Published on: 2014-05-13T10:02:08+00:00
In a message posted on GitHub issue manager, Peter Grigor has proposed a new method for calculating transaction fees in Bitcoin. The proposed method involves calculating the fee from a percentage of the input amount divided by the confirmations of the input multiplied by the number of inputs. This proposal was made in response to concerns about the safety of small "spam" transactions that could become unsafely inexpensive with the use of 0 confirmation inputs.However, there are some concerns raised in the issue tracker regarding the suitability of this proposed method for Bitcoin. Some responses suggest that it may do more harm than good. As a result, there is uncertainty about whether or not this proposal should be implemented.The proposed formula for calculating transaction fees is ((INPUT_AMOUNT * BASE_PERCENT) / CONFIRMATIONS) * NUMBER_OF_INPUTS. The INPUT_AMOUNT, CONFIRMATIONS, and NUMBER_OF_INPUTS would be determined by the creator of the transaction, while the BASE_PERCENT would be hard-coded in the bitcoind software.This proposed method aims to ensure that the transaction fee always makes sense regardless of the bitcoin price in fiat. Dividing the fee by the number of confirmations encourages careful spending and rewards savings, while multiplying the fee by the number of inputs discourages "payment fragmenting." Payment fragmenting occurs when multiple inputs are required to pay for larger purchases, leading to higher transaction fees.To provide a visual representation of the proposed fees based on this method, a spreadsheet has been created. The spreadsheet shows the various fees by amount and confirmations. This allows for a better understanding of how the proposed formula would work in practice.Overall, Peter Grigor's proposal for a new method to calculate transaction fees in Bitcoin has sparked discussions and debates within the community. While the proposal offers potential benefits, there are also concerns raised about its suitability and potential negative impacts. Further analysis and consideration are needed before deciding whether or not to implement this proposed method.
Updated on: 2023-08-01T09:14:40.598945+00:00