Don't Make This Newbie Bitcoin Mistake
Like many bitcoin holders, I've been obsessively checking the price the last few days as it has gone to the moon. I've been into bitcoin since early 2013, so I knew a correction was coming and wanted to sell some bitcoin before it did (I held through the last all time high and regretted not selling and re-buying lower).
Last night I decided to import one of my paper wallets to blockchain.info and then transfer it over to Gdax to play around with some trading. I was really surprised to see the suggested fee at over $5 for the transfer! I'm used to paying a few pennies or dimes at most. This is supposed to be bitcoin, not some bank wire transfer! (I foolishly told myself)
Against the multiple warnings of blockchain info's interface, I continued ahead with a fee of 0.0005 (which I still thought was high at $0.55). Here's where I made a newbie mistake.
Bitcoin fees are not arbitrary.
Miners get paid by working on blocks which include transactions with the highest fees. Each transaction has a size based on the number of inputs and outputs. Including small transactions with high fees is the best approach for them to remain profitable. My mistake was not thinking about how this address was one I used for mining back in the day. To transfer out of it requires 33 inputs! The size of the transaction is 5,973 Bytes! As you can see here, it's still unconfirmed after 13 hours and may remain so for quite some time:
With the price volatility, thousands of people are moving bitcoin around and the unconfirmed transaction count is now up over 36,000!
My transaction is probably somewhere near the bottom of the list.
Though I haven't done it before, I hear one way to push this along is to spend the coin in that output address using a high fee which will encourage miners to include the previous unconfirmed transaction. Unfortunately, since this address is owned by Gdax, that's not something I can do. For now, I'll just let it sit and see what happens.
Lesson learned: pay the fees.
There's a reason blockchain.info was suggesting such a high fee. They were thinking, I was not.
Additional lesson for those paying attention: bitcoin feels ancient compared to STEEM. 36k unconfirmed transactions compared to a blockchain which confirms in 3 seconds with no fees at all? Seriously. This isn't even like comparing betamax to VHS. This is like comparing a couple cans with some wax string to a Satellite phone.
I'm publishing my stupidity for your educational enlightenment. You might think after this failure (and my mining catastrophe melting 100 bitcoin) I'd be frustrated with bitcoin and cryptocurrency. Nope. I'm still as excited as ever because cryptographically secure money in the hands of individuals uncontrolled by governments and central banks is the future of stored value.
Anyone want to wager on when this transaction will actually confirm without intervention (if ever)?
36270 Wow! Just after christmas I ran into a long transaction confirmation and the unconfirmed were only at 16000+ then.
Using an old address stored on a paper wallet doesn't sound like a risky move to make, since that address would presumably never have been used before. However, the fact you said it was a Gdax address makes me think it wasn't truly in cold storage, which I generally think of when someone says "paper wallet". Muy bad assumption on that point.
I have noticed increasing trouble with Bitcoin transactions clearing over the last several months. I never use a centralized exchange. My Bitcoin wallet stays offline unless I am sending or receiving. The wallet I use generates new addreses for every transaction, so I don't concern myself with how many inputs or outputs a transaction uses as it never has been more than 2 or 3 when I've looked at them on blockchain.info.
When I had my first slow confirmation 6 or 7 months ago, I switched my wallet from using a fixed fee to one calculated by the full node servers the wallet connects with (I use Electrum). That is a dynamic value based on the size of the transaction in bytes, not the amount of Bitcoin being transferred. The transaction I did just after christmas was 250 bytes or so, which took over 12 hours to confirm. The fee calculated was .00014 BTC which was around $0.12. I decided after talking this over on SteemSpeak to go back to manual fees. The next transaction I did I used a fee of around $0.50, which went through in about an hour. Still slow but a lot better than before!
This trend has led me to overpay my server fees so that there is always a positive balance even if the payment takes several days to confirm. I wish that wasn't necessary but I believe it's only prudent given the delays I've experienced.
Word to the wise is increase your transaction fees if you have control over them. Even if the fees are as much as .01% of the value transferred it's still a huge bargain compared with those charged by any financial institution.
I was watching unconfirmed transactions pretty closely last night and it was down much lower than 16k at one point. Woke up today to see it much higher.
The sending address was my own paper wallet (after I imported it into blockchain.info), the destination address was Gdax. They create new addresses per transaction, as they should. The problem relates more to how many different transactions were sent to my paper wallet address over time. Since it was one I used for storing mining rewards, there were many different transactions from a mining pool into that address, making up for the 33 inputs needed to get the funds out of it.
But yeah. I should have noticed the inputs and either swept them into a clean address before transferring to gdax and/or paid the higher fees. If I had sold last night, I could have made a nice little profit. So much for trying to "save" $5.
I cashed out some steem the past few weeks for the first time ever. I must say I cashed the first time it was worth $53US of BTC which after the rise in btc price and few poor but positive trades i nearly doubled it. Seriously, and I have no idea about trading crypto.
Nicely done! Any time you can nearly double your investment is a good time.
Yes, pretty soon the network will also have a crisis from this.
Your transaction will confirm within 36 hours most likely.
36 hours sounds about right, assuming the unconfirmed transaction count drops back down again. If the price keeps going crazy (either up or down), it might stick around for longer though.
Interesting, I'm low tech new school with this....sent some btc I had on bittrex to my coinbase account, then sold into USD last night and waiting for it to arrive in my bank account. It will be cool to see money come in for the firs time, thus far I have only withdraw fiat to buy btc and steem.
Ah, the first transaction is always the most interesting. It makes it real. Congrats on your timing!
It's so good to see your still positive after what you have endured, im sorry for your loses
Thanks for raising awareness about the fee's for us the newbies here.
No problem! Life is too short not to stay positive. As long as we're not risking more than we're willing to lose, it's all good. Everything is a learning experience to help us grow and improve.
Thanks for the info. The slow transaction speed has annoyed me since I ffirst dabbled in biitcoin.
It's one thing that impressed me so much about Steem.
3 second block time certainly is nice, along with 10k transactions a second.
Unconfirmed transactions is up to 51k. Wow.
62k unconfirmed transactions now, last time just 40k made some peopel wait up to 3 days for their money ;)
I just noticed the same thing! This money will probably be locked up for quite some time unless I convince Gdax to try and send it from that address with a higher fee, if that's possible.
I've been wondering how long people will actually promote Bitcoin. It's very clear that it can't scale up. The problems have been coming for a long time but people haven't believed them. Maybe now?
Superior technology isn't always the most adopted technology. The network effect of bitcoin is orders of magnitude beyond anything else. I don't thin that'll go away any time soon. If anything, the recent price surge confirms bitcoin's dominance in the crypto space. At least for now.
I started with bitcoin in early 2013, I invested in mining. I should've just bought the coins, they were around $30 each then and people were giving them away like candy.