Why fees matter to miners
Bitcoin was designed to distribute coins to miners through the block subsidy. The subsidy halves every 210,000 blocks. Currently we are in the fourth phase of the halving process. As the subsidy continues to decrease it is in miners’ financial interests to earn more revenue from the massive proliferation of low fee transactions, which is the other key component of the block reward.
Among all networks implementing the Bitcoin protocol, Bitcoin SV (BSV) is the only massively scalable blockchain that can handle large amounts of transactions, where the miners can earn more in transaction fees, while the fee of individual transaction can still remain extremely low. Currently miners have been able to mine blocks of transactions ranging in size from 2~4 GB with the total transaction fees exceeding the subsidy.
The Bitcoin SV node software empowers miners to handle massive amounts of transactions efficiently, while still enabling miners to configure their nodes according to their infrastructure and business strategy.
In the latest node upgrade (v1.0.11), we have made some changes on the fee settings.
Former Fee settings on Bitcoin SV
Bitcoin SV miners should configure fee settings manually to determine their own mining policy before they run the nodes. Prior to v1.0.11, there have been two different fee settings:
- The relay fee (-minrelaytxfee): determining whether a miner will accept a transaction into its mempool and broadcast it to other nodes. It is is the minimum fee required by a node to relay a transaction to other nodes.
- The transaction acceptance fee (-blockmintxfee) : also called mining fee, it is the minimum fee required by a node to include a transaction into his own block.
Usually, the relay fee is set to be lower than the transaction acceptance fee by the miners, and there are default settings in the node software that have enabled this.
Fee settings changes in Node software v1.0.11
The Bitcoin SV Infrastructure Team recently released Node software v1.0.11, removing the relay fee and changed the option name -blockmintxfee to –minminingtxfee to better reflect the setting.
The setting -minminingtxfee is a mandatory setting that miners must configure manually. To still use the default setting from the previous release, a miner needs to configure –minminingtxfee=0.00000500 (i.e. 500 Satoshis/KB).
Options -minrelaytxfee, -dustrelayfee, -dustlimitfactor have been removed. That means the node’s mempool will reject incoming low fee transactions based on its dynamic rejection fee algorithm; the dust threshold is now hard coded to one Satoshi per transaction output.
Why we removed the relay fee
As more and more utility comes to the Bitcoin SV network, fees will keep dropping. If the transaction fee is dropped low enough, the relay fee would drop to zero eventually, removing the requirement to have a relay fee.
More importantly, removing the relay fee eliminates the possibility of double spending attempts by those trying to exploit the difference between the relay fee and the transaction acceptance fee. It also brings the software back in line with the original design of Bitcoin by Satoshi Nakamoto. Furthermore, the dust output level was derived from the size of the transaction or relay fee. Users are free to do zero fee transactions, but are not recommended to do so. It will be up to the users and miners to decide the market fee together, not by the default settings in the node software.
- Can miners still run any version below v1.0.11?
- What are the benefits for running the latest version?
Currently we highly recommend BSV miners to implement all latest versions of the software because of considerable performance improvements. Miners that don’t upgrade to latest versions may miss out on transaction fees or be unable to detect double spend activities efficiently.
- What steps are necessary upon upgrading?
To implement v1.0.11, miners must configure -minminertxfee manually before they activate the node. This is a mandatory setting for this version.
Miners should also check their own system configurations (Processor, RAM and Internet connection) to ensure they can match the capacity of the network (for more information, scroll down and see the “System Requirements” section: https://www.bitcoinsv.io/node)
In the long term, enterprises should organize an annual software upgrade. Any urgent updates will be released separately by Bitcoin Association.
Please make sure you always down load Bitcoin SV node softwares here: https://download.bitcoinsv.io/bitcoinsv/
Thank you for your continued support of Bitcoin SV.