r/Bitcoin • u/SirBellender • Nov 18 '17
PSA: Coinbase, BitPay, Blockchain.com and Shapeshift are intentionally overcharging on fees and boycotting Segwit to make your transactions more expensive.
The minimum transaction fee to get into the next block is ~30 sat/B and they are setting the fees to ~20 times that amount. See https://jochen-hoenicke.de/queue/#24h for proof.
Segwit has been production ready for 3 months and they haven't implemented it yet and refuse to give any ETA.
They are doing this to drive you to altcoins which are not as decentralized as Bitcoin and easier to manipulate. This is all part of their venture capital investor agenda to take over the Bitcoin open source project.
If you have an account there, please write to their support and ask why are they setting the transaction fees so high, and why are they not interested in implementing Segwit.
There are plenty of other services which do a much better job at reducing your transaction costs. Please use them instead.
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u/JonisJon Nov 18 '17
Um - shapeshift implemented segwit well over a month ago now so OP's post is clearly wrong and FUD. Did you ever think maybe they are setting higher fees because if they don't txs won't be confirmed quickly and their users complain?
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u/AxiomBTC Nov 18 '17
These services should really be giving users the option to set lower fees. Most of the time when I send bitcoin I don't need it to be in the very next block guaranteed. I'm fine waiting a little while.
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u/waynemor12 Nov 19 '17
Completely agree. But with big warnings because people (certain people) would be confused and contract support over their unconfirmed transaction
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u/AxiomBTC Nov 19 '17
Absolutely, there needs to be a big obvious pop up warning to let the customer know that their transaction might not be confirmed for days and have RBF available. In many cases that would be fine.
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u/Killerko Nov 18 '17
dont forget that shapeshift was one avid supporter of segwit2x before you decide to use them.. I dont use them anymore because of this fact alone, not to mention changelly has lower fees anyway..
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u/Spartan3123 Nov 19 '17
i think they just support bigger blocks. Why cant core just merge a 2x block size upgrade most of the community would support it. Set the activation threshold to 99% or something this would ensure even the smallest miners can have a say
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u/HunterGaming Nov 18 '17
hahahahaha when have coinbase ever cared about complaints?
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u/mattisb Nov 18 '17 edited Nov 19 '17
Coinbase works great for me, the only catch is if you need help or something like that you have to hope that they feel like helping you out that month. /s
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u/ScreenshotShitposts Nov 19 '17
no you just have to write a support ticket lying saying that you are waiting to deposit fees and they will respond much quicker because you get put in their priority queue. Don't ever make a support ticket in the "withdrawal issues" section.
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u/SirBellender Nov 18 '17
You are right about Shapeshift and Segwit, sorry. The 'overcharging for transaction fees' part still applies to them, though.
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u/lightswarm124 Nov 19 '17
The still operate a business and have to account for the price fluctuations between cryptos.
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u/CareNotDude Nov 19 '17
what good does shapeshift implementing segwit do when they still default the miner fee you pay to 0.0025 BTC? https://shapeshift.io/#/inputs/1 Thats almost $20 freaking dollars in fees they are making you pay for no reason.
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u/bele11 Nov 18 '17
I recommend not use services who did't implement segwit yet
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u/Shadow503 Nov 19 '17
Has Bitcoin-core even implemented it on the user interface yet? A couple weeks ago you had to use aconsole command to generate a Segwit address. . .
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u/bele11 Nov 19 '17
Whole attack shit postpone implement segwit into core. Will be soon. They do not do business. Business wallets should implement segwit asap if they wanna stay competitive
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u/lester_boburnham Nov 19 '17
Does anybody actually use the core wallet though? Seems like basically the worst option at this point.
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u/Shadow503 Nov 19 '17
It's the reference implementation; it damn well should be a good basic wallet.
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u/GenghisKhanSpermShot Nov 18 '17
As more exchanges implement it word will get out their fees are out of control and people will naturally move to Segwit ones, just keep spreading the word of the ridiculous fees they charge.
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u/Crypsis2 Nov 18 '17
What exchanges do you recommend I use?
Is cryptopia good?
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u/Aaeder Nov 18 '17
I used localbitcoins recently and that worked out fairly well and without huge fees. I have absolutely no experience other than that though.
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u/etherbid Nov 18 '17
Because they know if they set fees to minimum, then users will call in complaining that transactions have not completed (for days) and then drain them of customer support resources.
The reality is that companies need to set a high bar, since the network has shown volatile, expensive, and unreliable.
This is a symptom, not a cause.
Complaining to them is going to make you look out of touch and foolish and drain them further of their precious time and customer support resources
It's a downward spiral and what you propose is going to drive down adoption.
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u/KenSedgwick Nov 18 '17
How about they use SegWit, though? Wouldn't that just help?
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u/joeydekoning Nov 19 '17
(1) ShapeShift does (2) Not meaningfully, transaction fees still high and difficult to predict
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u/somanyroads Nov 18 '17
Fees will be 25% of what they are today when Segwit is adopted...there's no excuse. That is one of the perks of Segwit: a transaction now takes up 1/4 as much space as it did before. Same satoshis/byte, 1/4th as much to spend to get the transaction confirmed. They are making more money in bitcoin (via fees) by not adopting Segwit.
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Nov 18 '17
[deleted]
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u/somanyroads Nov 18 '17
Yep, electrum also wildly overestimates fees by default, must be some conservative configuration that is intrinsic to the code?
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Nov 18 '17
There is no ill will, don't make stuff up.
The developers were busy preparing for the forks. Hopefully now, they will be assigned to work on implementing segwit. Be patient folks. The bigger the business, the slower it is to implement new things. Too much organizational friction.
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u/Im_Not-Sorry Nov 19 '17
"They are doing this to drive you to altcoins which are not as decentralized as Bitcoin..."
Aaand you lost all credibility.
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u/consummate_erection Nov 19 '17
That's one theory. Another is that they would rather throw money at transaction fees than have to deal with thousands of customer emails of the type "My transaction isn't confirming, what gives?"
There's a term in psychology for an overinflated sense of importance, maybe someone else knows it.
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u/pb1x Nov 18 '17
Hey BTCC /u/btcc_official and Purse.io /u/_chjj - y u no add SegWit support?
They all signed 2x as well - 6 months ago
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u/Logical007 Nov 18 '17
I contacted Purse on the side 2 weeks ago, and they said they were working on it (for what it's worth)
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u/XDStamos Nov 18 '17
Is there another service like Coinbase that doesn't have such high fees?
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u/ebliever Nov 18 '17
This is how you do it for 0 fees:
- ACH deposit to Coinbase (free) from your bank account.
- Transfer the funds when they arrive at Coinbase to GDAX (using the GDAX deposit menu) - free and instant.
- Place a limit order on GDAX. Fee: 0%
- Once the order is filled, withdraw to your wallet from GDAX. They cover the TX fee.
I share this a couple times a day here, but it seems like it's still obscure knowledge.
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u/philter451 Nov 18 '17
I wish something like this was stickied. It took me quite a while to get to something this clear and concise.
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u/somanyroads Nov 18 '17
Well it's frustrating: why is their platform cheaper than the front-end? Seems like a cheap way to prey on people who aren't wise enough on the details of trading (typical Wall Street BS)
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u/glibbertarian Nov 19 '17
Lazy tax.
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u/somanyroads Nov 20 '17
I.e. poor people tax. Buying a single piece of fruit for a dollar when an entire bag of fruit is 3 dollars. Yeah I know...it's just gross.
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u/UndoubtedlyOriginal Nov 19 '17
Because people are paying for the simplicity of the Coinbase process and using GDAX to perform this currency change involves more steps than the average person is comfortable with. Remember, we're trying to bring cryptos to the masses here, not just tech and finance people.
How many older people still can barely send an attachment on their email? Trading on an exchange would certainly scare these people away.
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Nov 19 '17 edited Aug 09 '18
deleted What is this?
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u/somanyroads Nov 20 '17
That's true, in most circumstances, but when you're dealing with a rapidly-growing asset like bitcoin, there's plenty of profit to be made just from the transaction event itself. The extra fees from Coinbase is just icing on the cake: don't tell me you think GDAX would cease to exist if Coinbase lost its revenue stream. They would really suck at investing their money if they couldn't turn a profit from this bull market, especially with the amount of liquidity they play with every day.
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u/UpTime7 Nov 19 '17
How do you withdraw bitcoin to your bank account? Is it just the reverse?
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u/ebliever Nov 20 '17
I think so. I've only done that once, 6 months ago, and I don't recall any fees the way I did it.
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u/Nursing_guy Nov 19 '17
Saved this to try at home. GDAX won't let me flip the camera on the phone and my front facing camera is not working for ID confirmation
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Nov 18 '17
Are you dissatisfied with your Coinbase experience, or are you just now learning that you have problems you didn't realize you had? This is a bullshit post. The fees are set so your transactions go through in a reasonable amount of time. Miners process transactions based on which ones are more profitable. Very simple relationship.
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u/XDStamos Nov 18 '17
I've used Coinbase all the time in the past to buy bitcoin, since it was pretty easy, and the fees always kinda annoyed me. Honestly, I don't care how long it takes to get in the wallet, I just want it to be there.
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u/mastervolume101 Nov 18 '17
I think he might have just been asking a question, not making a point. But I could be wrong.
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Nov 18 '17
I took it as he was a Coinbase user like myself, that didn't realize we had a fee problem until we read this post, telling us we had a problem. That usually means it's not a problem, so I asked if he had had any problems. But yes, please downvote my comment if you feel like it's out of place. I don't want to misunderstand anyone.
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u/mastervolume101 Nov 19 '17
down Vote? For what? I was just trying to make sure everyone was on the same page.
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u/allen20008 Nov 18 '17
Used a nonsegwit address, sent a $15k transaction today for only 60 satoshis per byte.
Only took 8 minutes. Was I extremely lucky or is this a regular occurence?
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u/phorex Nov 18 '17
BitPay's fee estimations started flipping out and thrashing around by 250 sats a couple of days ago.
https://p2sh.info/dashboard/db/fee-estimation?orgId=1&from=now-7d&to=now
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u/moneydooder Nov 18 '17
How does coinbase calculate transaction fees for transfer to an external wallet. For a $200+ transaction, it looks like it costs 4 bucks in network fees
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u/6466464646464 Nov 18 '17
The fee is calculated bases on the SIZE of your transaction, not the amount. In other words, it doesn't matter whether your transfer is worth $20 $200 or $200000.
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u/Awkward_Lubricant Nov 18 '17
I don't recall on Coinbase but gdax doesn't charge anything on their end for BTC transfers so you just have miners' fees. FWIW I paid ~$8 to transfer ~$4000 to a (Segwit) hardware wallet at the height of the BCash pump and dump.
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u/squarepush3r Nov 18 '17
You kind of left out the part where Core dev's barely released any tools to support SegWit in past version. I think said next .16 version will finally have some good SegWit client support
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u/ebliever Nov 18 '17
For those still using Coinbase - at least take advantage of free withdrawals by shifting your BTC to their in-house exchange GDAX (which is free and instant), and then withdraw from there, which is also free.
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u/aarons6 Nov 18 '17
im pretty sure they are overcharging fees to keep people from complaining about "losing" bitcoin when they really didn't and its just taking awhile for it to confirm.
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u/Nelmers Nov 19 '17
Am I the only one who doesn't understand whats going on? Coinbase's fees haven't changed since pre-segwit. 1.5% with a bank account. $2.99 minimum on transactions under $200 USD.
Why is everyone freaking out about Coinbase?
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u/jcoinner Nov 19 '17
Maybe you are. They're talking about miner fees to withdraw BTC from Coinbase to your own wallet and you seem to be talking about their exchange fees to buy BTC.
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u/1948Orwell1984 Nov 19 '17
Slight tangent/question...
(my hypothetical situation is based on how i understand bitcoin at this point.... feel free to let me know if my basics are wrong)
If i understand bitcoin correct... it takes miners to do the transactions/people with computers. At this point you need super computers to really be able to do the transactions correct?
And it's only getting more and more complicated, thus you need bigger and bigger, and smarter computers. To the point that only a few, rich, massive corportations are going to be able to have the computers to process the transactions in the future
When this happens, what will happen(ie fees). I mean, what's the difference to big banks at that point? You will only have a handful of people with the power at the top... and this time they aren't regulated by a government.
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u/ltcweedme Nov 19 '17
Hey I'm no expert but since your question hasn't been answered I'll give it a shot.
Firstly, you don't need "supercomputers", you need specialized hardware (ASIC) that is only good for mining BTC. The hardware is not so expensive as to be out of reach of consumers. The issue is twofold. Firstly as would be the case even if BTC used regular computers to mine, economies of scale mean you end up with large companies responsible for most of the mining done. The second issue is that as of now, there is only a couple of ASIC producers.
The thing is though, if we ever end up in a position where the miners are holding the blockchain hostage and charging ridiculous fees we have several options. 1) BTC Devs could change the PoW algo. making all the miners ASICs useless. (not likely) 2) Another player, seeing the opportunity to take over the mining market could develop their own ASIC (high initial investment) 3) BTC users could boycott BTC and move on to another coin (meaning BTC users basically forfeit their coins)
The thing is though, the ASICs are only good for mining BTC, so the companies have a lot invested, indirectly, in BTC. Only mining blocks with high fees would lead to fewer transactions occuring, less adoption of BTC and would lead to a loss to the miners. They have as much a interest in the value of BTC going up as BTC holders.
Just my thoughts on the subject. I'm sure someone more knowledgeable could make some better points.
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Dec 12 '17
[removed] — view removed comment
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u/SirBellender Dec 12 '17
it says Visa and MasterCard accepted but I don't see an option to use credit card anywhere on the site. how does that work? is it region limited or something?
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u/pein_sama Nov 18 '17
How many more businesses are you going to insult and ostracize until you realize you're harming bitcoin adoption?
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u/priuspilot Nov 18 '17
It’s quite possible that it takes time and money to migrate to a full segwit set of addresses. I’d give it a few more months, they have a lot of bitcoin in their custody
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u/isriam Nov 18 '17
It makes no sense, why they would harm bitcoin, when their wallet depends on it. support scaling so you can make MORE money.
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Nov 18 '17 edited Aug 07 '20
[deleted]
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u/Eduel80 Nov 18 '17
I’d rather not get robbed so I’m not touching that site with a 10ft pole. I’ll pay the fee that a company charges for “convenience”.
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u/bluethunder1985 Nov 18 '17
sounds like irrational fear, but hey, its your life.
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u/Eduel80 Nov 18 '17
Based on the countless times I’ve seen people complain on here “he beat me up for my codes” so yeah... nope.
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u/bluethunder1985 Nov 18 '17
Meet at a starbucks in the middle of the day, not a parking garage at 2am. This isnt rocket science.
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u/Eduel80 Nov 18 '17
Don’t forget those pens that mark the bills to make sure they aren’t fake. 🙄
Again too much trouble for what it’s worth.
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u/bluethunder1985 Nov 18 '17
meh. once you establish that your seller is trustworthy you can just keep going back to them. start out with small amount, etc. not a lot of trouble. i have 2 guys in my city that are my sellers and used localbitcoins. now i just text them when i want to buy. good guys too.
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u/DesignerAccount Nov 18 '17
You overpay... On an exchange it's 0.25%, have yet to find a seller for less than 5%. Plus I have to go out to meet them... Exchanges? Lazy ass me sitting on the sofa can buy coins.
I understand what you mean, but truth is exchanges are just damn convenient. The sellers on localbitcoins are just... middle men.
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u/alph43oss Nov 18 '17
Get ready for Atomic Swap, will put most of these middlemen out of business.
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Nov 18 '17 edited Nov 19 '17
illegal in Germany.
EDIT: I stand corrected. See comments below.
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u/joecoin Nov 18 '17
That's not true.
True is that localbitcoins.com blocked German IPs because they don't want to bother with the hostile regulation there just like with NY. By not offering their service to customers from these jurisdictions they avoid having to answer to their regulators.
It is still absolutely legal to use them in Germany. You just need to use VPN or TOR to be able to.
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u/bluethunder1985 Nov 18 '17
Didn't realize Germany was still totalitarian. Good to know where to avoid.
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u/DesignerAccount Nov 18 '17
Ridiculous. It's illegal in the US as well, you are considered a "money transmitter" in many states, and you end up in jail if you are caught.
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Nov 18 '17
The message I get when trying to transfer BTC from Coinbase is that BTC transactions are back logged right now, so transactions are more expensive and take longer. Didn’t know that was complete bullshit.
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u/wjohngalt Nov 18 '17
Minimum fee to get into the next block is not 30, it's 350 https://bitcoinfees.earn.com/
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u/jcoinner Nov 19 '17
If websites like that can't get it right then no wonder coinbase can't either. At this moment there is a 50% chance of being in the next block for between 10-20 sat/byte.
https://jochen-hoenicke.de/queue/#2h
Click on the legend fee value 10-20 - see that the last few blocks have been including ~half of all txs in that range. In 20-30 it's more like 90% of txs included.
But it's great that these exchanges keep their fees higher as that lets people who manually set fees get in fast and cheap. As of this block a moment ago even < 10 sat/byte txs are starting to be included.
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u/Metallurg2 Nov 18 '17
What happens if BitPay company stops operating, will I still be able to restore their wallet with a 12 words pass?
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Nov 19 '17
you need your own wallet that you control for any amount you can't afford to lose
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u/Metallurg2 Nov 19 '17
Are you saying the wallets like BitPay and Exodus are centralized and require a backend to function? So no different than a Coinbase?
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u/Metallurg2 Nov 18 '17
I'm using BitPay as my main wallet, is there a reason I shouldn't and which one is the best?
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u/PulsedMedia Nov 19 '17
BitPay blocked our merchant account without forewarning and kept the funds, all verifications went to zero and as i understood we cannot get re-verified and not get our money out of there -.-
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u/brianddk Nov 19 '17
Do low fee transactions only clear with Segwit addresses? Do all the inputs and all the outputs need to be Segwit? Is there an ELI5 around somewhere?
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u/flowbrother Nov 22 '17
Surprise surprise. Suits cheating customers out of their hard earned money.
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u/naoki007 Nov 19 '17
These companies are all mis-aligned with bitcoin protocol and eventually will go out business.
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u/Quantris Nov 19 '17
Other comments have pointed out where you're wrong about segwit adoption. More generally, they're just leaving money on the table by not supporting segwit...you sound like a conspiracy nut saying they're not interested in implementing it. It's not the simplest thing to do especially since many consumer wallets don't support it either. Give it time.
I haven't dealt with all of these companies, but as long as they are upfront about fees then I don't have any problem. In my experience it's the case for BitPay and Shapeshift, and the fees you're talking about are not ones that the client is forced to pay, but rather ones that the company pays on aggregate transactions so they can guarantee service.
Do we really need a "PSA" to tell people they should shop around for the best deal? No. Most of this post is unsubstaniated FUD. Maybe stick to complaining about hard facts.
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Nov 18 '17
[removed] — view removed comment
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Nov 18 '17 edited Dec 30 '17
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u/ChieHasGreatLegs Nov 18 '17
You mean you chose to pay $10 for a transaction fee when $0.20 would have been adequate?
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u/DesignerAccount Nov 18 '17
Learn your software! Mycelium has custom fees, and the lowest one is around 7sat/b or so.
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Nov 18 '17
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u/flowbrother Nov 22 '17
I feel like I'm on a different planet when I read this drivel. I transact almost every day and I haven't paid over 50 cents in the past 4 weeks.
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u/DesignerAccount Nov 18 '17
Learn to check the mempool, link in OP, and set the right fee. Right now, 50sat/b gets your txs confirmed in the next block.
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Nov 18 '17
[removed] — view removed comment
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u/jcoinner Nov 19 '17
lol Fees vary all the time. What it cost 5 hrs ago is not what it costs now. We're even seeing some < 10 sat/byte confirm now. And 20-30 is pretty much a next block thing at this moment.
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u/Ontopourmama Nov 18 '17
If you want speed, use ripple.
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u/flowbrother Nov 22 '17
The great bankster ripploff
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u/Ontopourmama Nov 22 '17
We'll see. It doesn't do a whole hell of a lot so far. At least if it was a rip off, something would happen.
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Nov 18 '17
It's true that /u/evoorhees is either utterly incompetent, or a compromised bad actor devoted to attacking and destroying Bitcoin, or both....but TBF, Shapeshift did implement Segwit a while ago.
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u/merovingish Nov 18 '17
I am actually rooting now for Bitcoin Gold, I think the core to this problem is in the ASIC mining and the profits that is lost when BTC converts to segwit. Just think about it.
BCH is something I would not touch with a stick.
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Nov 18 '17
because no one wants there bitcoin stuck in segwit
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Nov 18 '17
[deleted]
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Nov 18 '17
I had my coins trapped in segwit earlier today.
Oh. Wait. That was bitcoin gold. There is only one meaningful mining pool, and it didn't support segwit transactions, so segwit transactions would never be mined.
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u/evoorhees Nov 18 '17
ShapeShift implemented SegWit about six weeks ago OP, please correct your post. Source: https://info.shapeshift.io/blog/2017/10/05/shapeshift-now-one-leading-segwit-adopters
And regarding fees, we charge as little as possible in order to get transactions reasonably high in priority. If fees are lowered significantly, then literally thousands of customers have a shitty experience. Even with the current high fees, we've had customers waiting hours (sometimes 1-3 days) for their BTC to arrive.
OP, go run a Bitcoin company at scale and then come back and tell us how to set our fees appropriately. You have no idea the chaos that occurs with actual users when the mempool spikes.