
Did Bitcoin just prove it can't scale? - graniter
The past few days have shown what happens when many people attempt many transactions using Bitcoin. The network slowed to a crawl. Transaction prices went through the roof. And we still are at a point where only a tiny fraction of people are using Bitcoin, and only a tiny fraction of all financial transactions are using Bitcoin.<p>How is this expected to work with 7 billion people using it for every tiny financial transaction? I don&#x27;t think it can.<p>I have owned BTC for 5 years and I am enjoying the rally, but with the high transaction fees, back log, and long transaction times, I wonder how well it can really work as a replacement for banks.<p>Am I wrong?
======
moduspol
Others here are touching on Bitcoin being like the "1.0" of cryptocurrency,
but it's actually a lot more than that. In the public eye, it's a symbol of
what cryptocurrencies can be.

You're suggesting Bitcoin just proved it can't scale, but it actually just
proved it did--just not with transaction volume. The network continued to
process transactions averaging one block every ten minutes exactly as it was
built to do, despite the heavy load.

To put it differently: A different online payment system could have stopped
accepting transactions, or run out of resources, allow transactions it
shouldn't have, disallow ones it should, or something else terrible. But
Bitcoin didn't. If you wanted into the next block, you'd need to pay more, but
that's (from a technical perspective) entirely by design.

What Bitcoin is proving is that it has clear and well-understood limits and
continues to work well within them, and that's incredibly important for public
perception. IMO, if Bitcoin's transaction capacity never scales, it'll still
be a huge technological success. Other cryptocurrencies can try their hand at
scaling, but Bitcoin needs to be rock solid to the extent possible for all
cryptocurrencies' sake.

~~~
KirinDave
Bitcoin is a lot of things, and many of them interesting, but suggesting that
~4 t/s is impressive or "scaling" is an insult to kids in high school writing
rails apps that can do 100x the volume.

We already know at least 2 obvious ways to improve the transaction flow rate
of bitcoin in trustless ways, and many others are being proposed that do not
also create energy arms races.

Please don't redefine success.

~~~
etr-strike
If proof of stake proves itself to actually work, Bitcoin will adopt it.
Migrating a 200 billion dollar network to an untested PoW proposal would be
irresponsible.

Arbitrarily increasing blocksize without addressing propagation delay and
centralization impacts is also irresponsible.

Bitcoin has been tirelessly working on the scaling problem in a responsible
way. SegWit will allow up to 12t/s. Mimble Wimble and Schnorr Signatures will
further compress transaction size and increase t/s to roughly 20t/s. All this
without increasing propagation delay (increasing blocksize).

Lightning network further reduces the number of onchain transactions
necessary.

Rootstock adds ethereum compatible smart contracts to bitcoin as a side chain.

All these technologies responsibly scale Bitcoin. Your comment implies Bitcoin
is stagnant which to me implies you don't know what you're talking about.

~~~
theWatcher37
The lighting network completely undermines the entire purpose of bitcoin, and
blockstreams seeming desire to sabotage bitcoin for daily use coincides
suspiciously with their outside “investment”.

If you read the original bitcoin white paper it is clearly evident that the
purpose of bitcoin was as a currency. These insane fees, wait times, and
rediculous technical decisions by core have made it such that bitcoin is
becoming “bank coin” aka only used for settling between large groups and
useless for individuals (unless you’re a speculator).

This has to change

~~~
SaltyFetus
If you believe lightning undermines the whole purpose and is the product of
sabotage (or whatever core is being accused of these days), there are multiple
forks to choose from that don't use it.

No need to attack Bitcoin, just go all in on Bitcoin Cash , put your money
where your mouth is, and move on.

~~~
jaredklewis
Yea! And I wish all these American liberals would stop complaining about Trump
policies. Put your money where your mouth is and move to Mexico already! /s

~~~
Rmilb
Terrible analogy. To be more accurate, you would copy america and change the
policies you want. Then the market decides on what they believe in and want.

------
jen729w
IMHO (because to claim to "know" anything about how this is all going to turn
out is to be a fraud), Bitcoin is the proof of concept for this whole crypto
thing.

It was the first. It was the genesis idea. But good lord, do we think it's the
actual solution? What would be the odds?

I imagine that Bitcoin will play its part as the public face of the blockchain
revolution, but something else - or many other somethings - will be the
successors that we actually _use_ in the future. (Pick your own alt-coin as
the successor; good luck.)

If I had a large holding in Bitcoin now I would be cashing out or I'd be
nervous. I'm not saying it won't go higher, I'm saying that at some point its
demise is inevitable. Might be quick, might be slow, but it'll happen because
Bitcoin is not the technically best solution in this incredibly exciting
field. It's not even close.

~~~
ignoramous
> Bitcoin is not the technically best solution in this incredibly exciting
> field. It's not even close.

Just curious here: What would you say are technically better solutions than
bitcoin?

~~~
eternalcode
that is a tough question as many other alt-coins have yet to be challenge by
the huge volume that btc/eth experience. Some might say litecoin for one.

~~~
badloginagain
I also like litecoin for the purely selfish reasons of it still being
(relatively) cheap. BTC prices are out of my ability to play, and most ICO's
are derivatives of 'ScamCoin'. LiteCoin is one of the few options it feels I
can still get in on the action with a purpose driven coin with a
strong/transparent dev team.

~~~
berberous
You know you can buy fractions of a BTC, right?

------
blondie9x
As engineers and technologists we must always be mindful of our impact on the
planet. Bitcoin has been a disaster when it comes to environmental concerns.
It is a shadow on techs efforts to lead the way toward a sustainable future.

We need to figure out a way to solve this issue, especially if cryptocurrency
utilization is to increase, in particular through Bitcoin:

Bitcoin uses about 32 terawatts of energy every year, enough to power about
three million U.S. households, according to the Bitcoin Energy Consumption
Index published by Digiconomist, a website focused on digital currencies.

By comparison, processing the billions of Visa (V) transactions that take
place each year consumes the same amount of power as just 50,000 American
homes, according to Digiconomist.

~~~
polock
You're wasting energy for posting comments too. If we think a way like this,
we can't no anything.

~~~
KirinDave
What on earth is this logic. Bitcoin is _by design_ inefficient. Its scaling
inefficiency _is the principle method by which it ensures fairness_. That's
what PoW chain commits are. That's how they work.

Bitcoin was ALWAYS going to be inefficient. It was assumed that hardware would
scale to keep up with demand, but that hasn't proven true in the advent of ad
hoc mining pools.

~~~
Jasper_
> It was assumed that hardware would scale to keep up with demand,

No, it was designed to stay at "one block every ten minutes" _regardless_ of
the hardware added or overall hashrate of the system. Which is why you hear a
lot of people arguing over block size and block compression: you always have
one block every ten minutes, how many transactions can we squeeze into that
block?

The only thing that adding more hashrate does is waste more power, since the
network will adjust.

~~~
KirinDave
The power consumption is what I was alluding to. I guess I was too vague.

------
lawn
You are both right and wrong.

There have been multiple attempts at scaling Bitcoin on-chain by raising the
blocksize. They have all been unsuccessful because they have been blocked by
the Core developers and their supporters using censorship, troll campaigns,
ddos and abuse. It's not due to technical reasons but because they want to
redirect scaling off-chain, using technology they coveniently develop. The
very same developers actually supported bigger blocks a couple of years ago
but changed their tone to support the scaling approach their company favors.
After the last attempt (Segwit2x) it's clear Bitcoin won't scale on-chain.

However the technical limits of the technology ha never been reached, tested
or even been fully researched. Bitcoin Cash is for example a fork which aims
to scale on-chain by increasing the block size. If all transactions from
Bitcoin would be done on Bitcoin Cash the network would work fine today.

Where the actual limit is we don't know. It's probably not possible to support
every financial transaction for everyone. For that we do need off-chain
scaling in addition to many other improvements.

~~~
dr_win
Maybe you are right and it would be technically feasible to bump the block
size limit 2x, then 2x again and maybe later 2x again... Basically every time
people demand extra cheap block space for their transactions someone would
have to lead the charge and coordinate a hard-fork (probably with a lot of
drama). But then we (as a community) would set a dangerous moral hazard there
and be like the U.S. Senate increasing the debt ceiling limit every year or
so.

For reference this is a year-old article from Gregory Maxwell, a prominent
Bitcoin Core developer, explaining his view:
[https://www.reddit.com/r/Bitcoin/comments/438hx0/a_trip_to_t...](https://www.reddit.com/r/Bitcoin/comments/438hx0/a_trip_to_the_moon_requires_a_rocket_with/)

I think Greg is right. And at least this scaling situation puts a lot of
pressure on Bitcoin blockchain and accelerates whole ecosystem to quickly
develop and deploy layer-2 solutions like Lighting Networks or parallel 2-way-
pegged solutions like sidechains. Which is in my opinion a good thing even for
the price of hampering Bitcoin growth in short-term.

And from technical point it is beneficial that Bitcoin Cash folks forked the
chain and will experiment with their own scaling solutions. It will be
interesting to watch future technical developments on both sides.

~~~
lawn
Which is why a dynamic block size should be implemented. (This is on the
roadmap for Bitcoin Cash).

For reference here's a paper by Peter R, a prominent Bitcoin Unlimited
developer, arguing that a blocksize limit is unnecessary:
[https://www.bitcoinunlimited.info/resources/feemarket.pdf](https://www.bitcoinunlimited.info/resources/feemarket.pdf)

Who's right I do not know. But even if Greg is right he's worrying about a
potential problem decades from now. We have very real problems _right now_ we
should solve first.

I would also be wary of any claims Greg makes as he has clear conflict of
interests against raising the blocksize. He's one of the founders of
Blockstream whose goal is to earn money developing 2nd layer solutions. With
working on-chain transactions what use would their 2nd layer solutions have?

------
ericsoderstrom
People now envision bitcoin as 'store of value', and less like an actual
currency. I imagine there are many technical and financial reasons why it will
never be suitable as a currency. (Deflationary by design, technical
limitations on size of blocks leading to slowness of transactions)

Does being unsuitable as a currency mean it's also unsuitable as a 'store of
value'? The answer to that isn't obvious to me.

The value of the US dollar comes in part from our ability to pay taxes with it
(and perhaps ultimately from the US military). Cryptocurrency has no central
authority to enforce its value via taxes or military, and isn't particularly
suitable for day-to-day transactions. Without either of those properties, I
have a hard to imagining it being a particularly good store of value. But
we'll see. I think we're all watching an interesting experiment unfold in real
time.

I don't think the current price of btc has anything to do with whatever
utility it may or may not have as a currency or store of value. The price is
entirely informed by speculators hoping to sell it the following day for 100%
ROI. I think a collapse is inevitable.

~~~
jstanley
> The value of the US dollar comes in part from our ability to pay taxes with
> it (and perhaps ultimately from the US military).

It doesn't come from either of those things. It only has value because people
believe it does, otherwise they would all try to get rid of it as quickly as
possible.

~~~
laurus
> It doesn't come from either of those things.

Yes it does. You have to pay your taxes in U.S. dollars, so people have to use
it. That's one of the purposes of taxes: so that the government-issued
currency is used.

~~~
jstanley
It's quite obvious that the value of USD comes from much more than the taxes
people have to pay. If the only demand for USD was from people paying taxes,
it would be worth only a small fraction of what it is actually worth.

~~~
laurus
The "demand for USD" is really demand for goods and services that are priced
in USD. Because everyone living in the U.S. uses USD because that's what we
pay taxes in in the U.S., most people in the U.S. offer their goods and
services in exchange for it.

~~~
betterunix2
The demand for USD comes from the legal structures that exist in the United
States for things like debts, torts, taxes, etc. Basically, if you take out a
loan to buy a house, you have a legal obligation to repay it regardless of how
it is denominated by your bank; but if you fail to meet that obligation, you
will need to deal with a bankruptcy court, which will only deal in USD. So if
you take out a 40BTC mortgage and fail to pay, the judge will first convert
the value of the house into USD and work out a way to repay (all or part) of
the debt in USD. By forcing you to convert what assets you have to USD, the
court is creating demand for USD.

Of course, banks know this (it is the core of their business) and will
therefore denominate loans in USD to avoid the risk of an unfavorable
conversion during such a proceeding. Such an unfavorable conversion is exactly
what the creditors in the MtGox bankruptcy are facing, because the proceeding
involved converting their BTC accounts into JPY according to the exchange rate
in 2014. Due to the change in BTC prices recently, that means that under the
law the creditors will be fully repaid using what BTC assets MtGox still has,
despite the fact that the creditors would receive a far greater payout if they
received the amount of BTC that had been in their accounts at the time of the
hack.

Beyond debts, there are also torts. Suppose I crash my car into your house and
you sue me for the damage I caused. The courts will order me to pay in USD; so
again, the courts are creating USD demand by creating an obligation to pay
with USD.

So the demand for USD is only indirectly due to demand for goods and services;
after all, there must be some reason why merchants are pricing their wares in
USD. The direct driver of demand is the law itself, hence "fiat" currency.

~~~
laurus
> So the demand for USD is only indirectly due to demand for goods and
> services; after all, there must be some reason why merchants are pricing
> their wares in USD. The direct driver of demand is the law itself, hence
> "fiat" currency.

That's exactly what I was saying: the goods and services are priced in USD
because the legal structures require USD. I just used taxes as the most simple
example.

But the whole point of the legal structures requiring USD is to get people to
offer goods and services for sale in exchange for it. That way the government
can purchase goods and services from the private sector to use as public
goods, without having to first "get the money" from somewhere else.

------
thisisit
Two popular refrains on scaling:

a. Block size - This was increased in bitcoin cash. What many people are not
aware of is the paper 'Information propagation in the bitcoin network' by
Decker and Wattenhofer in 2013. The average time for a block to be seen by a
node is ~13 secs. As per the paper:

 _" For blocks, whose size is larger than 20kB, each kilobyte costs an
additional 80ms delay until a majority knows about the block." -'Information
propagation in the bitcoin network._

So, increasing the block without increasing the block time actually increases
chances of double spending. But, increasing block time is well simply delaying
the payments.

b. Lightning network - Off-chain transactions. Fascinating idea. The problem
is it goes to a form of centralization. And if things hold the companies
running these channels will invariably meddle in some transactions. But the
stated goal of bitcoin was -

 _Commerce on the Internet has come to rely almost exclusively on financial
institutions serving as trusted third parties to process electronic payments.
While the system works well enough for most transactions, it still suffers
from the inherent weaknesses of the trust based model. Completely non-
reversible transactions are not really possible, since financial institutions
cannot avoid mediating disputes. The cost of mediation increases transaction
costs, limiting the minimum practical transaction size and cutting off the
possibility for small casual transactions, and there is a broader cost in the
loss of ability to make non-reversible payments for nonreversible services.
With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would
otherwise need. A certain percentage of fraud is accepted as unavoidable.
These costs and payment uncertainties can be avoided in person by using
physical currency, but no mechanism exists to make payments over a
communications channel without a trusted party_

~~~
jstanley
Anybody can run a lightning node. I intend to do so.

It's not like PayPal where if you want to pay using PayPal you have to use
PayPal-the-company. With Lightning, if you want to pay using Lightning you can
use any route you like over the Lightning Network to reach the recipient of
the payment.

~~~
magnat
If you run your own LN node, your channel is associated with your IP, and your
transactions are associated with your channel. It is the same as reusing a
single bitcoin address for all your transactions, with all the consequences
[1], except this time you can tracked down to your physical location. In
vanilla bitcoin you can at least generate addresses at will, while opening and
closing payment channels every now and then undermines the whole idea of the
off-chain transaction layer.

[1] -
[https://en.bitcoin.it/wiki/Address_reuse](https://en.bitcoin.it/wiki/Address_reuse)

~~~
solotronics
if you don't want your IP associated you can host anything on a cloud
provider, run it through a tunnel, VPN, or TOR.

------
barnacs
> How is this expected to work with 7 billion people using it for every tiny
> financial transaction?

[https://lightning.network/](https://lightning.network/)

tl;dr: a network of off-chain, transitive payment channels. two on-chain
transactions (to fund and settle channel) allow for ~unlimited, ~free,
~instant transactions across a p2p network of nodes off-chain

~~~
runeks
Payment channels (which Lightning Network uses) allows for unlimited
transactions, but not an unlimited number of users, because — as you say — two
on-chain transactions (deposit+withdrawal) are required to initiate and
finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M
transaction per month, this means only 20M people can deposit to/withdraw from
the Lightning Network (LN) per month.

To this critique, some reply that merchants will just start trading unsettled
(off-chain) LN transactions to pay their suppliers, but no one has presented
any model of how this would work in a real economy, with merchants needing to
pay suppliers, who need to pay their suppliers, who need to pay their
employees.

~~~
gst
~20M transaction per month are an arbitrary limit. The economic majority
recently decided against increasing that limit, but this doesn't mean it's not
going to get increased at some later point.

~~~
KirinDave
There are very good technical reasons for that limit. It is not as simple a
problem as "voting".

~~~
gst
Of course there are technical reasons for that limit. But whatever the correct
size of the limit is - the current limit is almost certainly too low. The
Ethereum blockchain is able to handle a significantly higher amount of
transactions without implementing all of the performance optimizations that
Bitcoin has (such as compact blocks).

------
reefoctopus
“A Fast and Scalable Payment Network with Bitcoin Duplex Micropayment
Channels”

[https://www.tik.ee.ethz.ch/file/716b955c130e6c703fac336ea17b...](https://www.tik.ee.ethz.ch/file/716b955c130e6c703fac336ea17b1670/duplex-
micropayment-channels.pdf)

~~~
KirinDave
Why do you think this fixes the transaction speed problem?

------
Ajedi32
Obviously no, the current version of Bitcoin does not scale.

I don't see why you think that means Bitcoin _can't_ scale though. In order to
convincingly make that claim, you'd need to be able to prove that all existing
proposed solutions for scaling the network (lightning, block size increases,
etc) cannot possibly work.

------
busyra
Off Topic: Is anyone else creeped out by having an open ledger? As soon as I
transact with someone or an entity, they now have access to view my wallet's
holding/transactions via pub key. I don't know how I feel about Overstock
having that information.

~~~
jiggunjer
You never use the same address twice. scatter received coins over other
addresses.

~~~
busyra
The fees to move the coins to another wallet just to pay for coffee would be
4x the coffee.

~~~
jiggunjer
you don't have to pay fees to transfer to yourself, assuming there is no rush.

------
pmorici
The piece you are missing is that this problem is a direct result of the Core
dev teams deliberate choice not to scale. They have a strangle hold on
development and vehemently opposed any proposal to scale through block size
increases as was the original intent.

Bitcoin Cash isn't having these problems and won't have these problems in the
future. Many people aren't aware of the underlying issues driving the
transaction backlog in part because the historically important forums where
Bitcoin is discussed have suppressed any discussion of this issue for a couple
years now.

[https://www.yours.org/content/a-roadmap-for-scaling-
bitcoin-...](https://www.yours.org/content/a-roadmap-for-scaling-bitcoin-
cash-b11efae5ef9d/)

~~~
jeremyjh
So if we say it “won’t” scale - would that be more accurate? It can, but
chooses not to? Seems like a distinction without a difference.

~~~
pmorici
The point is it is a team issue not a tech issue. The team behind Bitcoin Cash
which is rooted in the original Bitcoin block chain is scaling Bitcoin w/o
issues. The Bitcoin Core team who has control over development of the legacy
chain is the problem not the technology itself.

It would be like if there were two auto makers one claimed that you can't make
a car that holds more than two people and refused to do so. Along comes
another auto maker and builds a bus off the same concept. Doesn't mean that
automobile tech is bad it means the team insisting it can't / won't scale is
incompetent.

------
anonymous5133
That's why I tell you guys to just use bitcoin cash instead. Bitcoin cash uses
bigger blocks that can accommodate more transactions per second. We are going
to increase it as more people use it. Right now the transactions are nearly
free.

~~~
_tulpa
Ok.

We'll just ignore the issues associated with increasing full-node storage
requirements even faster than they're already increasing. And lower
transaction fees lead to lower block rewards which lowers mining
profitability. Both of these things result in more centralization.

While we're at it we'll forget the post-fork difficulty adjustment faisco
brought to us by the Bitcoin cash devs. We'll just trust their competancy and
good will.

Also we won't think about the legitimate off-chain solutions for transaction
rate scaling, or how the side-chain concept dates back to early Satoshi
emails.

There are better alt coins for cheap and fast transactions. Besides,
recommending something based entirely on those two factors is a massive
oversimplification.

~~~
sgspace
Lower transaction fees leads to more volume of transactions. They’re going for
the amazon approach of razor thin margins which should lead to more
transactions overall. They plan to keep transaction fees around 1 penny by
increasing the block size as it fills up. Next fork for Bitcoin Cash will give
it 32mb blocks.

~~~
_tulpa
Yeah I realise that. Even if it does work (noting currently most BCH blocks
are tiny) then the chain will grow by ~135Gb per month (the entire Bitcoin
chain is ~145Gb). Running a full node means you now have to buy a hard-drive
(or two) and hope your internet connection isn't capped. You also have to be
OK with really slow block propagation (which you _really_ shouldn't be).

There are some very good reasons for small blocks and higher on-chain
transaction fees.

------
partycoder
The idea is that bitcoin is decentralized. But common sense tells you that by
having an append only system, eventually you will need a supercomputer to deal
with the blockchain.

Naturally, the blockchain will have to be hierarchical, or find ways to
compact it.

~~~
moondev
Dosen't the blockchain already compact? Correct me if i'm wrong but once a
block is hashed and confirmed as the most recent block, why would you need to
store the previous blocks?

~~~
nikkwong
Full nodes must store the hashes that are generated from previous blocks. If
they didn't, how would you know that the most recent hash really is the
generated as a result of hashing the previous block recursively? A malicious
attacker could forge a previous block, act as the next one is the current
block based on the hash of the forged block, and there would be no way to
verify that the hash of this block is valid or invalid.

~~~
moondev
I was under the impression that attack would not work because as long as the
majority of nodes are "honest" there would be no way for an attacking node to
outpace the chain. Each node votes with their cpu so the combined
compute/speed of honest nodes would always outpace the introduction of a
corrupt block. Since the the most recent "confirmed block" is a hash of the
previous successful block it just continues.

However I admit much of my assumptions are just from reading the original
paper so i'm probably over-simplifying. I guess it would make sense they need
some history but not sure why they would need all of it since the previous
blocks are confirmed?

------
grubles
Have you seen any announcements from merchants, businesses, exchanges
regarding downtime due to congestion? Probably not, because the spam-
prevention mechanism built into Bitcoin by Satoshi themselves is working as
intended.

On the flipside, you have Ethereum with more or less unbounded block sizes
having issues with Cryptokitties congesting the entire network. Numerous
entities using Ethereum are unable to do business due to the equivalent of
Beanie Babies clogging the network [0][1].

[0] [https://www.coindesk.com/ethereums-cryptokitties-
blockchain-...](https://www.coindesk.com/ethereums-cryptokitties-blockchain-
deluge-sparks-ico-delay/)

[1]
[https://twitter.com/myetherwallet/status/874285733707526145](https://twitter.com/myetherwallet/status/874285733707526145)

~~~
heptathorp
It's the same case for Ethereum. Blocks are bound by total gas, and you can
ensure your transaction is included into a block quicker by paying a higher
gas fee, if you are willing.

For about $0.40 you can get an ETH transfer into a block in a couple of
minutes. [https://ethgasstation.info/](https://ethgasstation.info/)

------
WheelsAtLarge
Growing pains. Think about it, it's been less than ten years since bitcoin was
created. Give it time. The code will change and it will be able to scale. We
now have multi-millionaires that have a very strong incentive to make sure it
never fails. 20 years from now the bitcoin code and network will be very
different and many of the bugs will be worked out.

I was a disbeliever but now I am a true believer. Bitcoin is here to stay. The
only danger is that countries will make it illegal. It really is a danger to
the way countries manages their economies. But only time will tell. Keep the
coins and enjoy the ride. You won't be sorry. Lucky you.

------
chrischen
Bitcoin can be used for transactions? And here I thought it was just used as
free money!

------
keith_analog
What would concern me is, for example, if the cost of a transaction grows
faster than the price of a given bitcoin in dollars. If that trend would
continue for too long, then I suppose my bitcoin could get trapped in the
system for an indefinite period of time, that is, from the time I no longer
can justify moving the bitcoin because of high transaction fees to the time I
can. It seems that this situation suggests a lower bound on the amount that
makes sense to store in a bitcoin wallet. I wonder what that lower bound is
today.

~~~
wmf
That has already happened as transaction fees have increased from less than 1
cent to $5.

------
mrgordon
I’m not sure why so many people ignore that Bitcoin and all other serious
cryptocurrencies are focused on their next generation scalability
improvements. Several of the most viable blockchains like EOS are built to be
scalable and the legacy coins like Bitcoin are working to adopt similar ideas.
When the entire 2018 roadmap is about scalability, it gets boring reading
these same posts about how it’s too slow and doesn’t scale without any
reference to their work in progress.

~~~
Jasper_
Because the whole 2016 roadmap and the whole 2017 roadmap was also about
scalability. All they've done so far is throw their hands up and say "it's a
really hard problem trust us guys". And nobody has shown any sort of traction
on a solution: the developers admitted Lightning Network won't solve
scalability concerns.

Some people are getting a little tired of the pony show.

~~~
mrgordon
Then people will move to Ethereum and EOS (or whatever competing blockchains
get scalability first). With interoperability of blockchains, transactions can
be done on alt blockchains that are cheap and fast instead of on the Bitcoin
chain.

------
betterunix2
Bitcoin involves broadcasting all transactions; that is obviously not
scalable, regardless of block size, regardless of PoW, regardless of other
design details.

~~~
programmarchy
You don't have to broadcast all transactions to all parties. Merkle trees can
summarize past transactions, so not everyone needs a copy of the entire
blockchain.

------
TimJRobinson
This video: [https://youtu.be/GtKhYx2Vlb4](https://youtu.be/GtKhYx2Vlb4) helps
explain and address the thought process you're going through now. Bitcoin
scaling issues are analogous to many internet technologies such as Ethernet.
With Ethernet people initially thought there was no way it could scale to
support the whole world because the tech just couldnt support anything more
than 1mbps, yet people found a way. They built new technology on top of it,
they changed packet routing algorithms and they even changed the underlying
physical hardware used. The only thing that remains is the name and the brand,
Bitcoin will probably go through a similar development process.

In upcoming Bitcoin technology, the lightning network is really exciting. It's
a layer that runs on top of Bitcoin which allows thousands or possibly
millions of transactions per second, performed instantly, with almost zero
fees. It may have bottlenecks of its own, but I'm sure we can overcome them.

------
freekh
My view of BTC is as digital gold, in that, it is the standard to which other
easier-to-trade (digital or fiat or not) currencies are anchored in (so like
gold standard). Ever since I started reading about it, this was how it was
sold. The new gold standard. In this regard, high transaction fees/times was
expected. POW is a feature, not a bug.

------
adangert
Many say that Bitcoin's primary use is a store of value and a horrible medium
of exchange. In that light, being unable to make small transactions makes
sense, you store your wealth in Bitcoin and leave it there, kind of like a
savings account, the high fees and slow transactions don't matter because you
are not moving funds. High fees also reduce the amount of transactions in kind
of an equilibrium,the higher fees go, the less people are willing to transact,
thus lowering fees to the point of usability.

The other camp that wants to use Bitcoin for small transactions is either in
the illusory lightning network camp, or more realisticly investing in bitcoin
cash. In my opinion, bitcoin has proven itself to be a great store of value
but a poor medium of exchange, so just treat it as such.

~~~
ascorbic
Anything that fluctuates in value by 20% of more in a day can't be called a
store of value.

------
TD-Linux
I don't know what you mean by "prove". People have known about the block size
limit for years. It's been increased, but most haven't updated their software
to make use of it yet. Lightning now works on mainnet, but no one is using
that either.

Maybe it's more proof that no one cares?

~~~
cocktailpeanuts
I think I'm living in a different world than yours. Where I live, it's all
different that what you said.

The block size hasn't increased. Instead, a new chain forked out with an 8MB
block size, it's called Bitcoin cash.

Lightning network hasn't launched yet. A few people are testing alpha on the
main net and that's it. (Btw I'm a skeptic of lightning network so i'm not
advocating lightning network here).

~~~
zorked
I think he referred to SegWit, which increases the block size a bit under
special conditions. That's the thing about bitcoin scaling: instead of
improving scaling by increasing the block size (which will be required anyway
even with Lightning), a solution that requires only changing the thousands of
full nodes, they go for SegWit, which requires changing millions of wallets.
Then everybody wonders why adoption isn't instant.

And Lightning, yup. I tried to use two Lightning implementations on the test
net and neither worked, but they have been declared "ready!" by fans.

And Lightning deserves skepticism. Releasing software 1.0 means nothing: it
requires a totally new infrastructure, with new wallets (again) which have to
be online to receive money, hubs which don't exist at all today, liquidity
providers willing to leave money locked in channels, (but hey, at least we
didn't have to upgrade full nodes) and has completely different failure modes
than the blockchain on top of the failure modes that are already there. As far
as I understand it isn't even possible to receive more money than you already
have with Lightning, and any part you open a channel with can block your funds
for as long as the channel timeout has been set (and you don't want
short/underfunded channels or you may end up paying more in transactions than
you would have with a pure blockchain).

Also the opening and closing of channels means that if Lightning is actually
successful the current block sizes won't be sufficient. It's at least one
transaction to open the channel and another to close it, and because you want
to keep a warm channel so you can buy coffee, you will want to do that whether
you end up using the channel or not, but you also don't want it very long
otherwise your money will be stuck if the channel goes down. So essentially
you need to pay subscription fees to the blockchain for using the channels as
well as well as commission to the channels for providing liquidity to you.

Maybe some super-centralized thing will come out of it and we'll all connect
to the Coinbase Channel or something to do trustless centralized off-chain
transactions (as opposed to trusted centralized off-chain transactions that
they provide now) but even that has a host of problems when you think about
it.

It's... a complicated system. It's cool and very interesting but it won't
happen overnight and it's not guaranteed to actually work.

~~~
tyler33
I think lighting is more to trading webs, if you want to transfer from bittrex
to blockchain.info it would be trough light so all this kind of transactions
would free the blockchain

------
neilwilson
Bitcoin, like gold, is useless as a currency.

humans trade on credit not by exchange. Always have done.

~~~
dibbsonline
Seems pretty popular in places like India.

------
KaiserPro
You are correct. One interesting point to note is the high disparity between
prices on different exchanges.

COinbase shot through the roof, but other notable exchanges were sometimes $5k
out for a number of hours. This proves that either people couldn't cross trade
(i.e. buy cheap on one market and sell high on the other) or didn't know how
to (which is suspect)

this could be because the transaction speed stalled trades, meaning that
effectively each exchange became its own global market, either way, having
large disparities between exchanges is problematic.

------
oldsklgdfth
One of the questions I have is why is that a requirement? Why does one network
need to support the entire global populations? I mean if it's to be used as
fiat currency then I only need it to pay for things roughly in my extended
community. Why aren't there seperate networks developing in distinct
geographic areas?

------
wyldfire
Yes, BTC has weaknesses. No, it cannot scale up to "7 billion people using it
for every tiny financial transaction" likely even with Lightning. It doesn't
need to and you should please ignore the people who say it will.

I love BTC, I think it's great. I think other cryptocoins innovate where BTC
can't. But the BTC zealots who act like BTC will displace general purpose
banking (or zanier still, the entire financial industry) make this
conversation so frustrating.

BTC can be a success without this all-or-nothing campaign. In fact, it is a
success because it will continue to exist/store value, and operate as a medium
of exchange. It will have hiccups and scaling challenges and we will entertain
proposals like segwit and LN which don't radically alter the coin's design.

Unfortunately they alter enough of the design to disturb the
economics/incentives for the different roles. Those different roles have had
well-aligned incentives for a long time and hopefully they don't continue to
drift apart. This is the greatest risk facing Bitcoin IMO. For a long time I
was worried about a weakness in the signature hash. But the bounty for that
has been so enormous for so long that I'm doubtful one will ever be
discovered. So Bitcoin is truly a robust coin, and it can continue to serve us
well. If the 15000USD value is based on "7 billion people using it for every
tiny financial transaction" then people should probably start shorting BTC
(maybe tomorrow evening w/CBOE/Gemini).

------
CPLX
Bitcoin is a quasi-legal worldwide distributed mechanism for financial
gambling that everyday people can now participate in from their smartphone.

Clearly it has scaled well, it is now one of the more successful means of
gambling extant. The fact that it is becoming unusable for any other purpose
could have implications, but it's self evident that this use case has scaled
considerably.

------
rwaliany
Bitcoin is Myspace.

------
JAdamMoore
You are not wrong. The same math that created BitCoin necessarily ignores the
basis for the value is a sociopathic waste of time.

------
CryptoPunk
Of course it can't scale. Blocks can't grow larger than 1 MB, which means no
more than three transactions per second.

If you want scale, you have to look to Bitcoin Cash (which carries on
Bitcoin's original vision of being a massively scalable peer-to-peer
electronic cash) or Ethereum.

------
vexangel
I use electrum wallet and never had a problem with the default settings -
transactions appears after 20 mins.

~~~
mynewtb
That's about 19 minutes and 59 seconds longer than what would be acceptable
for a digital cash system.

~~~
svet_0
You just need to wait for a few seconds for the transaction to be "pending"
though, which is enough for small-medium payments. Unless you're worried the
guy buying a 5$ burrito from you will mine a block with his double-spent
transaction.

~~~
alanfalcon
A service could pop up that offers to double spend your $5 transaction and
refund you a percentage of the amount. If they mine the block you scam a few
bucks, if they don’t you paid full price. It would be profitable for the miner
and for the burrito buyer at the expense of the burrito seller. If such a
service becomes common, that seller is going to start making you pre-order
your burrito 20 minutes in advance – at which point people will just switch to
cash, credit, or a blockchain without these problems.

~~~
solotronics
you can also walk out of the store with the burrito without paying but that is
also stealing. this small transaction issue will be solved technologically but
the changes are incremental because of the risks involved.

------
crispytx
I think you're right. Bitcoin sucks. It cost around $5 to make a single
transaction back in August, and that was when Bitcoin was at 1/3 of its
current price in US Dollars. Does anyone know what the cost to make a single
transaction is today (in US Dollars)?

------
celticninja
I sent $30k for less than $5 and the transaction was confirmed within 15
minutes (second block), the network is fine. Yes it isn't free transfers but
they are still possible if you don't mind waiting and your transaction is
reasonably sized you are fine.

------
polock
Watch this prediction.

[https://us.teamblind.com/article/update-from-block---btc-
fut...](https://us.teamblind.com/article/update-from-block---btc-futures-hodl-
and-moving-funds-into-fiat-4c0jpDZV)

------
chisleu
Bitcoin is like gold, has always been. It's pretty bad for routine payments.

------
yeukhon
Bitcoin has always been slow compared to other alt-coins such as Litecoin.

------
andrewtbham
My understanding is... There is a scaling problem. It could be help by
increasing the block size (like segwit2x) But the miners don't want to fix it
because they like the high transaction fees.

~~~
bpicolo
A global currency controlled by a few warehouses in china sure does sound
optimal.

------
sillysaurus3
_How is this expected to work with 7 billion people using it for every tiny
financial transaction? I don 't think it can._

It's not meant to. It stores wealth. Nothing more.

------
donjoy
I believe ripple has solved the problem with scaling. It can handle more than
1500 tps and the throughput can be increased upto 50k tps

------
weissy
The idea seems to be that BTC is a store of value (eg: gold) and payments is
something to be implemented on a different layer.

------
obfk
Quantum computation will prove much more about the limitations of these
cryptocurrencies that we expect.

#shorsalgorithm

------
Blazespinnaker
Bitcoin is competing with gold, not visa.

------
adamzk
Not just BTC. iota, which is supposedly scalable, has come to a screeching
halt over the last few days as well

~~~
lawn
IOTA is however fundamentally flawed. It can never be decentralized if it ever
even becomes useable.

------
curyous
Bitcoin Cash can easily scale.

There never was a "scaling problem." The only problem is "people that don't
want Bitcoin to scale."

[https://www.reddit.com/r/Bitcoincash/comments/7gmn8t/there_n...](https://www.reddit.com/r/Bitcoincash/comments/7gmn8t/there_never_was_a_scaling_problem_the_only/)

------
scotty79
Couldn't bitcoin blocks be 100 times larger? What's the drawback of huge
blocks?

------
bossx
What are the best resources for staying up to date with Bitcoin and Ethereum
development?

------
sgspace
Check out Bitcoin Cash if you want a scalable on chain crypto currency.
Bitcoin Cash has the same history as Bitcoin up until August 1st, 2017 when
they forked off the majority chain. Bitcoin Cash allows you to send any amount
of money to anyone in the world for about 1 penny per transaction.

~~~
fullshark
And if its transaction volume were equal to bitcoin what would happen?

~~~
sgspace
Well right now Bitcoin Cash has 8x the capacity for on chain scaling 1mb
blocks on BTC vs 8mb on BCH. Next Bitcoin Cash fork gives us 32mb blocks or
32x transaction capacity.

Simplified a little bit I know you can pack segwit transactions into 1.7mb
blocks on BTC.

------
crispytx
Crypto-neckbeards be like "Bitcoin is going to $500,000!"

------
arisAlexis
There are altcoin solving all these problems

------
freqn
Not sure if it will ever scale. Look into Iota.

------
greg_____ory
Litecoin is the solution. It was not designed to be a Bitcoin replacement, but
rather to handle this exactly.

~~~
dangero
No it wasn't. It's 99% a copy of Bitcoin with small configuration file
differences. It is configured for one order of magnitude more transactions,
but it provides no architectural scaling innovations. It's just like Bitcoin
-- can only be used at scale as a settlement layer.

~~~
zeep
Litecoin is similar to Bitcoin, but it was the first to make some of the
changes that were made to both, like Segwit ...

------
alfios
and what happens if Governments decide by law that bitcoin is illegal?

------
xHopen
Buy Ethereum

------
fungusow
Etherium

------
davidmetcalfe
Betteridge's law of headlines.

------
ethftw
> have owned BTC for 5 years and I am enjoying the rally, but with the high
> transaction fees, back ...

That sir is a first world problem!

------
greg_____ory
Litecoin is the solution.

------
bsvalley
Same question back in 1994 about the internet. "build things that don't scale.
PG".

~~~
KirinDave
"Then sell them to sucker companies who will throw out all your work and redo
it better." was the rest of the quote, right?

------
grandalf
Maybe we learned that _coinbase_ can't scale its website, but that has nothing
to do with the ability of BTC to scale.

~~~
drexlspivey
Did you try to make a BTC transaction lately?

------
rdiddly
I don't think you're wrong and there are other problems too. Widespread
Bitcoin adoption would require more energy for mining coins than the entire
world can currently produce.

~~~
runeks
Bitcoin has no particular requirement for energy, it’s an arbitrage involving
the prices of three components: 1) a bitcoin 2) a KWh of power 3) mining
hardware.

As long as the value of newly minted bitcoins makes it profitable to buy
mining hardware and burn off power to earn them, the amount of power used by
bitcoin miners will increase.

So, way before Bitcoin miners consume all of the world’s energy, either energy
prices or mining hardware prices will increase, or the bitcoin price will
fall, to make mining unprofitable.

~~~
codecamper
And a kWh of power is of course done with coal. How pathetic.

~~~
runeks
I believe most mining operations make use of hydro-electric power, simply
because it’s much cheaper than burning off coal.

~~~
lawn
Also practically free hydro-electric power which would otherwise be wasted.

~~~
Symbiote
That's not true at all. If the power were not used by Bitcoin miners, it would
be used by other industries, and less more-expensive (coal etc) power produced
by other power plants.

------
taysic
The rally is partly because it can’t scale and people are unable to get their
bitcoin to an exchange to sell it. Instead it is stuck in the mempool... and
there is an increasing amount of bitcoin that can’t be moved because fees
surpass its value.

For a bitcoin that has scaled see Bitcoin Cash.

~~~
gruez
>The rally is partly because it can’t scale and people are unable to get their
bitcoin to an exchange to sell it.

that's demonstrably false. there's plenty room of you're willing to pay enough
in transaction fees. if you don't want to pay $5 in transaction fees to cash
out $5000, that's your problem. either that or you don't want to pay $5 to
cash out $10, but in that case that has no appreciable impact on trading
volume.

>For a bitcoin that has scaled see Bitcoin Cash.

if you mean bitcoin with block size limit lifted, then yes. but right now it's
handling less transactions than bitcoin so it's not fair to say it has scaled.

~~~
taysic
The median fee is currently $15 and there have been around 200k unconfirmed
transactions for days. Is it false in addition to this that around half of all
bitcoin addresses hold less bitcoin than the current fee? That’s a massive
constriction of supply. Very few people are transacting at amounts of $5000
where the fee might make sense.

------
MichaelBurge
It's not really designed to handle every little transaction. I would expect it
to be used by exchanges and banks as a settlement layer, with most
transactions happening off-chain.

It's a mistake to look at recent news, because this has been known since the
very beginning.

~~~
cwyers
There is a thread on the site with the original Bitcoin paper right now. The
first sentence of the abstract:

> A purely peer-to-peer version of electronic cash would allow online payments
> to be sent directly from one party to another without going through a
> financial institution.

A peer-to-peer network without going through a financial institution. The
design was certainly intended to scale up to large numbers of small
transactions.

~~~
sdwisely
it would and it will imo. I just don't think bitcoin is it.

It has however bootstrapped a few potentials. Until its decided which that
might be, bitcoin kinda serves its purpose.

~~~
snodnipper
root DNS services do not service _every_ lookup _but_ they back delegated
authorities, which does scale. Same for blockchain tech.

~~~
philipwhiuk
So you're saying Bitcoin needs banks like every other currency then?

So what's the point of it again?

------
wmnwmn
Not only is BTC epicly badly designed (energy consumption=Denmark) but it
doesn't solve a problem that anyone actually has (and neither do any of the
other cryptos). Nobody uses them to pay for things, and nobody has any
incentive to start doing so, because paying for things is not currently a
problem. Compare with the Internet boom: along with the stock bubble, millions
of people began using this new tool which changed their lives forever. Compare
with the housing boom: tons of people got something, at least temporarily,
that changed their lives, namely a house. Now look at cryptocurrencies. They
having zero effect on ordinary life because they don't solve a problem that
anyone has.

~~~
jiggunjer
You must not have any experience with international transfers or currencies
other than euro and USD.

~~~
wmnwmn
Indeed I don't. Nor do most other people. That's one of the reasons why, to
first approximation, zero people are using them. And even if lots more people
suddenly begin needing to transfer non-reserve currencies internationally,
these transfers are going to run into legal issues which, despite fantasies of
bitcoin enthusiasts, are not going to be evaded just by putting "crypto" in a
prefix.

~~~
jiggunjer
Your claims are fallacious. Most people, i.e. 51%+ don't use USD or EUR. Many
people also make international transfers. There is a use-case and your
observations that zero people use btc are anecdotal at best.

Pray tell what kind of legal issues would suddenly arise if it became
mainstream.

------
runeks
> How is this expected to work with 7 billion people using it for every tiny
> financial transaction? I don't think it can.

Give it ~30 years, for the cost of CPU time/storage space/internet speed to
cost 0.1% of what it does today, and — in combination with off-chain clearing
— this becomes feasible.

For Bitcoin to even work as money in the first place, people need to store
their savings in bitcoins. This transition will take at least ~30 years
anyway, which leaves ample time for computing costs to fall to a level where
1GB blocks are realistic. Combined with an off-chain clearing protocol (like
Stroem[1]) for consumer-to-merchant payments, this should allow Bitcoin to
scale to ~10bn people.

[1] [https://www.strawpay.com/docs/stroem-payment-
system.pdf](https://www.strawpay.com/docs/stroem-payment-system.pdf)

------
aSockPuppeteer
You may place too much value in the transactions of fiat currency. You can
still do an in-person trade.

Credit payments may seem instantaneous but they are not. Research the gold
standard and who actually stores the gold not the paper receipts for it.

The endgame for bitcoin...Transaction fees? Popup currencies ala private
currency?

I hope we are solving some fun math problems with all this distributed hash
power.

