Jochen Hoenicke

yeah if you look at https://jochen-hoenicke.de/queue/#0,1w , you'd see that anything above 20 satoshis/vByte would be overpaying[1]. the transaction in question paid 400 satoshis/vByte. [1] ie. anything at that rate or greater would confirm in the next block, so there's no difference in paying more

https://jochen-hoenicke.de/queue/#30d There are 100,000 transactions with fees greater than $1. Where are these 0-fees? (15 sat/Byte, ~443 B/tx)

Bitcoin has absolutely no utility as a currency. Look at the current mempool [0] to see why. People then switch to arguing that it's a great store of value. Given its volatility this makes no sense. [0]: https://jochen-hoenicke.de/queue/#24h

If anyone wants to see what the "practically empty" mempools look like over time, this is a great resource: https://jochen-hoenicke.de/queue/#1w The connection between full blocks and transaction fees is here: https://i.redd.it/ec0r495f4nny.jpg

> Very costly in the sense that an individual Bitcoin transaction curently costs about $20 you've cherry-picked the exact point in time when due to various factors ("civil war" between bitcoin and bitcoin cash supporters, propaganda campaigns, price rally) transaction fees are at their peak. if you look at the graph - https://jochen-hoenicke.de/queue/#all you'll realize that for majority of this year transaction fees were well below 50c. this is what happens if you blindly believe the echo chamber. besides, i'm not convinved all and every transaction belong on the chain. chain provides bunch of very strong guarantees that no other system in the world provides - it's ridiculous to claim that those guarantees are not worth anything. > I literally synced the Ethereum chain on my laptop last weekend. lol, nope. let me guess, `geth --fast`? well, i suggest you go read up on what `--fast` means. i challenge you to try syncing from the genesis block. > This is only true if you are using the phrase "up for debate" in the sense that smoking being bad for you is up for debate no, it is literally up for debate. there is a multitude of bottlenecks involved in having a healthy blockchain and a network around it, they are all affected by bumping the blocksize in non-trivial ways through secondary and tertiary effects. and it's not even obvious we can handle the primary effect of growing blockchain and utxo set - that quite literally leads to centralization of full nodes via making…

People do hold this viewpoint, and that's why I linked hard data. You can see the fees fluctuating from day to day. On Sep 3, many transactions had 10x the normal fees. On low volume days such as Sep 11, very few transactions had high fees. You can argue philosophically about whether a chosen narrative makes sense or "should" create demand for block space, but I'm ignoring philosophy and looking at empirical data. Since this is already happening, and has been for the history of the project, it's not a stretch to predict it will continue happening. If there was no competition for block space, the fee market would look like white noise, like BCH or DOGE: https://jochen-hoenicke.de/queue/#DOGE,30d,weight

Fungibility is split out into three separate properties: Hides amounts, Hides addresses, Hides the transaction graph (untraceability). Bitcoin tx fees are near all time lows [1] although many people still overpay. And lightning fees are way lower still. [1] https://jochen-hoenicke.de/queue/#BTC,24h,weight

The only thing that comes to mind here is that there was a fee spike [1] and they've got too many unspents stuck in the mempool and can't initiate further withdrawals because their wallet is effectively "spent" until those pending transactions complete and they receive their change. I find this a bit hard to believe though...wallet management isn't simple when it comes to the scale that Binance handles, however I'd be shocked if they didn't have code written to trigger CPFP (Child Pays For Parent) [2]. [1] https://jochen-hoenicke.de/queue/#BTC,30d,weight [2] https://bitcoinops.org/en/topics/cpfp/

https://jochen-hoenicke.de/queue/#BTC,24h,weight Where did you get this number? Transactions for as low as 1 satoshi per vbyte have been included for a while, with the average around 10 sats/vbyte. That’s like 3 cents for one transaction.

>>What are transaction fees, still $20 USD average like they were in April? Looks like txn fees are less than $1 USD [1] today; certainly a lot lower than they were back in April. High priority transactions likely can be pushed to $2+ if you are in a rush to get your txn processed. >>Also, there is a backlog of transactions, so it can be days to get a transaction done. Backlog seems to be low at the moment.[2] [1] https://mempool.space/ [2] https://jochen-hoenicke.de/queue/#BTC,1y,count

Wow. That site is very wrong. Their historical data is wrong too. It’s all the same value!! It’s about 100x off reality. It’s been known since 2020 that it is fiction. Bitcoinfees.net appears to be correct (1-2 sats/vB). https://jochen-hoenicke.de/queue/ Also shows vast majority in last 24 hours paid <10sats/vB. I notice that earn is also reporting way way too high numbers. The fact is you can send 1sat/vbyte right now and it will confirm. 7 cents. Anyone actually using BTC will agree with me here. Look at the mempool. If it’s empty, BTC is super cheap. It is empty right now and frequently is on weekends.

So in january-may there was a lot of on-chain activity [1], just like in 2017, but by now it all somehow moved to ETH? Hmm. [1] https://jochen-hoenicke.de/queue/#BTC,all,weight

I don't understand how you arrive at this seven dollar figure. Right now a median fee is 3-4 satoshi's per byte resulting in a typical transaction cost of about $0.64 usd. Here is a site that shows the live fee spread: https://jochen-hoenicke.de/queue/#BTC%20(default%20mempool),1w,fee

> Also you can send a 50 cent tx fee and it will make it through but not be the fastest. This has tended to be true (that it’d go through within a few days), but right now it’s probably largely false. Assume a small 226 byte transaction (one input and two outputs); at $50,000 per bitcoin, 50¢ is 1000 satoshi, which is about 4.4 satoshi per byte. Per https://jochen-hoenicke.de/queue/#0,30d, transactions with fees under 5 satoshi per byte were last cleared on February 8 (~8 days ago), and before that last on January 28 (~11 days). (Before that, such transactions stalled for about 12 days in October/November; other than that, it looks like such transactions never stalled for even a week back to the January 2018 craze, to say nothing of 50¢ being more satoshi per byte back then anyway.) And if your transaction expires after a week——

Nope. They're actually getting away with quite a big loot! The number of unconfirmed transactions has catapulted from ~9k to about ~50k right now, which means there's large amount of activity. It will take a while for the dust to settle. You can watch them here https://www.blockchain.com/btc/unconfirmed-transactions chart https://www.blockchain.com/charts/mempool-count A better graph of the current transactions sitting unconfirmed: https://jochen-hoenicke.de/queue/#0,24h Note: I'm not saying that these are all from the hack, I'm saying that the activity on the Bitcoin blockchain has significantly spiked, and the hack was still ongoing at the time of writing this.

Nowhere near the limit, and hasn't been for a while: https://jochen-hoenicke.de/queue/#0,24h

Related topics: * https://jochen-hoenicke.de/crypto/trezor-power-analysis/ * https://www.bearssl.org/constanttime.html

I’d be curious how much of present demand is people dumping shitcoins for BTC (most coins are denominated in BTC), so that then they can eventually sell for fiat. The mempool is starting to spike as people rush for the exits https://jochen-hoenicke.de/queue/

I'm interested in knowing why you think it failed scaling and evolving. SegWit and by extension LN, increased both scaling and was a significant evolution that enables sidechains and interchain transactions. What became quite obvious was the "scare" with full blocks and expensive transactions was with all likelihood an attack with spam transactions and not an actual issue at this moment. See https://jochen-hoenicke.de/queue/#1,all for unconfirmed transactions and notice how it doesn't exactly line up with price increases where you would expect more activity. There seems to be some correlation with the entire BCH fork.

Yes, I used breadwallet to sell some bitcoins, accidentally set the transaction fee at (what I'd later find out to be) ~10 satoshis/byte. Now I have ~$2300 locked up in the mempool, and no end in sight for these high transaction fees. Can't figure out a way to raise the fee. https://jochen-hoenicke.de/queue/#4d

Seems like bad timing, the transaction fees compared to other crypto currencies are massive right now[1] and the transaction speed is just as bad, with 70.000 pending transactions[2]. Im assume that this situation is going to become better. Apparently one reason is, that segwit transaction space is barely used at the moment. [1]https://bitinfocharts.com/de/comparison/transactionfees-btc-eth.html#6… [2]https://jochen-hoenicke.de/queue/#24h

A world where an offline, encrypted data file offers exactly the same security level as an offline, encrypted memory cell. You invoke side channels -- what about these side channels: https://jochen-hoenicke.de/trezor-power-analysis/

Interesting to see that the backlog in unprocessed transactions on the original bitcoin chain is exploding at the same time: https://jochen-hoenicke.de/queue/#24h

Transaction fees only need to be high if you are in a hurry. If you can wait a week or two you can go with very small TX fees. As you can see in this graph even very low (5 to 10 Satoshi per byte) fee transaction are confirmed eventually. https://jochen-hoenicke.de/queue/#24h

Another all time high (or so): Over 100k transactions in mempool (waiting to be confirmed) https://jochen-hoenicke.de/queue/all.html

> Measuring energy use per transactions makes no sense I am well aware of the difference between average and marginal energy use. This would be particularly relevant if the blocks were not full, but mined anyway, so that any additional transaction could've been included "for free". However, more often than not, that's not the case, but the mempool is non-empty, and the constraint (of max transactions per block) is binding. [1] Thus, one can not trivially argue that the marginal cost of a transaction is zero. Next, yes, my figures (165 TWh/a = 19 GW) from Digiconomist [2]) are at the upper end of the estimates, but other figures (eg Cambridge Bitcoin Electricity Consumption Index) estimate 100 TWh/a, with reasonable bounds of 36 to 376 TWh/a, so 12 to 28 GW, so are largely in alignment, modulo a factor of 2. (Note that your source is also within a factor of 3 of those estimates, pegging BTC at 0.2% of global electricity consumption.) At any rate, the average cost is just preposterous, even if off by a factor of 3. [1] see for example https://jochen-hoenicke.de/queue/#BTC,1w,count [2] https://digiconomist.net/bitcoin-energy-consumption/ [3] https://cbeci.org

> Would raising the block size to 10-100MB cause significant latency issues for transactions even if one could fit a lot more transactions into a single block? There are two ways to understand your question so I'll just answer both of them: Fitting more transactions in a block leads to faster confirmation, and potentially lower fee. When a transaction gets into a block, the network confirms that the transaction is valid and can't be reversed. Right now each block can only fit ~2k transactions, and since a block can only be generated every 10 minutes, the mempool (backlog of unconfirmed transaction) is rather huge. This site shows how big it is: https://jochen-hoenicke.de/queue/. Miners are incentivized to only select transaction with high fee into the next block, which in turn incentivizes users to pay more fee to get their transaction to confirm faster. With bigger blocks, more transactions get confirmed quicker, which leads to lower fee. Bigger blocks however mean miners with slow internet connection are at a disadvantage. When a miner finds a winning block, they broadcast the block to as many nodes in the network as possible. After a while, a majority of nodes accepts that winning block, and the miner is eligible for the mining reward. If A finds the winning block 10 seconds after B, but A is able to propagate their block quicker than B, then it's possible that A's block is accepted and not B'. In reality, it's possible that B might still win the race, but the rule is:…

You (or your wallet, or both... depending of your wallet and your settings) choose the fees you like (the wallet could guesstimate based on the current congestion and your time preference). The miners then choose the transactions they want to include in a way, as to maximize their gains. As a block can only hold a certain amount of transactions and the limit being set by the weight-units [1], miners will want to prioritize the transactions that offer them bigger fees per weight unit, or usually expressed as sats/vbyte (satoshis per virtual bytes). So if you don't need a transaction to arrive in the next 1-2 hours, you can lower your fees, and the transaction might pass in the night (although BTC is international, congestion is less on US night time and especially week-ends) or if not, probably in the week-end. If it doesn't clear fast enough, or as fast as hoped, then RBF (replace-by-fee) or CPFP (child-pays-for-parent) might help (manually or an increase of the fee could be automated by the wallet every set amount of time). TL;DR: there is a free market for transactions, but the price is not dictated by the market (and there is no real bidding system), instead you suggest a fee, and see if any miner around the world wants to include it in a block (and you can adjust if the outcome isn't achieved, which has similar results to a bidding system... but is more like natural supply/demand mechanism, as miner do not guarantee to include a transaction). Helpful to see current…

Energy use is proportional to the revenues gained from mining. Revenues are based on the block coinbase reward and transaction fees from transactions (txns) included in the block. The coinbase reward is currently a large majority of mining revenue, but this will decrease over time according to the coinbase halving schedule every ~4 years. Since block capacity is arbitrarily limited to 1MB, txn throughput is limited. Therefore, all txns contribute to txn fee competition. There is a transaction fee market where users must outbid each other to ensure their txns are incorporated into the blockchain in a timely manner. The net effect is that txn demand does contribute to mining rewards and ultimately the energy used for mining. But it is a very small effect at present: * Txn fee competition only rarely kicks in. The network operates most of the time without substantial mempool backlog. https://jochen-hoenicke.de/queue/#0,6m This does change with market activity, and we are certainly looking at more txn fees overall in the future. * Coinbase rewards dominate mining revenues, so the effect is proportionally small. As these rewards decrease in the future, txn effects will have bigger effects. The upshot of all of this is a shift into a 'mature' paradigm of blockchain security funding. It's a pretty big shift and easily the biggest unknown in the future of Bitcoin. More and more, the focus will be on scaling and whether the opposing goals of affordable transactions…

I literally transact almost every day. To give you an example, the withdraw fee for BTC on Kraken is 0.0005 BTC, which is currently about 17.50 USD. Here is the current mempool: https://jochen-hoenicke.de/queue/#0,24h To get your transaction confirmed in the next few blocks, you have to be in the "yellow" of the chart, and use a fee of around 120 satoshi's per byte. The average transaction is around 200 bytes, so you need to pay 24000 satoshis, which is 0.00024 BTC. That's 8.40 USD right now. The problem is that it's a double blind auction, so to have a very high likelihood of getting into the next block, you often have to pay 200-400 satoshi's per byte, which puts you right up at the $20 level. If your transaction is larger, it can be significantly more. Also, if the mempool gets even more backed up than it is right now, the fees can literally go as high as people are willing to pay when fighting over the restricted block space. >You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough. If you try sending a Bitcoin transaction with a $1 fee right now it may not confirm for days and might confirm at all! That isn't a user experience that's going to create mass adoption. It needs to be an improvement on the existing options. How, exactly, is my statement that the fees are often over $20 a lie? You should stop accusing people of being liars without data to back it up. This forum is supposed to be for intelligent discussion, not…