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Comment by themagician | Hacker News Reader

Bitcoin has shown us exactly why centralized monetary authorities are so important, and that alone was worth it. With a decentralized currency you end up with something that is neither stable nor easily liquid, because it’s not in the interest of those who hold the most to provide either.

It was an experiment worth playing out.

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It's very unclear that Bitcoin's problems are a direct result of its decentralized nature.

Decentralized _operation_ might be ok but decentralized management and oversight seems to have not worked out. "Market Forces" don't seem to produce good architecture.

As far as I can tell the biggest problem with Bitcoin right now is the high transaction cost, which happens because it's not worth it for miners to validate transactions unless you essentially bribe them. If mining were more lucrative on its own, this wouldn't be a problem, but the reward rate for mining is hardwired. So in this case I'd say the problem isn't caused by the market but rather by the hard-coded nature of the monetary policy and the fact that there isn't a good process to change such core matters.

No, the high transaction costs are because the blocks are too small. As the currency has grown in popularity the volume has increased but the blocks have not, therefore the competition to get your transaction into the block has grown and market forces means prices have increased because of it.

Mining is incredibly lucrative.

Still the argument that "high transaction costs are because the blocks are too small" doesn't conflict with the argument that there is no easy way to change the code running bitcoin's blockchain, and in fact the latter would allow the former.

It's very easy to change. You just fork it.

No, forking bitcoin doesn't change the code running bitcoin's blockchain. Carefully re-read what I wrote: "no easy way to change the code running bitcoin's blockchain".

Of course it does, that's exactly what a fork is.

Or, maybe the question is what is the bitcoin blockchain? The truth is there is no such thing.

Its insane energy use is only because of the need for the constant proof of work to make the decentralization possible.

Bitcoin was from day one built to entice the crossover of cypherpunks and goldbugs. Effectively it is emulating gold bullion using cryptographics.

I believe in the end it will be the high transaction speed and fees that will kill it.

That's temporary.

That’s what they said. Then it wasn’t. Then it forked. I wouldn’t be surprised if it forks again.

Forking is positive and healthy. It's how they innovate.

“They” are? Everyone seems to expect everything in Bitcoin development to happen by magic and complain when things don’t happen quite fast enough. These complainers are rarely writing code to make it happen themselves though. If you don’t like it, get involved and help it move faster. Lightning is testing right now, so people who want to help could start there by helping to test the network.

I’m using “they” to refer to the larger community. Go back a few years ago and look at hypotheticals about changing bitcoin to deal with scaling issues. The thought was that when changes were needed the community would vote for those changes. Simple. Until it wasn’t.

But now voting power is too consolidated for any real community change to occur. The block size needs to change. Lightning doesn’t solve the fundamental problem. It just creates a new group of people with power to confirm transactions. Decentralized… until it isn’t.

There was this idea early on that power would be distributed across a wide range of people and the future of BTC would be transparent and democratic. I don’t know that mining pools were really forseen, at least not in the way the exist today.

I guess my point of this whole thread was that we quickly found out when something is “decentralized” it just results in a relatively small group of people becoming the defacto authority through force (in this case, sheer computational power). It was thought that wouldn’t be possible. But here we are.

Lightning solves the fundamental problem that a blockchain can’t scale to support the number of transactions needed. A block size limit increase can only get you so far. The block size will still need to increase with lightning at some point but it’ll be many orders of magnitude less.

Under lightning who is this new group that confirms transactions you’re concerned about? At the moment hashing power is fairly well distributed on the Bitcoin blockchain, not at all well on BCH. For lightning transactions there could be thousands of “people” you can decide to open a channel with. You can set up your own nodes if you wish.

> when something is “decentralized” it just results in a relatively small group of people becoming the defacto authority through force

Failure to grasp this principle accounts for a large percentage of libertarians, and to somewhat of a lesser, though still significant, degree, ideological conservatives.

Which was forseen. It was the big “that will never happen.” The fork was never supposed to happen.

If things continue to progress as they already have it will become untransactable. It already pretty much is as far as business is concerned.

> Bitcoin has shown us exactly why centralized monetary authorities are so important

Bitcoin has a central authority, and it's the Chinese state.

*IS an experiment... It's still in the very early stages. :)

So in the dystopian future of Chinese bank account/citizen social points and even present-day American Fed/Bank collusion, you are continuously supportive of centralization? And now you claim the experiment has been "worth playing out" while Bitcoin has experienced the most adoption it's ever had within the last few months? What?????? Please tell me you are joking.

Also, what incentive do governments have to keep people paying their taxes and using their own fiat that corporations seem to be able to control and play with hundreds of billions on their own accord and on separate rules. What about privacy, with the government having easy access to every financial institution I encounter and every transaction I make, why should I agree to that?

Pretty much all the early adopters who sought to use bitcoin as a currency have backed out because transactions aren’t confirmed for days, in which the price swings wildly, or transaction costs are insane, or some combination of both.

And what about privacy? At least with banks you have some. Or with cash you have the ultimate privacy. With Bitcoin every transaction is public and permanent. You’ve got to convert to dollars at some point, because bitcoin is no longer really transactable itself, and once you do your entire spending history is now available to the big bad government.

@rjromero, it doesn't hurt to be courteous and respectful to people. The crypto community has a very bad reputation for obvious reasons and it really is not pleasant.

I want the government to raise taxes, because I want it to do a lot of useful things for society that it can't otherwise do. That's what government is for.

And I want it to be very hard to dodge taxes, so everybody pays their share. If that means less privacy, so be it.

Way to early to know that for sure. Lightning is not too far away.

Lightning is like the Schroedingers Algorithm for BTC.

When people need it to be close, it's "not too far away".

At other times, "you need to remember it's still a few years away".

Not true, some projects like Groestlecoin already have it implemented on their mainnets. Bitcoin development is akin to airframe development. Slow is smooth, smooth is fast.

People are too impatient.

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