to Bitcoin, but things like BitUSD will never appeal to users of Bitcoin and shouldn't be trying to appeal to Bitcoin users. BitUSD should be an alternative to things like Paypal where the consumer doesn't pay any fee at all.

Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

Is it not possible to re-balance some of the fees towards merchants instead of consumers, eg by finding some way to force merchant checkouts accepting BitAssets to issue a pending transaction which is free to approve or deny and placing all the fees on issuing the transaction and none on approving or denying it, (as I suggested here: https://bitsharestalk.org/index.php/topic,16794.msg214909.html#msg214909)?

Not mentioned, but we plan on showing the receiver of the funds paying the fee rather than the sender.   So it will work just like paypal.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
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Offline profitofthegods

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You are comparing to Bitcoin, but things like BitUSD will never appeal to users of Bitcoin and shouldn't be trying to appeal to Bitcoin users. BitUSD should be an alternative to things like Paypal where the consumer doesn't pay any fee at all.

Why would somebody choose to use BitUSD and pay small but not insignificant fees, when they can use Paypal and pay zero fees?

Is it not possible to re-balance some of the fees towards merchants instead of consumers, eg by finding some way to force merchant checkouts accepting BitAssets to issue a pending transaction which is free to approve or deny and placing all the fees on issuing the transaction and none on approving or denying it, (as I suggested here: https://bitsharestalk.org/index.php/topic,16794.msg214909.html#msg214909)?

Offline bytemaster

I have seen quite a few posts concerned about the "high" transaction fees.  I want to provide some perspective to show how these "fees" are actually quite "low".

1.  When dealing with a non-stable crypto-currency the "fee" of $0.04 is the least interesting part of the cost.  And only applies when the two parties are both willing to remain "long" on BTC.  Everyone who is simply using BTC as a payment vehicle rather than a speculative investment sees a fee equal to  2 * spread + volatility risk + 2*market fee + transfer fee.   In other words, the "cost" to transfer 1000 stable dollars via BTC or any other crypto-token is easily 1-3% or about $10 to $30. 

2.  Imagine Lemonade cost just $0.01 in materials.   Imagine there was one lemonade stand that charged $0.02 and could barely cover the cost of the table (aka server).   The creators of this lemonade hope that low prices will help them dominate the beverage market.    Now imagine an Ice Tea vendor opens up down the street with materials that cost $0.01.   This Ice Tea vendor decides to charge $0.20 for a drink and offers its customers an opportunity to earn money by referring friends and coming up with creative advertising.    Customers see an offer for $.20 and compare it to the Coke they are use to paying $0.40 for and conclude "what a deal", "tastes great, less fattening, half price!".   The value of a refreshing drink is easily worth $0.40 and now they can get it for $0.20.   So they switch to Ice Tea and happily pay $0.20.   Ice Tea goes viral and gains the network effect while Lemonade waits and hopes people will discover their service.

The thing to remember is that lower prices isn't always better.  We provide a huge value to our users every time they make a transfer and while they are holding their money on the blockchain.  The customers also benefit from the referral program because it means a large and growing network.    So the customers must ask which they would rather have low transaction fees with poor network effect or high fees with larger network.   Time and again the market has shown that customers are willing to pay more to be part of a larger network.   

 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.