POV: Fee market never works

in steem •  last year

This is very short post (pov, point of view) about how amusing it is to see, some people ignoring the potential of Steem 😊

Fee market never works

I would understand if you would get privacy when paying fees, like what Monero does.

But other than that, it doesn't make much sense to pay so high fees, we are not empowering banks or western union or other companies. 😶

We want to solve problems that is foundation of those companies, right?! We all know Bitcoin is having problem during high transaction volume where miners choose which transactions to confirm based on their fees. Same goes to almost all other crypto projects, sooner or later they will experience what Bitcoin is experiencing or seize to existence without reaching bigger user base.

Today Ethereum experienced it as well, yes you read it right... Popular BAT ICO that happened today caused network to hiccup, costing way higher transaction fees, gas if you would want to participate.

This transaction paid 9.9914 Ether ($2,233.78) fee! That's unbelievable.

Screen Shot 2017-05-31 at 9.09.15 PM.png

I am not saying Ethereum or Bitcoin will die, but my opinion for longer term they will struggle to grow and scale.

That's one of many factors, I am more confident that projects like Steem and EOS will actually get somewhere.

What do you think?

Steem on!

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Exactly, Blockchains should be better than that and solve those issues. That's one of the fundamental value proposition, isn't it...


That's what got me hooked on bts/steem... Free or close to free transactions.


Yeah, why pay a fee when you can use cash for a lot of transactions? It's a problem.

Completely agree. The problem is that most don't really know about Steem yet. The ones that do are clinging to whatever "technology" their blockchain offers. If we could get a few real world use cases for steem perhaps the ball would start rolling...


Indeed, real uses cases are being developed by few people I know and I am sure it will boost the adoption 😊


Sadly, it's as simplistic as some large retailers accepting steem for it to spread like wild fire. Bitcoin is finally getting love because you can use it at Dell, Wordpress, Newegg, Expedia, etc.

I want to use steem to book a vacation thru expedia, that'd due the trick :-)


You're right on, but I think the real Steem advantage is in facilitating a lot of smaller transactions - stuff like streaming music or upvote-for-content-access models could be cool.

Bandcamp is a great example of a site that could use Steem integration.


I'd like to see that.....then I can say, "this one time, at band camp I used steem to buy a new uniform." :-)

Wow, what a news and an incredible one to boot!

Thanks for sharing, this will give Steem a lot of reasons to be adopted by many. All for one and one for all! Namaste :)

Steem is very different from anything else. It's success is tied to the participation of it's members. It is it's members. It's kind of like cryptocurrency by the people, for the people and of the people. Now where have I heard something like that before?

Wow!!! That is ridiculous. I have always thought that people are just putting future problems off when going from set mining rewards to just fees for mining rewards

Maybe part of the challenge in getting more people onboard with Steem lies in the fact that a lot of people live by the (false) paradigm that "you get what you pay for." In this case... "Well, if it's completely FREE, there most be something 'wrong' with it... or it's not good or reliable." Then there's also the old "Too good to be true" fear.

I'm borrowing these "objections" from outside the world of crypto... from retail sales of goods and services. There's a "re-training" process that needs to happen.


True, that new shift will take some time to sink in...

haha I laugh so hard now that I re-read the title of the post, you really got me there! xD


😂 eager to see what else future holds

I've said it for a while: In order to succeed, you have to deliver on a few things. Price, convenience, reliability being among those. To say that ether (or any crypto) is practical in a everyday sense is bullshit. Price varies enormously from platform to platform. Steem and bitshares is among the cheap ones. Overcoming the inconvenience of long, computer generated addresses would also speed up adoption. Again Steem and bitshares in the forefront with human readable addresses. The last piece of the puzzle: mobile apps that actually works like a wallet. Then we get somewhere.


I agree, with Steem we already have those solved and constantly trying to improve 😉


Thats why i keep supporting you, jesta and the other developers. The road to usability is through programming, clear goals and a demand. And I think we're getting somewhere. Meanwhile my Steem dollars is diversified into multiple other ventures. The time for crypto mass adoption is not yet.

You have to understand why transactions are free on steem. You give up certain rights so that blocks can be fast and transaction can be free. This is different from Ethereum where ETH provides a different trust landscape than steem entirely.

The 9ETH fees from the ICO were inherent to the platform - essentially by intention. They are not proof that a fee market does not work - that transaction is proof that a fee market does work. This was not a hiccup. Users who wanted a confirmation and to be included into the sale payed for that privilege.

There is always a place in the market for steem and EOS.


You are right, it was paid voluntarily and it is by design. I am just giving my opinion that in a long run, it won't work/scale. Like I mentioned in a post, I don't mean they will die off, I do hold eth and quite positive that it has potential to outperform bitcoin but not for long... In real world applications, you shouldn't compete for the fees. Sure, all projects will have their use cases and places.


I do see what you are saying. I am interested in how the future will progress. I do think real world applications will have to compete for fees, there will just be much more space and much lower fees overall.

Transaction fees should be a thing of the past, or the very least be kept to a minimum.

If stock market experts were so expert, they would be buying stock, not selling advice

yes , We need to make some solution for this. we need to find some alternative or create some way

Wow that are some insane fees @good-karma. I also believe in EOS and Steem, but focus on the latter. Any ideo when EOS will go live?


Not sure, closely following the news 😉

Well, time to go back to use euros and USD ! No way I would ever pay 2200 USD to send a bitcoin or some ETH.

That 9 ETH fee was optional, to get their transaction processed faster to get into the ICO. They could have launched at a normal fee and just missed the ICO window, ETH would have processed it. I still agree 30 TPS for Ethereum is a long-term bottle-neck, but this was people gaming the system to outdo one another into a limited window of an ICO.


You are right, it is optional but doesn't mean there is an equality. Look where it got Bitcoin today, loosing market share.. not that it is good or bad, it just doesn't scale

Wow that is insanely high! Progress is being made on the blockchain, but there is still many improvements that can be done! It does seem like Steem/EOS and others like it may be solving some of these issues

That's crazy. And let's be realistic about the level of adoption currently ... ETH is doing great, but compared to fiat it's microscopic. If crypto is ever going to scale to fiat level, which i believe it will, it's gonna have way bigger volume than events like this. STEEM + EOS 👍


I agree about adoption and speculation, it is very high and it might even pass bitcoin in terms of market cap, but it doesn't mean it will stay there long enough. And I believe they have better chance if they try to address these issue and solve it as early as possible. As for long term adoption and use cases I think Steem and EOS will have better chance, it has also its challenges though

Idiots are everywhere - struggling usually by the fact people think it sounds too good to be true - the old problem. When I show them the rewards they still say, there must be sth you do not know and you will pay in the end lol


Well, ignorance is our nature... but we do what we can to improve lives right 😉


Yes Sir, we improve, you improve, all for a better life

Question: how do we know for sure that Steem transactions fees stay close to zero when the masses going te use it?


There are no transactions fees on steem... so it's impossible to keep it close to zero.

@good-karma Steem has so much potential it's unreal. Kinda like Facebook when it first came out, but bigger...:O

interesting take, i do agree steem is poised for something BIG

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STEEM will be rally since this is a new project and there are millions of would-be entrepreneurs who really don't make any money that will find out about this and join. Since this is all about people to people the STEEM and SBD will climb to all time highs like the bitcoin.

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Nice articles @good-karma

I like yourcpost. that is very benefits

good project

but no need to listen to the likes of Tone Vays, Adam Meister, and many others. pointing this shit out long ago


Those guys are complete idiots.