
The Dream of Buying a Coffee with Bitcoin Is Dying, If It’s Not Already Dead - wslh
https://motherboard.vice.com/read/the-dream-of-buying-a-coffee-with-bitcoin-is-dying-if-its-not-already-dead-block-size-fees
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Falkon1313
Bitcoin was a great project that got a lot of things right, but it has not
worked well in at least two major areas:

> "The transaction fee market is a free market of users bidding for a limited
> amount of transaction capacity. It is subject to the natural laws of supply
> and demand for that limited economic resource."

This is ridiculous. When bitcoin was developed, there was plenty of
distributed transaction processing capacity and we have many more and much
more powerful computers and better networks now. Our growth in supply of the
ability to process transactions in a distributed fashion has dramatically
outpaced the demand.

But bitcoin's built-in scaling mechanism led to a
CPU->GPU->FPGA->ASIC->Dedicated hardware arms race. So most of the world's
capacity can't really take part. The supply is wasted. And as a result,
everything ended up monopolized and centralized in the hands of a few people
in one place. Of course they're going to want to keep the supply limited to
protect their monopoly, and of course they're going to want to charge fees to
capitalize on it. But it's all artificial. We have tons of spare compute
capacity. It's unlikely that will become a scarce resource at any time in the
forseeable future. Not scarce enough to induce delays or justify fees.

The other failure was simply the fact that it was so difficult (and lengthy,
scary, potentially expensive) to get money into or out of the system. It's
hard to build adoption rate when you require people to link their bank
accounts to shady exchanges and go through complex transactions that take
multiple days (and/or download a massive blockchain that may also take days).

Hopefully a future cryptocurrency can address the issues discovered with
Bitcoin and succeed. It should seek to remain decentralized; everyone should
be able to participate, and to do so relatively quickly, easily, and safely.

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jepler
On the one hand, when you use your card instead of cash to buy that coffee,
there's absolutely a fee and it's absolutely bigger than the USD.04 I saw
posted in another bitcoin thread today as now being typical for confirmed
transactions.

On the other hand, for bitcoin to keep working we have to keep burning fossil
fuels, and total transaction fees plus total mining rewards have to pay for
that. At USD400/BTC, rewards are worth USD1.44 million per day. As rewards
drop to zero over time, the transaction fees must rise to keep miners
interested. Based on 600,000 transactions per day in 1MB-bitcoin, that's a
$2.40 rise per transaction by time block rewards drop to zero in order to keep
miners interested. Ouch.

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coralreef
Can you expand on the fossil fuels comment?

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jepler
What I mean is that most electricity is presently generated from fossil fuels.
E.g., 2008 figures on wikipedia show 2/3 of electricity from coal+oil+natural
gas
[https://en.wikipedia.org/wiki/Electricity_generation#Product...](https://en.wikipedia.org/wiki/Electricity_generation#Production)

