Altcoins recommended for payouts

[Steve Sokolowski]

The bitcoin network has maxed out its capacity and, as a result, the transaction we sent this morning to pay users remains unconfirmed after 16 hours. Because of the way the network works, we can't withdrawal the transaction, which means our only choice is to wait and see when the transaction confirms. Additionally, the software complexity required to double-spend the transaction, if it would even be accepted by nodes, is not feasible for us to implement.

For now, we urge everyone to please request payouts in litecoins, Monero, Ethereum, NXT, Dogecoins, or another coin. These networks are much more reliable and your payments will be received promptly. If you don't know which to choose, the litecoin network has shown excellent price stability over the past six months and litecoins are tradeable for almost every other currency at most exchanges. We will be setting the default payout coin for new users to litecoin in the coming weeks, although anyone can still request payouts in bitcoin through the usual payout proportions interface.

If our transactions continue to disappear for two more days, Chris will investigate other options, which may involve a surcharge on bitcoin payouts to allow us to raise fees. Regardless of what we decide, altcoin payouts will remain free (as long as the amounts are above the payout threshold).

[GenTarkin]

Yeahp, a tad higher fee on the btc payments should do the trick. Just a tad above standard tho I think is all thats needed to get that payment through reliably.
Something needs to be done about this blocksize ASAP... LOL!

The good thing is, the fact the network is maxed just shows how its grown in popularity over the years...
That is unless someone is still spamming the crap outta it for no reason.

[RockXie]

Apart from the volatility of Alt Coins, converting those Alt Coins to bitcoin is also a headache. I think, bitcoin payments are still going fine as long as you pay standard fee. I received my payment from http://www.cloudmining.website yesterday and it went through promptly. The mining payment Tx ID is given below. Please notice the Tx fee they have given...

https://blockchain.info/tx/6e6b9ea23fa6 ... 14c9429967

[Steve Sokolowski]

Alas, the problem isn't that simple. One of the main reasons we want to reduce bitcoin payouts is that we can't set the fees that exchanges use to send us money, and the bitcoin network doesn't allow recipients to pay more to process a transaction. We need six or more transactions to all go through before we can even send our own transaction to the network at any fee.

I like to compare this to a postal service. When I want to buy something, I get a list of prices that tell me exactly when I will receive the item for each price. I can then decide how much to pay, and I can also plan ahead. For example, since I spend 12 hours a day working on weekdays, I would usually only be willing to pay more if it were Thursday or Friday, so that I can make use of the item during the weekend.

But with the bitcoin network, you order an item and have no control over when it will be received. Not only that, but the merchant just needs to guess at what the costs will be. And when I don't receive the item at all, then I call up the merchant and complain to them. Then the merchant sends a second package that includes both the previous item I didn't receive and the items I ordered today - but I actually receive the original package and the other items I ordered today aren't included.

This describes our lives. We can't pay exchanges to get money to us in any reliable fashion. When our transactions get lost, then we have additional debts we owe the next day. If we re-issue the payout with the higher amount, then what happens if the first transaction goes through? Now customers would have negative balances and our auditing system will stop trading as a hack prevention mechanism, because that's what we designed it to do.

And that doesn't count a massive problem - if the database gets out of sync due to this, then we stand to have unlimited losses if an altcoin goes into a bubble. Imagine if such a scenario had happened (our bitcoin balances messed up) during the Ethereum bubble. We could have owed people $1000 in Ethereum that suddenly appreciated to $5000, but we were unable to buy it in real time.

People make this sounds like it's as simple as increasing fees. It isn't about fees - it's about the complete lack of reliability of the bitcoin network that makes basic business functions, like an auditing system, nearly impossible to manage anymore.

[GenTarkin]

Ah, didnt even think bout the exchange side of things ... that make sense =)
Thanks for the explanation!

[kires]

Are there any sites that can automatically convert an altcoin to USD like the coinbase hookup here does? Or, failing that, what is the next-easiest/cheapest way to get from here to USD? I'm currently being paid in USD via the automatic coinbase hookup, and if I can achieve that same result via some other coin, that will be ideal.

[Steve Sokolowski]

The direct payments to customers are expensive, because there are so many outputs. One option we investigated is sending all the money to Coinbase and then executing hundreds of Coinbase API calls to resend the money. They have no terms against that and they would have to pay much higher fees than we do.

However, Coinbase has demonstrated through their actions in closing accounts that it is risky to depend on them. They monitor the blockchain and pry into people's personal finances. We could save money that way, but I'm not sure I trust Coinbase to not close our or one of the recipients' accounts at random. But this is also why we will never charge for dollar payouts - because the transaction to get money to Coinbase has only one output regardless of how many dollar recipients there are.