Gass Cost & Micro-Transactions

finibhirefinibhire Canada BC VancouverMember Posts: 7
edited August 2015 in Projects
So I prefer mining in a pool because it's just more convenient and it's not such a roll of the dice. I just got my first transfer in of some of the work I've done for the pool. It wasn't much, just a little over one ether and the transaction fee was a little over 1 Finney. While that's pretty damn nice being just a fraction of a cent for a transaction cost I quickly came to the conclusion that I must be missing something here. Right now that transaction cost is about a 1/10th of a cent. However this is the simplest and cheapest transaction possible. Furthermore I expect the value of Ether in relation to other currencies to increase, maybe even to the multi-hundreds of dollars per Ether.

If the transaction costs stay roughly the same (1 Finney) as the value of Ether rises then the value of that 1 Finney would increase at the same rate making it as high as tens of cents for a simple transaction. This would remove the possibility of micro transactions. I was under the impression that Ethereum would be an acceptable method of dealing with micro transactions (although not the best). I feel like my understanding of how gas works must be incomplete and I need to understand it better so I can better evaluate an idea I have for a DApp + App.

My idea involves the voting equivalent of micro transactions where people could do many votes (much like “liking” a page on facebook). It will also involve more complex voting algorithms that include First Past The Post, and Single Transferable Votes. I'm afraid anything over a cent or two per vote would break my idea.

Does anyone have some quick answers for me and maybe some reference material I could read on the topic at hand? I've done quite a bit of research but I seem to be unable to answer this concern still.
Post edited by finibhire on

Comments

  • oliverkxoliverkx Member Posts: 85
    My understanding is that the transaction costs will vary using some kind of market mechanism - i.e. miners will only include transactions over a certain limit that they set themselves (although most miners will take their cue from some kind of oracle). So, as the price of Ether (compared to, say, USD) increases, the transaction cost in ETH may decrease.
  • ledgerwatchledgerwatch Member Posts: 57
    edited August 2015
    Transaction fee (as expressed in USD) would be calculated as "price of ETH in USD" * "price of unit of gas in ETH" * "number of units of gas spent by transaction".
    The simplest transaction has "number of units of gas spent by transaction" around 21000.
    As the component "price of ETH in USD" rises, the second component "price of unit of gas in ETH" will probably go down accordingly, so the cost of transaction in USD can stay the same.
    Introduction of gas was one of the great things about Ethereum design - it decouples market price of Ether from transaction fees charged by the Ethereum network!
    @finibhire So your worries about viability of micro-transacitons are unfounded, this will be independent of how expensive Ether is
  • gs02xzzgs02xzz Member Posts: 10
    how much ether is 21000 gas?
  • ledgerwatchledgerwatch Member Posts: 57
    edited August 2015
    @gs02xzz It depends on the gasPrice. For example, currently the gasPrice stands at around 55 gwei (gigawei), so 21000*55*10^9 wei = 1.115*10^15 wei = 1.115 finned
  • finibhirefinibhire Canada BC VancouverMember Posts: 7
    @ledgerwatch thanks for your help with this! I'm already working hard on my idea. Now it's just a matter of if I can actually make my idea work in the limited amount of time I have before I go back to school full time. ^.^
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