path: root/cc/b6c8f5985bd2d202718f0a95baa7459217186e

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 &lt;<a =
href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" =
class=3D"">bitcoin-dev@lists.linuxfoundation.org</a>&gt; 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. =
&nbsp;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? &nbsp;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&amp=
;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:&nbsp;<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." &nbsp;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. &nbsp;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--