The Bitcoin Foundation announced that its latest wallet code will have the ability to include flexible fees so confirmation of transactions will be more predictable
Bitcoin Core has decided to make transaction fees more flexible instead of using hard-coded rules for what fees need to be paid under its next major release.
The Bitcoin Foundation on July 7 announced that the wallet code in its upcoming version (0.10) will be “smarter” about fees, and will observe how long transactions are taking to confirm and then use the data to estimate the right fee to pay so the transaction confirms quickly, or it will decide whether the transaction has a high enough priority to be sent free and quickly. The announcement came in a blog post written by Gavin Andresen, a board member and chief scientist of the Bitcoin Foundation.
The version will include a new option that allows users to control how quickly they would like a transaction to confirm: txconfirmtarget. The default value is 1, meaning the user wants the transaction to be sent with a fee and priority that confirms it will be included in the next block. The values can then go up to 6, which means a transaction can take up to six blocks until it gets confirmed.
Know how many blocks it will take
Andresen has been tracking bitcoin transaction fee estimates according to the amount of blocks needed. According to his data, a 250-something-byte transaction costs 0.0001 BTC or about 0.0004 BTC per kilobyte. With the hard-coded fee rules, a big transaction of about 1,000 bytes will still cost 0.0001 BTC, but it may take 15 blocks – which translates to about two hours – to get confirmed. Andresen said the new code makes transaction confirmation much more predictable.
“The current situation is even worse for free, high-priority transactions: the hard-coded ‘high-priority’ constant is much too low, so transactions sent for free can take a very long time to confirm,” Andresen wrote.
Transactions can be confirmed more quickly through the paytxfee option of Bitcoin Core or some other wallet implementation. Andresen noted that minimum fees are needed to avoid spam, as they keep people from flooding networks with 1 satoshi fee transactions that miners would never include in their blocks. Miners choose which transactions to include in blocks based on priority, which in turn is based on fee amounts and how long the transaction has been pending.
Bitcoin fees seem to be the big issue that make some hesitant of using the digital currency. Last month, for example, Israeli VC firm Aleph announced that it would provide $50,000 bounties to entrepreneurs that could reduce the cost of using Bitcoin. Entrepreneurs that would like a shot at the bounties have until July 15 to submit solutions.
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