I just got my first confirmation on a send from the Bitcoin Unlimited software within two minutes of sending! I’d been noticing that confirmations have been coming through faster recently. Now, I’ve started using a per kilobyte fee of .001 BTC, recently on most transactions, but that still only came to .000225 BTC on this transaction - not an unusually high number.
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I’ve been noticing a slight increase in confirm speed, but I’ve only been really looking the last few weeks after I got my bitpay card. The card itself apparently doesn’t care about confirmations, and adds the funds as soon as I make the send, but the confirmations have been within a matter of minutes. The wallet I use has a default fee of .007, and in the past, it’s taken as long as three blocks before I’d get a confirm. Now, it seems to be within this block or the next.
Correction, the default fee is .0007, not .007
Yes the last three times within 15s-1 minute to see the transaction. I don’t know how long the confirmations took, but one time it was within 1-2 minutes for 1 block.
Definitely hasn’t been fast lately. I’ve been using a high fee of 0.001 per kB, but even that is getting clogged up. Last fee I sent was .000521, about $0.53 and I don’t have a confirmation after 30 mins.
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i think fees in general are going up, which means that lower fees will probably take awhile. the default fee on Jax went from .0007 to .0008 then .0009, and last time I checked it was .001.
Yea- you know I noticed this the other day. Fortunately it doesn’t usually matter. For a burger they tend not to demand confirmation before they’ll let you scarf it down. As long as they see “payment received” message on their device it’s good enough even if it hasn’t been confirmed. Don’t over-think this. It’s not as far as I can see the end of Bitcoin. The only annoying thing about this is if I send myself $2000 for a car payment before going down to pay my car bill and then it not having gotten confirmed by the time I want to spend that. The problem is averted by paying the $0.50 fee to speed up the process though and it might only be a problem if I were wanting to pay for say a burger. But reality is how often do you have that scenario? I usually fill up by phone a few hundred USD worth of BTC at a time. And it’ll last me a week min. So 99% of transactions aren’t going to be a problem.
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This is a huge problem to get average people to adopt bitcoin. It almost makes me want to stop heavily promoting it, but I’m pushing ahead, because I figure we’re still so early on that we’re still most likely to attract people who might be fanatics down the road, and we want to find those people.
That said, Erik Voorhees really lays out why this is a major issue for the future of this currency:
http://moneyandstate.com/the-true-cost-of-bitcoin-transactions/
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Ian: I really don’t think the argument holds much water as far as reality is concerned. Yes- it could cost $0.83 a transaction. It doesn’t mean it has to if you aren’t willing to spend that. It just takes longer to confirm, but immediate confirmation isn’t even necessary for most small transactions, so its a mute point.
The fact people are paying even more to speed up the confirmation process is not a necessity either. I’ve only ever done it twice and one was just so I could demo Bitcoin (the hard way) with a real transaction by sending Bitcoin to somebody who had installed a wallet and then who was going to try and spend it right away. The other time was when I sent myself a large amount of Bitcoin to pay a car bill. I had never raised the fee amount before to speed up a transaction, but with the $3,000 I was spending the $1-2 expedite option was trivial.
I also thing this argument overlooks the fact that having a bank account and dealing in fiat currencies have other costs too. For instance pretty much all major banks such as TD, Bank of America, and even small banks (I know I used them all) charge fees for all sorts of normal things including transfer of money. For currency deposits over a certain threshold for instance they’ll often a percentage, they’ll charge a monthly fee, they charge yearly fees (even to normal account holders, I pay like $25-100 / yr for a BoA credit card, and I was paying $15 / month for a BoA bank account), they charge overdraft fees (TD is particularly bad with this in my experience), they charge significant wire transfer fees (one Bank of a dozen I thoroughly investigated wire fees on a few years ago was charging $120 to do a wire transfer- that was INSANE), they charge conversion fees (8% for TD to convert between USD and Euros I believe, got hit by that once, only cause the person initiating the wire screwed up), and so on.
It’s almost always an option thing when you are talking about having $200 USD worth of BTC in your smart phone- or are making an online payment. The confirmation time simply doesn’t matter for the vast majority of transactions and the few where it might matter the time sensitivity just doesn’t exist. If I spend $20 at Local Burger they’re not going to concern themselves with whether or not you made payment. The reality is restaurants accept a certain amount of loss from unscrupulous players and this is no different from any business.
The other thing is that he’s talking about third world scenarios with his $3 a day paycheck thing. While it would be ideal if we had a solution for third world scenarios like that there are significantly bigger hurdles to overcome- like basic utilities such as power and internet access. And do you think these people have smart phones with internet access? No, solid infrastructure is just not something the vast majority of the actual third word has. It never was going to be a solution for that- at least not by anybody who actually understood Bitcoin’s value- not in the short term anyway. It might have potential to help poor countries- but not places where people are maybe making $1-3 USD / day at best. Where it’ll help is people in places like Mexico which are not third world, but still very very poor by American / modern western standards. Instead of paying $40 plus to wire a paycheck back home it’ll cost a fraction of that (ie Mexican’s working in the US and sending money home, but this also applies to more than just Mexico, lots and lots of temporary and permanent immigrants do this all over the world). Bitcoins might realistically cost maybe 1/40 as much give or take specifics. It might actually be significantly more saved because they’re paying a premium on wire-like money transfer services (due to issues opening bank accounts).
I think it is also important to remember that converting USD to Bitcoin has a non-zero cost that is going to be more significant too. But it does depend on the circumstances. Like is the person being paid in BTC? Or did they have to convert? Do they have a bank account where they are paying 1/2 to 1% to convert? Or are they paying 7% through a Bitcoin vending machine? The reality is 7% is still less than the 8% conversion cost I paid with a bank account to do a wire transfer where the money was converted from USD to Euros. At the end of the day I think Bitcoin has a lot of value proposition going forward even if we’re not all (the poor) able to fully take advantage of that savings instantly.
I have made some transactions to convert from USD to Bitcoin to then withdraw in HKD. It was cheaper than going directly through the banks. However it also depended on using the right channels to do the conversions. If we eliminated the fiat to Bitcoin and back conversions Bitcoin comes out way ahead. It also doesn’t lose value the same way fiat currencies do. It fluctuates, but long term usage should result in increases in worth not decreases. I’m temporarily poorer when I invest in something and that is what Bitcoin is sort of- even though it is a bad investment in my humble opinion. That investment can go down- but it can also go up- but every investment has some risk. People are better off storing their money in Bitcoin long term than fiat currencies despite the fluctuations in Bitcoin’s value. People don’t not use Canadian dollars or Australian dollars or Euros just because they have lost some value over the last few years. Bitcoin makes it easy to see the losses and gains so it frightens people. But it’s not that different than having some fiat currency in your pocket. The US dollar is in a permanent downward decline and that is by design. It is intended to push people to spend and invest their money rather than hold it. Bitcoin is a bad investment and I feel people shouldn’t hold it either- but that doesn’t mean it isn’t a better choice than say fiat currencies. It works very well as a temporary storage mechanism relative to fiat currencies to conduct day to day business. For everything else you should be investing your money in something that reasonably reliably will grow in value. Like say a business, stocks, bonds, or even a house, etc.
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You are not a marginal user, so the objections roll of you like water off a duck’s back. Despite your belief, there are many places in the world where infrastructure is poor, but cell-phone coverage is ubiquitous and competitive. Many places in Africa, like Somalia are in this situation. Smartphones may not be ubiquitous, but there is an African company that facilitates BTC transactions over text messaging - no smart phone required.
Users who just want to try bitcoin may be scared away by the fees. Even at the “economical” setting in Mycelium (some wallets don’t let you set a fee, but Mycelium does), my last fee was .00019, or about $0.19 at current rates. This was for Local Burger. It was an extra 1.6% that I paid because I’m a fanatic about bitcoin. Will the average person want to do that when they can pull out a credit card or cash and pay nothing extra?
Your points about banking and old money system fees are true, but not relevant to this conversation. Those fees are not a factor in small point of sale transactions.
Fanatics like me and you might be willing to give $0.19 to the bitcoin miners to buy a $1 soda at Corner News, but we are irrational compared to the average person who might be willing to try bitcoin and then gets sticker shock at the crazy fees.
Dismiss this factor at bitcoin’s peril. If this doesn’t get solved soon, its growth will be hurt and competing currencies will get more and more attractive.
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I’d be skeptical if the average Bitcoin user now- and especially in the future even knows what they are paying in fees. I paid $0.11 fee just now to buy a $100 worth of BTC tip cards. Per tip card that is $0.011. I also just spent $50 in BTC and paid $0.14. I’m just not seeing how somebody whose willing to pay $1-2 for a can of soda is going to freak out about the fees like your implying (I don’t hear many people complaining about sales taxes and the fees are about that at best for small items- give or take- which range from %7-25 depending on where you are)- and it seems like such a rare scenario at that. I eat out- but rarely do I find myself spending $1 for anything. By the time you get the drink, food, etc it ends up being closer to $10-20. I recognize that the fees have gone for a short period as high as $1. The other issue is the value of the holdings (Bitcoin) is growing generally so whatever fees exist are not that big of a deal. The more you use it and the longer you use it the less of an impact it has.
Sodas, bottled water, and some of the less expensive items we’re talking about have huge margins on them already and people worried about such things aren’t likely to be going and buying a $1-2 bottle of water or soda anyway. Most small items like this are high margin so you can go and buy a 24 pack for as little as $0.10-$0.50 per item. The people who are going to flip out are going to be the kind of people Ian who go to the grocery store and buy it in volume anyway- or just ask for a free cup of water instead at a restaurant on the rare occurrences they eat out.
I get that there is a good argument for lower fees. It would help it to compete with hard government subsidized currencies in the brick and mortar world. However Bitcoin is so much more useful than that regardless of if we’re talking $1 or $0.01. It’s useful for more than purchasing small inexpensive items. It’s a significant saver for larger items like purchasing electronics online, hotel rooms, transferring money overseas, and similar.
“Smartphones may not be ubiquitous, but there is an African company that facilitates BTC transactions over text messaging - no smart phone required.”
Yea- I’m not at all worried about what is happening in Somalia. I don’t see Somalia having any impact on Bitcoin adoption elsewhere and despite some cellular infrastructure and dumb phones being available and used in limited contexts and even with Bitcoin I don’t see its relevance here or that impacting the success/failure of Bitcoin adoption in places like Mexico, China, Canada, the United States, Europe, Saudi Arabia, Australia, Russia, New Zealand, and other places with poor and/or wealthier individuals and infrastructure. I think Bitcoin despite “high fees” (I’m putting this in quotes because “high fees” is relevant to what specific thing we are discussing- it’s cheaper than the banks- in other words even if it isn’t cheaper than say storing hard currency under the bed) would still have value in places with poor infrastructure, but I don’t think that’s the biggest issue such third world states and their peoples have to deal with. Bitcoin will have some impact, but less with higher fees.
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But to the end user, it’s not cheaper than the banks. My credit card gives me 1.5% BACK at the end of the month, but I have good credit. Even someone who gets 0% back is still paying the sticker price for the product they are buying if they use credit card. Bitcoin payers are now paying significantly more on small dollar purchases.
You act like the fees are no big deal, but you are a successful business owner. To people who are living paycheck to paycheck and counting change, this matters.
Look, bitcoin used to be great for micropayments. Being able to send someone less than a dollar’s worth was no problem due to the previously very small fees - now that whole aspect of bitcoin is GONE. It’s not going to kill the currency, but everyone interested in micropayments (and there are a LOT of people interested in that - people who want to request, say small donations for blog posts, whatever) is now no longer using bitcoin. That’s bad for bitcoin.
This is the biggest hurdle facing bitcoin mass-adoption right now. You’re trying to make excuses and rationalize away a significant problem and change to the original usefulness of bitcoin. It’s now less useful - still great, but diminished. As a bitcoin fan myself, it hurts to watch the miners decide not to decide and not yet adopt either of the proposals to fix the problem.
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“But to the end user, it’s not cheaper than the banks”
It’s cheaper than the banks for the end-user, but I see how it appears to not be.
While you and I might get 1.5% back it’s not actually cheaper and the people living paycheck to paycheck are probably not getting that 1.5% cash back either. I have a secured credit card myself from a time before I had a credit history or any real employment (I was self-employed and for those of us like that it’s basically the same as being unemployed in the eyes of the banks and/or had a basically little above minimum wage job). I had the max 20% or something like that interest rate on it AND to get that $500 “credit” limit I had to give the bank $500. Poor people will utilize these cards to rack up debt that they can’t pay back every month. To suggest those in such situations are getting 1.5% back is probably not reality. To add to the burden it actually now costs me $25 or so a year to possess this card (I need to get rid of it).
The reason I’m a successful business owner is because I’ve thought about these things. Most people who are poor aren’t thinking about these things though or they wouldn’t be poor. I essentially put myself into poverty to become “wealthy”. I have a bit of an idea what people go through as a result of putting myself temporarily into a poor 2nd class citizen position immediately after college. I couldn’t get a loan for a car let alone a credit card that pays me. That was with a barely above minimum wage part time job (no health insurance or other benefits). I did that because I knew the long term prospects of going to work for someone else at $75,000 / yr were worse than working a minimum wage job temporarily while I got a business off the ground. When I started working for $9 / hr I also filed the paperwork for two DBAs (doing business as)- or in other words businesses.
I agree that micro payments are a good thing for Bitcoin. I’m just skeptical that there are that many micro payments going on. I make small donations all the time and the $0.11 cost is hardly a hindrance to me. People who have the money to make donations won’t be hindered by this imho.
Yea- and I agree with you that it is at least a little less useful without micro transactions (ie being able to make transactions less than $1-2). The thing is your acting like the sky is falling. I don’t think it is. To suggest we should stop using Bitcoin all because it’s not as useful for certain type of unusual transactions just blows my mind. Maybe I’m getting the wrong impression, but it seems like your concern is a bit over the top. I understand the concern though if your interest in Bitcoin was because of the ability to do micro transactions. That sort of transaction never really spiked my interest.
I just don’t see this as the “biggest hurdle facing bitcoin mass-adoption right now”. I can sympathize with the thought Bitcoin’s usefulness is diminished… but only slightly imho.
I’m also not sure the fixes are worth the costs. If I’m not mistaken the fix here involves significantly expanding the amount of data a user needs to store and that inherently will make Bitcoin less decentralized. I may not be knowledgeable enough on the particulars to argue this with anyone, but it generally seems to me that it’s something we should be at least conscious of. I’m not looking to make money off Bitcoin. I’m looking to utilize it as a privacy and security tool (ie secure ones assets and access to means of transferring value) and forcing users onto third parties is not in my mind a good idea. Maybe there is a solution to that problem or a comprise. Maybe a personal server with enough storage to store it would work with increased block sizes when combining it with a personal web wallet for smart phones… I don’t know… but I’m not sure either of us are up on the details of the technology to have a real conversation on this. Maybe I’m wrong. I don’t know.
And yea- I’m one of the few people who do utilize Bitcoin core on my computer. It’s important that users retain control and not become dependant on centralized entities. That will end the usefulness of the Bitcoin technology. It’ll become Fedcoin if we let that happen.
Where did I suggest that?
I specifically said:
It almost makes me want to stop heavily promoting it, but I’m pushing ahead, because I figure we’re still so early on that we’re still most likely to attract people who might be fanatics down the road, and we want to find those people.
Not anymore.
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Just so you all are aware, it looks like the REASON that fees are going up is because TRANSACTION VOLUME is going up, here’s a link, https://blockchain.info/charts/n-transactions-per-block, and the most likely reason for that is capital flight, aka people in a place want to get their wealth out of that place, and often due to capital controls, the easiest way to do that is through a crypto currency, so it indicates some adoption by the lower and upper middle classes in various places.
Now, with more transactions comes more selection available to the miners when they break a block, and they will always grab the higher fee transactions because, obviously, money.
If they ever get the whole block size thing sorted out, this will be greatly alleviated. So, basically, we just need the miners to adopt a larger, perhaps even dynamic, block size, and that will definitely sort this high fee business out.
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I agree with Ian, the microtransaction utility was very attractive in the early days, and now it’s Bitcoin’s weakness. But does gold suffer from lack of microtransaction utility? Perhaps. But silver filled that void, just like the other cryptocurrencies can fill that void.
I’m not married to Bitcoin’s success. If it totally fails, I’ll pick up the next big cryptocurrency. But the miners are married to Bitcoin’s success. They’ll eventually adopt a larger blocksize. They’re obviously not very proactive about it, but Bitcoin has endured rougher times than this.
Patience is key. I never felt that Bitcoin was on the brink of mass adoption, did you? Just like the miners are going to wait until crisis hits to adopt larger blocksize, average joes are going to wait until a dollar crisis hits to get crypto.
No, we are nowhere close to mass adoption. That’s why I’m continuing to pour money into promoting BTC as a major church outreach project - because we’re still finding the fanatics and early adopters.
However, this is a hinderance to reaching mass adoption, and I’d rather have that be bitcoin that is adopted than something else.
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I would say we’re not at a place of majority adoption, but we ARE at a place where bitcoin is poised for a very large uptick in adoption for several different functions. Obviously, it’s already seeing a lot of use as a capital flight vehicle. Add in the fact that you have things like bitpay and purse.io which definitely give utility for your bitcoins, and all that you really need is for people to -notice- bitcoin in a positive way for them to start considering it.
Just tell them they can save 20% on amazon purchases by using bitcoin at purse.io, and I’m sure you’ll get a few bites 
I don’t know enough about the details, but if a dynamic block size can be done that may resolve the issues I’d be concerned about.
Ian: It was a bit of a hyperbole to say you wanted to stop using Bitcoin, but you implied that you were ready to stop promoting it [heavily], almost. I was merely taking that to mean you were near to giving up on Bitcoin. The attitude if nothing else.