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.
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.
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
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.
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
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.
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...
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.
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...
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.
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-...
[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...
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.
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...
We'll have to see how it functions in the real world later this year...
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
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.
--which is almost all of the gold in the world.
https://en.wikipedia.org/wiki/Gold_reserve#Officially_report...
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.
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...
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.
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 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.)
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.
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.
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.
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 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 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.
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.
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.
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?
If you mean for cash/gold/diamonds/..., then yes, absolutely, all the time.
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
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.
Have you seen how the United States enforces sanctions?
I don't think they're going to be able to ban atomic swaps.
Now there are anonymous currencies like Monero.
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.
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?
Again - what is the darknet supposed to protect me from?
2. Your counterparty (the dealership) will sell your data, regardless of whether you pay with cheque, cash, bitcoin, gold coins, or lost pirate treasure.
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.
Cash comes with substantial privacy benefits. It's also inconvenient. TL; DR Most people trade privacy for convenience.
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.
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.
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.)
There's a great use case in suckering honest people into holding your bags using the promise of instant wealth.
EDIT: Added quote
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.
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)
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.
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”...
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".
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.
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.
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.
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
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.
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...
I don't understand the point of your comment
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.