Bitcoin is no long the only game in crypto-currency town
economist.com
economist.com
It's like trying to make a 56k modem work, when broadband is available.
When litecoin came around a few years ago these were abstract problems, but now that transactions with $10 fees take 36 hours to confirm... the issues are real and a switch needs to happen. Lightning network or not, these hacks to speed up the network unequivocally make more sense to do on a network with faster block generation times. Necessity will force this outcome.
For larger amounts, you want confirmations, but then it's generally alright to wait a little while for confirmation, too.
Note that replace-by-fee means this only works with Bitcoin Cash.
It's really not fine at all.
The competition is full confirmation transactions on a debit card or bank account in seconds with much lower or zero fees.
At PoS systems in the US, it's typical to have to wait 30+ seconds for chip cards to go through. I'm guessing that this has more to do with the PoS system / slow internet connection for the store / slow network on the back-end card network, but cryptocurrencies would need to be sub-minute to be ~acceptable for in-person retail transactions.
Until that is solved, until cryptocoins are more than speculative securities where the value is only the current market price on a handful of exchanges, and until you can use them to realistically buy and sell things instead of using cash or a credit card, I don't consider them a "real" currency (by my own definition). I DO hope that it gets there some day, but I don't see that happening for at least another 5 years, likely with quite a few people who put a significant amount of money into it getting burned quite badly.
[1] https://squareup.com/townsquare/weve-chipped-away-at-emv-tra...
Seen it couple times.
The fundamental problem with bitcoin is that it is decentralised and trustless, and those two properties preclude fast transactions at a global scale - for that you need a federated system with trust between nodes. If you remove those properties, you're no longer using anything resembling bitcoin, and why not use a system with proper validated parties in the first place?
The bigger problem is having full blocks forever so it never gets processed.
I have no idea why you think that's related to time to confirm that a customer has money to pay for goods, which is an entirely unrelated problem which bitcoin solves badly in comparison to current payment networks, and due to its distributed nature is unlikely ever to solve well.
Actually, it really is. I've been accepting 0-conf transactions for nearly a year and had negligible double spends. https://incoherency.co.uk/blog/stories/zeroconf-payments.htm...
The small number of double-spends that did occur since I wrote that blog post I think are mostly due to bad luck (and opportunism) rather than malicious intent upfront, and represent only ~0.1% of payments.
1-The current solution is worse on this dimension.
2-Since Bitcoin Cash doesn't have replace-by-fee this is impractical for any small transaction.
3-Most of the situations that need to be immediate are small--with the large ones it makes sense to wait.
So your approach to preventing fraud is... to trust people not to defraud you?
Glad it worked for you with bitcoin and the particular people using your service, but that's not really a good basis for a payment network. There are multiple other problems with bitcoin as a payment network and currency, the delay in transactions (which prompted your experiment in ignoring a key part of the currency) is only one of them.
If you run Starbucks and serve 1000 transactions per day, you’ll have some fraud. If 0.1% are fraud, that’s not too bad.
No. Those do not compete with trustless digital money. If you think that then you don't understand the point of Bitcoin. It's like saying landlines are better than mobiles because you can never misplace them.
If you can't then you are going to lose this argument.
That being said we really should see exchange -> exchange txs be conducted over large LN channels, it could off load a lot of pressure off the chain.
>For example, if a parent transaction output is spent by a child with a nSequence value of 10, one must wait 10 confirmations before the transaction becomes valid. However, if the timestop flag has been set, the counting of confirmations stops, even with new blocks. If 6 confirmations have elapsed (4 more are necessary for the transaction to be valid), and the timestop block has been set on the 7th block, that block does not count towards the nSequence requirement of 10 confirmations; the child is still at 6 blocks for the relative confirmation value.
>This gives sufficient time and block-space for transactions at the current auxiliary timestop block height to enter into the blockchain, which can prevent systemic attackers from successfully attacking the system.
It's not perfect by any means (a malicious miner with a significant portion of the hashpower could never set the timestop bit and spam the mempool at the same time), but it mostly removes this worry in a "normal congestion" scenario, and makes it require a pretty large portion of global hashpower as well as very VERY deep pockets to pull it off in a "malicious" scenario.
Seems like a decent idea, although I don't see why miners would be incentivized to set timestop and the paper suggests that timestop is set to 1 whenever the block is full. The blocks are almost always full, so is it just up to the miner to choose if time is stopped or not?
But the idea relies on miners "doing the right thing", and in this case since there isn't any downside for following this rule, the assumption is that miners will act in good faith.
>The blocks are almost always full, so is it just up to the miner to choose if time is stopped or not?
It's not necessarily if the block is full that the bit is set, but rather if there is "network congestion". This can mean many things to many people, but the assumption is that if fees go up significantly over a short period of time, that could indicate congestion which miners would set the bit on, or perhaps if the mempool of pending transactions gets over a certain BTC amount, it could be set.
Also, I completely forgot to mention the other piece that makes all of this much less worrisome. If you need to broadcast any transactions to prevent "theft" of your BTC, you will receive all of the BTC in the channel by doing so. This gives you the ability to make a child-pays-for-parent transaction with the UXTOs from the channel closure (in a contract revocation scenario) with an absurdly high transaction fee to guarantee inclusion in the next block (basically using ALL of the other party's money as the transaction fee).
Technically, the other party in the channel could also do a CPFP to try to get their transaction included before yours, but as long your side of the channel never went to 0 at any point, you will always be able to "outspend" the other party for transaction fees.
Time to reestablish quality over quantity.
Do you want it to say "crypto-currency game in town" instead of "game in crypto-currency town"?
Even were that not the case and they had meaningful price discovery mechanisms 'market cap' would be a meaningless metric because if someone were to buy all the coins, they'd have destroyed the value of them because they've ruined the network value of the currency. This isn't the case for stocks in an actual company, because if you buy all the shares of a company with a 10 billion dollar market cap, you now own a company worth approximately 10 billion dollars.
Obviously we are in a post scarcity world and therefore producing something of value is really a net negative. All hail the inert string of chars! It’s better than something because it does nothing.
Most people look at the price and the market cap because they can tell that the primary use of crypto-currencies is for speculation.
I sold one to a friend of mine for $0.01 yesterday, which made me not only the richest person in the world, but also the first trillionaire, as the coins I own are valued in $1T USD.
And my UCC has a market cap of $1T USD (and one cent).
Then I exchanged a single coin with myself for $0.01. As my coin has zero transaction cost and instant transactions, I traded it back and forth with myself 100 quadrillion times.
This generated a total traded value UCC-USD of 1 Quadrillion Dollars yesterday.
Anyone wants to invest on my UCC?
https://cdn.shopify.com/s/files/1/0858/9696/products/122_102...
Oh, thanks, although winning hacker news is quite irrelevant when you're a trillionaire.
Now if you excuse me, I'll retire to my orbiting chateau, it's tea time at my geostationary orbital slot.
They decided that it would be a good idea to start centralized, then over time wane themselves out of the "validation" of transactions until it's in the hands of a diverse group of validator nodes where no one person has the ability to change things.
Ripple labs has a very strict way of handling the XRP they hold. It's not just "lose structures" in place, they are using the Ripple blockchain to escrow 55 billion of the XRP and release it on a set schedule of (I believe) 1 billion per month, and any that is left over at the end of the month is re-escrowed. So they can't just "flood the market" at any time, there is a set limit to how much they can even sell without hardforking the blockchain in their favor.
The founders have free reign on their 20 billion XRP, but I don't see why they would ever use it to crash the price.
Profit motive?
IMO, having many cryptocurrencies above an arbitrarily-large threshold of USD equivalency (let's say $1b, which according to https://coinmarketcap.com/ right now gives us 40) dilutes the overall chance of cryptocurrencies ever becoming viable for commerce, instead positioning them more similarly to stocks or other speculative investments.
To meet my definition of "succeed" as currencies ("when in actual use or circulation as a medium of exchange"), we would likely need just a few, or likely, one, that works e.g. at brick-and-mortar places. Overstock, Newegg, Steam, etc give good credibility to this idea, but look at which cryptocurrencies they accept (and how the price in those is tied to the real-time market rate).
Also regarding decentralization, and again because these cryptocurrencies largely have value right now only because of their order books on a handful of exchanges, are we actually in a better place? If the feds in the US decided that they wanted to regulate / shut down the big exchanges for whatever reason (e.g. billionaire gets burned and cries to his politician buddies to "fix" it), sure the coins don't go away, but as long as you can't realistically spend them on basic needs like food and shelter, are they actually decentralized? To me, cryptocurrencies are the similar to Chuck E. Cheese tokens that vary thousands of percent in value per year; they have some cash equivalency if you're able to convert them, but alone, they have no real utility.
Chris Burniske, a crypto fund manager writes "these aren’t companies; they don’t have cash flows. Hence, using a discounted cash flow (DCF) analysis is not suitable. Instead, valuing cryptoassets requires setting up models structurally similar to what a DCF would look like, with a projection for each year, but instead of revenues, margins and profits, the equation of exchange is used to derive each year’s current utility value (CUV). Then, since markets price assets based on future expectations, one must discount a future utility value back to the present to derive a rational market price for any given year".
“Cryptoasset Valuations” @cburniske https://medium.com/@cburniske/cryptoasset-valuations-ac83479...
Bitcoin has good liquidity and been tested though many drops and spikes. Each time it makes the network more antifragile. No one wants to trust a new currency where a large percent of holders have never been tested and might sell off their entire share at any time.
Bitcoin is pretty much impossible to change now. It's just too big for that.
Example: Segwit voting was available in October 2016 but didn't manage to get significant miner support, finally got activated in August 2017 after a lot of controversy, and is still not seeing convincing adoption[1]. It seems to be stuck around 10%. If a soft fork is that difficult, then more drastic changes must be impossible.
Feeless, near-instant transactions could displace a lot of the coins out there, if they can solve all attack vectors.
There are real competitors to Bitcoin Core today, and Raiblocks is not one of them. Your value proposition cannot be "like Ethereum but fractionally better because volume is two orders of magnitude less". There are even interesting coins like Aragon, Po.et, SALT, Aeron, district0x that actually do things Bitcoin doesn't do.
Competing for "payments on the internet" is a losing battle, of which you can find hundreds of other pumps on coinmarketcap. They all have nice landing pages about how the blockchain is the future and this is the new way for money and banking. That's a clear sign there's no future in a coin, because the founders can't come up with anything but "let's make Bitcoin faster".
Obligatory disclaimer that I don't invest in any of these things. I'd rather have people invest in curing disease, space travel, longevity research; things that affect the physical world and push humanity forwards. "Like Visa but fuck Visa" is not a compelling pitch.
There are not meaningful differences between different proof of work coins. All PoW is based on the same principles, has the same security costs, and the same scaling challenges. Bitcoin remains the top dog and will likely stay that way due to network effect.
PoS could be interesting, but it's largely untested in the way that Bitcoin is. We need to see how mineres/voters behave and whether large holders can exert undue influence. Ethereum is by far my favored coin to see this tested, and if successful, would actually have more security for a given network cost. This is potentially disruptive.
DAG-coins or whatever you'd like to call them seem to like they're getting 'free wins' and I suspect that their security model is not sound. They're interesting but extremely risky.
Ripple is simply not a cryptocurrency by any reasonable definition.
What bitcoin has is the network effect and security, but if the friction from tx fees becomes too high it could be dethroned.