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The cost of a transaction should be lowered again.

Discussion in 'Pre + Budget Proposal Discussions' started by Plateglassarmour, Dec 17, 2017.

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Now that we're over $1000, would you support lowering the transaction fee again at the next release?

Poll closed Jan 1, 2018.
  1. Yes, I would support lowering the fee 10x again.

    88.9%
  2. No, I think we should leave the fee as is for now.

    7.4%
  3. Abstain, I have no opinion on the matter.

    3.7%
  1. Plateglassarmour

    Plateglassarmour New Member
    Masternode Owner/Operator

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    Proposal:

    So, now that we are sitting at $1000 or more per Dash, the cost of a transaction is creeping up again. I think that the minimum cost of a transaction should be lowered another order of magnitude at the next software release. At the moment, the average minimum fee using the Dash core wallet is about $0.01 for larger transactions, and I think we should strive to keep it below that threshold.

    To that end, I'm thinking about making a proposal to have a standing policy that any time the minimum cost of a transaction approaches $0.01, we lower the fee again at the next release of software. I'm looking for feedback so that I don't waste my money posing the question to the masternode network if it looks like the sentiment is against me.

    To those of you worried that this will mean we get "spam" transactions as an attack vector, I just did some math that may set your mind at ease (see below). If someone wanted to attack us right now with "spam" transactions by filling up our blocks, the minimum fees could more than cover the cost of running all the masternodes with a healthy margin to spare, ignoring income from the block reward. I chose to be pessimistic and conservative for the values I chose so that there will be no doubt that the network could support such an "attack" (such as assuming that all masternodes are hosted on $20/month servers, which is overly generous at the moment.)


    --------------------------------------------------------------------
    "Spam attack" math:

    43,800(minutes per month)/2.5(minutes per block)=17,520(blocks per month)

    Masternode costs
    4,500(MN)*20$(cost of 1 month of hosting)=90,000$(cost to host all MN for 1 month)

    Transaction income
    0.00001Ð(min. transaction cost for 1 kB)*2,000(kB in 1 block)=0.02Ð(min. income for 1 full block)
    0.02Ð(min. income for 1 full block)*0.5(MN's share of transaction fees)=0.01Ð(MN income for 1 full block)
    0.01Ð(MN income for 1 full block)*17,520(blocks per month)=175.2Ð(income for 1 month of full blocks)
    175.2Ð(income for 1 month of full blocks)*1000$/Ð(price of Dash)=175,200$(income for 1 month of full blocks)

    175,200$(income) vs 90,000$(costs)

    This also assumes that our value will not increase from what it is right now as a result of having 8 times the transaction volume of Bitcoin.

    The math only gets more favorable as our network increases in size. Lets assume that our price triples, and our blocksize goes up to 5mB (which is in the current roadmap) while the transaction fees are 10 times lower (as per my proposal) and the cost of hosting stays at $20 per month/masternode (which I think is a fair assumption given that the initial estimate of $20 is very generous at the moment.) It works out to:

    131,400$(income) vs 90,000$(costs)

    Which initially looks like there is less profit from a similar "spam attack", but the transaction fees are 10x lower, and wouldn't need to be lowered for some time to come. If you want to compare like to like, you would have to multiply our price by 10, not 3, and that would give:

    438,000$(income) vs 90,000$(costs).

    And all of this assumes that they can pull of an "attack" using only the lowest fees, which in reality would mean that the "attack" would be useless, because people could just pay $0.005 higher per transaction and ignore the "attack" altogether.

    So, bring on the "spam" I say! It will just make me more money!
     
    #1 Plateglassarmour, Dec 17, 2017
    Last edited: Dec 17, 2017
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  2. paragon

    paragon Member

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    Given that the minimum hourly wage in Zimbabwe and Venezuela is $0.20 to $0.50 USD, having fees that are near an hourly wage sometimes depending on the number of inputs is unacceptable to most of us.

    I support lowering the fees again by 10x assuming Core doesn't see significant risk to this. Your calculations seem reasonable plate.

    I would like Dash to be able to say it clearly has lower fees than Bitcoin Cash and Litecoin at at all times which are our two main competitors to be fast and cheap digital cash. This will be just one more selling point to tip the scale in our favor. I'd also like to see privatesend fees in particular lowered as much as possible. Privatesend fees can easily sometimes be much more than an hour's wage for Zimbabweans and Venezuelans currently
     
    #2 paragon, Dec 17, 2017
    Last edited: Dec 17, 2017
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  3. Plateglassarmour

    Plateglassarmour New Member
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    The main problem with trying to have lower fees across the board is that so much of our current average fee is determined by the wallets people use, there's a reason our average fee at the moment is $0.47. All we can do is plug away at lowering fees and encourage wallets to lower their Dash fees. It's also a pretty good advertisement for using Dash wallets, as opposed to 3rd party wallets.
     
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  4. pille

    pille Active Member

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    Please also lower the mixing denominations. smallest ist 0.01 currently which is more than 10$.
     
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  5. solarguy

    solarguy Active Member

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    Certainly, the general feeling I get from the community is a determination to achieve the goal of usable money world wide. And certainly, Bitcoin has shown us that failure to control transaction costs is the kiss of death to be digital cash. I'm not sure exactly what mechanism we could adopt to insure that.

    But yes, let's keep low fees somehow some way.
     
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  6. Abdul kudus Mutaru

    Abdul kudus Mutaru New Member

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    Definitely, the fees have to be lowered, many are those who are so much into Dash due to the lower of transaction cost and of course it gives Dash an upper hand against any other coin. In Africa, the transaction cost and Dash instant features are among the magnet that has held more people in the Dash community because imagine paying $0.01 per transaction, it seems so meager in such that it won't affect the sender as against bitcoin which charges $30 or more. Personally, people have affirmed to me that, one key feature they are so much into Dash is as a result of its transaction cost and many even shared their past stories with bitcoin.
    The transaction cost should decrease in my opinion.
     
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  7. thedesertlynx

    thedesertlynx Active Member

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    I would think that a fee reduction is a great thing to do again at this point, though of course we should have some dev input first.
     
  8. UdjinM6

    UdjinM6 Official Dash Dev
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    I wouldn't jump the gun with yet another fee reduction - avg fee is still relatively high because original bincoin fee estimation algo is way way way too conservative (not to say "broken"). Many wallets relying on core's fee estimation are overpaying even though there is plenty space in blocks. Base fee is 0.00001000 per Kb which is $0.015 at current prices. We are going to fix the algo in the next release first and then we'll see if there is still a need to lower base fee even further but tbh, I wouldn't bother messing with it unless we are 10x in price from current levels ;)
     
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  9. solarguy

    solarguy Active Member

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    Excellent. Once again, the Dash Core Team is anticipating the problem and actively taking steps to solve it.

    I think the intent of the discussion is to make the commitment to very inexpensive transaction costs more formal and public, and what that might look like.

    Carry on, have fun, win!
     
  10. Plateglassarmour

    Plateglassarmour New Member
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    Precisely; I'm going to word the proposal something like "Should the minimum transaction fee be lowered 10x when the minimum price of a normal transaction is over 1 cent". That way it sets a good ground rule that the community can stick to in the future, without requiring immediate action on behalf of the Core developers. After all, a 500byte (average sized) transaction is 0.8 cents at the moment, so nothing needs to happen right away. It's just a statement of intent on behalf of the community observing our commitment to low fees, spelled out in black and white.

    Think of it like the original 2mB block vote, it didn't have bearing on the actual software for quite a while, it just informed the future behavior of the network.
     
    #10 Plateglassarmour, Dec 20, 2017
    Last edited: Dec 20, 2017
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  11. UdjinM6

    UdjinM6 Official Dash Dev
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    First of all, base fees do NOT guarantee the actual price you'll have to pay to have your txes included into blocks, miners might just refuse to include overly cheap txes. Not because they are evil but because they are rational (or at least they should be) - when blocks became huge it could be more rational to exclude 1 cent txes rather than risk orphaning the block due to its size (larger blocks take more time to propagate). This should be negotiated quite a bit via compact or xthin blocks (the data transferred when the block is found is going to be much smaller), we are researching which one to choose atm. So yes, technically base fees could be lowered to be kept at 1 cent, but no, this might not work without additional technical improvements at all and simply lowering the base fee might be kind of meaningless action.

    Secondly, comparing this to 2 MB block size increase, you should keep in mind that the 2mb proposal was made at times when the cost of running a node which would be able to handle 2mb blocks was comparable to the MN reward, so it was not so obvious for MNOs from the price point of view (I bet they predicted a slight price jump due to adoption increase but still :)). That's not the case anymore. MNOs can easily pay for the node today, fees doesn't make much of a difference for them. And asking someone a question that makes no difference to him is probably not a very good idea. I don't think you can compare these two proposals.
     
  12. camosoul

    camosoul Grizzled Member

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    This needs to scale dynamically...

    While I hate the idea of valuating against fiat, it's what people understand, and it's the very argument always made when we say "muh TX feez, oh noes!"

    If it were locked to scale against an average of fiat exchange values, we wouldn't have to have this conversation anymore, and nobody would be in charge of coding it anymore. It would become autonomous and trustless... We could even use the consensus protocol to vote how many fractions of a penny it should be... Put it directly into the hands of the MNOs... Which could be a train wreck, too, given the mental capacity of the MNOs...

    I realize some of the problems involved in doing that... Exchange APIs going offline/changing... You'd almost have to run your own service to assure sanitized inputs... Which comes back to a centralized, trusted system that some guy is in charge of... But, it would be a very different thing in which trust and management was needed, so it might be an excusable form...
     
  13. TroyDASH

    TroyDASH Well-known Member

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    Yeah it doesn't matter if the "base fee" is $0.01 if the wallets aren't smart enough to know that they can send less than $0.40. Hopefully the algorithm can be adjusted to be more accurate
     
  14. demo

    demo Well-known Member

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  15. UdjinM6

    UdjinM6 Official Dash Dev
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  16. demo

    demo Well-known Member

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  17. CarlosTrujillo

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    I think it's good that someone is worried because the price of transactions remains low, because it's a feature that differentiates us from other cryptocurrencies. With a good update we can face the challenges that are presented to us at a technological level. Good idea.
     
  18. solarguy

    solarguy Active Member

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    The required cost that originates from the blockchain is dirt cheap. We have to make a concerted effort to get the folks who design wallets to recognize that fact.
     
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