alot of people are arguing that due to the reward halving, fee's need to increase above 0.0001btc.
this is not true, and now i will explain
this is the amount of bitcoin reward for solving blocksthis is the amount of tx fee with the assumption that starting from 4000tx(1mb) staying at 0.0001 and the blocklimit doubling every 2 years starting mid 2016 with 8000tx(2mb) leading to a 0.8btc total fee potential, then doubling block limit mid 2018 to 16000tx(4mb) with a 1.6btc total fee potential.. basically the fee per tx stays at 0.0001 forever, no matter whatnow this is more complicated to explain, but basically speculating that when a reward halves, the fiat valuation doubles which means the tx fee halves, which is what happens already. miners try to retarget fee's to only be a few cents at most. but the chart also includes the increase of transactions allowed due to larger blocks allowing more tx's can fit in.. basically the tx fee drops when fiat value rises, thanks to deflationso,, hopefully you can understand and see that in the image..
now
(1) this shows that while the
block reward is 25 the
constant transaction fee's are 0.4btc, the
deflationary transaction fee is 0.4btc.
(2) now if we went with
constant 0.0001 fee fee's will exceed block rewards in the year2022
(3) now if we went with
deflationary fee's which decrease as fiat valuation increases. the fee's will exceed the block reward in the year 2029.
just to note.
constant 0.0001 fee, means that when 1 bitcoin costs (speculating) $10,000 the transaction fee is $1 (which is not good and no one will want to transact.
where as
deflationary fee allows the fee's to stay as only a few cents or less.. while also earning miners over $20,000 in the year 2029, and upto $90,000 in 2034
which is fair for the users and also fair for the miners. as currently they average $10,000-$12000(depending on fiat valuation the last 4 years) so they are not really going to lose out either
in short:
with all that said transaction fee's should not need to go above 0.0001 again, as the fiat valuations and blocklimit increases will take care of things to allow miners to get an nice income for just 10 minutes work. as show in the
deflationary fee chart
.
it would only be miner greed to choose to keep it at
constant fee, which would make it too expensive for user usage, and would ruin bitcoin.
so lets just stick with the
deflationary fee model which has worked well for the last 7 years, and should continue to work for both miners and users to both benefit, and simply end the tx fee debate as nothing needs to alter.. miners just got to continue reducing fee's to keep it inline with a few cents at most.. like they have so far