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Trends, Tips, Tolls: A Longitudinal Study of Bitcoin Transaction Fees

Part of the Lecture Notes in Computer Science book series (LNSC,volume 8976)

Abstract

The Bitcoin protocol supports optional direct payments from transaction partners to miners. These “fees” are supposed to substitute miners’ minting rewards in the long run. Acknowledging their role for the stability of the system, the right level of transaction fees is a hot topic of normative debates. This paper contributes empirical evidence from a historical analysis of agents’ revealed behavior concerning their payment of transaction fees. We identify several regime shifts, which can be largely explained by changes in the default client software or actions of big intermediaries in the ecosystem. Overall, it seems that rules dominate ratio, a state that is sustainable only if fees remain negligible.

Keywords

  • Time Stamp
  • Client Software
  • Block Chain
  • Mining Pool
  • Transaction Partner

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 1.

    More precisely: to verify that all inputs of a transaction one is about to receive reference to so far unspent outputs of past transactions.

  2. 2.

    We suggest that a probabilistic summation function, in Hirshleifer’s terminology [15], is a reasonable approximation in the short run.

  3. 3.

    The default client implements soft rules reflecting part of this wisdom. But uncertainty remains as users cannot anticipate enforcement of these rules. Unlike hard rules (for instance, the requirement to verify signatures), soft rules do not decide the validity of a block. Moreover, miners organized in pools are less likely to heed the defaults than individuals who use the standard client to manage their own transactions.

  4. 4.

    It was one Satoshi initially, then increased to 0.00005460 BTC after the default client required a minimum output value of 0.00005430 BTC to fight transaction spam [10].

  5. 5.

    We appreciate hints and anecdotes which might lead to testable hypotheses.

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Acknowledgements

We thank the anonymous reviewers for their feedback and the hint on the emergence of 0.0002 BTC fees. We also thank blockchain.info for providing us with an API key to bypass their request limit.

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Correspondence to Rainer Böhme .

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© 2015 International Financial Cryptography Association

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Möser, M., Böhme, R. (2015). Trends, Tips, Tolls: A Longitudinal Study of Bitcoin Transaction Fees. In: Brenner, M., Christin, N., Johnson, B., Rohloff, K. (eds) Financial Cryptography and Data Security. FC 2015. Lecture Notes in Computer Science(), vol 8976. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-48051-9_2

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  • DOI: https://doi.org/10.1007/978-3-662-48051-9_2

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