Return-Path: <dave@hashingit.com> Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id 7EBCA47F for <bitcoin-dev@lists.linuxfoundation.org>; Thu, 30 Jul 2015 14:25:47 +0000 (UTC) X-Greylist: from auto-whitelisted by SQLgrey-1.7.6 Received: from heron.directrouter.co.uk (heron.directrouter.co.uk [89.145.69.228]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 0AF1F146 for <bitcoin-dev@lists.linuxfoundation.org>; Thu, 30 Jul 2015 14:25:44 +0000 (UTC) Received: from 50-76-32-109-ip-static.hfc.comcastbusiness.net ([50.76.32.109]:53852 helo=[10.0.7.15]) by heron.directrouter.co.uk with esmtpsa (TLSv1:DHE-RSA-AES256-SHA:256) (Exim 4.85) (envelope-from <dave@hashingit.com>) id 1ZKomE-001yzh-4I; Thu, 30 Jul 2015 14:25:42 +0000 Content-Type: multipart/alternative; boundary="Apple-Mail=_1BDB8183-955D-4E11-BDC8-432E00175867" Mime-Version: 1.0 (Mac OS X Mail 8.2 \(2102\)) From: Dave Hudson <dave@hashingit.com> In-Reply-To: <55BA2329.1080700@thinlink.com> Date: Thu, 30 Jul 2015 07:25:43 -0700 Message-Id: <58D8CEFE-2763-452E-B731-DDF7AFD77677@hashingit.com> References: <CADZB0_ZgDMhVgCUh2PTAPDL7k_W8QGt_HLYdkwv_qQ5xEMn8HA@mail.gmail.com> <543015348.4948849.1438178962054.JavaMail.yahoo@mail.yahoo.com> <COL131-DS3F7339BCCA36BEFD1755ACD8C0@phx.gbl> <55B959A2.9020402@sky-ip.org> <CAF_2MyVAXg9788gatEQ-t4=8rJxXdkf9DA45uF5_gksDUM6b=A@mail.gmail.com> <CALqxMTHEknuwPW-uG3W9Fv1sQC54ud3zk4aLQaFGTTjAt7ghfA@mail.gmail.com> <CAF_2MyXhhZyHSekOR0uTKndt8onEHqTJGnZwWFXoHw6xngidPA@mail.gmail.com> <55BA2329.1080700@thinlink.com> To: Tom Harding <tomh@thinlink.com> X-Mailer: Apple Mail (2.2102) X-AntiAbuse: This header was added to track abuse, please include it with any abuse report X-AntiAbuse: Primary Hostname - heron.directrouter.co.uk X-AntiAbuse: Original Domain - lists.linuxfoundation.org X-AntiAbuse: Originator/Caller UID/GID - [47 12] / [47 12] X-AntiAbuse: Sender Address Domain - hashingit.com X-Get-Message-Sender-Via: heron.directrouter.co.uk: authenticated_id: dave@hashingit.com X-Source: X-Source-Args: X-Source-Dir: X-Spam-Status: No, score=-1.9 required=5.0 tests=BAYES_00,HTML_MESSAGE autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org 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?= X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Development Discussion <bitcoin-dev.lists.linuxfoundation.org> List-Unsubscribe: <https://lists.linuxfoundation.org/mailman/options/bitcoin-dev>, <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=unsubscribe> List-Archive: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/> List-Post: <mailto:bitcoin-dev@lists.linuxfoundation.org> List-Help: <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=help> List-Subscribe: <https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev>, <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=subscribe> X-List-Received-Date: Thu, 30 Jul 2015 14:25:47 -0000 --Apple-Mail=_1BDB8183-955D-4E11-BDC8-432E00175867 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=us-ascii > On 30 Jul 2015, at 06:14, Tom Harding via bitcoin-dev = <bitcoin-dev@lists.linuxfoundation.org> wrote: >=20 > 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: >=20 > = https://blockchain.info/charts/transaction-fees?timespan=3Dall&daysAverage= String=3D7 = <https://blockchain.info/charts/transaction-fees?timespan=3Dall&daysAverag= eString=3D7> 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 = <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). --Apple-Mail=_1BDB8183-955D-4E11-BDC8-432E00175867 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=us-ascii <html><head><meta http-equiv=3D"Content-Type" content=3D"text/html = charset=3Dus-ascii"></head><body style=3D"word-wrap: break-word; = -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" = class=3D""><br class=3D""><div><blockquote type=3D"cite" class=3D""><div = class=3D"">On 30 Jul 2015, at 06:14, Tom Harding via bitcoin-dev <<a = href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" = class=3D"">bitcoin-dev@lists.linuxfoundation.org</a>> wrote:</div><br = class=3D"Apple-interchange-newline"><div class=3D""><span = style=3D"font-family: Helvetica; font-size: 12px; font-style: normal; = font-variant: normal; font-weight: normal; letter-spacing: normal; = line-height: normal; orphans: auto; text-align: start; text-indent: 0px; = text-transform: none; white-space: normal; widows: auto; word-spacing: = 0px; -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">Another empirical fact also needs explaining. = Why have average fees *as</span><br style=3D"font-family: = Helvetica; font-size: 12px; font-style: normal; font-variant: normal; = font-weight: normal; letter-spacing: normal; line-height: normal; = orphans: auto; text-align: start; text-indent: 0px; text-transform: = none; white-space: normal; widows: auto; word-spacing: 0px; = -webkit-text-stroke-width: 0px;" class=3D""><span style=3D"font-family: = Helvetica; font-size: 12px; font-style: normal; font-variant: normal; = font-weight: normal; letter-spacing: normal; line-height: normal; = orphans: auto; text-align: start; text-indent: 0px; text-transform: = none; white-space: normal; widows: auto; word-spacing: 0px; = -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">measured in BTC* risen during the times of = highest public interest in</span><br style=3D"font-family: Helvetica; = font-size: 12px; font-style: normal; font-variant: normal; font-weight: = normal; letter-spacing: normal; line-height: normal; orphans: auto; = text-align: start; text-indent: 0px; text-transform: none; white-space: = normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: = 0px;" class=3D""><span style=3D"font-family: Helvetica; font-size: 12px; = font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; float: = none; display: inline !important;" class=3D"">bitcoin? This = happened without block size pressure, and it is not an</span><br = style=3D"font-family: Helvetica; font-size: 12px; font-style: normal; = font-variant: normal; font-weight: normal; letter-spacing: normal; = line-height: normal; orphans: auto; text-align: start; text-indent: 0px; = text-transform: none; white-space: normal; widows: auto; word-spacing: = 0px; -webkit-text-stroke-width: 0px;" class=3D""><span = style=3D"font-family: Helvetica; font-size: 12px; font-style: normal; = font-variant: normal; font-weight: normal; letter-spacing: normal; = line-height: normal; orphans: auto; text-align: start; text-indent: 0px; = text-transform: none; white-space: normal; widows: auto; word-spacing: = 0px; -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">exchange rate effect -- these are raw BTC = fees:</span><br style=3D"font-family: Helvetica; font-size: 12px; = font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px;" = class=3D""><br style=3D"font-family: Helvetica; font-size: 12px; = font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px;" = class=3D""><a = href=3D"https://blockchain.info/charts/transaction-fees?timespan=3Dall&= ;daysAverageString=3D7" = class=3D"">https://blockchain.info/charts/transaction-fees?timespan=3Dall&= amp;daysAverageString=3D7</a><br style=3D"font-family: Helvetica; = font-size: 12px; font-style: normal; font-variant: normal; font-weight: = normal; letter-spacing: normal; line-height: normal; orphans: auto; = text-align: start; text-indent: 0px; text-transform: none; white-space: = normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: = 0px;" class=3D""></div></blockquote><div><br class=3D""></div><div>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: <a = href=3D"http://hashingit.com/analysis/35-the-future-of-bitcoin-transaction= -fees" = class=3D"">http://hashingit.com/analysis/35-the-future-of-bitcoin-transact= ion-fees</a></div><div><br class=3D""></div><div>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).</div><br class=3D""><blockquote = type=3D"cite" class=3D""><div class=3D""><span style=3D"font-family: = Helvetica; font-size: 12px; font-style: normal; font-variant: normal; = font-weight: normal; letter-spacing: normal; line-height: normal; = orphans: auto; text-align: start; text-indent: 0px; text-transform: = none; white-space: normal; widows: auto; word-spacing: 0px; = -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">... more evidence that conclusively refutes the = conjecture that a</span><br style=3D"font-family: Helvetica; font-size: = 12px; font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px;" = class=3D""><span style=3D"font-family: Helvetica; font-size: 12px; = font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; float: = none; display: inline !important;" class=3D"">production quota is = necessary for a "functioning fee market." A</span><br = style=3D"font-family: Helvetica; font-size: 12px; font-style: normal; = font-variant: normal; font-weight: normal; letter-spacing: normal; = line-height: normal; orphans: auto; text-align: start; text-indent: 0px; = text-transform: none; white-space: normal; widows: auto; word-spacing: = 0px; -webkit-text-stroke-width: 0px;" class=3D""><span = style=3D"font-family: Helvetica; font-size: 12px; font-style: normal; = font-variant: normal; font-weight: normal; letter-spacing: normal; = line-height: normal; orphans: auto; text-align: start; text-indent: 0px; = text-transform: none; white-space: normal; widows: auto; word-spacing: = 0px; -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">production quota merely pushes up fees. We = have a functioning market,</span><br style=3D"font-family: Helvetica; = font-size: 12px; font-style: normal; font-variant: normal; font-weight: = normal; letter-spacing: normal; line-height: normal; orphans: auto; = text-align: start; text-indent: 0px; text-transform: none; white-space: = normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: = 0px;" class=3D""><span style=3D"font-family: Helvetica; font-size: 12px; = font-style: normal; font-variant: normal; font-weight: normal; = letter-spacing: normal; line-height: normal; orphans: auto; text-align: = start; text-indent: 0px; text-transform: none; white-space: normal; = widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; float: = none; display: inline !important;" class=3D"">and so far, it shows that = wider bitcoin usage is even more effective</span><br style=3D"font-family:= Helvetica; font-size: 12px; font-style: normal; font-variant: normal; = font-weight: normal; letter-spacing: normal; line-height: normal; = orphans: auto; text-align: start; text-indent: 0px; text-transform: = none; white-space: normal; widows: auto; word-spacing: 0px; = -webkit-text-stroke-width: 0px;" class=3D""><span style=3D"font-family: = Helvetica; font-size: 12px; font-style: normal; font-variant: normal; = font-weight: normal; letter-spacing: normal; line-height: normal; = orphans: auto; text-align: start; text-indent: 0px; text-transform: = none; white-space: normal; widows: auto; word-spacing: 0px; = -webkit-text-stroke-width: 0px; float: none; display: inline = !important;" class=3D"">than a quota at pushing up = fees.</span></div></blockquote><br class=3D""></div><div>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.</div><div><br class=3D""></div><div>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).</div><div><br class=3D""></div></body></html>= --Apple-Mail=_1BDB8183-955D-4E11-BDC8-432E00175867--