Author Topic: "High" Transaction Fees  (Read 15051 times)

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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.

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.

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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Offline fav

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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)

Offline luckybit

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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 ...