Trends, Tips, Tolls: A Longitudinal Study of Bitcoin Transaction Fees
2nd Workshop on Bitcoin Research, affiliated with the19th International Conference on Financial Cryptography and Data Security, Puerto Rico, January 30, 2015
16 Pages Posted: 26 Nov 2014 Last revised: 27 Apr 2015
Date Written: October 26, 2014
The Bitcoin protocol supports optional direct payments from transaction partners to miners. These “fees” are supposed to substitute miners’ minting rewards in the long run. Acknowledging their role for the stability of the system, the right level of transaction fees is a hot topic of normative debates. This paper contributes empirical evidence from a historical analysis of agents’ revealed behavior concerning their payment of transaction fees. We identify several regime shifts, which can be largely explained by changes in the default client software or actions of big intermediaries in the ecosystem. Overall, it seems that rules dominate ratio, a state that is sustainable only if fees remain negligible.
Keywords: Bitcoin, Virtual Currencies, Payments Innovations
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