Doesn't this kind of put a dent in the whole micro transaction argument? Once we hit peak Bitcoin, if I want to tip you a penny for your HN comment, I'm not going to pay a nickel in transaction fees to do so.
It is, however, true that microtransactions were heavily touted by Bitcoin advocates, until of course it became blindingly obvious that Bitcoin didn't scale.
And having two parties create paypal accounts and go through all the necessary verification steps to actually do that is most definitely hard.
Plus, bitcoin is not much use unless its converted to fiat.
Wallet security is pretty much the same you'd be practicing with your bank accounts, which you pretty much need to actually utilize paypal (And to be honest, sometimes to get bitcoins too).
Paypal barely has enough users worldwide to cover half of US population, so most people definitely don't have it. Of course bitcoin has even less users.
Pretty much 100% of my income is in bitcoins, about 90% of my expenses are paid for in bitcoins. I use bitcoins to pay for flights, groceries, rent and so on.
Of course my situation is rather unique, but it does go to prove that bitcoins aren't completely useless by themselves.
You mean the same blockchain.info which was making http requests to random.org to generate their rng, and when the http requests became a 301 redirect to https, it just used the first 32 bytes of the redirect message to generate the rng, hence producing the same random seed for all their wallets since may 2014 or such?
And all other online wallets also have problems. From what I've seen, using an online wallet is highly discouraged due to security risks.
> Wallet security is pretty much the same you'd be practicing with your bank accounts,
Frankly, that's bullshit. Wallet security is a really complicated topic, which often starts with, 'get a laptop disconnected from the net, and do a blank install of a linux VM'.
How exactly is wallet security any different from bank security? Bank transactions don't tend to be reversible either.
> How exactly is wallet security any different from bank security?
I don't need to start by installing a blank linux VM on a permanently offline computer, to have a secure bank account.
Why would you have to do that with bitcoins? How are bitcoins any easier to steal than your bank credentials?
"[SECURITY ADVISORY] All addresses made with the Android Blockchain.info wallet application since 1 May 2014 are potentially compromised, your funds are at a direct risk of theft."
I've answered your 2nd question already:
> I don't need to start by installing a blank linux VM on a permanently offline computer, to have a secure bank account.
This is incorrect, posted by some random guy on reddit. Check out the source code he links to, it should be obvious that on any sane platform the random.org generator is used in conjunction with /dev/urandom.
> I don't need to start by installing a blank linux VM on a permanently offline computer, to have a secure bank account.
I don't even know where to begin here, why would you have to do this with bitcoins? How is storing your bitcoins on your computer any different than using online banking? In both scenarios you risk losing everything if you get hacked.
Microtransactions were much-advocated by proponents as a Bitcoin use case for many years, until it became clear that wasn't feasible.
Likewise if there was a ubiquitous browser plugin to micropay bloggers for access to their articles and it was compatible with WP, Tumblr, etc, users could microtip to their hearts content and only need to reload once month via the blockchain.
I agree with you that they are wrong, though.
Dogecoin has the same thing. It was likely not free for you to send those coins (unless it was an off-chain transfer via a hosted wallet [think transferring money between checking accounts at USBANK])
Although, a hostile party would be able to stop transactions without fees from being processed simply by flooding them.
The idea is that in the long term as the block reward tends toward 0, the value of bitcoins rise and a tiny fee from each transaction compensates the miners as much or more than the current block reward does which will continue to incentivize them to be honest.
Currently, fees are essentially an anti-spam measure to keep people from creating millions of transactions with the same coin and DDoSing other transactions. I.e. without fees a single person could be issuing more transactions than this stress test did, for free, non-stop.