
Bitcoin transaction processing takes up to 10 hours - elorant
http://www.coindesk.com/bitcoin-capacity-nightmare-fees-reality/
======
buttershakes
This is a really complicated discussion, that has been splashed all over
reddit and other forums for the last year. The reality is that the network is
rapidly approaching if it hasn't already exceeded capacity at 1 MB. This
doesn't break the network, but it ends up with load sheddding (people who no
longer transact) and worse, people who transact but due to rapidly changing
fees have to wait in line indefinitely to get their first confirmation. The
mempool will eventually randomly eject transactions, but this can cause issues
for wallets and other services.

To say that centralization increases dramatically at 2 MB just isn't the case.
Once people stop running full nodes because they don't believe in Bitcoin's
potential as a transaction network then what? This is all about control, who
gets to control the fate of the Bitcoin network, and right now that battle is
being waged between large well funded companies each of which has its own
vision for what Bitcoin is.

Development should under no circumstances be centralized with one entity, but
there you have it. The only people who benefit from bitcoin being unable to
scale are those who want it to simply be a digital gold / store of value, and
those that sell alternative solutions for various markets. This is just going
to lead to capital flight from Bitcoin into alternative networks that have a
growth potential despite being inferior at the moment.

~~~
nadaviv
> To say that centralization increases dramatically at 2 MB just isn't the
> case.

No one is saying that. Core's SegWit proposal also gives us an effective
blocksize of ~2mb, the same as Classic - only _without requiring a coordinated
network-wide upgrade_ and without the risk of splitting the payment network
and currency in two if everyone doesn't upgrade in time. This is the more
responsible way to deploy such an upgrade, especially if you consider the
capacity bump to be urgent. (a safe hard-fork would require a grace period of
6-12 months to wait for everyone to upgrade, and so would be much slower to
roll out than SegWit)

Also, several of the Bitcoin Core members have committed to coding an hard-
fork proposal for raising the block size limit within a few months, and to
bring it up to the wider development community to gather consensus.

I do agree that this isn't about the technical issues, but about control. The
bitcoin development community has been very responsive and insightful
throughout the scaling debate, and has provided us with great technical
solutions to some very difficult problems. The ones opposing the Bitcoin Core
development community seem to disregard the technical merit of their proposals
in favor of repeating personal attacks, conspiracy theories and toxicity. This
is creating an hostile environment that developers will start running away
from... which is a shame, because we don't really have any developers to spare
- people with intersection of the domain knowledge required to work on Bitcoin
(cryptography, distributed networks, game theory, economics, computer science,
etc) are VERY rare.

~~~
pmorici
>No one is saying that. Core's SegWit proposal also gives us an effective
blocksize of ~2mb, the same as Classic - only without requiring a coordinated
network-wide upgrade and without the risk of splitting the payment network and
currency in two if everyone doesn't upgrade in time.

If that is such a huge concern then why is core proposing a hard-fork to
change the way the difficulty is adjusted? [0] If they are for adjusting the
difficulty computation why not raise the block size at the same time?

[0] [https://lists.linuxfoundation.org/pipermail/bitcoin-
dev/2016...](https://lists.linuxfoundation.org/pipermail/bitcoin-
dev/2016-March/012489.html)

~~~
nadaviv
"Core" is not proposing anything, that difficulty adjustment hard-fork
proposal was brought up on the mailing list by a member of the community and
is in early discussion stages. There's no consensus that this change is
necessary, and there hasn't been an in-depth discussion about how and when it
should be incorporated (if accepted) and whether it should be alongside the
block-size hard-fork or separately.

~~~
pmorici
That was made by Luke-jr one of the more influential and out spoken developers
who is strongly opposed to a block size increase. He's also associated with
Blockstream.

------
matthewbauer
This may be a little unpopular here, but I really appreciate the conservative
approach by the Bitcoin core team. There's a lot of cryptocurrencies out there
and Bitcoin's dominance is from its long history and staying power. Bitcoin
needs to have a near majority of agreement for any breaking change or else its
risking its own dominance. Hopefully, transaction fees become less over time,
but regardless they're necessary to prevent spam. No matter how big of blocks
you have, you're always going to have a spam problem and the Bitcoin forks
have yet to show how bigger blocks will mean faster transactions.

~~~
ggreer
Except they're not being conservative. Core's approach has been to introduce
new complexities such as replace-by-fee[1] and segregated witness[2]. These
are much bigger changes to Bitcoin than a one-time increase of the max block
size.

1\.
[https://github.com/bitcoin/bips/blob/master/bip-0125.mediawi...](https://github.com/bitcoin/bips/blob/master/bip-0125.mediawiki)

2\.
[https://github.com/bitcoin/bips/blob/master/bip-0144.mediawi...](https://github.com/bitcoin/bips/blob/master/bip-0144.mediawiki)

~~~
ikeboy
The first is just putting in code that had been part of Bitcoin since the
beginning, temporarily removed due to DoS concerns, and re-added once those
concerns had been alleviated by requiring a higher fee.

The second is being implemented as a soft fork, while a block size increase
would be a hard fork. Soft forks have been done many times while hard forks
have no precedent. Why do you consider that a bigger change? Soft forks are
"optional", a backwards compatible change, while hard forks aren't.

~~~
pash
Your understanding of soft forks is incorrect. Changes to the consensus rules
implemented by soft forks are in no way optional, nor are they backwards-
compatible [0].

Nor are soft-forking changes meaningfully more limited in scope than hard-
forking changes. Soft forks, by introducing new rules referring to data
unreferenced by the old rules, can be used to make almost arbitrary changes to
the protocol. Bitcoin Core's planned implementation of segregated witness uses
this technique, which is how it is able effectively to loosen the constraint
on block sizes. The technique can be extended to implement an arbitrary
increase in the blocksize as a soft fork [1], or even to change the rule that
limits the final supply of bitcoin to 21 million units [2]. Name a change you
want to make to the consensus rules: chances are that with enough cleverness
(and a willingness to make a big enough mess) you can find a way to implement
it as a soft fork.

The most salient consequences of changing consensus rules by soft fork versus
by hard fork, to my mind, are that (a) soft-forking changes ordinarily
introduce substantial additional complexity compared to effecting the same
change with a hard fork, and (b) developers can introduce changes via soft
forks without having to secure the same degree of explicit consent from miners
and users that hard forks require.

Phenomenon (a) occurs because soft-forking changes must be implemented by
roundabout mechanisms that preserve formal (but not semantic) compatibility
with the old rules, whereas hard forks provide the freedom to make changes in
the simplest or most technically appropriate way. Point (b) perhaps helps to
explain the preference of Bitcoin Core's team for soft-forking changes: they
are less constrained by the desires of users and miners under a policy of
implementing changes to the consensus rules by soft fork than they would be if
they were to attempt the same changes with hard forks.

0\. [https://medium.com/@octskyward/on-consensus-and-
forks-c6a050...](https://medium.com/@octskyward/on-consensus-and-
forks-c6a050c792e7#.kxsty3rw9)

1\.
[https://bitcointalk.org/index.php?topic=1296628.0](https://bitcointalk.org/index.php?topic=1296628.0)

2\.
[https://np.reddit.com/r/bitcoin_uncensored/comments/43w24e/r...](https://np.reddit.com/r/bitcoin_uncensored/comments/43w24e/raising_the_21_million_btc_limit_with_a_soft_fork)

 _Edit: I encourage interested readers to verify what I have written by
referring to the sources I cited or by doing their own research. Downvotes in
discussions of Bitcoin here unfortunately tend to reflect the voters '
loyalties in the blocksize brouhaha more than their honest assessment of
whether a comment is informative and correct._

~~~
makomk
No, you cannot "change the rule that limits the final supply of bitcoin to 21
million units" through a softfork. You can indeed append an "extension record"
with "extension transactions" that generate and transfer whatever number of
extension coins you like as
[https://np.reddit.com/r/bitcoin_uncensored/comments/43w24e/r...](https://np.reddit.com/r/bitcoin_uncensored/comments/43w24e/raising_the_21_million_btc_limit_with_a_soft_fork)
lays out, but you can never ever convert those extension coins into ordinary
Bitcoins that existing nodes accept as valid. You've basically created a very
elaborate altcoin as a sidechain of Bitcoin.

This is not the technique that segregated witness uses. All SegWit
transactions are on-chain transactions that are visible to existing clients,
which means that the coin cap and all the other Bitcoin rules still apply and
the coins from them can subsequently be sent to non-SegWit clients - the only
thing that's not available to older nodes is the information about who's
allowed to spend SegWit transactions. It's similar to the P2SH fork a few
years back in that respect. (That's also why the effective block size gain is
limited. Any further increases are planned to be done through a hard fork.)

Now, technically of course 51%+ of miners could refuse to accept standard
Bitcoin transactions of any kind and force everyone onto their extension
chain. In fact, they could even declare a day zero after which they refused to
accept any existing transactions or coins as valid, resetting the whole thing
as an extension chain. This is an unavoidable consequence of miners being able
to decide which valid transactions they accept - Bitcoin simply relies on the
majority of miners not trying to shut the whole thing down.

~~~
pash
Yes, you're right, but again only in a formalistic sense. It is the
_semantics_ of the rules that matter, not their form. And the semantics can be
changed arbitrarily in the way I described. I don't think my point is
pedantic. Segregated witness is just this sort of change, one that preserves
the form of the old rules while significantly reinterpreting their meaning.

No, segregated witness doesn't change the semantics as drastically as, say,
changing the effective cap on the final supply of monetary units. But that's
beside the point—which is that it is wrong to think of soft-forking changes as
intrinsically less significant or more acceptable than hard-forking changes.
You can effectively change anything with either approach. To judge a change to
the consensus rules, you must look at its semantics: whether it is implemented
as a soft fork or a hard fork tells you essentially nothing.

Yet a large chunk of the Bitcoin community seems to believe that soft forks
should be preferred to hard forks as a matter of principle. That is nonsense.

------
Animats
It's a free market. If you pay a higher transaction fee, your transaction gets
processed sooner. Typical transaction fees are now $0.04.

The big spike seems to be over, anyway.[1] Median time never exceeded 13
minutes. Note that this does not include no-fee transaction requests. There
may be an attack underway which involves lots of tiny transactions that may
never clear. One of the purposes of the fee is to discourage such spamming.

[1] [https://blockchain.info/charts/avg-confirmation-
time?timespa...](https://blockchain.info/charts/avg-confirmation-
time?timespan=180days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=)

~~~
pash
> _It 's a free market._

It's a broken market, one in which the supply of space in the blockchain is
unresponsive to increases in price induced by higher demand.

This impasse over block sizes and Bitcoin's governance would never have
happened if Satoshi Nakamoto had designed the protocol well in this respect.
It's unfortunate that nobody seems interested in fixing the basic problem,
which is arbitrary parameters trying to do the job of endogenously determined
economic variables.

~~~
zdkl
Why is it automatically assumed that higher tx fees are bad? It only
disincentivises microtransactions on the bitcoin blockchain. There's nothing
stopping anyone from using another coin (litecoin springs to mind) for smaller
transactions.

TL;DR microtransactions discouraged on BTC blockchain? What's the problem?

~~~
schmichael
Any fees above $0.01 make microtransactions unlikely. Maybe not a bad thing
though.

However, if fees hit the $0.30 and up range they stop losing their competitive
edge against credit cards.

If consumer retail on the Bitcoin blockchain isn't a concern for you (as it
doesn't appear to be for Bitcoin Core), then high fees aren't an issue. If
consumer retail is a use case you want for Bitcoin, fees need to stay low to
offset Bitcoin's other disadvantages against credit cards.

That being said high fees don't negatively affect the main retail use cases
Bitcoin has demonstrated the best suitably for: cryptolocker payments and
contraband.

~~~
nadaviv
We're still quite off from $0.30, though. At the peak of the recent
transaction flood attack, you only had to pay $0.06 (60 satoshis/byte for a
250 byte tx) for a 90% chance to get including in the upcoming block. Now,
that the attack has somewhat calmed down, we're down to the $0.04-$0.05 range,
and will probably continue going down over time.

> as it doesn't appear to be for Bitcoin Core

Source?

Core has shown a very promising roadmap for scaling the bitcoin network. This
includes SegWit, which gives us a 170%-400% capacity bump _without requiring a
network-wide upgrade_ (at the risk of splitting the payment network and
currency in two if everyone doesn't upgrade in time), work on IBLT/weakblocks
to improve network propagation times and bandwidth usage, and research on
compressing data more efficiently [0]. Several of the Bitcoin Core members
have also committed to working on an hard-fork to raise the block size [1],
propose it to the development community and try to build consensus around
that.

In addition to that, Blockstream, which was founded by a few of the core
developers, is funding work on Lighting Network, a write-cache for bitcoin
transactions based on payment channels, which would allow for scalable,
instant, nano, near-free payments.

[0]
[https://bitcointalk.org/index.php?topic=1377298.0](https://bitcointalk.org/index.php?topic=1377298.0)

[1] [https://medium.com/@bitcoinroundtable/bitcoin-roundtable-
con...](https://medium.com/@bitcoinroundtable/bitcoin-roundtable-
consensus-266d475a61ff)

~~~
schmichael
> Source?

I was making an inference but one it seems Gavin Andresen agrees with:

"Over the last year of trying, and failing, to reach a reasonable compromise,
it has become clear to me that some developers don’t want any on-chain scaling
solution any time soon. [goes on to reference Lightning]"
[http://gavinandresen.ninja/satoshi-roundtable-
thoughts](http://gavinandresen.ninja/satoshi-roundtable-thoughts)

------
pbreit
Brian Armstrong also just posted this: [https://medium.com/@barmstrong/what-
happened-at-the-satoshi-...](https://medium.com/@barmstrong/what-happened-at-
the-satoshi-roundtable-6c11a10d8cdf)

Bitcoin is starting to look like "decentralization" at its worst. Pretty much
the only asset ever in existence that hasn't fallen in price due to
uncertainty.

Regarding "the halving", how in the world could you design in a doubling of
expenses on some arbitrary date in the future? That didn't make any sense to
me.

~~~
ikeboy
It's not a doubling of expenses, it's a halfing of reward. The reward is meant
to go to zero eventually, and halves every four years.

~~~
dllthomas
A halving of reward per unit of expense is a doubling of expenses per unit
reward.

That said, it is neither - it is a halving of _extra_ reward on top of
transaction fees.

~~~
eordano
Also, "reward" is not appropriate. It has been historically referred to as
"miner subsidy": it was intended to be a way to make mining attractive for
early adopters.

------
exolymph
Correct me if I'm wrong, but doesn't this just mean that fees have to be
higher? Welcome to markets, where technical constraints and supply/demand
dynamics both influence price.

~~~
gruez
Exactly. The issue is that people are to accustomed to paying little to no
fees, so nobody wants to pay a few cents more for faster confirmations.

~~~
Tideflat
Having little or no fees was supposed to be one of the big advantages of
bitcoin compared to traditional financial transactions.

~~~
lololomg
Not true at all. I'm not sure where people get this idea but if you read
Satoshi's original paper you'll see that this is just false.

~~~
haakon
Unfortunately, this is how Bitcoin was promoted for a long time. "Free,
instant transactions!" It always bugged me.

------
dontscale
The tone of the article is objective, but surely Coindesk has an interest in
Bitcoin Classic. I read it as nothing more than propaganda.

I don't have a side one way or another, and I don't own bitcoin. But, it's
ridiculous to see these bitcoin 'companies' taking such desperate measures.
Given the nature of all the characters I've seen come out of the woodwork thus
far, it is not surprising.

~~~
CyberDildonics
They have an interest in bitcoin working, I'm not sure what other ulterior
motives you think they have to the actual protocol.

~~~
jalfresi
Control?

~~~
CyberDildonics
You think coinbase wants to control the protocol? How would they do that
exactly? The best way we've seen so far is to stuff the developer list with
people you've bought off and alienate the others, which is what blockstream is
doing and what is happening right now.

------
yxitcti
Coinbase has an interest to increase the block size so that the protocol can
be further centralized, making people more reliant on their centralized
bitcoin as a service business.

Honestly, the whole bitcoin ecosystem is a sinking ship at this point. The
protocol is broken and there are too many vested interests to properly fix it.
It's time to move over to Ethereum.

~~~
snitko
Why is it a sinking ship? I can still send money to anyone anywhere in the
world for a very low fee relatively fast, without any restrictions, long forms
or questions asked. I don't know what do you think Bitcoin's value is to
people, but I surely know what value it has for me personally.

~~~
yxitcti
Sinking doesn't imply fully sunk. Yes, bitcoin is still semi-useable but it's
becoming less and less so. Meanwhile businesses are chomping at the bit to
bring it fully under their control so they can profit more from it. There are
much better alternatives.

~~~
NhanH
How financially invested are you in Ethereum?

~~~
yxitcti
Not at all. I hold about $5 worth of bitcoin, but that's it.

------
oleganza
I can't help but notice that the only news about Bitcoin that ever enter HN
front page are some sort of drama, or "issue with bitcoin". There are a lot of
truly great things going on in the space, yet these are carefully kept off the
mainstream news outlets and even HN.

------
nonuby
Does Ethereum have the same scaling issue if a group setup a direct currency
on it?

------
lojack
Is there anything preventing an implementation vote by the miners? I would
think that convincing 50% of miners would be all it takes to change these
types of features.

~~~
colejohnson66
IIRC, The majority of the blocks are "mined" in China where they continue
using the "old" fork of Bitcoin instead of the "new" fork that upped the block
size. I would assume they're resistant to change as keeping the block size
down can, over time, force the transaction fees up (bringing in more cash for
the miners)

~~~
21
I find it funny how all talk about decentralization, but ignore the fact that
most mining is in China, a known bastion of freedom.

Yesterday it made illegal movies depicting homosexuality or one night stands.
Tomorrow it might decide to make bitcoin mining illegal (as it has forbidden
some forms of bitcoin trading in the past)

~~~
Nutmog
All kinds of silly things are illegal in China, even copyright infringement,
but that doesn't mean the police are breaking down people's doors and
confiscating their computers. People flagrantly do many of the illegal things
anyway.

So I'd say, yes China really is a bastion of freedom - just a different kind
of freedom than what westerners think. Economic freedom, rather than political
freedom.

------
kang
"up to" being the key word in the title. Don't pay enough fees and it'll take
even days.

------
jackgavigan
I think this vindicates the banks' decision to build their own blockchains
instead of building on top of the Bitcoin blockchain.

------
aminorex
Which is part of the reason why I think taking the long side in the brewing
short squeeze in XMR will be brilliant for me.

------
look_lookatme
If companies like Coinbase, which live and die by the health of the Bitcoin
ecosystem, have taken so much capital, why can they not solve this problem by
spending money to shore up the health of bitcoin ecosystem (I assume this
requires adding processing power)?

I don't know anything about Bitcoin, so maybe it's just unfeasible.

~~~
thescriptkiddie
They are. Coinbase has several bitcoin devs on their payroll, and they have
thrown their support behind a scaling plan that includes bigger blocks.

~~~
nullc
If they do, these parties are not disclosing it AFAIK.

------
al_chemist
Why it takes so long? Because network is being DoSed. How? By sending a lot of
small transaction to fill out blocks - they also pay for those transactions.
Why? Well, to prove the point. "You need bigger block, you need our fork".

DDoS - the best weapon of Internet, still undefeated.

~~~
stale2002
Lol wut? It's the classic nodes being DOSed. Also, the whole network being
full isn't even supposed to be a problem, according to Core. Prices will just
rise? Correct?

~~~
makomk
This has been going on, on and off, since before Classic and XT and all the
others were announced. Someone's been spending a fairly substantial amount in
transaction fees to send spam transactions in order to "prove" that the block
size needs to be increased and openly bragging about it.

~~~
PascalsMugger
Doesn't the action actually prove the point? At the very least, it's proof
that the network is vulnerable to this kind of attack. Seeing as it has been
ongoing, it can't be that expensive to do, since it isn't really going to
result in a financial payoff for the attacker.

------
julie1
You don't have to be smart to understand the universe is resource bound.
Bitcoin core seems to have made a money that has a "resource" like behaviour.

The more you mine it, the more it costs. They seem to have a concern about a
virtual currency that unlike real ones can prevent some "non realistic"
transaction behaviours that are not compliant with the real world.

Transactions are never free. And the bigger a system is the more a a
transaction costs.

What frightens me is the High Tech business trying to piggy back on a pretty
sane currency and want to influence for their personal interests the system in
a way that might deserve the economy globally.

Are all High Tech companies sociopaths just caring about nothing but their
private benefits built upon other's works?

~~~
scient
Welcome to the real world, where companies are ran for profit, not for some
"greater good". I can safely assume you have never owned a company. How would
you feel if you would not get paid for your work, but it would instead be
handed out to homeless people for the greater good (as an example)?

~~~
julie1
You unsafely assumed. I had more than one business.

As a former small business owner I know very well how workers and small
companies are being put in an unfair competition, especially because bigger
companies have de facto monopolies and the support of both administrations and
governments to play dirty.

Especially by having hidden subsidies or regulation unfairly protecting their
business and weakening others.

I think as someone who was taxed 40% as a worker, 50% as a business owner, I
have the right to be scandalized at the fiscal contribution of any so called
successful businesses (google, apple, fb, ms, jp morgan ...). Fuck, this is
clearly fiscal inequity. What triggered revolution in USA and France.

When competition is not fair it is not a liberal system anymore. And when
wealthy kids get wealthy by birth and citizens find it remarkable, I guess
people forgot why and how the citizens of the USA created their own country.

USA was despising the priviledge system and wished for a system where every
one had a fair chance to compete for their success (except the black slaves).

