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From: Melvin Carvalho <melvincarvalho@gmail.com>
Date: Mon, 12 Feb 2018 18:23:35 +0100
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To: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
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Subject: Re: [bitcoin-dev] Total fees have almost crossed the block reward
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On 21 December 2017 at 22:30, Melvin Carvalho <melvincarvalho@gmail.com>
wrote:

> I asked adam back at hcpp how the block chain would be secured in the long
> term, once the reward goes away.  The base idea has always been that fees
> would replace the block reward.
>
> At that time fees were approximately 10% of the block reward, but have now
> reached 45%, with 50% potentially being crossed soon
>
> https://fork.lol/reward/feepct
>
> While this bodes well for the long term security of the coin, I think
> there is some legitimate concern that the fee per tx is prohibitive for
> some use cases, at this point in the adoption curve.
>
> Observations of segwit adoption show around 10% at this point
>
> http://segwit.party/charts/
>
> Watching the mempool shows that the congestion is at a peak, though it's
> quite possible this will come down over the long weekend.  I wonder if this
> is of concern to some.
>
> https://dedi.jochen-hoenicke.de/queue/more/#24h
>
> I thought these data points may be of interest and are mainly FYI.  Though
> if further discussion is deemed appropriate, it would be interesting to
> hear thoughts.
>

Just following up on this, for no other reason than I've had my eyes glued
to these stats the last few weeks.  I'll share a few more stats links.

Mempool has come down significantly, as have fees.  Tho, of course, this
could spike any time.

https://bitinfocharts.com/bitcoin/

Typically fees are :

 $2.06 on tx $543 (median) # 0.38%
 $3.47 on tx $75,000 (mean) # 0.005%

Aside: An observation on this.  High value transactors seems to be getting
a much better deal, than the mean.  This lead me to ponder whether the
intuitive metric of satoshi/byte is, in fact, game theory optimal.
Possibly over the short term it is, but over a longer period, those wishing
to increase the longevity of proof of work in general might wish to
consider more progressive fee approaches.  Naively, it might be possible to
imagine some kind of gaussian distribution that picks tx according to a
blended combination of sats/byte and %transacted.  Perhaps something for
miners and fee estimation algorithms to develop over time.

Segwit adoption has increased, and anecdotal evidence shows that trend to
continue.  The release of 0.16 will I think also have a positive effect.

Finally, I came across this wonderful site that shows lightning network
adoption on mainnet

http://shabang.io/

LN is increasing well.  Some blocks are not far off 1% lightning funding,
which I think bodes well.  I'll go out on a limb and predict that over 1%
of btc tx will be lightning based by year end.

Since such posts are not strictly development, I'll keep them to a
minimum.  However, I hope these stats provide useful data points for
project evolution.

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<div dir=3D"ltr"><br><div class=3D"gmail_extra"><br><div class=3D"gmail_quo=
te">On 21 December 2017 at 22:30, Melvin Carvalho <span dir=3D"ltr">&lt;<a =
href=3D"mailto:melvincarvalho@gmail.com" target=3D"_blank">melvincarvalho@g=
mail.com</a>&gt;</span> wrote:<br><blockquote class=3D"gmail_quote" style=
=3D"margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding=
-left:1ex"><div dir=3D"ltr"><div><div><div><div><div>I asked adam back at h=
cpp how the block chain would be secured in the long term, once the reward =
goes away.=C2=A0 The base idea has always been that fees would replace the =
block reward.<br><br></div>At that time fees were approximately 10% of the =
block reward, but have now reached 45%, with 50% potentially being crossed =
soon<br><br><a href=3D"https://fork.lol/reward/feepct" target=3D"_blank">ht=
tps://fork.lol/reward/feepct</a><br><br></div>While this bodes well for the=
 long term security of the coin, I think there is some legitimate concern t=
hat the fee per tx is prohibitive for some use cases, at this point in the =
adoption curve.<br><br></div>Observations of segwit adoption show around 10=
% at this point<br><br><a href=3D"http://segwit.party/charts/" target=3D"_b=
lank">http://segwit.party/charts/</a><br><br></div>Watching the mempool sho=
ws that the congestion is at a peak, though it&#39;s quite possible this wi=
ll come down over the long weekend.=C2=A0 I wonder if this is of concern to=
 some.<br><br><a href=3D"https://dedi.jochen-hoenicke.de/queue/more/#24h" t=
arget=3D"_blank">https://dedi.jochen-hoenicke.<wbr>de/queue/more/#24h</a><b=
r><br></div>I thought these data points may be of interest and are mainly F=
YI.=C2=A0 Though if further discussion is deemed appropriate, it would be i=
nteresting to hear thoughts.<br></div></blockquote><div><br></div><div>Just=
 following up on this, for no other reason than I&#39;ve had my eyes glued =
to these stats the last few weeks.=C2=A0 I&#39;ll share a few more stats li=
nks.<br><br></div><div>Mempool has come down significantly, as have fees.=
=C2=A0 Tho, of course, this could spike any time.=C2=A0 <br><br><a href=3D"=
https://bitinfocharts.com/bitcoin/">https://bitinfocharts.com/bitcoin/</a><=
br><br></div><div>Typically fees are :<br><br>=C2=A0$2.06 on tx $543 (media=
n) # 0.38%<br>=C2=A0$3.47 on tx $75,000 (mean) # 0.005%<br><br></div><div>A=
side: An observation on this.=C2=A0 High value transactors seems to be gett=
ing a much better deal, than the mean.=C2=A0 This lead me to ponder whether=
 the intuitive metric of satoshi/byte is, in fact, game theory optimal.=C2=
=A0 Possibly over the short term it is, but over a longer period, those wis=
hing to increase the longevity of proof of work in general might wish to co=
nsider more progressive fee approaches.=C2=A0 Naively, it might be possible=
 to imagine some kind of gaussian distribution that picks tx according to a=
 blended combination of sats/byte and %transacted.=C2=A0 Perhaps something =
for miners and fee estimation algorithms to develop over time.<br><br></div=
></div>Segwit adoption has increased, and anecdotal evidence shows that tre=
nd to continue.=C2=A0 The release of 0.16 will I think also have a positive=
 effect.<br><br></div><div class=3D"gmail_extra">Finally, I came across thi=
s wonderful site that shows lightning network adoption on mainnet<br><br><a=
 href=3D"http://shabang.io/">http://shabang.io/</a><br><br></div><div class=
=3D"gmail_extra">LN is increasing well.=C2=A0 Some blocks are not far off 1=
% lightning funding, which I think bodes well.=C2=A0 I&#39;ll go out on a l=
imb and predict that over 1% of btc tx will be lightning based by year end.=
<br><br></div><div class=3D"gmail_extra">Since such posts are not strictly =
development, I&#39;ll keep them to a minimum.=C2=A0 However, I hope these s=
tats provide useful data points for project evolution.<br></div><div class=
=3D"gmail_extra"><br><br></div></div>

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