What would be the transaction cost for a couple-euro-equivalent vending machine purchase, using Bitcoin today? What about the cheapest (per transaction) cryptocurrency out there?
Bitcoin Layer 2 (lightning network) ~= 0.0005 euro
Source: https://twitter.com/alexbosworth/status/1029425619350642688 These costs are independent of the bitcoin amount transfered.
>blockchain solutions implement this as many, distributed middlemen, IIUC
There are no "middlemen" required to transfer bitcoin via layer 2. "Middlemen" required to transfer bitcoin via layer 1 are miners and a peer (could be the miner) to relay a block to you.
https://medium.com/@nopara73/stealing-satoshis-bitcoins-cc4d...
"Satoshi accumulated about 1 million bitcoins, 1/21 of the total coin supply, many of them are sitting on public keys due to this early feature. This one million Bitcoin is poised to be stolen within 5 to 15 years. Or even sooner, depending on, if secret government projects are still a thing."
At price of $6K/BC, there seems to be $ 6 Billion incentive to build that quantum computer to hack his pirate key.
If/when that happens, it will be interesting to see what will happen for the rest of crypto base eco-systems.
That's the same OOM as what one might expect from a traditional payment card processor (although I don't think it's ever a flat fee, but that's less relevant in the context of transactions that would otherwise be in cash, presumably low-value ones).
> Source: https://twitter.com/alexbosworth/status/1029425619350642688
I'm not sure if that's someone who's a well-known follower of Bitcoin costs or just a random person who tweeted. I'm willing to take your word for it, however, without a source.
> There are no "middlemen" required to transfer bitcoin via layer 2.
If that's the case, why is the transaction cost greater than zero?
I'm not the least bit familiar with "layer 2". If it's well-understood enough that it's just as trustworthy as the underlying currency, then it would make sense to use it. But, then, why would anyone ever use "layer 1" in the first place?
> "Middlemen" required to transfer bitcoin via layer 1 are miners and a peer (could be the miner) to relay a block to you.
Yes, the miners were the middlemen I was considering. Since they have to be paid, blockchains will never have free (gratis) transactions.
One of the comments theorized that this was because the ATM service used only 2 verifications instead of 6, taking a slightly higher risk due to the small transaction amount (which implies a typical wait time for a large amount of an hour, not 2 weeks).
Of course, even 20 minutes is too long to wait for a vending machine transaction, so your point still stands. I also found an article [2] that incorporates the problem of delay in even determining what the fee would be.
What was also interesting is that it [2] detailed a transaction cost 8x what was quoted above, and seems to be backed up by https://bitinfocharts.com/comparison/bitcoin-transactionfees... . It brings a new concern, volatility, to someone like a vending machine operator whose transactions aren't "micro" but are always going to be on the small end of "every day".
Presumably, it's possible to have a cryptocurrency without these issues. Lightning may sufficiently solve this for Bitcoin (and/or other cryptocurrencies), but that has yet to be seen in practice, at scale. If a DDoS attack forces all (or even just some) Lightning transactions on-blockchain, what does that do to transaction times and costs?
[1] https://news.ycombinator.com/item?id=17898721
[2] http://moneyandstate.com/the-true-cost-of-bitcoin-transactio...