Bitcoin.org removes “fast” and “low fees” from Bitcoin description page
github.com
github.com
Note: I am not a big fan of the stock market either (it's pretty much a fake investment), we need investing 2.0, we have the tools, we just need the "Elon Musk" of finance
Note #2: I don't do what i'm preaching. I do own Ethereum because i'm hoping the smart contract layer might actually become useful someday (right now there are about 1000 DApps and they aren't that useful just yet IMHO)
Hm? In the stock market, you pay a current stockholder for their share(s). The company sees no money from the transaction. It sounds like what you're thinking of is banking, which is something different.
The current "valuation" suffers from the same issues as the valuation of any asset.
A quick, rough calculation - if ~30 TWh were spent on mining Bitcoin, and the marginal rate of death for electricity generation is at least 100 per TWh (https://www.forbes.com/sites/jamesconca/2012/06/10/energys-d... or https://www.nextbigfuture.com/2016/06/update-of-death-per-te...), this means that we have sacrificed the lives of at least 3000 people to make this happen. Are the benefits worth this cost?
Clearing transactions, the (comparably small) part of a financial transfer that Bitcoin does, is comparably simple and easy and constitutes a minority of both the effort and cost of financial transactions. Things like dispute resolution, fraud control, client-side tools, customer service and acquisition, etc take more than that, but that's not included in the standard Bitcoin transaction fee / miner's expense.
Or, said another way: what service does bitcoin provide, as opposed to say banking? Because that is what it is "trying" to replace. How many deaths does banking produce? Will replacing a part of the banking activities with bitcoin increase or decrease the death rate?
If I look at the headcount structure of a typical bank or at the tasks where the wider financial industry employs people, the settlement of payments takes 1%, perhaps 2% depending on how widely you interpret the area. So total worldwide adoption of Bitcoin (or some newcoin) might replace at most 1%-2% of the current banking employment and energy cost. As far as I understand, this energy cost is already smaller than Bitcoin's despite processing multiple orders of magnitude more transactions.
Second, the resources used by the banking industry to provide the services they do are not limited to the direct associated costs: we also have technology development, personnel costs (including energy used by the banking personnel to reach their workplace, the costs of turning on the lights in all the bank offices, and the fuel consumed by the bank managers to attend the party on the other side of the country without which the industry can not function, since, you know, you need some fun in order to sign the required contracts), the fuel consumed by the customers to reach the branch where, for the third time, they are going to evaluate their mortgage application, ... A long list.
In summary, yes, you are probably right that bitcoin is currently inefficient, and that currently it is not providing much value. But the sector is ripe for disruption, it is easy to disrupt, and any change in the current status quo will be an improvement, since the banking industry is so hugely inefficient for society as a whole.
At the core, the banking industry is just information processing, and that is the cake that technology is eating at the moment.
It's also used to speculate.
It's also used in industry.
It's actually pretty easy to turn gold into fiat and vice versa outside of north America. It's also fairly easy to do it in North America as well. The spread between buy/sell is also quite low.
There's not a lot of love here on HN for a lot of that effort, but it's not terribly controversial to say that there are a large number of dev teams working on products in a multitude of fields that are putting the blockchain to work.
The controversy seems to be whether blockchain tech is a sensible solution to some of these problems (that is, people ARE actually building lots of things, but the verdict is contentiously out on how sensible/lasting those things will be).
When corporate bylaws are written in code, you can replace a single legal entity with thousands of former employees operating as sole proprietorships.
Like I said, it depends on how you define "the blockchain". Many problems don't involve an open set of untrusted peers, and many problems don't require proof-of-work. So if you include those in the definition, then the blockchain isn't appropriate for a lot of those problems. And if you exclude those aspects, then what do you have left? A chain of cryptographically signed nodes that each point to their predecessor? That's been an underpinning of x.509 for, what, over 20 years? It's nothing new.
(I do agree that 99% of the decentralization of protocols can happen off the blockchain, amongst trusted parties... just saying that doesn’t get you all the way to “McDonalds Corp Replacement”.)
One positive effect this is possibly having (I haven't seen a direct analysis of this) is to boost GPU R&D. Right now it sucks for people who want to use GPUs for other things, because it's causing shortages, but that's presumably not a permanent state of affairs. And better GPUs will be good for a lot of other fields, particularly AI.
https://bitcoin.org/bitcoin.pdf
It's just not reality for today's Bitcoin. We'll need better scaling in production to make it reality, either on Bitcoin or other cryptocurrencies.
Edited to provide additional information:
- low fees ($0.01) to have your transaction confirmed in next block
- zero confirmation transactions safe for most users
- same pre-fork ledger
- businesses are starting to integrate with the technology because it's usable again (e.g. yours.org)
Even satoshi(before you try to cite him) himself said off chain might be needed.
Doge coin is still going even though the creator did it as a joke.
Bitcoin cash has by forking from bitcoin itself also guaranteed it would have users as it gave everyone who had bitcoin some bitcoin cash. It's a clone of bitcoin with the brakes removed.
For me, it would be its value plummeting to near-zero. If no one values it or uses it for anything, I'll be convinced it was a scam. Now, your turn.
It was designed to avoid a fix that would prevent the use of asicboost.
You're goalpost of a zero or near zero value is bad. Even fake art can be sold.
Also, I'm happy to pay a (reasonable) fee to miners to compensate them for the resources they spend in keeping the network secure for me.
I have kind of mixed feelings about removing ASIC boost. I do feel it is everyones right to innovate and get an advantage, then patent that advantage. It takes money to do that R&D, so it should be protected. Others can do so as well, or operate from countries where these patents are not respected. On the other hand, others have so far been unable to get their own advantages, so maybe it is time to hardfork (yes, hardfork, SegWit does not fix it, not until > 90% of transactions are using SegWit) to prevent getting this advantage.
Actually... I like that, just phrased a little different - Bitcoin Cash - it's bitcoin with the parking break disengaged!
... if you have to result to namecalling, you'll probably a shill.
There's an anti-miner narrative that bitcoin core is selling, but in the end, the market will decide.
As for developers removing the malleability fix (SegWit) to break the LN, that is just a plain lie. First, SegWit was removed because it is just an hack that can be achieved in much better ways. SegWit is such technical debt because it did in a soft fork what should have been done in a hard fork. Second, you can see on the development mailing list that fixing it has been discussed well, and a fix for third party malleability is actually already active. You can also see that nobody is against 2nd layer systems like Lightning Network, and it will be supported if and when it is actually useful.
The EDA that was in place in the first 3 months was indeed a big mistake and has since been replaced with a well performing fast acting DAA, but it is not the reason people push for 0-conf. 0-conf was a pretty well used and working feature of BTC before the blocks first became full. It is only logical to use it again on a chain that does not intend to let its blocks become full.
There's always going to be niche markets for people who can't use fiat currencies for one reason or another (international commerce, failed states, black markets, etc.), and there's probably going to be some number of hobbyists who want to transact in crypto as a political or technical end in itself.
But why would the median consumer possibly want to migrate to a world where their real net worth could halve or double literally overnight, repeatedly, at any time, for reasons they can neither predict nor control?
3rd gen tech is here, with instant transactions and 0 fees. Look at RaiBlocks and IOTA, these things make microtransactions a reality.
I passed funds with RaiBlocks the other day, fast as hell, 0 fees. Try to beat that.
IOTA has an absolutely unprofessional development team, doing things like saying critical security vulnerabilities are there on purpose so they can point it out when someone forks or saying that the network being unusable due to a DOS attack is fine because they can use it for testing. Don't forget the time they turned off the network for 2 days without any prior notice (yes, they can do that). I'm all for new technology, but Bitcoin is 9 year old proven technology at this point, while IOTA and RaiBlocks are both new and unproven. Let them mature a bit before suggesting people rely on them. Would be quite bad if someone turned off IOTA when you need your money, wouldn't it?
I agree with you that bitcoin derivatives (with blockchain) have proven themselves with a robust security implementation. But if you look at adoption, none of the cryptocurrencies really proved itself. Bitcoin was even dropped by some (such as Steam). And with the high transaction fees, you couldn't really blame them, it just makes no sense.
I also agree with you that RaiBlocks hasn't proved itself yet in security and scaling. But in my opinion, instant and free transactions is a total game changer. If these technologies are able to stand, it's a total game changer for all cryptocurrencies that focus on fast transactions and low fees. That includes Bitcoin Cash and Litecoin.
As for IOTA, I consider that tech in alpha stage. They are not trying hard to make it usable, but it seems they are putting all their focus on trying to build up a standard for the industry. All the partnerships and relations they have going on make sense. Is it usable for end users? No. But RaiBlocks is. And instant feeless transactions indeed could have nice synergy with IOT.
These are definitely interesting times. But I wish more focus would be put on applications and use cases than on the market cap of each coin.
>but isn't centralized wallets/exchanges like coinbase defeating the entire purpose of crypto currency
This is true. This is my biggest problem with the current ecosystem. If history is any guide, they'll eventually suffer from some sort of scandal and/or run that drives customers to a superior competitor. This only kicks the can, I realize, and is far from the original vision. But at least each centralized service learns from the costly mistakes of previous ones.
Step 2: make use of Bitcoin illegal. You know, "ban" it. It's a plaintext P2P protocol, not exactly magic. If you control the network, you can identify Bitcoin nodes and charge their owners, exactly how law enforcement can enforce laws against other illicit P2P traffic. This would drive any remaining die-hard users to services like Tor.
Step 3: if Bitcoin is somehow still popular enough to be considered a problem, block Tor.
“One has a moral responsibility to disobey unjust laws.” ― Martin Luther King Jr.
The most obvious way is to make it a crime to exchange bitcoin for USD, goods, or services. (Doesn't even have to be bitcoin specifically; they can say "blockchain-backed digital resources" or whatever.) Scope it under interstate commerce, in the US; who's going to stop them? Obviously that wouldn't kill BTC overnight, but it would kill any legitimate market. If they're really worked up they can compel financial entities to disclose or block payments to/from known BTC exchanges, or compel telcos to do the same for blockchain mining traffic. They could even ban owning bitcoin; delete your keys or you're committing a felony.
How wouldn't they ban bitcoin, really?
In that scenario I suppose bitcoin's only hope would be that the countries of the world wouldn't coordinate to enforce a global ban. Seems unlikely that they would. But, back to your point, a total US ban might be enough to eventually kill the ecosystem.
So whilst you can transfer money censorship free, you and the recipient need to then handle the transfer into and out of crypto which seems to be in many cases more difficult than actually transferring money other ways.
Not to mention the fact that that purpose is an astonishingly niche thing to want to do - at least in first world countries.
Are you suggesting crypto has no long-term value in the west?
Don't get me wrong. That vision of the future isn't here yet. Far too few vendors accept bitcoin today for it to be a viable closed loop system.
So, how does this work if I'm, say, trying to support the protests in Iran, who just shuts the internet off?
Centralized exchanges will remain a thing for rapid and cheap exchange; Bitcoin in particular has the flaw that it's slow and expensive to transfer between wallets, so the exchanges provide a fast alternative. You give up the decentralized nature in favor of fast and cheap transfers between wallets and currencies. This is more for the traders though.
In practice, running a mining node without specialized equipment is prohibitively expensive so we're stuck finding a third party. Most of those third parties are looking to do a volume business and aren't interested in one-off small dollar transactions, so it's centralized exchanges or nothing.
When the internet first got going, everything worked with protocols. Protocols are open, decentralized, interopable. Think email. Anyone can send an email as long as they follow the protocol.
Then people figured out that you can't make any money from protocols. Instead we got platforms: closed, centralized, and most importantly monetizable. Think facebook.
Cryptocurrencies are a way to combine open protocols with making money. Instead of building a cloud-storage business, you build a cloud-storage protocol and make money on the coin that is used within that protocol. ICOs are how you fund development of these protocols.
Now, in reality, a huge number of coins are borderline useless or outright scams, and the current valuations are absurd. But long-term I think it's a very valuable technology.
Anyone who believes this probably wasn’t alive then.
Everything we take for granted is built on open and free (as in beer) protocols. The people who created and supported TCP/IP, HTTP, XMPP, etc. figured out ways to have successful careers without a micropayment scheme for basic participation.
And personally, I remember a simultaneous mix of excitement and disappointment from the internet of the 90s.
For example, the little guy might be able to make a small income from IPFS/Filecoin that would otherwise be strictly the domain of AWS and other giants.
Seems like a bit of wand waving going on in your description there.
There actually already exists a coin connected to messaging protocols, Kin. I don't see much practical use for it however.
This is my limited understanding:
1) You want to allow users to send and businesses to receive (micro-)payments within your messenger/protocol.
2) You want to allow users donate/vote/gift/award other users/groups/posts with their tokens within your messenger.
3) You want to allow users create custom (chat-)bots which could apply some scripted logic to send/receive tokens; etc.
Inventing a new distributed messenger/protocol with cryptocurrency, you essentially create (and own) a new platform with services operating on "virtual money". Rules of money (tokens) distribution in theory must be guaranteed by your protocol implementation (usually presented via whitepaper).
If potential future users like your idea (whitepaper), they may invest into your new shiny platform via ICO (with other cryptocurrencies) to get some of your initial (limited) tokens. They want to get them while they cost less than they potentially will cost later, if your platform becomes popular. It's assumed that in the case of an open distributed blockchain platform, amount and belonging of tokens won't be able to be painted by you, but guaranteed by algorithms and public network.
We've seen how it works on totally scam projects. And apparently, we'll have a chance to witness how this works out in case of the already popular platform[1].
[1] https://techcrunch.com/2018/01/15/inside-telegrams-ambitious...
It seems like a bit of a chicken-and-egg problem (at least in the way I keep seeing it described): you fund your project/app/scam with money from your ICO, but you only get money from your ICO when people believe in your project enough to put ("real") money in it prematurely.
At best, this is basically the Kickstarter model that everybody likes to trash, is it not?
But people who participate and invest from the start can make money if the project succeeds. So the economic incentives for those involved are greater than the incentives in a walled garden.
But this makes zero sense! What purpose does the coin serve here? Imagine coins had somehow gotten tied in with email protocols. The person who came up with the protocol somehow gets to magically siphon off money every time someone sends an email? Why? How?
The same is true with Bitcoin or Ethereum. You can fork it and make your own, but the majority of the people want to use one of the original protocols, and you can only use the protocol if you pay with the proper protocol token (either BTC or ETH).
But not value that can be captured by the creator of the protocol. Let's go back to cloud storage. Sellers of storage sell 1GB-Month for 1 token (or whatever). Buyers of storage eventually run out of tokens because they've given them all to sellers. So they have to purchase the tokens back from sellers for dollars. How much will sellers charge? The cost of storage (plus whatever profit they can get away with).
At that point buyers of storage are paying exactly what they'd pay for storage if the token system didn't exist. It's just this goofy middle layer of scrip. There's no magical extra money that the protocol creator can siphon off.
Step back and look at the big picture. The only way for a protocol creator to make money is for either sellers of storage to charge less than they otherwise would or for buyers of storage to pay more. Why would either of those two groups ever want to do that?
I'm saying that the creator of the protocol won't.
That's also how proof-of-work systems should have worked with surplus compute cycles, except ... ASICs. I basically consider Bitcoin broken because of this.
As to how the protocol creator makes money, they can sell storage like everyone else, but creating a protocol doesn't require the same initial capital as starting a whole cloud storage company.
Because? Value?
Sorry, I really lost a lot of faith after that one.
No, it doesn't. Being scarce, by itself, is not valuable at all. Being useful is was gives something value. In fact, I'd argue a protocol that I have to have a coin for is much, much, much less useful, and therefore less valuable, than one that doesn't.
They don't, why would they?
The only people who need to be magically paid are the ones executing the contract... miners, signers, etc.
In FoodCoin the cooks would get paid, the health inspectors would get paid, the poisoning investigators would get paid, the underwriters would get paid when those people do their jobs and lose their stakes when they don’t. The eaters would pay.
These people are paid for doing work in alignment with the contract incentives. A good cryptocontract makes it hard to get rewarded for work that goes against the planned incentive scheme. A bad one fails at this.
In order for this to work without a centralized payment gateway like PayPal, you need to issue tokens. Those tokens will have a value of TOTAL_TRANSACTED_PER_AVERAGE_HOLDING_PERIOD. Their price will depend on speculation about that value over time. Contracts finding more use will tend to have a bigger TOTAL_TRANSACTED_PER_AVERAGE_HOLDING_PERIOD.
In that case it is not an open protocol (at least not in spirit). It is better to go with platforms.
What Ethereum for instance did is genius. It distributes storage and compute across the world to those willing to share their resources and you get paid by doing so. It's a way to drive decentralization, because there is an incentive for mining. Is it perfect? Not quite yet for various reasons (performance, privacy), but its an interesting new paradigm.
In theory, protocols like the blockchain are open, decentralized, interoperable. Yet in current practice a cryptocurrency only works with platform lock in: if you don't lock people into your platform it isn't monetizable. Market forces push toward closed (artificial scarcity, rising costs for new players to enter the market versus entrenched players/miners/etc) and centralized (central wallets/brokers/exchanges on the one side, complex miner unions as complex political boundaries form on the other side).
I'm not sure cryptocurrencies can save the internet from platform problems when they themselves are platforms.
Email is not centralized under a single authority, but I disagree that it's so decentralized that "anyone" can do it.
The openness worked so well in the short-term that spammers and scammers started using it, so all the major email providers started running serious spam filtering. As an individual, I can't realistically set up a mail server to send email to anyone, like I could in 1995, since Gmail will reject it.
SMTP is a pretty simple protocol but now I have to use major third-party services for both sending and receiving internet email.
In the case of email, that's fine, because there was never a centralized alternative. In the case of currency, what's the point? Isn't it just going to circle back around to (mostly) centralization again, and so what was the point?
I'm an individual who runs his own mailserver and all emails are accepted by Gmail.
Sure, today a mailserver must be absolutely properly configured. Not just to play with Gmail, but with all other players as well. The HELO string, DNS settings and especially reverse DNS settings must be correct. Don't run it in a non-dynamic IP range. And for IPv6, better have correct SPF/whatever records.
This is initial effort, for sure, but absolutely doable for an idividual who plays with their own server/VM anyway. Pro tip: It is more fun if you share the infrastructure with friends.
And there are properly configured projects with ready-to-use VM images and good tutorials out there.
In some sense it is even easier than HTTPS, because for SMTP+TLS and IMAP+TLS a self-signed certificate is sufficient, you don't need Let's Encrypt certificates, let alone pay dubious CAs for certs if you are commercially active.
This is not true, at all. Only one of the regular Bitcoin Core contributors, Pieter Wuille, works at Blockstream. Other companies, Chaincode in particular (http://chaincode.com/#team) have many more Bitcoin Core developers.
Current and former Blockstream employees that work on core or have worked on core:
* Dr. Pieter Wuille
* Greg Maxwell (CTO)
* Andrew Poelstra
* Mark Friedenbach (Founder)
* Luke Jr (Contractor for Blockstream)'
* Jorge Timón (Founder)
* Patrick Strateman (core tech engineer)
* ฿tcDrak (anonymous dev, but publicly support blockstream)
The list is more extensive than this, but I can't be bothered to waste my time. Your propaganda and lies are disgusting.
Maxwell JUST left a few days ago and spent plenty of time at both Blockstream and Bitcoin Core simultaneously.
Timon is still there.
You also left out Strateman.
In any case, your strong assertion that only one contributor works at Blockstream is flat out wrong and easily shown to be wrong by anyone with 2 minutes to google.
You seem to know all these people, which indicates intentional deception rather than ignorance.
I use the word "disgusting" because the choking off of BTC is an intentional play to further a greedy business model and not just an act of stupidity.
We rely on many central authorities because that was the only way to get safety, security, dependability. Governments enforce ownership, banks maintained records. When the systems were created it was the only way, short of physical ownership of all of your money (who wants $100,000 under their bed?).
Blockchains and related technologies offer an alternative. You can have all the same things, but without the need for central authority. That appeals to some people.
The centralized wallets and exchanges are indeed a potential problem, but you can always switch your money elsewhere, choose a different central authority or choose none. And whatever you choose, the underlying system is still free from central authority. No one can control what you own except you.
The problem that I think is overlooked is that central authorities like governments do more than just that small list of things. They offer protection from inflation and deflation. They offer protection from scams (rollback of the transaction, if you will). They can use physical violence (arrest, confinement, and so on) to enforce their central authority. They can enforce, to some degree, that illegal actions aren't occurring using their centrally controlled currencies. Blockchains do not offer that- for better or worse, you decide.
It most likely still is, and forever will be, in any practical sense.
Bitcoin, et al. provide an alternative through literally flushing humongous amounts of energy down the toilet (ironically, at the very moment in history, when we can't afford to do that). Energy requirements for maintaining the integrity of blockchains is unbounded and scales up with network use. If we were to accept Bitcoin as the primary world currency and use the network for the next hundred+ years, I'm confident we'd had to eventually (within couple of centuries) start sucking stars dry to keep up with the energy requirements.
Compare with the "traditional" economic system, which prefers to minimize waste and exploits benefits of centralization to improve efficiency, while still delivering mostly the same thing Bitcoin promises.
(In fact, all this gives me an idea for a sci-fi story: humanity is visited by aliens and encouraged to join an interstellar trade empire; only too late they realize that the friendly aliens are going to suck the Sun dry within couple hundred years, in the process of maintaining a blockchain-based interstellar currency.)
Bitcoin Is None Of The Things It Was Supposed To Be
https://theoutline.com/post/2592/bitcoin-is-none-of-the-thin...
Imo it's an experiment in a decentralized privatized currency. And what we're learning is the benefits of centralized banking may outweigh the potential costs (namely inflation, a fairly justified fear depending on where you live).
On that note, shameless self promotion in case someone wants to understand how transaction and fees work in bitcoin and most cryptocurrencies, I have written this post:
https://medium.com/@smith.garg/fees-calculation-in-bitcoin-a...
After you forget about that, take a look at the posibilities this new tech has to offer.
3rd gen crypto is here, with instant transactions and 0 fees. It's working today. Try RaiBlocks if you don't believe me.
Imagine that you own a fully automated Tesla. When you're not driving it, it's making money, driving Lyft and Uber passengers. When it needs to recharge, it goes to the most advantaged station and recharges.
The cool thing about this device is that it's a real actor in the economy, making money, and paying for things it needs.
If you give this device some pocket money such as IOTA, it can receive payments from anyone, and pay for electricity in any station. Each coin that goes over budget is passed to your account, or maybe to multiple if it's co-owned. Remember 0 fees and instant transactions.
In such a wold, why would you work with wire transfers from a bank account, if you can let machines work with "cash" internet money?
If such internet money is worth $0.000001, it has value, because you can make instant, feeless transactions with it. A corrupt state is also not able to mess with your money.
So yeah, I see a bright future for cryptocurrency. Even when the market crashes, it will still have value and plenty of usecases where it dominates all other options.
The main business I work for started to accept bitcoins for our physical goods in 2014ish. I did the integration.
I adopted Bitcoin because I'm not a huge fan of payment processors, I'm a cryptonerd and because I wanted to provide a use case for a technology I believe in, which wasn't illegal. I've also helped chime in with devs on open Bazaar and assist them with issues people who run stores have.
Over the years we've processed ~10,000 dollars worth of Bitcoin transactions.
We've ran into issues where confirmations take longer than our fulfilment center are used to, so we needed to wait to ship out orders.
We've run into issues where refunds get weird due to price fluctuations.
I've always noticed customers buying our products when the price of Bitcoin was too high and due for a crash, but since it's run up over $2000 I've noticed barely any transactions.
This is a fundamental change in how people are using it, and due to the high fees and slow confirmation times, it's no longer useful for us and it seems people would rather HODL than use.
Personally I enjoy the tech, but never cared for it as a speculative asset, which now I believe it has become (but kinda always was).
Have fun with your digital gold.
I wanted to ask again here, directly to Bitcoin techies: How can BTC survive 100 years if no one can download the massive blockchain? Most residential IPs enforce a 1TB/mo cap. Much of the internet is also on slow connections (Australia).
The BTC whitepaper is surprisingly hand wavey on this one subject, and the more I think about it, the more it seems like an Achilles' heel.
Can we eventually reboot BTC back to the genesis block, but with all current BTC pre-mined and allocated to current holders? Kind of like a manual GC, or hard reset back to initial commit.
But it doesn't seem that simple. Millions of people have certain quantities of BTC, and even tiny ones add up. You have to track that data somewhere. It doesn't seem possible to encode the whole state of the world into a 1MB genesis block.
So the question becomes, at what point to we reboot, how, and by what mechanism can we achieve community consensus?
This is combined with the fact that BTC is deflationary, so eventually miners will charge nothing but tx fees. No more block reward = the TX fees must be at least as high as the current block reward. That is a staggering cost since a 1MB block can only encode a couple thousand tx.
That leads to the difficulty death spiral: difficulty re adjusts every 2016 blocks. Two weeks when every block mines at ten minutes. But if miners leave en masse, then suddenly it will take a very long time to mine blocks. It could be months before the difficulty readjusts down.
This must sound identical to all the previous BTC naysayers, but believe me when I say I believe this can work. I'm trying to discuss the technical merits and set aside the question of whether it will fail.
Presumably in 100 years, your cap will be larger, and your internet will be faster.
So if I give you a coin, and you give it back, 1 trillion times, we have a huge database with two trillion transactions. But at the end of the day, nothing changed, I still have a coin and you don't, because you gave it back each time.
Much of that data (i.e. 99.9999% of it, in this case) can be reliably thrown away for all practical intents and purposes.
That's the gist of it. I'll spare you the technicalities (which I'm not intimately familiar with anymore myself, in any case), but the basic idea is that you don't need all data to run the network reliably.
That, plus moore's law's equivalents for storage and networking, google them. They're not as strong as for CPU, but they're quite good anyway.
It's currently about 150 gigs.
https://www.wdc.com/products/internal-storage/wd-purple-surv...
This is specifically why the bulk of the community has stayed on a chain that limits blocks to 1 MB blocks. If you increase the shared resource, blockspace that everyone has to store, you increase free-rider problems and the tragedy of commons that goes with them. Given your question, and the properties of the Bitcoin blockchain size today, the rate of blocks being issued, it would take ~13 years before the blockchain would reach 1 TB.
Since there is no central authority in bitcoin, there isn't a process where one can screen out "spam" and legitimate uses. The only way to do it this is to rate limit transactions. Periodically you'll see people come on to the network and try to issue large volumes of incredibly low-value transactions into the mempool queue. Are those spam transactions? I'll let you decide.
See here:
https://dedi.jochen-hoenicke.de/queue/#all
Second chart shows that there's about 16 BTC worth of outstanding transactions in the queue for inclusion in a block (about 1 PPM of total coins in circulation). The third chart shows that there is about 170 MB of transactions and you can see large number of low-fee, low value transactions being dumped on to the network.
That's exactly what fees are
> blockspace that everyone has to store
Only people who sync with the chain have to store the blocks, not everyone who uses it. The vast majority of people don't sync with the chain and still reap all the benefits.
> Are those spam transactions? I'll let you decide
The miners decide
There are over 7 billion people in the world. A good crypto-currency should be able to handle millions of transactions a second, indefinitely. It should be as ubiquitous and as easy to use as the internet itself. In an ideal scenario, the cost to run the currency network should be cheap enough that there should be virtually no transaction fees other than participation alone (think bittorrent), and the entire thing should be secure and un-hackable. It should be stable in value, or at least slightly inflationary (so people actually spend it instead of just holding onto it and treating it as an investment vehicle).
Bitcoin doesn't even come close to meeting these goals. It's so incredibly flawed, it boggles my mind how people don't see the glaring problems.
The wheel is moving, though! Bitcoin may not be the end-all, be-all solution, but it has certainly got people thinking.
https://medium.com/@melik_87377/lightning-network-enables-un...
so basically as you bootstrap and verify you can prune older blocks without sacrificing security.
also there were some proposals related to utxo set commitments, where utxo set signature is recorded in the blockchain, so bootstrapping node can just download it from anyone and verify starting from the commitment block. this would solve the problem entirely.
second - storage and bandwidth are still a concern out of which a whole bitcoin cash altcoin was born - some people thought it would be good idea to go with even larger blocks justifying it by even more handwaving.
third - there is a strong push towards developing upper layers of the network, so called payment channels. one solution that already exists on mainnet in alpha stage is Lightning Network, is basically a protocol for routing payments between multiple channels kademlia-like. these channel transactions are not recorded in the blockchain, you only need to pay fees for opening and closing a channel, so two on-chain transactions, and then you use your channel funds like a debit card, paying for low cost things.
and your last point - yes, halving is a significant event during which miners lost almost half the revenue. on original bitcoin network this is offset by a working fee market: right now about 20%+ of block rewards come from tx fees. obviously miners know the schedule of halvenings and those that will become unprofitable will try to get rid of their infrastructure investments beforehand - this will lower network hashrate which will send tx fees higher, which will somewhat offset losses as well. we've already been through couple halvenings, they didn't really affect much, i think next one will be crucial test for bitcoin's survivability.
of course people pushing for zero fee transactions are trying to have their cake and eat it too, storage is a scarce resource and nobody can sustainably to offer it for free.
bottom line is - blockchain cannot scale to micro transactions, most of economic activity will be done in payment channels, on chain transactions will be mostly for high-value settlements between larger players (banks, exchanges, etc).
edit: word
Bitcoin Cash is fast and as low fees but if it manages to scale to something like a Visa network number of transactions, it will be centralized and then some geographical jurisdiction or miner cartel will try to have control over it lowering the censorship-resistance characteristic.
I think is great to have to different paths on Bitcoin BTC vs BCH so we have opportunity to see own they evolve.
This just isn't true. Today's commodity hardware can already process gigabyte blocks[1], which corresponds to approximately 3000 tx/s globally. In addition, Moore's and Nielsen's laws will bring down the cost of cpu power and bandwidth, and will enable terrabyte-sized blocks within the next decade or two - all while still running on commodity hardware.
[1] https://news.bitcoin.com/gigablock-testnet-researchers-mine-...
One thing is to test on a controlled environment another completely diferent thing is to test on real world.
Basically each adress has its own blockchain, and proof of share is done with directed acyclic graphs.
https://twitter.com/a_man_in_black/status/639287717705089024
Here's a map of the LN network. So far there are about 100 nodes: https://lnmainnet.gaben.win/
Once you insert trust and centralization, then all of the supposed benefits of the blockchain are gone, but all the shady behavior will remain and almost certainly get worse.
My understanding is that it is a bit like IOUs redeemable for bitcoin. But just like with Tether and so many other supposedly-redeemable IOUs on the blockchain, there's always going to be serious doubts about whether there really is anything backing them.
If you send money with the LN you have to regularly(about once a week) connect and verify that no one is trying to cheat you. If you only receive through a channel you don't have to do this. In principle it's possible to delegate this to a third party.
Another complication is that sending funds to an arbitrary party involves finding a path through a graph of nodes. We'll see how this works out in practice.
LN tx's are actually bitcoin tx's. Micro ones! Proper real bitcoin segwittx's! Secured by the network. Its just they are not registered on chain until the payment channel is closed.
Nobody verifies the order, but if you try to broadcast an intermediate state without your counterparty's permission, you can't actually spend it for 1000 (?) blocks.
If your counterparty is able to present a proof that that was an intermediate state rather than the latest state then he gets to spend all of the money in the channel immediately.
So all you need to do is monitor for transactions that are spending old channel states, and take all of the money if your counterparty tries to do it. This is even out-sourceable, so you could have a third-party monitoring the blockchain for old channel states and spending the money to you if anything goes wrong.
There is an "off-chain" network that we are being assured is trustless, and you say nobody verifies the ordering of transactions. It just doesn't make sense. Either it requires trust or requires some alternative non-scalable consensus mechanism. There is no magic algorithm that doesn't have tradeoffs.
If bitcoin core agreed to ensure that opening a channel freezes both wallets until the channel is closed, then that would prevent one kind of fraud. But there's still other kinds of fraud, like double spending, or changing the ordering.
You say that a counterparty can "present a proof" but to whom? Isn't timestamping itself a hard problem, and one that it is said only the blockchain can solve in a trustless way?
It's a hash timelocked contract[0]. You "present the proof" by spending the UTXO. I was reading up on this quite a while ago so I'm fuzzy about the exact details, but the hashes are created as part of the LN transaction.
The transaction can be broadcast immediately by a malicious party, but won't be spendable until 1000 (?) blocks have passed.
If you can prove that there was a subsequent channel state signed by both parties (i.e. the tx that was maliciously broadcast was not the most recent state of the channel), then that can be used to spend the UTXO immediately instead of waiting for the 1000 blocks.
Like I said, do some research before asserting that it can't work.
[0] https://bitcoinmagazine.com/articles/understanding-the-light...
It sounds like this wouldn't be very useful for just one or two transactions, because to open a channel it requires a real bitcoin transaction, and then LN transaction fees on top of that.
So instead, it would only be useful if people plunk down a large amount of bitcoin in order to conduct a large amount of transactions. So you'd have a huge amount of money tied up in this network, and people would be spending it as if it were real bitcoin when it isn't, and the double spending problem is truly only solved when the channels are closed.
The only guarantee against double spending is the blockchain.
Note that when you have 1 LN channel open, that doesn't mean you can only transact with 1 person. You only need 1 channel open to get on the network, and then you can transact with everybody else on the network.
How is it not "real bitcoin"?
> the double spending problem is truly only solved when the channels are closed.
How are you going to double-spend on a LN channel? Your counterparty knows the state of the channel just as well as you do. You physically can't update the channel state without your counterparty's approval. Part of updating the channel state is revealing to your counterparty the secret hash that will allow them to steal the money from the previous state if you broadcast that previous state's HTLC instead of the updated state.
The double-spending problem is solved by it being possible to settle the channel on the blockchain. The blockchain is still required, but it's not like you can cheaply or easily double-spend a channel at any point in time before it's settled on the chain. If you try to do that, your counterparty will just take all of the money.
This is an oversimplification. LN transactions have much different properties than regular bitcoin transactions. Most notably, LN transactions require the user (or someone they trust) to be online in order to verify that they aren't being defrauded by someone broadcasting and earlier state of the payment channel.
You're right but to clarify, the user getting online once a week or so is enough. They don't have to continuously be online.
99% of people won't be able to run their own nodes, so a huge amount of infrastructure and services needs to built around it before it's useful for more than a few percent of people.
I'd guess in a years time we'll still be hearing about how lightning will save us from fees soon
Can you elaborate on this please. Why is that? Sorry for my lack of technical knowledge.
> 99% of people won't be able to run their own nodes
99% don't need to run full nodes, they can (and mostly do) use SPV wallets. full nodes are important to network connectivity, but running a full node right now is not expensive - i run one on rpi3.
Has there ever been a technology that had a first mover advantage and large network effect but still got bested by a superior technology?
The only truly 0 fee, virtually instant cryptocurrency i have encountered so far is raiblocks. It only achieves this by using block-lattice, not blockchain. The whitepaper is pretty interesting.
EDIT: Thanks for the downvotes (please check out their purpose, it's not to disagree with people). You guys should go and read the Bitcoin Whitepaper.
Then why the $#@! did they include "fast" and "low fee" as 2 of the 3 main points on their website.
"The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions"
Clearly lowering transaction cost is one of the basic ideas behind Bitcoin that has now failed.
If the minimum transaction fee is X then the minimum reasonable transaction is ~10-20x. Based on current fees you can't do 0.0001 BtC transactions, thus it fails one of the primary goals and the entire value from irreversible transactions.
Really this get's to the hart of irreversible transactions. Without artificial limits like the current 1MB block size transactions take meaningless amounts of computation and bandwidth and so they should basically be free. It's really oversight which is why Visa can get away with 30cents or more for what take a computers well under 1/1,000th's of a cent to maintain.
1) Peer-to-Peer transactions
Thats's nice, but so do Square Cash, Venmo, Paypal, etc... and they currently do it cheaper.
2) Borderless payments
How do we define borders? They're just arbitrary demarcation lines regulated by governments, so wouldn't the developing regulations in South Korea and China be creating borders for bitcoin?
3) Fraud Protection
Maybe someone can explain this to me. If any weird activity happens on my bank account, my bank contacts me and shuts down my card until I verify transactions. If I make a purchase with my CC and the seller is fraudulent, I can charge-back and have the CC deal with the seller. How does Bitcoin even come close to that level of fraud protection? I assume multi-sig is their way of defining "fraud protection"?
Is it the decentralization? Because isn't the bulk of the mining being done by large pools that can then be regulated and controlled by the governments of the countries in which they operate? I just checked the mining breakdown[0] and the two top mining pools (BTC.COM and AntPool) are owned by Bitmain[1], which is a Chinese company, and the next two (BTC.TOP and ViaBTC) also look they're controlled by Chinese companies. I'm not anti-chinese, but lets not pretend that companies operating in China aren't in some way beholden to their highly centralized and non-democratic government.
So what are, and have always been, the main benefits of bitcoin again?
[0] https://blockchain.info/pools [1] https://en.bitcoin.it/wiki/Bitmain
With the difference that your wallet and means of transferring funds is centralized; you can't transfer money from your Paypal wallet without using Paypal's services. With crypto all you need is a connection to the network and your private key.
> How do we define borders? They're just arbitrary demarcation lines regulated by governments, so wouldn't the developing regulations in South Korea and China be creating borders for bitcoin?
They are, plenty of countries where crypto tech is not officially allowed. Or well, they can block the exchanges; in theory, using a VPN service people could still get on the network. But that too can be blocked. So you have a point there, while transferring coins is a global thing, there will be countries without an open internet where it won't be possible.
Re: fraud protection, that's a tough one indeed. I think that implies that you can't get hit by a malicious bank? I'd argue it's more insecure than regular currencies, and like you said, official banks and currencies have a guarantee system, that is, if e.g. a bank gets hacked, or even when, due to your own fault, you get scammed, banks and credit card companies will reimburse you, often backed by national / global banks and systems.
No they don't. Any one of those services can freeze your money or worse, go into your banking account and reverse transactions. That's not peer-to-peer. There's a centralized governor.