Changing the minimum relay feerate

The discourse presents a nuanced perspective on the management of transaction fees within Bitcoin's network, advocating for a more lenient policy towards the minimum relay fee rate that nodes require to propagate transactions. This is predicated on the belief that overly stringent policies might inhibit nodes from processing transactions likely to be mined, suggesting an adjustment could enhance efficiency.

A novel proposal introduced is the creation of a subpool specifically for transactions with fees below 1 satoshi per byte (sat/vbyte), which would operate under distinct parameters such as a maximum memory pool size and an expiry time, exemplified by 32 MB and 36 hours respectively. This approach aims to segregate lower fee transactions without resorting to a free relay system, which could potentially devalue transaction fees. Consequently, it suggests that the minimum relay transaction fee (minrelaytxfee) could be reduced to a nominal amount above zero if this subpool mechanism does not encourage the practice of free relay.

Furthermore, the argument highlights the implications of adjusting fee policies on mining revenue and fee estimates. Observations indicate that since 2017, fee revenue (in BTC) has consistently declined, notwithstanding a modest increase in Bitcoin's USD price and a significant reduction in block rewards from 12.5 BTC to 3.125 BTC. This trend raises concerns about the sustainability of mining revenue as lower fee rates become more prevalent. However, there remains an optimistic outlook that most blocks will maintain a minimum fee rate above 1 sat/vbyte, driving users towards Layer 2 solutions for transactions requiring lower fees. This sentiment is supported by data indicating that despite the potential for lower fee rates, there is hope for a balanced ecosystem where both high and low fee transactions can coexist, benefiting from the layered structure of Bitcoin’s network.

This discourse underscores the importance of adapting Bitcoin's transaction fee policy to reflect the evolving needs of its users and miners, while also considering the long-term economic implications of such adjustments. The inclusion of free relay and revenue trends further enriches the discussion by providing empirical evidence to support the proposed policy modifications. Additionally, the reference to mempool.space offers valuable insights into current mining practices, reinforcing the argument for a more flexible and inclusive fee structure.