Lowering Transfer Fees

[merivercap]

two points:

I think low transfer fees will also render the referral system ineffective.   There would be very little reason to upgrade memberships and people won't be incentivized by getting a few cents trickling in each month from referrals.

and the "first one's free" salesman trick

We need a sales team, and we need to pay them. Where's the money going to come from to pay them, and what is there incentive to sign up "big" clients?

At the same time, no one will try out a superior product if cost appears to be a barrier to entry. Look at what google's doing now with google docs enterprise... they are making it free/cheap so you adopt them and don't even try microsoft.

What is unique to the BTS network? These can have high fees
1) Decentralized Market
2) Smart Coins

What is not unique to BTS? these can have low fees
1) Transfer of cryptocoins (e.g, the BTS coins themselves)

Each fee should be set based on a competitive pricing model. BTS should trade with BTC level of fees.
Market and SmartCoins should trade with polo and paypal level fees, respectively.

If network bandwidth starts limiting transactions, then fees can be made proportional to the true "network cost" (which might mean raising transaction fees). Assuming unlimited network bandwidth, fees should maximize revenue and therefore at least be competitive with competing tech.

That's a good perspective to take. 

I like the idea of lowering transfer fees but keeping trading fees higher.

I agree you can make the case for trading fees being higher because of the value of a secure decentralized exchange, but traders are generally risk takers so unfortunately the low fees and liquidity of centralized exchanges may be more compelling no matter how many MtGox events occur.  It is also important to attract liquidity so trading fees that are at least competitive with centralized exchanges would be a good start.  .1 - .25% is what Bitstamp charges and at an average trade of $20 I think 5 cents is more appropriate to match the Bitstamp fee schedule.    We should have a maker/taker model with 0% fees for market makers so we get a lot of market depth.  Liquidity is king and that means keep trading costs extremely low especially for market makers.   

I would support regional based pricing if it was possible. $0.2 for US and Western Europe is fine.

We've had feeback from South America (ElMato) , Eastern and Southern Europe (Noisy and Liondani) and China (Alt + many many more)  saying the fee is too high for their market.

If we have $0.2 transfer fee for USD, it's okay. But if the fee of CNY is $0.2, it may not be acceptable. Differentiate transfer fees for each assets (especially smartcoins) would be the solution.

I agree China and other regions could be lower. 

Are we able to vote for different transfer fees PER bitasset? So USD can stay on the expensive side... CNY can be cheaper, etc. Whatever makes sense for each currency/country-demographic.

It would give us an easy way to have region-based pricing.. a must-have strategy for competitive pricing globally

That is possible by setting the core exchange rate and keeping the fee pool funded (subsidizing some transfers).     

That would be great if we did this ...

[phillyguy]

I would support regional based pricing if it was possible. $0.2 for US and Western Europe is fine.

Why is a $0.20 USD transfer fee considered high? Even in developing markets, or for the unbanked, is 20 cents per transaction really a financial burden that will hinder adoption?

I also think a lower fee is not needed. Lifetime membership returns $.16 of those cents anyway.

We've had feeback from South America (ElMato) , Eastern and Southern Europe (Noisy and Liondani) and China (Alt + many many more)  saying the fee is too high for their market.

You're competing with BTC, Centralized crypto exchanges and their local banking services at the moment with a by comparison new, risky, somewhat complicated alternative.

When you have a liquid and popular derivative stock market/ Popular BitAssets with easy BitAsset to real asset crossover/third parties offering full service remittance via BTS/BitGold to real vault options etc. Then you will start to be offering products and services they are used to and willing to pay much for and also in some cases won't be able to get anywhere else. Then you can look at raising fees substantially.

Thoughtful response. Makes sense - thanks!

[clayop]

If we have $0.2 transfer fee for USD, it's okay. But if the fee of CNY is $0.2, it may not be acceptable. Differentiate transfer fees for each assets (especially smartcoins) would be the solution.

[Empirical1.2]

I would support regional based pricing if it was possible. $0.2 for US and Western Europe is fine.

Why is a $0.20 USD transfer fee considered high? Even in developing markets, or for the unbanked, is 20 cents per transaction really a financial burden that will hinder adoption?

I also think a lower fee is not needed. Lifetime membership returns $.16 of those cents anyway.

We've had feeback from South America (ElMato) , Eastern and Southern Europe (Noisy and Liondani) and China (Alt + many many more)  saying the fee is too high for their market.

You're competing with BTC, Centralized crypto exchanges and their local banking services at the moment with a by comparison new, risky, somewhat complicated alternative.

When you have a liquid and popular derivative stock market/ Popular BitAssets with easy BitAsset to real asset crossover/third parties offering full service remittance via BTS/BitGold to real vault options etc. Then you will start to be offering products and services they are used to and willing to pay much for and also in some cases won't be able to get anywhere else. Then you can look at raising fees substantially.

[merivercap]

This is a very good perspective.   The fees are already very low from a merchants perspective.  A simple change in the GUI / billing / transfer page can make it looks like the sender is paying no fees.   

Being able to change the GUI like that would be great.  We are thinking of not showing fees and temporarily putting the following note as a modal or info link:
“Note: Please be aware recepient will receive amount after deducting 20 cents (and up to 2 cents based on memo length fees) to support our company and protocol for each transaction:.  Thank you.” 

I think for the average consumer this should work well and they will probably only need to see this note maybe 5 times as a reminder and after that there is no need to inform them.  We are planning to limit memo length to 40 characters so that's around 2 cents right now it seems. 

[Ander]

I like the idea of lowering transfer fees but keeping trading fees higher.

[maqifrnswa]

two points:

I think low transfer fees will also render the referral system ineffective.   There would be very little reason to upgrade memberships and people won't be incentivized by getting a few cents trickling in each month from referrals.

and the "first one's free" salesman trick

We need a sales team, and we need to pay them. Where's the money going to come from to pay them, and what is there incentive to sign up "big" clients?

At the same time, no one will try out a superior product if cost appears to be a barrier to entry. Look at what google's doing now with google docs enterprise... they are making it free/cheap so you adopt them and don't even try microsoft.

What is unique to the BTS network? These can have high fees
1) Decentralized Market
2) Smart Coins

What is not unique to BTS? these can have low fees
1) Transfer of cryptocoins (e.g, the BTS coins themselves)

Each fee should be set based on a competitive pricing model. BTS should trade with BTC level of fees.
Market and SmartCoins should trade with polo and paypal level fees, respectively.

If network bandwidth starts limiting transactions, then fees can be made proportional to the true "network cost" (which might mean raising transaction fees). Assuming unlimited network bandwidth, fees should maximize revenue and therefore at least be competitive with competing tech.

[phillyguy]

Why is a $0.20 USD transfer fee considered high? Even in developing markets, or for the unbanked, is 20 cents per transaction really a financial burden that will hinder adoption?

I also think a lower fee is not needed. Lifetime membership returns $.16 of those cents anyway.

[mike623317]

I would not lower it to 5 BTS, 10 BTS should be the minimum, that is 4 cents. Very reasonable IMHO.

I agree.

[bytemaster]

I would urge the community to keep transfer fees in the US the same.  I think regional pricing is a good idea. 

As someone who is building a real US-based payments business on top of Bitshares the transfer fees are important to keep the business sustainable.   Otherwise it will probably take hundreds of millions of VC money, hundreds of millions of users, 10 years to even get the cash flow in the black, much less pay back the cost of capital.  Free or close to free is not a great business model unless you plan to show a 30-sec video ad before you send every payment.  I'm certainly not interested in pursuing a business like this.  I would argue without the payments side, the exchange side is far less valuable. 

We shouldn't compete with other cryptos on cost.  Bitcoin and other cryptos are already essentially 'free'.  But ask yourself how are business that build on those ecosystems going to grow?  What is the revenue business model of anyone who builds on other cryptos?  I would tell you most have no sustainable business model. 

We can do well with peer to peer payments, but this should be a secondary focus because the perception and reality for the mainstream public is that payments are already free.  I would even recommend Venmo, Square cash, traditional online bank transfers via email/phone # as much better solutions for the average consumer.  I'm saying this as a competitor to those payment solutions.  We are naturally going to need and get a good % of unbanked, anti-bank, be-your-own-bank crowd that don't like traditional solutions and the fees aren't going to be a deal breaker.

We should be focused on merchants.  They are desperate for a solution because they have to pay 3 - 8% transaction fees,  annual/monthly fees,  hidden fees,  and deal with the headache of chargebacks.   When I tell merchants the cost for them is  20 cents  they are immediately sold.  The question I get from merchants is why and how are we so cheap?  I got a question from a merchant (who actually worked in payment processing before) about if we are going to be around in the future because 20 cents doesn't sound sustainable for any payment business.   I agree.   I assume if we want we can structure payments so that merchants are 'paying' the cost so that should allow users to feel like they aren't paying anything in transaction fees. 

I think low transfer fees will also render the referral system ineffective.   There would be very little reason to upgrade memberships and people won't be incentivized by getting a few cents trickling in each month from referrals.

This is a very good perspective.   The fees are already very low from a merchants perspective.  A simple change in the GUI / billing / transfer page can make it looks like the sender is paying no fees.   

[merivercap]

I would urge the community to keep transfer fees in the US the same.  I think regional pricing is a good idea. 

As someone who is building a real US-based payments business on top of Bitshares the transfer fees are important to keep the business sustainable.   Otherwise it will probably take hundreds of millions of VC money, hundreds of millions of users, 10 years to even get the cash flow in the black, much less pay back the cost of capital.  Free or close to free is not a great business model unless you plan to show a 30-sec video ad before you send every payment.  I'm certainly not interested in pursuing a business like this.  I would argue without the payments side, the exchange side is far less valuable. 

We shouldn't compete with other cryptos on cost.  Bitcoin and other cryptos are already essentially 'free'.  But ask yourself how are business that build on those ecosystems going to grow?  What is the revenue business model of anyone who builds on other cryptos?  I would tell you most have no sustainable business model. 

We can do well with peer to peer payments, but this should be a secondary focus because the perception and reality for the mainstream public is that payments are already free.  I would even recommend Venmo, Square cash, traditional online bank transfers via email/phone # as much better solutions for the average consumer.  I'm saying this as a competitor to those payment solutions.  We are naturally going to need and get a good % of unbanked, anti-bank, be-your-own-bank crowd that don't like traditional solutions and the fees aren't going to be a deal breaker.

We should be focused on merchants.  They are desperate for a solution because they have to pay 3 - 8% transaction fees,  annual/monthly fees,  hidden fees,  and deal with the headache of chargebacks.   When I tell merchants the cost for them is  20 cents  they are immediately sold.  The question I get from merchants is why and how are we so cheap?  I got a question from a merchant (who actually worked in payment processing before) about if we are going to be around in the future because 20 cents doesn't sound sustainable for any payment business.   I agree.   I assume if we want we can structure payments so that merchants are 'paying' the cost so that should allow users to feel like they aren't paying anything in transaction fees. 

I think low transfer fees will also render the referral system ineffective.   There would be very little reason to upgrade memberships and people won't be incentivized by getting a few cents trickling in each month from referrals.

[clayop]

Are we able to vote for different transfer fees PER bitasset? So USD can stay on the expensive side... CNY can be cheaper, etc. Whatever makes sense for each currency/country-demographic.

It would give us an easy way to have region-based pricing.. a must-have strategy for competitive pricing globally

That is possible by setting the core exchange rate and keeping the fee pool funded (subsidizing some transfers).   

I support this idea!

[ElMato]

What happens if we set (as a registrar) the network_fee_percentage to 100%

Will the users registered by this registrar only pay $0.04? and nothing to the registrar?

[bytemaster]

Are we able to vote for different transfer fees PER bitasset? So USD can stay on the expensive side... CNY can be cheaper, etc. Whatever makes sense for each currency/country-demographic.

It would give us an easy way to have region-based pricing.. a must-have strategy for competitive pricing globally

That is possible by setting the core exchange rate and keeping the fee pool funded (subsidizing some transfers).   

*Except* it is technically possible to pay your fee in any asset (different from the one you are transferring) thus it would have to be a wallet enforced convention rather than a blockchain enforced rule.

[bytemaster]

Are we able to vote for different transfer fees PER bitasset? So USD can stay on the expensive side... CNY can be cheaper, etc. Whatever makes sense for each currency/country-demographic.

It would give us an easy way to have region-based pricing.. a must-have strategy for competitive pricing globally

That is possible by setting the core exchange rate and keeping the fee pool funded (subsidizing some transfers).