To: Dave Hudson <dave@hashingit.com>
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From: Tom Harding <tomh@thinlink.com>
Message-ID: <55BA3B57.2060101@thinlink.com>
Date: Thu, 30 Jul 2015 07:57:27 -0700
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Cc: bitcoin-dev@lists.linuxfoundation.org
Subject: Re: [bitcoin-dev]
 =?utf-8?q?R=C4=83spuns=3A_Personal_opinion_on_the_f?=
 =?utf-8?q?ee_market_from_a_worried_local_trader?=
Precedence: list


Yes.  So far, the transaction count factor has completely dominated the
per-tx fee factor.  This fact should be of great interest to miners.


On 7/30/2015 7:25 AM, Dave Hudson wrote:
>
>> On 30 Jul 2015, at 06:14, Tom Harding via bitcoin-dev
>> <bitcoin-dev@lists.linuxfoundation.org
>> <mailto:bitcoin-dev@lists.linuxfoundation.org>> wrote:
>>
>> Another empirical fact also needs explaining.  Why have average fees *as
>> measured in BTC* risen during the times of highest public interest in
>> bitcoin?  This happened without block size pressure, and it is not an
>> exchange rate effect -- these are raw BTC fees:
>>
>> https://blockchain.info/charts/transaction-fees?timespan=all&daysAverageString=7
>
> I've not published any new figures for about 8 months (will try to do
> that this weekend), but the thing that that chart doesn't show is
> what's actually happening to fees per transaction. Here's a chart that
> does: http://hashingit.com/analysis/35-the-future-of-bitcoin-transaction-fees
>
> The data is also taken from blockchain.info so it's apples-for-apples.
> It shows that far from a fees going up they spent 3 years dropping. I
> just ran a new chart and the decline in fees continued until about 8
> weeks when the "stress tests" first occurred. Even so, they're still
> below the level from the end of 2013. By comparison the total
> transaction volume is up about 2.4x to 2.5x (don't have the exact number).
>
>> ... more evidence that conclusively refutes the conjecture that a
>> production quota is necessary for a "functioning fee market."  A
>> production quota merely pushes up fees.  We have a functioning market,
>> and so far, it shows that wider bitcoin usage is even more effective
>> than a quota at pushing up fees.
>
> I think it's equally easy to argue (from the same data) that wider
> adoption has actually caused wallet users to become much more
> effective at fee selection. Miners (as expected, assuming that they
> hadn't formed a cartel) have continued to accept whatever fees are
> available, no matter how small. Only where there has been an element
> of scarcity have we actually seen miners do anything but take whatever
> is offered.
>
> Clearly history is not an accurate indicator of what might happen in
> the future, but it seems difficult to argue that there has been any
> sort of fee market emerge to date (other than as a result of scarcity
> during the stress tests).
>