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Comment by afreak | Hacker News Reader

Why do people assume that Bitcoin is going to revolutionize the banking sector when it cannot even scale? Why would we want to subject the poorest to a system that won't be able to handle at best more than a handful of transactions per second?

Bitcoin is literally a bottom-tier system and suggesting that we use it to help those who are financially not-well-off is insulting.

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When an article simply states, with absolutely no attempt at justification, 'But how do you solve this? Bitcoin will be the solution', you can just give up there and then. The author is a lost cause.

There are literally already lots of people in other countries who are saving a larger percentage of their money by using bitcoin even if they don't know it. Remittances from Filipino maids in southeast asia are already an up and coming area. All they do is go to a small stall in a shopping mall, and all their family has to do is go to a small stall in a shopping mall in Manila. Now any two people can set up a back and forth settlement using btc.

And how many of these anecdotes do you have going here? BTC is not simple enough to allow regular people to send remittances to other countries.

Also you're willfully ignoring the fact that Bitcoin doesn't scale. Are you telling me that people who send their money overseas are going to wait for BTC to process their payment which may take an insane period of time seeing that right now Bitcoin can only process 1-3 transactions per second?

What is in place right now works fine for those who want to send money overseas to their families. Hell, it doesn't require a day's worth of electricity consumption by an average home to do so.

> BTC is not simple enough to allow regular people to send remittances to other countries.

They are using companies to do it. There are also multiple bitcoin atms in other countries. Also a company in thailand has made it so anyone can send btc to a code, and someone using that code can get cash from the atm.

> Are you telling me that people who send their money overseas are going to wait for BTC to process their payment which may take an insane period of time seeing that right now Bitcoin can only process 1-3 transactions per second?

This is so far off base I have to wonder if you have even used bitcoin or if you are just threatened by it in some way. I've bought things with it many times including very recently. Transactions take 1-2 seconds to show up, and the same 10 minutes per miner confirmation that they always have (coinbase will let you use money after 3 confirmations).

> What is in place right now works fine for those who want to send money overseas to their families. Hell, it doesn't require a day's worth of electricity consumption by an average home to do so.

Both of these things are total bullshit. Gouging people who already have very little money for 11% just for them to send it to their families is not 'working' and your electricity idea is so ridiculous I think the burden of proof is on you ( and keep in mind that more transactions don't use up more electricity).

> They are using companies to do it. There are also multiple bitcoin atms in other countries. Also a company in thailand has made it so anyone can send btc to a code, and someone using that code can get cash from the atm.

Have you ever used a Bitcoin ATM? Because I have as I wanted to see how ridiculous the process was. To use the ATM it took me 45 minutes to make a transaction go through. Sure. To you, the person who's defending Bitcoin, it might possibly be acceptable, but to the average person they'll pay the 11% or whatever fee if it means that they don't have to wait for some feckless machine to artisanally process their transaction.

> our electricity idea is so ridiculous I think the burden of proof is on you

http://motherboard.vice.com/read/bitcoin-is-unsustainable

There's your proof, CyberDildonics.

You used one awkward bitcoin ATM and now the process can't work? How would you even spend 45 minutes at an ATM? Which model was it? Where was this?

There are buy only bitcoin ATMs that take cash and print out a QR code. I think most people could figure that out. Again though, there are remittance companies operating right now that do the process for someone.

Even taking the article's numbers at face value even though it is not exactly the most objective (equating using bitcoin to destroying the environment may skip a few logical steps) that would still mean that each transaction costs about 57 cents (average household electricity usage time the upper bound estimate of electricity in China, where the article focuses).

This is all ignoring what I said preemptively, which is that electricity usage isn't a function of transactions. Transactions don't use up more electricity. Let that soak in if you need a moment. When there are more transactions, the cost per transaction goes down. The more people that use it, the more efficient it is, electricity wise.

I get that you have some sort of vendetta against bitcoin, and maybe cryptocurrencies in general, but you should figure out some legitimate arguments instead of trying to backwards rationalize why it wont' work when it is actually working right now. It works, it is working, get over it.

Bitcoin can, and is in the process of scaling.

Transactions per second are bound to the block size.

The mining groups in China are against raising the block size because of bandwidth and other realistic concerns.

The core developers, many of whom are employed by a company that has a business model that has a higher chance of success if bitcoin does not raise the block size, can neither agree that the block size needs to be increased, nor how to perform the increase, nor to what size to increase it to. Even if they could agree, the Chinese miners wouldn't update their software, and we'd end up with a forked blockchain.

The primary places where bitcoin is discussed are moderated by a single individual that considers things like XT and implementations of BIP-101 to be altcoins and actively shuts down discussions about them and other block size increases.

It seems to me that bitcoin isn't in the process of scaling at all.

It's tragedy of the commons.

Bitcoin is designed for having rational actors as miners. The miners profit less from the larger block sizes, and since they control the block size it's not going to happen.

Bitcoin users who think the miners will do it "for the good of bitcoin" don't realize that the entire bitcoin ecosystem is built on the miners acting in their own best interest, not bitcoin's.

http://hackingdistributed.com/2016/01/03/time-for-bitcoin-us...

If the bitcoin consumers were king, then the majority of them would collude and stop hoarding their bitcoins.

But they can't, because they're rational like the miners. Bitcoins are deflationary and always going to be traded as an asset, for which the small block size suffices and the Miners will continue to profit from. The bitcoin consumers can as much influence the miners as they can influence each other to voluntarily lose wealth.

I wouldn't call that a tragedy of the commons. I would call that "capitalism" because it is exactly the relationship between the owners of the means of production and everyone else.

"But anyone can become a miner" so it's free as in market and fair as in game. /s

It's tragedy of the commons because the miners are trying to reap from a shared resource, with no alignment to the changes that are beneficial for Bitcoin.

Miners profit more from bigger blocks due to more transaction fees.

Miners profit from increased competition (for transactions to be included in smaller blocks) increasing the transaction fees. Only transactions with the highest fees are put into blocks.

It was proven several times with the "stress tests" of Bitcoin network.

> It was proven several times with the "stress tests" of Bitcoin network.

An attack on the network doesn't prove anything about the economic incentives that make up the mechanics of the system. Bigger blocks hold more data and transactions pay by the kilobyte. That's all there is to it.

Increased fees per transaction may give more money in the short term, but ultimately it isn't how a crypto currency will be sustained, because at any point a fork could have lower fees.

It's simple supply and demand. The less supply increases the demand for transactions and transaction fees. Larger blocks have way more supply and thus the fees are a minimum. Miners know this which is why they're not increasing block size.

There is nothing short term about it. The more competition the greater the fees and profits in the long run.

Miners haven't yet increased the block size because the Chinese miners are both risk adverse and afraid that any increase will give them more latency, which could reduce their mining competitiveness.

As soon as transactions are legitimately getting hung up with reasonable fees, any of the thousands of forks have the potential to fill the void and decrease fees since there is no real technical limit to blocksizes in the same orders of magnitude.

So what you are forgetting is competition in your model of supply and demand.

Miners will do what is most profitable for themselves. If they can double the amount in fees that they mine without halving the number of blocks they mine, they will do it, because they will make more money that way. This is much more likely than not since the latency introduced to block propagation from something like 1MB to 2MB is insignificant compared to the probability that someone else will mine another block and propagate it first.

The blocksize increase you're describing only benefits a single individual once. Once increased and there is no more competition, transaction fees drop to almost nothing again for all miners.

Bitcoin prevents individuals from making these one-time power grabs by design. Even if they colluded, the miners are not going to agree to increase the blocksize because it immediately means less money for 99.999% of them.

Again, it's tragedy of the commons. They could work together to make the shared resource better for someone trying to use Bitcoin as a day to day currency, but instead they're rationally maximizing their own returns.

> The blocksize increase you're describing only benefits a single individual once. Once increased and there is no more competition, transaction fees drop to almost nothing again for all miners.

This isn't true now and it hasn't been for quite a while now, transactions need to carry fees to go through because miners have another choice that you happen to overlook - they don't have to mine a transaction if they don't want to. Miners can ignore transactions and let another miner mine them. This is actually beneficial for them because it decreases their blocksize and therefore their latency. If a miner mines a block unusually quickly by chance and wants to be generous, they can include more low fee transactions but I'm not sure this something anyone is doing automatically.

So it isn't the bleak outlook you describe because mining small fee transactions isn't to anyone's benefit.

Now you're just being ignorant. The base transaction fee to cover latency is magnitudes less than that to be included in a competitive smaller block.

The point still stands, and you're demonstrating confirmation bias. How much money have you put into Bitcoin, I wonder?

> The base transaction fee to cover latency is magnitudes less than that to be included in a competitive smaller block.

None of this makes any sense at all, the words don't even go together in the context of bitcoin. It is isn't even coherent enough to be true or false, it reads more like some sort of auto generated nonsense. Do you even understand what I said earlier?

I get that you have some sort of vendetta against bitcoin but stringing words is pretty desperate.

The Chinese miners are worried about the block size _LIMIT_ (not the block size) getting too much bigger so that their greater latency reduces their mining effectiveness. They aren't against any increase as far as I know.

The criticism isn't invalid, but I think the pessimism is. The miners are ultimately in control, not the blockstream idiots.

Bitcoin can't - the transaction limit is in the protocol. The community has bitterly resisted all attempts to raise it, so the only way around it are various proposals to use sidechains, i.e. altcoins somehow pegged to Bitcoin. None of these have achieved running code as yet.

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