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Comment by vec | Hacker News Reader

For what it's worth, we just spent two weeks trying and failing to get Stripe's Bitcoin integration working on our site.

The short version is that Stripe guaranteed a USD <=> BTC exchange rate for an hour, after which they would automatically cancel the transaction. Given that most transactions now take well over an hour to be verified on the blockchain, that means basically every transaction fails.

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I honestly don't know what use-case remains for Bitcoin. If you have large value transactions you'd probably choose something with privacy like Monero, and if you want something cheap and fast, maybe Bitcoin Cash. In both use-cases, you have a few competing alternatives.

In no circumstance is Bitcoin preferable to one of the mature alternatives.

...and if no one is using it as a transaction medium, then acting as a store of value is better placed in an actively used coin network.

With South Korea trying to regulate anonymous trading on Korean exchanges, makes me wonder how long we have before regulations become more widespread. And if this happens do you think privacy coins even stand a chance?

Well, the problem with regulating anonymous transactions is you don't know who's doing them.

You don't have to regulate the transactions, you just have to regulate the usage of them.

With Bitcoin that problem may be somewhat short lived. The blockchain is forever. Once unmasked, your permanent, irrevocable, and cryptographically-verified transaction log is sitting in the open for all the world to analyze.

Doesn't matter how many years it's been since you've done business. Doesn't matter if you knew that the random dude you bought an antique thimble from was a political dissident or not. You still sent money to that btc address, that address owned by a terrorist, and now they're gonna wanna know why you were funding terrorism...

> the problem with regulating anonymous transactions is you don't know who's doing them

Every government has departments of agents adept at tracing cash transactions. Bitcoin offers the advantage of total transactional transparency.

Shady wallet? Trace back until you find a known wallet. An exchange, vendor, et cetera. Subpoena, find their counterparty, rinse and repeat. Best case: you find your guy. Consolation: money laundering charges against the schmuck who didn't keep books and records.

Arrest someone who conducted a fraud, Ponzi scheme, ransomware scam or terrorist financing? If they did it with cash, the money is gone. If they did it with Bitoin, you have the option of tracing forward and seizing the funds the moment they hit a known wallet.

Of course with enough effort and investment you can probably stop many things, the point is whether the increasing marginal costs of enforcement are worth it to the government and society.

By that same argument, the US could round up every illegal immigrant and deport them, or every casual drug user and lock them up for life. We don't do that because it'd be ruinously expensive (not to mention immoral) and transform us into a police state.

The combination of privacy coins + tumblers + crypto + VPNs + TOR will make it very hard for a government to punish motivated individuals short of extremely draconian measures, and changes the strategic calculus for the society as a whole.

> the point is whether the increasing marginal costs of enforcement are worth it to the government and society

The same applies to cash. Investigating them is expensive. We don't bust the kid who fails to report the proceeds from their lemonade stand because (a) it's too small and (b) it's too mean.

> privacy coins + tumblers + crypto + VPNs + TOR will make it very hard for a government to punish motivated individuals

Analogs for each of these exist for cash. None of this is new, it's just shinier. (In any case, now you're talking about willful money laundering.)

> None of this is new, it's just shinier

Yes, but again, costs matter (this time on the other side). Money laundering with physical cash is expensive, risky, and time consuming.

You need to first get a bunch of physical cash, which itself raises suspicion and is easily tracked. Then you need to find someone in the physical world that you trust to help launder for you.

If you reduce the cost of 'money laundering' by 2-3 orders of magnitude, it indirectly raises the cost of enforcement significantly, because then the government will have to sort out all the 'harmless' infringement from the serious crimes that it cares about today.

I'm shocked at how often tumblers come up on this site. It seems very clear to me that using a tumbler is straight up money laundering.

While there's no doubt they are used for money laundering, they also serve an essential privacy purpose.

Imagine if every vendor you made a purchase from with your credit card also received a copy of your entire transaction history with that card. The mafia run business, the fetish porn shop, the megacorp, the government agency.

While it wouldn't be that easy to connect a wallets previous transactions to the real world sources, the more people use it, the more incentive there would be for databases/services to grow mapping wallets to people/companies. Just like the services now where you can provide an email address and get the persons full details.

And that transaction history is out there forever, to keep re-analysing as more wallet data is discovered.

It's not that tumblers are just "used for" money laundering, it's that they are money laundering, definitionally.

All the terrible privacy implications of using Bitcoin that you've described are true. The conclusion "so therefore it's okay if I launder money" does not follow. You could instead not use Bitcoin.

You're taking the different definitions of money laundering and switching between them as it suits you.

If by 'money laundering' you simply mean transacting in a way that is mostly anonymous, you can do this today just be using cash, finding someone else with cash, mixing your bills together, and none of that is either wrong or illegal.

If by money laundering you mean committing a criminal act and then hiding its financial traces, then that is only one possible use of tumblers, but there are other legitimate uses.

It's kind of confusing that you consider switching bills around to be a normal part of transacting anonymously with cash. I mean, make change if you need to, but this is usually not motivated by anonymity.

It's sufficiently anonymous for most people to just spend the cash they have. You didn't get the cash from D. B. Cooper, right? So nobody's watching the serial numbers. You just spend it.

It's only Bitcoin where that isn't an option.

Edit to be clearer about what my point is: cash has a moderate amount of anonymity, with practical limits. If those practical limits are a problem for you, you probably are covering up a crime. Bitcoin, however, has no level of anonymity between "everyone can see everything you spent" and "covering up a crime".

I think the phrase "motivated individuals" is doing a lot of work there.

I don't currently take any steps to try and obscure my transaction history from the authorities, and I presume that most if not all of the merchants I transact with keep some form of subpoena-able records. I'm not certain why I would expect that to change just because we switched currencies. I don't personally have any desire to violate any financial regulations, so why should I go to all the extra effort?

Anonymity protections aren't of much use if your counterparty isn't also using them, and they're worse than useless if they make you pop out of the statistical background noise for one reason or another.

The government doesn't need to go beyond finding the tumbler. Here's how a sample investigation would go:

Honeypot drug purchase, paid via bitcoin to DumbSeller. DumbSeller routes bitcoins to tumbler. Using the NSA backdoor in TOR, they trace DumbSeller to VPN service, who they then subpoena. VPN service either complies or gets charged as accomplice to money laundering and other crimes and gives up customer as part of plea deal. They then trace the payment to VPN until they reach a warm body at the other end.

Let me give you some more parsimonious paranoia: the tumbler operator is likely already working for the government, or accepting money from governments to forward them DumbSeller's transaction history. Why would they not?

Running a tumbler seems like a great racket if you can cope with the amorality (and particularly if you can rationalize the fact that you're sending money to ISIS with probability approaching 1). People pay you fees in exchange for "privacy", and have no way to tell if they got it.

If there exist tumblers that don't sell their customers' transaction history, in the ruthless capitalist world of Bitcoin, they are easily outcompeted by the ones that do. And a tumbler "customer" has no way to shop around for privacy.

Why in the world would one host a VPN service in the US?

>Of course with enough effort and investment you can probably stop many things, the point is whether the increasing marginal costs of enforcement are worth it to the government and society.

They have been fighting a war where the "marginal costs of enforcement" are not worth it, with the "war on drugs" for a century now.

And they'll not fight something that cuts the governments and society's tax funds?

Has either of the above ever happened historically, not counting jumps of just 1 person?

If you mean for bitcoin, I'm not sure, but probably, and there's no reason to suspect it wouldn't.

If you mean for cash/gold/diamonds/..., then yes, absolutely, all the time.

At the same time, Monero functions basically the same way cash does in this scenario. Most cryptocurrencirs do not, though.

Money launderers are usually caught because they're already under investigation. Others become apparent when lifestyle and reported income disagree.

When thinking about what the government might do in a specific situation involving cryptocurrency, I've found it helps to replace "Bitcoin" with "cash". "I tumbled Bitcoin" becomes "I laundered cash." "I got paid Bitcoin for my car" becomes "I have unexplainable cash because a stranger gave it to me for my car." "I used TOR while being paid Bitcoin" becomes "someone I don't know drops off cash for me in person." "How can they bust everyone using cryptocurrency" becomes "how does the government keep people and businesses more or less honest when it comes to reporting cash business." "Depositing lots of Bitcoin" becomes "depositing lots of unexplained cash." Et cetera

Less than 2% of "money laundering" is ever caught. That's despite the enormous time, money, and loss of dignity and privacy burdens, which are overwhelmingly borne by people with no connection to crime whatsoever. "Anti money laundering" is a parasite on humanity. They should let it drop to 0% and not bother with any of it: they doubtless keep lying to themselves that they are doing something worthwhile; they are not.

That's not a problem at all; just ban them. For example, I would predict that Coinbase and Gemini will never support Monero or ZCash.

That's exactly what the authorities will do. In fact it'll be extraordinarily trivial for the G30 to regulate Monero et al. out of common use in larger markets if they want to. If you want to use it, you'll be a financial criminal, 99.9% of people in the G30 will avoid it accordingly.

It's not so simple. You only need one exchange, anywhere in the world, that will exchange Monero for non-banned cryptos, and the market will flow freely.

Except that any exchange trafficking in an illegal coin could be banned as well, and so your transactions with that exchange in other coins (in order to convert to or from Monero) would be traceable and illegal.

What about coins forked from Monero?

What about other privacy coins?

Are certain cryptographic algorithms going to be banned when used in a cryptocurrency?

These are all loopholes they'd have to tie up if they want to go down that rabbit hole. It will cost them millions of dollars and man hours to stop it. You're baiting the government to play a neverending and increasingly complex game of whack of a mole. It seems like a beyond awful use of tax dollars to me. We cannot let our government get sucked down the black hole of trying to regulate the unregulatable. They need to come up with solutions to co-exist with it, not outright ban it. That will be a disaster in the making on par with the war on drugs.

> You only need one exchange, anywhere in the world, that will exchange Monero for non-banned cryptos

Have you seen how the United States enforces sanctions?

It's irrelevant whether exchanges accept privacy-focused cryptocurrencies, because people could always use atomic swaps: https://www.cryptocompare.com/coins/guides/what-are-atomic-s...

I don't think they're going to be able to ban atomic swaps.

Very few cryptocurrencies are anonymous, Bitcoin is NOT. OMG do people really think this still?

Now there are anonymous currencies like Monero.

Not only they will stand a chance, they will grow substantially as the only way to mitigate the governments efforts to enforce surveillance and regulations. Darknet exchanges will emerge if not there yet. People have been dreaming of real electronic cash nobody can know you have or give to somebody for so long and wont give up easily. By the way this can even happen to be the way to the new kind of economy that relies on reputation and competition rather than surveillance and prohibition.

How does money get in or out of such a system. If you're cut off from all sources of fiat what's the point?

It can grow value of its own as the ecosystem grows and a black market can emerge for the needs of conversion.

The point is that people can still use it for things, and the various dark net markets that exist prove that there's at least some kind of use for unofficial (pseudo?)-anonymous currency.

Though, by no means are darknets the only way of getting some use out of unofficial currencies. There will always be desire and utility for such systems.

Those darknet markets are only used to buy illegal things, or circumvent currency controls.

I understand using a darknet to buy heroin and assassinations, but why on earth would I want to use a darknet market to buy a car? To pay my rent?

So all the spammers/scammers can't see what car you just bought and how much you paid for it and use it for spear phishing?

They can't see how much I paid for a car when I paid with a cheque either. This is not a problem that I, or 99% of human beings have.

Again - what is the darknet supposed to protect me from?

Seriously, I have yet to hear a single legal use case that Bitcoin improves.

Transferring large amounts of money overseas for large purchases is cheaper, faster and safer than using the current banking system. So that's at least one legal use case Bitcoin has improved for me. Even after exchange fees and miners fees, I paid less in fees then I would have using a bank and the transaction confirmed in under an hour vs several days or more through banks.

Mainly referring to the credit card companies that will sell your data.

1. You don't buy a car on a credit card. Dealerships won't even accept cards. Private individuals won't, either.

2. Your counterparty (the dealership) will sell your data, regardless of whether you pay with cheque, cash, bitcoin, gold coins, or lost pirate treasure.

No. Darknet markets also sell things that are unambiguously legal to buy everywhere, as well as products that are legal in some countries but not others. The products on sale are far from only the stereotypical drugs porn warez and fraud (and no you cannot buy assassination on darknet markets; any such offers are a mix of law enforcement stings and scams which take place without any marketplace providing escrow).

If nowhere but darknet markets let you buy a car with Bitcoin or Monero, then only darknet markets are what someone who has cryptocurrency and wants to buy a car with it will use. That being said, you can exchange cryptocurrency for a car safely and legally, without touching a DNM or doing anything shady.

> they will grow substantially as the only way to mitigate the governments efforts to enforce surveillance and regulations

Cash comes with substantial privacy benefits. It's also inconvenient. TL; DR Most people trade privacy for convenience.

What makes you sure convenience will not improve?

> What makes you sure convenience will not improve?

Nothing. I was responding to a comment claiming a national ban “will” cause Bitcoin to “grow substantially.” My position on Bitcoin has always been it’s an interesting moonshot being priced as an eventuality.

With increasing regulations around cryptocurrencies large private transactions will be much more regulated, or possibly illegal, which will cut down on usability. Even if it's actually anonymous and buyers don't have to worry about it sellers will have to or risk being shut down

The SEC is already moving in the direction of trying to mitigate large scale transactions. They know they can't stop the spread of crytpocurrencies, but they're doing everything they can to reduce people using it for larger scale transactions or investments.

>Not only they will stand a chance, they will grow substantially as the only way to mitigate the governments efforts to enforce surveillance and regulations.

Parent meant if it will ever stand a chance as a mainstream, legal, option. Not if it will make a second career as a tool in darkweb networks for buying CP, heroin, and "specialists".

>People have been dreaming of real electronic cash nobody can know you have or give to somebody for so long and wont give up easily.

People have mostly been dreaming of something like that you can easily use to buy regular things, and that wont land you in court if something goes wrong and they find you have it.

The real threat to privacy focused coins isn’t government — its competition from within the blockchain space. If the lightning network works, it would effectively hide transaction history and activity similar to how TOR works.

Your comment amounts to "I don't know why anyone would use X when they can use these other two things that are fundamentally the same."

His entire comment is about the differences between BTC and Monero and Bitcoin Cash that make the latter two more desirable. Not sure how your interpretation is remotely accurate.

Stripe is getting rid of bitcoin because it has proven to be impractical at scale. It is impractical at scale because the fundamental technology, proof-of-work, is impractical at scale. The two alternatives mentioned are the same in this respect, with only the smallest differences.

Bitcoin (BTC) chain stakeholders (miners, etc.) have chosen to make the current level of transaction throughput be expensive and relatively slow. But there is no such binary tradeoff between "does scale" and "doesn't scale". It is a spectrum. It would be (technologically) trivial for bitcoin to support its current transaction rate with cheap, fast transactions - but the community has opted not to. There are alternative coins that have decided that cheap and fast transactions are important now - not at some undefined future time as will be satisfied by a working, adopted lightning network implementation.

You are free to prefer one choice over the other, but I think it would be more accurate to say that regular on-chain bitcoin doesn't scale the way you want it to.

Uh, unless you've got some way to make a decentralized blockchain function at 2.5 GiB every 10 minutes, it's effectively not a spectrum.

At 8mb block size we'd still have the same problem. Except instead of happening at 5 million weekly users it happens at 40 million weekly users. And at 100mb block size we might get to 100 million daily users.

Still haven't scaled the thing. We'd need to support billions of daily users for people to be happy. It's an open question right now

There is work underway pursuing GB sized blocks (https://themerkle.com/what-is-the-gigablock-testnet-initiati...). I think it is a feasible path forward. And even if it turns out to be difficult to achieve with today's infrastructure and technology, cryptocurrencies won't suddenly have a billion people using it for daily transactions overnight. I think we could easily support 100 MB blocks now - which would be 100x what current bitcoin provides. In my opinion, that provides quite a bit of time to continue to investigate various scaling avenues.

Scaling is not a binary. Being "practical at scale" depends on what scale you're talking about. Some things scale better than others; sometimes you can make a change that allows for better scaling. Sometimes something may not scale very well, but may scale well enough for a specific task.

Bitcoin has made a number of decisions to limit how well it can scale. Other systems, despite having the same basic underpinning, have made different decisions, and can scale better.

> It is impractical at scale because the fundamental technology, proof-of-work, is impractical at scale.

Well, it isn't just the "size of blockchain" that is the problem. The idea that people want an irreversible system to perform commerce on the open internet seems to be a fundamental issue as well. That and all the other problems like no central bank to regulate money supply, no good secure way to store them, etc.... I have yet to see any of these issues be solved in any crypto.

In short, perhaps the entire idea of a crypto currency isn't a very good one at all...

They're "fundamentally the same" in the way that handing you $5 now is "fundamentally the same" as mailing you $5 in 3 to 5 days. They're the same in a lot of ways, but different in a way that is a dealbreaker for transactions that are impacted by time.

Fundamentally the same... except for the differences that were pointed out.

I don't understand the point of your comment

Use bitcoin with lightning.

Money is serious business, why would anyone rely on a network that was released days ago? Also it defeats the main guarantee of Bitcoin - that everything can be trusted.

Bitcoin would have had a great future if the big guys werent so greedy and sacrifised a little of their wealth for the benefit of the whole community. Since they refused to do so (=refusing any attempt to make BTC transfers faster and cheaper) the network is choking itself (=it takes days for a transaction to be confirmed, it costs >$30) and the community is thorn between altcoins.

We will see how this will play out, but my hunch is that we will see a huge market collapse and a "restart" by one of the emerging altcoins that solves the issues that came up with Bitcoin.

People (and service providers) just need to vote with their wallet

Start accepting BCH, Dash, etc, if lightning works out great, go back to BTC, if not, the alternatives are there

(Of course they can look at ETH, XRP, Monero, but accepting bitcoin forks is easier if the BTC infrastructure is already there)

But that doesn't work. When marketing a new product, you get at most one chance to do it right. If you fuck that up, you won't get a second chance.

No payment provider is going to take the same risks for BCH again that they took for BTC. No merchant, and also most consumers won't.

Monero is fast as well.

Sure, for now (and maybe in the future too?) - the thing is that every crypto is fast before it hits bitcoin scale.

Monero's block size scales automatically.

Thanks was going to post this.

I think Bitcoin is the AOL of blockchain technology.

It was a first mover, it had huge uptake and valuation, but in a few years (or perhaps already) someone is going to build a protocol that is capable of hundreds of thousands of secure transactions a second, and it will make Bitcoin look archaic.

FWIW that is the goal of the Lightning Network on Bitcoin: https://lightning.network/

I keep seeing this brought up over months and months, but how close are we even to using it? Is the technology a thing yet? Or is it all white papers.

Working implementations exist and are usable, but they are being very cautious before releasing to the general public.

It exists in its early stages, but it's terribly impractical, hence no exchange or end user is in a rush to adopt it. Its design is almost like someone took a hard look at Bitcoin and concluded "Gee, this is not cumbersome enough for people, we need to make transacting a worse and more confusing experience".

I demoed [0] receiving one tenths of a cent's worth of bitcoin (0.00000010 BTC) instantly, and on Bitcoin's mainnet (not a test network).

I also demoed [1] purchasing swag from Blockstream's store [2] which is powered by their newly released Wordpress e-commerce plugin [3] that enables Lightning payments.

I did not screencapture the videos because Qubes dom0 does not come OOTB with screenrecording software, and I don't want to enable networking in dom0 to install software that does.

[0]https://twitter.com/notgrubles/status/955611467889422337

[1]https://twitter.com/notgrubles/status/954933507863863296

[2]https://store.blockstream.com/

[3]https://blockstream.com/2018/01/16/lightning-charge.html

Here is a graph showing the number of lightning network payment channels on the bitcoin mainnet: https://p2sh.info/dashboard/db/lightning-network?orgId=1

it's not useful for speculating on the price of bitcoin so few people will use it

You can buy coffee https://twitter.com/alexbosworth/status/955870434230132736

The lightning network will be far less effective than people are hoping. You have to a) pay to open up a channel with each person you wish to use it, and b) each stake capital in that channel for it to be functional. This is useful only in specific scenarios like exchange-to-exchange transfers. Exchanges are going to be very unlikely to ever set up channels to customers. They haven't even implemented segwit yet, there's no way they are going to bother setting up the infrastructure needed to charge for and activate lightning channels.

> a) pay to open up a channel with each person you wish to use it

I think you only need a path to the person you want to pay, not a direct channel. eg if Alice wants to pay Bob, and they both have a channel to Greg, then Alice can send money to Bob through Greg.

> They haven't even implemented segwit yet,

The wikipedia[1] page seems to say that most miners implement segwit now.

* https://en.wikipedia.org/wiki/SegWit

Segwit is still not fully supported in the Core wallet [1] - change goes to P2PKH addresses and there's no GUI support for generating (or even sending to AFAIK) bech32 addresses.

While certain charts regulary show 10% usage [2], when analyzing UTXOs, the numbers are a miniscule 0.03% of transactions. [3]

[1] https://github.com/bitcoin/bitcoin/pull/11403

[2] http://segwit.party/charts/

[3] https://twitter.com/dukeleto/status/954759096544124928

It's named network because you do not need a channel with every individual user. You have a channel with one or more LN servers, they in turn have connections with yet more servers.

As the other guy said, there only needs to exist a path of channels between you and the entity you're paying, and the payment will be routed through the network.

> You have to a) pay to open up a channel with each person you wish to use it

This simply isn't true. You open one channel and then payments are routed over channels to your destination. It's no different to TCP/IP in this way and the reason why that analogy is used a lot in describing the network

Having a one channel single destination can be done with Bitcoin alone and the new timelock transactions - the purpose of lightning is automating these transacations and the routing between channels

Opening a channel in lightning is no different to having a balance in a wallet or a bank account - you don't notice that it is "locked". Channels can also create other channels using channel factories[0]. This all happens under the hood much in the same way somebody accessing YouTube knows little about routing infrastructure.

There really is a lot of FUD about Lightning and they get repeated a lot by people who should know better. There is now a series of simple infographics that explain what Lightning is and how it works so there shouldn't be any more excuses for such simple misinformation being repeated[1][2][3][4][5]

Your specific claim about one channel = one receiver is addressed in [5]

I think the HN audience should go out and try it themselves and read the paper. It's the most eye-opening tech experience i've had since reading the Bitcoin white paper.

If you've been kicking yourself about not getting into Bitcoin early - you have a new opportunity with Lightning now. There are only hundreds of nodes at the moment and only a couple of vendors accepting payments on the testnet and a ton of opportunity to build an entirely new infrastructure around it.

[0] https://bitcoin.stackexchange.com/questions/67158/what-are-c...

[1] https://i.imgur.com/L10n4ET.png

[2] https://s3.amazonaws.com/bitcoindesigned-prod/media/what-are...

[3] https://s3.amazonaws.com/bitcoindesigned-prod/media/lightnin...

[4] https://s3.amazonaws.com/bitcoindesigned-prod/media/lightnin...

[5] https://s3.amazonaws.com/bitcoindesigned-prod/media/lightnin...

> If you've been kicking yourself about not getting into Bitcoin early - you have a new opportunity with Lightning now.

Why not just delete the rest of your post and just leave this? This once sentence is what really drives all of the rest of your breathless hype. Naked greed. It's the only thing the entire crypto "space" has.

Lightning network is pure vaporware. It was "coming any day now" when Mt Gox collapsed. It's still coming soon. It will always be coming soon.

You'll be happy to hear then that a lot of progress has been made on Lightning since MtGox imploded

I probably should have linked to these from my original comment - rather than removing anything

Specifically with lnd the lightning daemon[0], BOLT's (the equivalent of Bitcoin BIP's) 1 through to 11 have been implemented in the core daemon[1]

There is also the Neutrino light client[2] (screenshot [3])

Far from being vaporware - you're only a few docker commands away from trying it out yourself[4]

[0] https://github.com/lightningnetwork/lnd

[1] https://github.com/lightningnetwork/lightning-rfc

[2] https://github.com/lightninglabs/neutrino

[3] https://blog.lightning.engineering/assets/images/app-chans-g...

[4] https://github.com/lightningnetwork/lnd/tree/master/docker#c...

This sounds just like a 15-year-old ad for Perl 6.

Bitcoin is the multi-level marketing of millennials.

Spot on!

Thanks for posting those infographics; they answer some lingering questions that have lain unanswered for years. I still see one problem, though, which is that the few on-chain transactions that are required (such as topping up a channel) will be far more expensive than in those other blockchains. Like $20 vs. 20 cents. So there are plenty of scenarios where LN fees will still be higher overall.

Other chains are cheaper because they have fewer users or higher trust/censorability.

With LN there are less transactions on-chain which reduces fees. Also, finally the temper-tantrum throwing core-supporters are quickly realizing that a block size increase is absolutely necessary going forward

"Getting into Lightning" won't make you money as you might think.

The network isn't a coin as such - merely a way of sending other kinds of coins. Hence it doesn't have a value which could skyrocket making one rich.

I worry that could hamper it's uptake.

> You have to a) pay to open up a channel with each person you wish to use it

Bitcoin's lightning network doesn't require you to open a channel for each person you want to pay https://unlikekinds.com/t/bitcoin-s-lightning-network-doesn-...

There's a few different ones that have made huge jumps forward; RaiBlocks can apparently do around 7,000tx/s.

Meanwhile, your payment card provider is probably doing that many transactions per second just in the small city I live in.

[citation needed] A quick google says Visa peaks at 4k txs/sec

[0]: VisaNet handles an average of 150 million transactions every day and is capable of handling more than 24,000 transactions per second.

[1]: 65,000 Transaction messages per second

[0] https://usa.visa.com/run-your-business/small-business-tools/...

[1] https://usa.visa.com/dam/VCOM/global/about-visa/documents/vi...

Also, consider there are other networks like MasterCard:

[2]: MasterCard’s 2012 annual report asserts that its network can handle more than 160 million transactions per hour with an average network response time of 130 milliseconds. Operating 24 hours a day every day, MasterCard reports that its processing systems have consistently maintained availability 99.9 percent of the time.

[2] https://www.philadelphiafed.org/-/media/consumer-finance-ins...

Thats around the world, not in one town/city

A currency with 'decentralization' as a goal should probably aim higher than satisfying the transaction rate requirements of a single town/city.

Id like to also add that there are an order of magnitude more transaction options provided by cryptocurrencies than there are for fiat payment systems. Id bet money that, collectively, the cryptocurrency ecosystem is able to process more transactions per second than all of the leading fiat processors combined.

Probably, but only because crypto doesn't scan for fraud and abuse among other things. Monero is happy to let someone completely empty your life savings.

Cc processors on the other hand are on the hook for fraud, so they are checking every transaction to make sure it doesn't match certain hueristics that could indicate theft or fraud.

I'm optimistic crypocurrencies (not all, but some) will achieve global adoption as a payment option. I think its possible to build a cryptocurrency that could emulate the fraud / refund detection features of cc processors. If there isn't one out there, I'm sure it will exist in the future. I certainly don't see monero being used in my local bodega or as a mainstream currency because thats not really what monero is trying to achieve.

I'd take that bet in a hot second (not that we could ever get verifiable numbers to prove it). There's just no way sorry

That's 25 million per hour, we must have very different definitions of what a small city is.

Steem regularly processes 1.5 million transactions per day and is at 0.13% capacity[1]. If my math is right, that comes out to the ability to process 14k tx/s.

[1]: http://www.blocktivity.info

It's important to note that that is theoretical capacity. We've no idea what it's actual performance would be.

Is it doing that in production at decentralized scale?

Someone did a stress test the other day. Nowhere near 7ktx/s and a lot of nodes started to crash. https://medium.com/@bnp117/stress-testing-the-raiblocks-netw...

Honestly it is scary to see how easy is to launch a DoS attack just by precomputing the PoW.

Edit: Here are some people saying their nodes went out of sync https://www.reddit.com/r/RaiBlocks/comments/7rzlid/minor_str...

Radix is publishing some eye popping numbers on their DAG-based testnet: https://twitter.com/radixdlt/status/956087291696566272

We'll have to see how it functions in the real world later this year...

I had a similar thought recently, only I thought MS-DOS. Same difference.

That's a great observation. I was struggling to put my view into words. That captures it perfectly.

Edit: Yes, against the guidelines to talk about downvotes, but really? This is more than a "me too". Parent was unusually on point for me, and felt compelled to offer thanks for the succinct summary

lighting network is pretty fast now. bitcoin cash will have the same problems like bitcoin once is growing in size. not a solution.

<snark>Bitcoin was pretty fast when practically nobody was using it too...

Here's a good rundown: https://a16z.com/2018/01/21/mental-models-tokens-crypto-tren...

The argument that makes sense to me is that Bitcoin is just “Digital Gold”.

But I don’t really understand why gold has so much value, so maybe it’s not really a good answer. It’s kind of like saying “Maybe Bitcoins will have value for a long time just like this other non-valuable, non-transaction asset that’s had value for a long time”...

Bitcoin's strategy is exactly that. And it would be a GREAT strategy if there was something about Bitcoin that made it the best "digital gold" available.

Sadly, the only property it shares with gold is that it's hard to move. In fact, Bitcoin Cash is functionally identical to Bitcoin and it's easy to move.

That's ignoring the hundreds of other digital currencies not named Bitcoin which make a better "digital gold".

Bitcoin doesn't have a strategy. The "value store" narrative is a post-hoc rationalisation for its continued, yet less and less rational, existence.

The proof that Bitcoin was intended as an alternative to cash, and to be used for small, everyday transactions is right there in the name: It's Bit"coin", not Bitgold, or even Bitbill.

Gold has value because it's shiny, doesn't oxidize, is malleable enough to easily form conspicuous jewelry, is much rarer than base mining elements, and is not cheap to extract.

The not oxidizing and rarity are key. E.g. platinum is also not cheap.

Aluminium is close but it's orders of magnitude more common, and still oxidizes a little.

Value as a currency.

Because it's rare.

Sure it's the rarity, but also the lack of corrosion. If your coins maintain the same weight for 100 years that's good, because the value can be measured by weight more reliably. Contrast that with iron that degrades, or copper that actually increases in weight as it goes bad... now how do you weigh out a coin?

The reason is that life is not really that simple. People pick people/assets/things based on reputation and popularity and not technical or practical merit.

Gold is used as a store of value despite the fact that it is 1. volatile 2. hard to store 3. hard to buy/sell and 4. hard to transport.

Gold at least has some unique purposes besides a store of value. Over half of it is used for jewelry and commercial reasons, so at worst it can be considered an over-speculated commodity. Bitcoin literally has nothing going for it besides being the current market leader.

If the International perception of gold being valuable disappeared overnight (which... yeah, won't happen unless someone discovers legit alchemy magic) the difference between losing 90% of your value or 100% if it had no use outside of the speculation shouldn't be influencing almost anyones decision in what to invest in. All the other parameters (volatility, profitability, etc) are way more important than if you are completely bankrupt or completely fucked if the market implodes.

My point is that gold can never lose 90% of its value because the majority of it is already used in luxury items and electronics. At worst, the total value of gold can only drop by the current amount that is being held in reserve or as investments.

Price is set at the margin. If half the demand for gold evaporated the price for gold would likely drop a lot more than 50%, probably more than 90%. When demand for gasoline went up by 2%, the price doubled.

>the current amount that is being held in reserve or as investments

--which is almost all of the gold in the world.

Hardly anyone uses gold as a storage of value.

> Hardly anyone uses gold as a storage of value

https://en.wikipedia.org/wiki/Gold_reserve#Officially_report...

I meant individuals rarely keep gold as a store of value.

It is not rare in South Asia.

> I meant individuals rarely keep gold as a store of value.

I think individuals with an actual portfolio of investments will hold gold or have some exposure to gold.

Also, you wouldn't expect gold to be widely held when you consider things like Executive Order 6102: https://en.wikipedia.org/wiki/Executive_Order_6102

Basically, the US government forced everyone to sell their gold in 1933. US citizens only regained the right to hold gold in 1974.

Governments are going to find it much harder to enforce such an order when it comes to cryptocurrencies.

Wrong, its not that volitile, its very easy to store, and its very easy to buy the physical coin...local or online and the paper version via some fund of some sort. Also easy to store for average Joe as he isn't buying kilos and instead is buying ounces.

> I honestly don't know what use-case remains for Bitcoin.

There's a great use case in suckering honest people into holding your bags using the promise of instant wealth.

EDIT: Added quote

There are several use cases.

1. Paying merchants who don't accept any other cryptocurrency (which is the majority of the available ones; typically they accept fiat in some form, plus Bitcoin since it's been around so long, but have barely heard of others).

2. Donations, same as above.

3. As an onramp from fiat to other cryptocurrencies, where those are accepted and Bitcoin BTC transaction fees for 1 confirmation in a reasonable time are an excessively high portion of the transaction amount.

4. For cryptocurrency payments which need the very highest possible level of security against double-spends, which is provided by Bitcoin's hashrate and decentralization, arising from there being a mature community around it. As far as I can tell, none of the other currencies have equally good metrics, though they do approach it.

Plus a few more.

And not forgetting that Bitcoin Core could in future raise the block size, making each unit increase sharply in utility and value, beyond its natural deflationary increase.

As a preface, I am long-term bearish on Bitcoin, and have been since it became apparent to me that the community and development process had basically been terminally broken in 2016 - everything that's happened since then has been utterly predictable, and I'm pretty sure that while it might not go away, it's basically a legacy product.

That being said, Bitcoin currently has the highest market liquidity (trading volume, markets, stability, convertability) and has the most mature investment infrastructure. It has the most fiat rails and trading pairs (almost all alt markets are pegged to BTC) and for moving sufficiently large sums around internationally it can still be considered relatively fast and cheap.

There's a large SoV use case for a cryptoasset that is censorship and seizure resistant, although personally, I have questions on whether something can be a long term SoV if it doesn't functional well as a MoE (maybe Gold proves the case).

Also, I feel like the financial side is currently not very savvy on the actual blockchain mechanics side of things and agree that it seems like you would absolutely want to use the most private blockchain you could find for SoV, but I don't have much expertise in that part of the world (offshore assets, wealth management, etc).

While it feels like we're a bit in '98 for the speculative bubble after last year, for blockchains/DLT, I think we're maybe '94 on the tech. Still, cryptoassets have seemed to make a jump to a legitimate asset class last year, one that's big enough for the financial world to pay attention to, and that has some very interesting investment properties and a lot of potential (when I sat down to total up the amount of long term economic impact, I came to the conclusion that it may be a bigger deal than the Internet.)

I just used the bitcoin stripe thing couple days ago. Time limit was indeed quite scary: they had a timer on the side running with something like 15 minutes to go until you need to request a new temporary address. Mine ran out but luckily it was still accepted.

What were you trying to buy?

Same here. Luckily I got confirmed in time as well.

For the interested I donated to charity water: https://www.charitywater.org/

If they "cancel" the transaction but it later ends up getting mined, who pays the fee for the return transaction?

Regardless of the answer, variable and large fees really do make this sort of transaction a minefield.

If money came in after an hour, they would immediately send an email to the customer asking for a refund address. My understanding is that the customer ate the first fee and Stripe ate the second.

We ended up offering free shipping to a bunch of disgruntled customers.

>We ended up offering free shipping to a bunch of disgruntled customers.

There are actually bitcoin users out there who aren't up-to-date on how long it takes to process a transaction?

Bitcoin’s tech-savvy early adopters phase was years ago. Users like that are probably the majority now.

With BitPay at least, you pay fees both ways. They'll refund you whatever they got minus the $40 of transaction fees to get it back to you. And of course they charge you the single-transaction rate, while they do a batch transaction that them costs much less (i.e. they are making money off refunds).

Happened to me a few weeks ago - I tried to buy something and it got confirmed, but not fast enough for Bitpay, and they cancelled the transaction. So I was out the fees both ways. It was unpleasant, but not surprising, given how shoddy the whole system is.

Everything is fees with Bitcoin - fees for transactions, fees for exchanges, fees for mining pools, dev fees for mining applications, etc. There are no end of middlemen, and they all have their hand out. Sure, each of them is providing some legitimate service, but it sure makes 3% merchant fees for Visa look positively cheap in comparison. And did I mention the instant transaction times, the fraud protection, and the complimentary hardware token that's accepted by millions of businesses worldwide!? Try a credit card today!

We've seen this increasingly happening as well, and it's kind of embarrassing because it's for a crypto-related website. After struggling with it for months I'm not surprised Stripe has thrown in the towel here.

Did their api allow you to set the transaction fee?

Nope. We set a price in USD and get paid in USD, minus their usual fees. The price in BTC was determined by the current exchange rate, hence why they were only willing to honor the price for a short time.

Takes the same 10 minutes on average per block if you include recommended miner fee. binance credits you after 2 confirmations. waiting for 6 confirmations is really overkill for transactions small enough that you are worried about the fee. So in practice, a transactions will either sit for a long time or be confirmed in 10 minutes. Just pay appropriate fee.

The problem is that the fees grow when there's a large backlog of transactions. And if the transactions grow faster than there's new blocks to process them, then the backlog grows infinitely and no amount of fees will ever get them all into the blockchain simultaneously.

We need second layer solutions like Lightning Network, and the Bitcoin Core developers should have listened 5+ years ago when a huge fraction of the community back then warned about exactly these problems, and asked for a plan for larger blocks. Back then we were told it's not a problem, won't happen, can be solved easily, etc... Right now some people says it's obviously working well because people are obviously willing to pay the transaction fees. These people are ignoring the long term effects of killing off important usecases and reducing demand, and that some only pay the fees so they can cash out. They don't understand psychology, and barely grasp the numbers.

I am curious why you wanted Bitcoin on your site. It has been dead as a payment mechanism for a long time. BitPay is a dead man walking, save for all the mining hardware purchases denominated in Bitcoins.

The PR value! People write stories about you when you accept Bitcoin!

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