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Comment by repomies69 | Hacker News Reader

Bitcoin has worked for me all right for 10+ years. What is exactly wrong with it? At times fees have been a bit higher, but overall I would see the protocol as "good enough". For smaller transactions I have been using Lightning Network and it seems to work all right. The fact that Bitcoin hasn't hard forked for whatever reasons is a positive feature, that outweighs the negatives.

You can consider for example Ethereum, which has hard forked numerous times and changed the monetary policy as well multiple times. It just feels quite centralized and controlled by Vitalik. Harder to trust that crap.

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Vitalik is basically only a thought leader these days, he has taken many steps back (as you can read about on his blog). He doesn't "control" anything.

The guiding principle for the monetary policy of Ethereum has not changed: minimum viable issuance. Thanks to the economic efficiency of PoS + fee burn, it enabled what amounts to frontrunning every "halving" and having ~net zero issuance, it's simply good for holders.

If Bitcoin had a way to be secure without further issuance (huge can of worms, halvings are slowly ticking time bombs in the long-run, unless fees rise significantly), it'd be good for holders to fork and scrap it too. There'd be no need to pay billions for security through issuance.

Calling Ethereum centralized at this point is ridiculous. The fact that core devs from multiple client teams can manage to agree on and implement forks to keep developing the protocol (unlike Bitcoin) is a major accomplishment, not a failure.

> I have been using Lightning Network and it seems to work all right

That won't last. As stated in the Lightning Network whitepaper [0], it will need much bigger blocks (it mentions up to 133MB) to scale.

[0] https://lightning.network/lightning-network-paper.pdf

Nah, channel factories solve that problem.

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

A new layer between the layer 1 and layer 2, sure...

Why don't you think it's possible?

It is possible, but absurd. Why more layers if layer 1 works fine just increasing the maximum block size? Bitcoin Cash did it and works flawlessly. Just try it.

It's called the blockchain trilemma.

Bitcoin cash pays the price through centralisation. It can still only manage 100 transactions/second so certainly isn't flawless.

Far better to make the base layer slow but very robust, and then add layers to scale.

> Bitcoin cash pays the price through centralisation

What centralization? If you are referring to the node implementations, it has several [0]: Bitcoin Node, Bitcoin Unlimited, Bitcoin Verde,... Bitcoin BTC has basically one: Bitcoin Core [1]. If you mean mining, it's the same as BTC, same mining algorithm, same miners.

> It can still only manage 100 transactions/second

True for now, but it's way more than it needs right now now [2]. But don't worry, this month upgrades to ABLA [3], and will be able to scale to as many tx/s as needed.

[0] https://bitcoincash.org/#nodes

[1] https://en.wikipedia.org/wiki/Bitcoin

[2] https://blockchair.com/bitcoin-cash

[3] https://gitlab.com/0353F40E/ebaa/-/blob/main/README.md

The increased block size increases the amount of storage required to run a full node (and also the bandwidth required to sync nodes). Even at just 100 tx/sec, you need 14x the storage of a bitcoin node (so around 10TB vs 700GB for bitcoin). That puts it out of reach for many people to run and so making it more centralised.

To compete with a payment rails like Visa and Mastercard, you'd need to increase that to 10000+ tx/sec, making running a node complete unfeasible for most people to run.

There's simply no such thing as a decentralised blockchain network with unlimited block-size. At some point if you want to remain decentralised, you have to create layer 2+ networks that can handle the smaller, high-bandwidth transactions, and so you may as well commit to that model now and focus on making the base layer as robust as possible.

Ultimately for a money to attract the most value, it needs to optimise for the very largest transactions, and offer the most robustness (i.e. most decentralisation). This is precisely what bitcoin has done.

If you mean a full non-mining nodes (which only a few people really need, merchants, exchanges, ...), read points 7 and 8 of the whitepaper. For full mining nodes, you need expensive specialized hardware anyway.

Non-mining nodes are just observers that do nothing good to the network. Is like going to war with popcorn as a weapon. Mining nodes are the only ones than can include transactions to a block.

https://www.bitcoin.com/bitcoin.pdf

Yes full non-mining nodes. I understand about pruned nodes, but that is a bonus for both networks - it means people can run a node on their mobile phone for example. The nodes have the real power in the network - they're are the people’s vote on what bitcoin really is. You can mine what you like but if my node says it's not bitcoin, it's not bitcoin. And there's many more who think like me. This has already been proven in the block-size wars - both the consensus on block-size and proof of the power of nodes vs miners.

The HW to run bitcoin is extremely cheap - less than $100. All you need is an old laptop or Raspberry Pi with a 700GB of storage, and a ham radio/dial-up internet connection to another node.

So you're telling me that you can have a say in the blockchain with no proof-of-work whatsoever on your part

Yes. It's network effect. Even if all of the miners simultaneously decided to go big block or some other controversial change that most people don't want, the majority of the population's nodes would then not accept the mined blocks. They'd see the rate of new blocks drop to 0, and people would instantly start mining on their PCs to get the block reward. Some of the miners would start to change their mind and start mining with ASICs for the easy block-reward and eventually the hash-rate would build back up again, with the previous miners or without them.

The non-mining nodes in fact can completely destroy the ASIC miners by upgrading to a new POW algorithm. Hopefully it will never come to that, but ultimately the people, with their non-mining nodes have the power, not the miners. The only way miners can successfully change bitcoin is if the vast majority of people agree with the change.

Why “non-mining full nodes” are a terrible idea:

https://medium.com/@olivierjanss/why-non-mining-full-nodes-a...

The comments to that article (especially the one from dooglus) make a decent rebuttal to the idea that full nodes are a "terrible idea".

If you're convinced a block chain can scale to 50k transactions / sec and also remain decentralised and offer enough privacy, then keep at it, but I'm afraid I'm unconvinced.

Even if it were theoretically possible, the solution would likely be so complex, or based on a long chain of "hopefully unlikely" events that I wouldn't have enough confidence in it to store large amounts of value.

The slowness and simplicity of the Bitcoin network is what gives it robustness, and if I'm storing large amounts of money, that's what I want even if it means I can't buy a cup of coffee on the same network.

There's also a rebuttal to that comment: https://medium.com/@olivierjanss/first-of-all-i-want-to-appl...

> The slowness and simplicity of the Bitcoin network is what gives it robustness, and if I'm storing large amounts of money, that's what I want even if it means I can't buy a cup of coffee on the same network.

Then why not just use gold? It is slow, simple, and you can't use it to buy coffee.

Because it's not as liquid, it's not as easily verified, the supply doubles every 40 years, it's not as easily protected (compared to multi-sig bitcoin), I can't send it around the world in 10 minutes, and I can't take it across borders in my head. It doesn't form the basis for the entire world's future reserve asset and monetary unit, and the market is mature/saturated whereas bitcoin is completely misunderstood by almost everyone and so is wildly undervalued.

Bitcoin is demonetising gold.

You are describing Bitcoin Cash too, with the difference that with BCH in that 10-minute window the transaction is irreversible (like the original Bitcoin), so a 0-conf tx. And extremely low fees, of course (also like the original Bitcoin).

back to the start we go :-)

Bitcoin transactions are also "irreversible" providing the fee paid is reasonable, but ultimately the clearing time for both networks is down to the likelihood of a 51% attack for which bitcoin is far more protected against due to the far larger amount of hash power. It's not comparable.

If I'm moving/storing $1 billion, do I care if the transaction costs $1 instead of $20? No - I care that I'm storing the money in the safest place to store value I can find.

If we're talking about amounts much bigger than the transaction fee, then I don't see any problem with BTC's layer 1, for now.

If we look simply at network growth in economic terms, Bitcoin is only going to attract larger and larger sums of money. This halving epoch we now have institutional investors (ETFs) and once it has proven itself at that level, the next stage will be nations openly buying it.

So even if fees increase in fiat terms, so will the size of the transactions. Enough to take the market cap far, far beyond that of gold. Once bitcoin has grown to the point that its value has stabilised, there will be substantial demand for transacting in it directly and there will naturally be a lot more work invested into higher-level payment networks/solutions. Right now though, Gresham's law sees to it that most people are happier to hoard than spend and that's likely to be case until bitcoin is at least $10M/BTC

> Bitcoin has worked for me all right for 10+ years. What is exactly wrong with it?

How much of your Bitcoin usage is associated with crypto investments, vs a replacement for traditional bank transfers and expense payments?

I think it has worked well for a lot of people as an investment. Not so much as a replacement to normal money.

Bitcoin was designed as an investment vehicle by its choice of capped supply. Use as a currency would have vastly benefitted from a fixed block subsidy, which also would have avoided much of its current wealth concentration [1].

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

Use as currency is possible with Layer 2 systems like Lightning. The issues I believe are both technological, political and philosophical: apart from the ease of use (or lack thereof), people prefer the currency they need to pay taxes with, and will always prefer the depreciating one, until it stops having any useful value. See the arguments put forth by Saifedean Ammous in his book.

For me the main ledger is equivalent to inter-bank settlement payments. It is not for people to use directly, it is to settle the large amount between "market makers", so $10+ transaction fees are not a problem when the amounts transferred would be in the millions. These settlements are few and far between, they do not require immediate execution. In Bitcoin parlance, these market makers would be Lightning nodes, which I imagine in the long run would not be operated by your Average Joe.

> Bitcoin was designed as an investment vehicle

Please read the whitepaper [0], at least its title

[0] https://www.bitcoin.com/bitcoin.pdf

I guess it was lucky that it was designed quite badly for the stated purpose and it was actually designed as investment vessel.

Bitcoin (BTC) worked perfectly as currency in the beginning, until Blockstream took over the development team, and they decided to keep the temporary anti-spam 1MB block limit, making 0-confirmation transactions (instant payments) very risky by implementing return-by-fee (which make transactions reversible before getting confirmed), etc.

It's the miners and users who ultimately decided if the 1MB block limit should be kept.

Then the miners are clearly smarter than the users

Why? They decided the same. Both miners and users favor the fork where the 1MB block limit is kept.

Bitcoin Cash and Bitcoin Gold are used and mined very little.

Miners mine whatever is most profitable for them, regardless of how good or bad is that cryptocurrency, and they switch between BTC, BCH or any other SHA256 (not Bitcoin Gold, which uses a different hash function) even many times in a given day.

Yes. And users use what's most profitable for them. Compare usage volumes of btc, bch and btg.

Network effect

Fixed block subsidy would have a risk of supply outpacing the demand. Then the price would drop structurally which could cause "run on bank" and wholesale abandonment.

Decreasing amount of bitcoin supply means that eventually the supply would fall below demand, which ensures rising price.

Every 4 years when supply and the demand reach equilibrium, the supply is halved which triggers new price rise and renewed interest. The entire crypto ecosystem follows.

Bitcoin halvings are THE reason crypto is a thing. Not just a curiosity for some techies.

We have maybe two cycles left ahead of us. Then crypto will become just digital gold randomly fluctuating with interest from the asset holders.

> I think it has worked well for a lot of people as an investment. Not so much as a replacement to normal money.

Replacing normal money altogether would anyway be an huge goal. Personally I believe, long-term Bitcoin is getting there. I've been using it for payments, now and then, for about 10 years. Mostly as an experiment, but sometimes it also is more convenient to pay with BTC. In general there has been slow, but increasing acceptance of BTC as a payment method. For some things it makes more sense than others. The biggest issue was the early misconception of it being good for microtransactions. I would say that it is more for macropayments.

> The biggest issue was the early misconception of it being good for microtransactions.

It used to be fantastic for regular transactions, such as paying on Steam or to Stripe.

But alas both Steam and Stripe dropped support for Bitcoin due to high fees and long waiting times due to blocks being backlogged.

Adoption for Bitcoin payments peaked years ago.

> At times fees have been a bit higher

Fees at $50 per traction is "a bit" higher to you?

Ethereum is not controlled by Vitalik. Have you actually looked in to how decisions in Ethereum are made?

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