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Why do you charge a small fee per transaction

Short answer: To secure the smooth operation of the blockchain network we have built in a fee of about 0,2 Euro-Cents per transaction. So for example if you want to empty a wallet with 250 Fair, you can transfer not more than 249,997 Fair.

Long answer: We had decided in June 2016 0,1 FAIR, but revised in the FairCoin assembly in June 2017 that CVN operators only get 0,01 FAIR per 1000 Bytes transaction size to cover expenses for electricity and connectivity. This still prevents people from spamming the blockchain with many small transactions, which would take up a lot of disk space on every node of the FairCoin network. A 'standard' transaction needs ~226 bytes so the fee is 0,00226 FAIR ~ 0,00 3 EUR = 0,3 ¢. A transaction with two inputs (=parents) needs ~373 bytes thus 0,00373 FAIR ~ 0,004 EUR.

The price assembly on 15 Jan 2018 decided: The fee rate is adapted in the same range as the value changes set by the price assembly, if this gap is more than 20% or the price assembly decides not to adapt the fee. The chain admins decide autonomously at what time and date they execute this change as block parameter, they try to do it as soon as possible.

In contrast to Bitcoin (where you can be charged at least some of the time up to hundreds of Euros per transaction), we decided to use an equal mandatory transaction fee for everybody instead of creating a so-called fee market, in which the rich pay more fees so that their transactions are processed quicker than others. In FairCoin we decided that everybody contributes to the blockchain with the same amount of fees per transaction size. The assembly could decide that CVN operators transfer the fees to a common fund, e.g. for basic income. That is really fair, isn't it?

To be honest: We are not a fan of fees, we would rather see zero fees. But we have to avoid a potential “tragedy of the commons”. We are working on a micro-transaction framework in the FairChain project that could potentially be integrated into FairCoins. This will take some time to implement and test. We already have some cases for zero fees: wallet to wallet transactions in chipchap and Fairpay payments with a physical card.