>spamming the mempool with small transactions that never confirm just to bump the TX fees.
For starters, i'm not convinced it's "spam" and not just people consolidating dust with low fees that don't really care if it never gets confirmed, but will try for a time when it might anyway.
I have done this myself, by carefully crafting a transaction with a ton of dust addresses and setting the fee to be a hair over 1 sat/byte, and it sat in the mempool for a month or 2 (after being rebroadcast several times) before finally getting confirmed a while back. You might call that spam, but for me it was Bitcoin working as intended. My "low importance" transaction waited until the mempool was low to get included.
But even then unless the "spammers" are spending a LOT of money on the fees, it won't affect anything, since all you need to do is spend 1 sat/byte more than them and you will get in next block...
>Furthermore, exchanges like Coinbase haven't implemented TX batching and Segwit, which further compounds the problem.
And fees provide them the ONLY incentive to fix those problems. Without the need for fees, why would anyone in the bitcoin ecosystem ever do batching (a complicated and potentially less secure way of managing transactions), segwit (requires more development resources), and even things like compressed keys (which some exchanges still don't use).
The spammers have been 'caught' on a few occasions. The patterns definitely look like transactions which have been generated by a script with the intention of filling the mempool to push up fees. I've also seen screenshots of Telegram chats where people discuss doing this on Reddit and elsewhere (although I can't find it now, and there's no way to verify authenticity).
Coinbase passes the fees directly onto their customers, and they don't seem to care much. They also don't let users change the fees. In fact, Brian has started shilling Bcash on Twitter, so one might guess they're intentionally pushing up fees to push an altcoin (Bcash).
Protip: GDAX pays the TX fees, so it's possible to workaround the TX fees by moving your coin to GDAX.
Well is it really "spam" if they are paying the same rate as you? It also points to tx fees being extremely necessary, as without them what would stop a malicious actor from spamming SIGNIFICANTLY more, clogging up the blockchain making it so a miniscule fraction of the real transactions could get through?
Also, I'm well aware of GDAX and coinbase and their pitfalls and benefits, but that doesn't have much to do with the discussion of fees and why they are necessary.
AFAIK RaiBlocks is the only coin that has tried to build a compeletely feeless cryptocurrency. Whether or not it will actually work, I don't know, and the current implementation has a lot of issues. But it's interesting if you're in to crypto. Furthermore, Lightning Network could provide a similar feeless system (excluding the settlement TXs).
>Furthermore, Lightning Network could provide a similar feeless system (excluding the settlement TXs).
There are even ways to get around the extreme majority of the fees for settlement transactions! Look up Channel factories for an idea on how even the opening and settlement transactions can be reduced to about 10% of their current size/cost for a single user. And there might be ways of interacting with channel factories to keep those settlement transactions off the main blockchain for the most part!
Also, I'm fairly certain IOTA doesn't have any TX fees, as well as several others that came before RaiBlocks.
- uses a bizarre internal trinary digit system, instead of binary
- I've heard that it doesn't actually work, as in, you can't perform transactions
In terms of the top ~25 coins by market cap, AFAIK RaiBlocks is the only feeless one which acutally works. Regardless, it's worth watching these coins to see how the economics work out.
For starters, i'm not convinced it's "spam" and not just people consolidating dust with low fees that don't really care if it never gets confirmed, but will try for a time when it might anyway.
I have done this myself, by carefully crafting a transaction with a ton of dust addresses and setting the fee to be a hair over 1 sat/byte, and it sat in the mempool for a month or 2 (after being rebroadcast several times) before finally getting confirmed a while back. You might call that spam, but for me it was Bitcoin working as intended. My "low importance" transaction waited until the mempool was low to get included.
But even then unless the "spammers" are spending a LOT of money on the fees, it won't affect anything, since all you need to do is spend 1 sat/byte more than them and you will get in next block...
>Furthermore, exchanges like Coinbase haven't implemented TX batching and Segwit, which further compounds the problem.
And fees provide them the ONLY incentive to fix those problems. Without the need for fees, why would anyone in the bitcoin ecosystem ever do batching (a complicated and potentially less secure way of managing transactions), segwit (requires more development resources), and even things like compressed keys (which some exchanges still don't use).