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Did Bitcoin just prove it can't scale?
361 points by graniter on Dec 9, 2017 | hide | past | favorite | 477 comments
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.

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

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.

Am I wrong?

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.

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.

What Bitcoin does absolutely is impressive, just not in terms of transaction volume. Comparing it to a rails app is pointless.

If we can improve the transaction rate without risk, then let’s do it. It just gets tiring seeing post after post suggesting it’s a valueless failure if it can’t be used for coffee. Let’s just keep it in perspective. It doesn’t need to supplant Visa to be successful.

The entire purpose is to replace fiat. It’s objectively a failure if you can’t buy coffee with it.

It is to replace central bank control of the money supply (which happens to be fiat).

It provides a ton of value even if you can’t reasonably buy coffee with it. The path to replacing fiat is not adding risk or unpredictability to the figurehead cryptocurrency.

I’m not sold on Bitcoin but I don’t agree with your definition of what it needs to be successful. There is no reason that actual bitcoin end-users need to deal directly in bitcoin. If Bitcoin were to ever become a major currency, a big if, there would be financial institutions (banks) issuing instruments (physical or digital notes) backed by real bitcoins held by those institutions. Real bitcoin transactions would be mostly performed between such institutions, or anyone else willing to pay the higher transaction fees. Most people would have their needs perfectly served by relying on bitcoin banks, at least for performing frequent transactions. Though they might very well seek to hold large sums directly in BTC.

Bitcoin and The Blockchain are only useful when you absolutely can't trust anybody but yourself. Why would financial institutions need Bitcoin and its immense overhead when they all can use the law as a tool to ensure adequate trust? If they can trust each other at that level, all they need is a simple database.

In other words, "financial institutions" have no need for the blockchain.

Want proof? You think the NASDAQ uses anything more than a (fancy, probably very high priced, extremely robust) database to store its stuff? They deal with all kinds of people who are actively trying to fuck them over every day and every second. They have no need for the blockchain. Neither does any other "financial institution".

What if russia and china decide to start their own global trade system based on something. http://www.zerohedge.com/news/2017-12-02/russia-china-and-br... And they don't trust eachother because well why would they. Would they have a use for a global, distributed, trustless system to keep inventory?

This defeats the entire purpose of bitcoin. The goal is a decentralized currency that isn’t controlled by shady political interests, and can reasonably replace normal currency.

Why would you want Bank 2.0?

No it doesn't. The purpose of Bitcoin is sound money.. A finite currency immune to governments' and central banks' desire to devalue currency for debt financing.

Bitcoin is more scarce and therefore better store of value than any fiat currency could ever be.

Do you not understand second layer solutions do not put your Bitcoin at risk? You commit to a payment channel which defaults to closing the channel according to original amounts when opened.. if the other party doesn't follow through. Again, your funds are not at risk so it's not like a bank, and there's no fractional reserve nor devaluing, so the SOV use case is preserved.

Not at all like current fiat money system.

You can certainly have fractional reserve banking in a Bitcoin financial system, just as we did under the gold standard. Banks would give you an incentive to deposit BTC with them (could be interest rates or lower transactions fees) and then lend out some percent of those deposits. Voila, FRB and money supply growth.

The bank would have no capital to lend at fractional reserve. It could not lend out 90% deposit value without getting run on, because there is no deposit insurance. There is no M1 money supply growth coming from the central bank. You would be buying a bond but also necessarily acknowledging the possibility of default, unlike today in the funny money world of perpetual debt money.

Fractional reserve banking predates deposit insurance by hundreds of years. All of what you say was also true about gold, which was of relatively static supply.

Well bitcoin fluctuates like crazy for one. It shouldn't cost me more than a dollar to make a transaction. Some exchanges charge upwards of $4/transaction now.

The vision was, you can have transactions of any value with very minimal fees. like less than 10 cents. People would have micro transactions for all sorts of things.

But what it has now become is a place to store your money. 10X growth in one year. And you can't trust your exchange to still be there when everyone tries to convert that 10X back to cash if the price were to take a dip.

I would love to see online marketplaces taking a flat fee in cents because they can bypass dumb credit card percentage based fees and can still be profitable because they are doing it at scale processing thousands of transactions a second on a digital currency

Bank 2.0 could also run its ledger of debts and credits on a public/easily auditable blockchain, and make a lot of guarantees that Bank 1.0 can't.

There will always be derivatives of underlying assets. Preventing that is not the “entire point” of bitcoin. Replacing the underlying asset, currently fiat currency, is the point.

Proof of stake is still bound to CAP theorem though. Even CASPER can not guarantee full consistency, availability, and partition tolerance.

There is also FLP impossibility, which reduces to the halting problem in an asynchronous distributed system setting.

By this logic, Bitcoin can never “scale”.

100x the volume of hello world or a basic CRUD app does not make it more impressive than what BTC has achieved. (Disclaimer I hold no BTC).

POS is neither secure nor an obvious solution.

Just 100x?

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.

PoS will never be adopted by Bitcoin. The mining pools that have invested in PoW won't allow it.

Every attempt to date to improve transaction rates on BTC have been hampered by a small group of developers who have a vested interest in it not scaling for reasons explained here: https://www.reddit.com/r/BitcoinMarkets/comments/6rxw7k/info...

Bitcoin won't get any of the improvements you hope it will because there is too much money vested in keeping it exactly how it is today.

Despite Bitcoin primarily using miner signaling for consensus changes so far, miners don’t actually matter as much as users: https://en.bitcoin.it/wiki/Economic_majority

If the vast majority of users and services decided to switch to PoS tomorrow there’s absolutely nothing miners could do about it.

That said, I’m not saying it would be easy to get consensus for such a major change. Futures markets might be useful for determining how much support for a change there is.

SegWit was activated. Lightning is working. Mimble Wimble and Schnorr signatures are in development.

I understand big blockers are upset they didn’t get their way. They need to understand the reason big blocks don’t have consensus is that they increase propagation delays and propagation delays leads to centralization. Core devs are pursuing many alternative and intelligent scaling avenues.

Also, miners don’t determine consensus rules. If PoS works, another UASF initiative will arise and everyone running a node can decide the new PoW scheme. The fact that you don’t understand this leads me to believe you don’t have a good understanding of the technology yet.

You should realize block propagation is largely a solved problem using xthin, compact block and graphene. We could scale to 1GB and propagation would not be an issue.

> Core devs are pursuing many alternative and intelligent scaling avenues.

Their strategy of stalling for the last couple of years is the least intelligent approach they could have taken.

> Core devs are pursuing many alternative and intelligent scaling avenues.

Yes they do, that's the point of Bitcoin.

> If PoS works, another UASF initiative will arise and everyone running a node can decide the new PoW scheme

You mean if PoS works they can fork and use their altcoin.

> The fact that you don’t understand this leads me to believe you don’t have a good understanding of the technology yet.

The fact that you don't understand this leads me to believe you're either a Core shill or you have been seduced by their pretty words. The whitepaper makes all this clear.

You continue to ignore the actual research.


The above directly demonstrates how block size results in significant propagation delay.

I ask you again: can you show me the research which demonstrates increasing blocksize won’t result in significant propagation delay?

Bitcoin Unlimited is successfully testing 1GB blocks: https://news.bitcoin.com/bitcoin-unlimited-reveals-gigablock...

As I already wrote what matters is propagation between miners which is already very fast, even according your own link, which examins propagation throughout the network as a whole not between miners specifically.

This news article doesn’t tell me anything other than if you have a few state of the art computers geographically close all connected to a state of the art internet connection they will maybe be capable of mining 1gb blocks.

If that’s your idea of research, best of luck to bcash.

> bcash


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

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.

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

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.

Yea, no. Lightning network still depends on the bitcoin network. All it means is any two parties can transact off chain and settle up later. Not sure what the problem is.

That the Bitcoin network is being crippled in favor of these solutions.

You’re upset the core devs didn’t let Bitcoin become a centralized coin? If you refuse to acknowledge the benefit of SegWit or the other scaling solutions then I can’t help you.

Big blockers have their Jihan and Roger coin now. Stop trying to steal the bitcoin brand. If there was consensus for big blocks then Bitcoin would have activated. Jihan and Roger couldn’t convince the educated people that their proposals would work. Now they’re throwing a tantrum.

Sigh. Increasing the block size to 2MB nor 8MB for that matter will not make a centralized coin.

Segwit (besides being a crappy implementation) is by far not enough scaling.

That you blame Jihan and Roger is typical stupid propaganda which doesn't belong here.

According to actual research here: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...

Each additional kb results in an additional 80ms of delay until the majority learns about a block. Increasing to 8mb means you’re adding a 9min delay in propagation. That is pretty much guaranteed centralization.

Perhaps you have some research you can point me to that demonstrates otherwise?

Which does not take into account xthin/compact blocks which cuts down propagation time a lot. In the future graphene will further reduce the time necessary.

How you can conclude a 9min propagation delay for 8MB blocks is beyond me as miners are basically directly connected to each other. This is the only thing that matters decentralization wise.

Bitcoin Unlimited are successfully testing 1GB blocks: https://news.bitcoin.com/bitcoin-unlimited-reveals-gigablock...

Your link is a news article and not actual research. The details of their specific test are barely provided. Please provide actual research as I have provided you.

This overcautious, "let's test everything for 10 years before trying it" approach is exactly what Bitcoin doesn't need when it has 0.001% of world transaction throughput.

Bitcoin is the conservative approach to any change that decreases the keystone of decentralization that allows it to survive. The market is deciding what it values.

The market is reacting to the fact that Bitcoin is in the public consciousness, and that is a result of years of advocacy done for Bitcoin, when its advocates (e.g. Roger Ver, Coinbase, PayPal, and all of the other signatories of the SegWit2x agreement) still believed that it would scale with large blocks and thousands of transactions on-chain per second.

Is there any data available on how long BCH blocks take to propagate? It's testing big blocks out in the real world so we can see how much delay that introduces and whether that leads to a significant increase in centralisation.

The BCH blocks are all very small. Go look at their blockchain stats. Most blocks are 10kb in size. The network is barely used. Once they start actually mining big blocks we’ll get some real data. I think it’ll be very interesting to see, tbh.

Ah that's a shame it would have been really interesting to see how that worked in reality.

I wonder if it could be measured the _other_ way around - i.e. are the sustained tiny blocks on BCH _increasing_ decentralisation compared to BTC right now? I can't find any good information on block propagation time though :(

I am not sure why it matters what the original purpose was. It seems that current consensus of bitcoin is to be a competitor to gold for store of value. there may be other cryptocurrencies that act more like currencies

> It seems that current consensus of bitcoin is to be a competitor to gold for store of value.

Only made by the incompetent/corrupt developers. Regular users just don't want to pay outrageous fees.

what outrageous fees? you can send a billion dollars for 10 bucks.

I'd be surprised if you weren't aware that the fee isn't proportional to the amount being transacted. A $10 fee on a $10 transaction is outrageous.

right, but you can set the fee to 20 cents, if you are willing to wait for a confirm

This you may not be aware of, but there have been periods where the fee has remained in excess of over $1 for over 72 hours. A 20 cent fee will not cover you there.

Looking at my transaction history, of my last 10 transactions, all had fees in excess of $1, one as high as $14.

I'm not losing any sleep over it, but I'm also not going to call the fees reasonable.

I agree, bitcoin is not good for micropayments. But that's not the only use case that matters.

It depends on your definition of "micro payments" ... With a fixed number of bitcoin ever in existence for it to ever become a real world currency two things have to happen A) it's value inflate to a value that is an order of magnitude of all the value of the world .... B) be cheap enough, and fast enough that you can buy gum at the corner store

Without micro payments it's stuck in a niche paying ransoms and doing drug deals

it's one of the only usecase that matters if you're talking about using it as a general-use currency...

Yes, but my original point is biggest holders of btc are talking about it as a digital replacement for gold, not as a general use currency

> If proof of stake proves itself to actually work, Bitcoin will adopt it.

I wouldn't hold my breath for that. Bitcoin still is having a holy war about increasing the blocksize.

One side effect of this whole deal is it shows that it is incredibly hard, if not possible, to change a decentralized system. By its very design, it will be all but impossible to make any breaking changes to bitcoin at this point.

> Lightning network further reduces the number of onchain transactions necessary.

Besides being complete vaporware, I do love how the solution to Bitcoin's scaling problems is to not use it...

Lightning isn’t vaporware. Follow the project on github, they are very active. Better yet, watch the first lightning transaction happen on mainnet which occurred just last week: https://youtu.be/a73Gz3Tvx3k

With regards to blocksize, the only reason it’s not widely embraced is because it’s known to directly impact propagation delay. One side couldn’t care less about centralization, the other side cares dearly. SegWit was activated, which compresses transaction size and doubles transactions per second without impacting propagation delay. Mimble Wimble and Schnorr signatures are coming soon, which are also soft forks and compress transaction size even further. There’s plenty of change happening that are all very intelligent scaling solutions. Big blocks are not intelligent nor difficult to implement.

It's not only vaporware, it's uneconomical. That demo doesn't withdraw Bitcoin - it locks it up. Two transactions for every channel. Lightning Network is just another bank, a third party with fees.

Strange definition of vaporware you have, considering I just showed you lightning network operating across three different implementations of the protocol on the main bitcoin network.

>Lightning Network is just another bank, a third party with fees.

source? afaik it's open source and it charges no fees.

The lightning network is not a decentralized solution. It gives more power/trust to a few large exchanges.

This is by design. If you break bitcoin, such that it’s only usable by large financial institutions, you completely remove the decentralized nature that made it attractive in the first place.

Congratulations guys, you made the banks SWIFT 2.0. I’m sure they appreciate it very much.

How is allowing two parties to transact off chain, and settle up later on chain, not a decentralized solution?

Because of the cost involved in setting up a channel. It's still not suitable for paying for a coffee or restaurant for example... Unless the cafe/restaurant happens to have an existing channel with an exchange that you yourself happen to also have a channel with; then you pay through that exchange... You can see how in this hypothetical word, it would be better to have fewer exchanges... More centralization.

The lightning network is actually a textbook example of a decentralized network. But I agree, how it will work out in practice is unclear and it could lead to centralization. I see it as a trade off between cost and convenience on one side and freedom on the other.

Complete vaporware? Uhm, no... https://www.coindesk.com/lightning-last-test-shows-bitcoin-s...

There have even been successful atomic Bitcoin<->Litecoin cross-chain transactions with Lightning last month.

> I wouldn't hold my breath for that. Bitcoin still is having a holy war about increasing the blocksize.

It doesn't matter - it can fork. And if the fork offers something compelling, it will get used. Even Bitcoin Cash, which is not (very) compelling, is now tradable more than most altcoins.

20 entire transactions per second? Amazing! Who has ever heard of software that could do 20 things in a second?

What it does is not just arbitration things, but establish global consensus and an unalterable log of that consensus.

If you've tried linking distributed Oracle databases between just a few different sites, you'd understand this has tons of failure cases and is, in fact, not a solved problem, even in the centralized world.

(Bigtable probably gets the closest these days, if you want proprietary and not globally auditable.)

> What it does is not just arbitration things, but establish global consensus and an unalterable log of that consensus.

That is nice. But can I, and everybody else in the USA successfully use Bitcoin on Black Friday? According to the National Retail Foundation, in 2016 over 101 million people went out on black friday to buy something. If Bitcoin could somehow 10x its transaction rate to even 40 transactions per second (which it can't and probably never will) it would take almost 30 days to process every order. At its current rate of 4tps, you are looking at about 292 days--during which, according to Wolfram Alpha, Venus will have made 1.3 trips around the sun.

So again, yeah, great job. Bitcoin solved some technical problem. Go team! But who gives a crap if some technical problem doesn't solve any real problem? Isn't that what we engineers exist to do? Solve real-world problems?

Lightning Network protocol has reached v1.0 and they have demonstrated transacting real bitcoins instantaneously on youtube.

That's a problem that hasn't been solved (yet).

That shouldn't diminish all the other things that BTC does successfully.

When the correct answer is “bitcoin“, what is the question? I genuinely, genuinely, don’t see any task for which it is the best solution — not even for anonymous online payments or secret ways to store wealth.

"what is the most well tested and carefully developed payment system today that allows me to have complete control of my funds without having to trust any third party?"

I see your suggestion and raise you “precious metals”

a) Precious metals are not portable enough. With Bitcoin someone can transfer any amount of value within a few minutes to the other side of the globe (and no-one can stop you from doing so).

b) Precious metals are too reliant on physical security. Someone can break into your house much easier than into i.e. your hardware wallet.

c) Besides these, precious metals are not a payment system, much less a programmable one. You can't code for example a logic that requires multiple untrusted parties to sign a transaction for it to complete.

Do wire transfers solve no real problems? I do essentially all of my large transactions usinng bitcoin.

I don’t think I ever claimed 20 t/s was sufficient. Just pointing out the throughput has increased by an order of magnitude and there is a tremendous amount of ongoing innovation in this space.

Marvellous, one whole order of magnitude! If you manage another factor of 5000 and Bitcoin will reach what Visa and Mastercard (and, separately, another cryptocurrency) managed several years ago.

Does every conversation about bitcoin have to devolve into snark and disrespect? It's not fun. It doesn't do any good for anyone.

Good question. I’m frustrated by the unwillingness of bitcoin (specifically bitcoin, not blickchain or cryptocurrencies in general) fans to recognise the flaws. It’s like… huh, like politics. Or religion, which is kinda also politics.

This is low level trolling. Visa and Mastercard are not decentralized. Centralization is an easy way to scale. They are not apples and oranges.

Also, Bitcoin settles transactions in 30 days, merchants get their funds in 30 days if they are lucky to not have the charge back.

Apples and oranges.

> Centralization is an easy way to scale

That is one reason why I prefer centralised to decentralised. I have yet to see a justification for the cost of decentralisation. This cost is an important thing, not a trivial thing.

Other reasons include but are not limited to the governance mechanism of things like bitcoin not being demonstrably better than the governance systems of any other currency, but that’s a much longer topic of discussion.

Which cryptocurrency supports 60k t/s?

BitShares, apparently. Press release June 10, 2015, claimed 100,000 t/s.

Never heard of it. I suspect their claim is either bogus or their coin is a database.

There are far too many cryptocurrencies to keep track of, bit even if the claim is false, Bitcoin is still absurdly slow compared to existing normal systems.

What existing “normal” systems?

Visa and Mastercard, like I wrote a few layers above.

My bad, I thought we were comparing global decentralized and trustless systems.

12 or 20 transactions per second? Let me regale you with a story from my youth... Once upon a time, it was 1985 and I worked at a company that developed a “Transaction Processor”. A multiprocessor CP/M system, with a “4th Generation” integrated app development language, a data store with an mathematician-optimized b-tree indexing system, paired with the fastest 120MB drives we could find through a series of phone calls and sample evaluations. It would be considered a proto-server by today’s standards. We were so proud at Comdex, bragging about 60 t/s to anyone passing by.

We had a gentleman visit our booth from one of the big 4 airlines. He asked us what we were going to do to get to 1800 t/s, because that was the load requirement for the reservation system he and his division were tasked with creating, deploying and maintaining.

I’m fairly certain a currency system needs to scale beyond what a single airline needs in terms of transactions per second.

I'll believe any of that will work when people don't cite Satoshi's holy insight as a reason why the block size shouldn't increase.

It shouldn’t increase because simulations of increasing blocksize have demonstrated centralization. If we didn’t care about decentralization we’d just use a database.

Could you point me to some sources that discuss simulation of the blockchain network? I would be interested to learn more.

Sure, here you go: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...

Tl,dr: each additional kB in blocksize adds approximately 80ms of delay until the majority learns about a block.


Why what? Why does increasing block size increase propagation delay? Here’s the research paper on it: http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23...

Tl,dr: each additional kB after 1mb adds an additional 80ms in propagation delay. It’s not just bandwidth that’s the problem. Nodes need to validate the block, then communicate that block to other nodes who also need to validate. Big blockers are drinking Roger Ver koolaid. The man doesn’t even know how to program, yet has convinced an army of redditors he knows best.

> Why what?

why does increasing propagation delay lead to centralization?

Because miners on the other side of the world don’t hear about the latest block until much later than other miners? Miners who hear about it first get a head start mining the next block. If the delay is significant, you get a single mining cartel.

Mining a block is suppose to be a lottery, not a race.

Thanks for the clarification here. I've read a lot of your comments today, and this is the first time I've understood your point.

I've learned a lot, btw... so thanks for that too.

So, you pretty much admitted that Bitcoin is unfit and outside of the fact that many people are vested in it, a new project would be a better idea unless we're emotionally and financially tied to the prehistoric thing.

Is there a good place to start reading about all of these scaling proposals, and maybe keep up to date on new ones as they emerge? Failing that, got any good links to papers/blogposts about the ones you mentioned?

Couldn’t have said better.

The size of blocks is not core to the algorithm of Bitcoin though. What would you say to the person trying to send $30 only to have $20 of it eaten up in fees? Come back later when you can afford to use Bitcoin?

Use a different cryptocurrency.

Seriously. And I'm not trying to be cheeky. If Bitcoin ends up only being a settlement layer, it'll still be a colossal success just being a decentralized, supply-limited, uncensorable, world-accessible payment system and store of value.

If someone else solves the scaling debacle better, I'll be the first to recommend that normal people switch to it. But it's not easy, and the world is watching Bitcoin. Governments are starting to accept its existence, big financial institutions are starting (just this month) to allow options trading, etc. That stuff is far more important even for other cryptocurrencies than low fees.

After six months of no issues with Bitcoin options trading, it's only a matter of time before other cryptocurrencies get the same treatment. That's why we need Bitcoin to be rock steady and predictable, while others can try to solve these tough problems.

This sounds a hell lot like changing the goal posts.

No, plenty of us have been saying this for a long time. Here is a HN post from 5 years ago where I say:

“even if it's only ever used for politically sensitive transactions, and it never takes off as a consumer payment service, it will be a very big economy” https://news.ycombinator.com/item?id=5526684#5526972

The goalposts for Bitcoin have always just been “can it sustain its market cap?”

Also it's not like everyone you see on the Internet is the same person.

Anyone who was hoping for it to replace credit cards didn't understand the system. Lots of other folks have known the limitations of Bitcoin for years and what we're seeing today was totally predictable.

To be fair, becoming a quarter trillion dollar store of 'digital gold' is a hell of a pivot.

Does that matter? If you're looking to develop a drug to treat hypertension but end up with Viagra by accident instead, do you throw it away because that wasn't the original goal?

It certainly matters if you've still got a lot of people running around telling anyone that will listen that the drug is a sure-fire cure for hypertension.

There's a lot of people in the world running around telling people all kinds of things.

If the production of Viagra at scale winds up causing global health problems, then yes, you throw it away.

This may be straining the metaphor a bit, but I think you underestimate how much individuals want a magic sex pill.

Tell that to the FDA...

Oh it absolutely is. I'll acknowledge that. If Bitcoin is amazing at 7/12 of the things it set out to do, and sticking to those seven will pave the way for the other five to be done by other cryptocurrencies, that's fair to me.

Yeah, well.... It would seem "transactions" should be among the things that a currency does well.

Not necessarily. Bags of grain or N cows did not do transactions well. Yet they were successful as currencies for millennia.

times have changed since...

I'm pretty sure bags of grain are still a significant unit of value exchange[1].

[1] yep: http://www.nasdaq.com/markets/wheat.aspx

They have, and we have bitcoins instead of bags of grain.

"Use a different cryptocurrency."

I started using Bitcoin Cash instead and I'm loving it. All the good parts about Bitcoin Core w/o the brain dead approach to scaling.

Yep. I expect the fee market alone will drive normal people toward Bitcoin Cash.

Dogecoin has much cheaper fees than Bcash and its block confirmation target is around 1 minute -- roughly an order of magnitude cheaper and faster than Bcash.

A note to readers: "Bcash" is a derogary term used by Core supporters to undermine and discredit Bitcoin Cash. Always be mindful when someone uses it.

“Bitcoin cash” is a name chosen to confuse newcomers and attempt to steal the bitcoin brand. The CEO of bcash refers to Bitcoin as “SegwitCoin” and their official /r/btc subreddit regularly claims to be the real bitcoin.

Bcash is an appropriate name for the altcoin to eliminate confusion.

This is the kind of propaganda Core is pushing.

Note that there is no CEO and the very same people who refer to Bitcoin Cash as Bcash refer to Ethereum Classic, Bitcoin Gold and others by their proper name...

Of course there’s a CEO. Here’s an official statement from him: https://falkvinge.net/wp-content/uploads/2017/11/letter-from...

Doge has unlimited inflation it is nothing like Bitcoin Cash.

That doesn't matter if you only use it for transactions. Step in, transact, step out.

Who is going to pay you for your Dogecoin if no one wants to hold them?

This is indeed the folly of only valuating a coin for its transactional properties.

Who's going to work for USD if no one wants to hold them?

No one, but that's an irrelevant hypothetical because people do want to hold them and that's unlikely to change. Even if people in the US did want to get paid in a different currency, they would still need some USD to pay their tax bill.

United States persons with tax or debt obligations, obviously.

Bcash is already over-inflated relative to Bitcoin due to its mining algorithm. When the block reward diminishes enough, and fees don't supplant it, Bcash will hard fork to infinite inflation.

It's 0.001% over-inflated? So it reaches the 2020 halving earlier, and wins then too.

In the ~4 months since its creation, 115,975 Bcash tokens were mined ahead of schedule.

It is about 60 days ahead at most and it doesn't matter because the hard cap of 21 million coins is till the same. This has gotta be the dumbest argument I've ever heard.

The hard cap is the same until it isn't -- when Bcash has to hard fork to infinite inflation in order to incentivize mining because fees won't supplant the mining reward.

Not gonna happen.

Explain to me what will incentivize mining on Bcash when the fees are too low compared to Bitcoin? The mining subsidy, by design, is eventually supplanted by transaction fees.

For those interested in this "inflation", there is a good chart here:


As it says, "Block height. BCH is currently ahead by 9272 blocks." with the block height of both being about 500k.

In fact, with the rate that BTC gains hashing power, and its comparatively less responsive difficulty adjustment algorithm, it is expected to overtake BCH's block height in the next couple of years.

If i gave you a search algorithm with a big db then asked if it could done quicker would you prefer to spin up more cpu's or try to improve the algorithm?

I would spin up more CPUs. Because changing code in the near term is expensive and hard. Spinning up more CPUs is cheap and easy and ensures my company remains successful while I optimize the algorithm.

Using your analogy Bitcoin Core is saying they are going to shut down Bitcoin service to all new users until they implement a new algorithm that hasn't been proven yet and is still years away from being ready.

^ Exactly. The answer should almost always be spin up more cpu's.

Depends on the search algorithm; if it can be parallelized, then modify the algorithm to take advantages of multiple CPUs. If not, then start throwing more threads at it.

In Bitcoin’s case, I don’t think we have a lack of CPUs though.

the velocity of money increases price, look at how the price of litecoin is rising when bitcoin mempool is congested, if Coinbase didnt play politics, Bitcoin Cash will be pumping right now too, decentralized exchanges are coming though in the coming years it will change the whole market dynamic

Exactly. But the critical fight is public acceptance and a lack of government interference. To win that, all Bitcoin needs to do is keep doing what it's doing.

> If Bitcoin ends up only being a settlement layer, it'll still be a colossal success just being a decentralized, supply-limited, uncensorable, world-accessible payment system and store of value.

So, what happens when all the bitcoin are generated and mining is complete?

Mining is still very profitable due to transaction fees.

I'd say stop storing your spending money as btc, it's an asset not cash. Can you liquidate your 30$ peice of gold in < 4 hours for market value? Probably not.

"Bitcoin: A Peer-to-Peer Electronic Cash System"

Peer to peer cash.

Not "Gold", not "asset", but "Peer-to-Peer Electronic Cash".

The IRS classifies and taxes it as an asset because functionally it is an asset. The design is speculated to be based off of hashcash and maybe it was suppose to be used as cash and in a way it is still useful as "electronic cash" for online orders since wait times are less relevant.


The IRS is wrong.

How so?

And obviously it doesn't matter if the law is wrong, it's still the law. But in this instance, why do you believe it to be wrong?

The IRS classifies and taxes it as an asset because functionally it is an asset. Satoshi was doing a bit of marketing with the title of his paper.

Bitcoin cash is still that.

Bitcoin Cash does indeed have very low fees... and about a tenth the transaction volume of Bitcoin proper, with few places using it, mainly just a handful of people involved in creating it.

It's certainly not as ridiculous an option as it was back before the difficulty adjustment fix when its supporters were promoting it as the fast option despite it usually taking days for transactions to confirm (supporters responding that block times were as low as a minute sometimes, and they were right... except it was a entirely bimodal distribution, with most of the time spent in the "hours per block" part).

However, the increased transaction capacity people are promoting is still about 100x its current transaction rate, and it's entirely unclear how well it'd handle scaling up by that much in practice. Especially since I'm pretty sure it lacks some of the scaling work that the original Bitcoin has. Also, the rampant dishonesty and all the attempts by sites and services owned by a guy with a major investment in it to trick people into thinking it is Bitcoin don't inspire confidence.

Bitcoin Cash has been around for 3 months. 1 tenth the volume in that time is extremely impressive given than popular services like Coinbase and Bitpay don't even support it yet.

Exactly. Price aside, the growth is insane. Things are being built. Merchants are coming back online. Within a few months the sentiment will start to change for BCH.

For those who don't know, Bitcoin forked into 1 "new" Bitcoin (kept the name, changed the model from currency to speculative asset), and 2 Bitcoin Cash, that continued development along the original crypto-currency design.


Indeed, what part of the name "cryptocurrency" would lead someone to believe it to be like cash?

Currency A currency in the most specific use of the word refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially in a nation. Under this definition, British pounds, U.S. dollars, and European euros are examples of currency.


Yes, a "currency" should be treated as an asset, not cash.

The pro-BTC arguments are becoming absolutely inane

To me it sounds like an admission that Bitcoin doesn't work too well as a currency.

It's classic goalpost-moving.

AKA pivoting.

Currency A currency in the most specific use of the word refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially in a nation. Under this definition, British pounds, U.S. dollars, and European euros are examples of currency.


Stores-of-value aren't "actually used" nor "medium of exchange". Bitcoin Cash fixes Bitcoin, restoring its utility and will cannibalize Bitcoin's market share.

I can take my maple leave or krugerrand and change that in any crash for gold/western union/money exchange shed for almost market rate in minutes. There are plenty of them. Even I take a cap that is its faster and cheaper than bitcoin.

I can take my seed words inside my brain through airport security.

Let's not get started on verification of the asset!

tbh, the smaller amount transacted, the less decentralization is necessary IMO. This is why people will tell you to use other, more centralized, less secure cryptos.


It literally stopped accepting transactions.

After 72 hours your transaction is dropped.

Without further notice. Until then you must guess if it was processed or not.

Well, that's not accurate either. Miners sort transactions by fee and fill up a 1MB block.

Use https://estimatefee.com/. Not paying enough to win the fee auction is not the same as no transactions getting through at all. You seem a bit misinformed to be using the "Dude" prologue.

Incorrect. The fact is the network lacked the capacity to handle the requested number of transactions, and in turn auctioned off the tickets to the lifeboat to whoever paid the most.

You’re arguing “nobody died in the titanic that didn’t pay enough”, when the problem is clearly there aren’t enough lifeboats.

why are you equating space on a global ledger with space on a lifeboat?

It's called an analogy.

The market doesn't function when people can't transact freely. Price signals get distorted. When the blockchain is frozen, we don't know the actual supply and demand of Bitcoin.

Bitcoin Cash fixes Bitcoin by providing a capacity market, where transactions can cost whatever nodes / miners can compete at.

Dropping low-fee unconfirmed transactions is not the same as not accepting transactions.

What is low fee to you? Because there are people paying several bucks to do a transaction right now that are being dropped.

Sorry—-I meant low relative to the other pending transactions. They’re not low at all relative to other payment methods.

This is certifiable.

I mean from an end user perspective maybe but it's always been an auction where you can buy yourself priority. Nothing has really changed except now there are more people bidding higher.

The thing that has changed is that the supply has been artificially limited where as before there was ample supply.

TL;DR you perform a new transaction that depends on the prior, unconfirmed transaction. To do this you have to pay double fees for the new transaction to make it attractive to miners to confirm both.

not really. by default, bitcoin core rebroadcasts your uncofirmed transactions periodically (not sure about the other clients). so as long as your client is open once every 72 hours, it won't disappear from the mempool. whether it gets confirmed is another story.

If you give a recommended fee it can go as fast as ever.

This is such a silly comment. This is like saying that you have a Bus with 20 seats and 40 people that want to ride. Your advice isn't get a bigger bus it is get to the bus stop earlier. It doesn't matter how early everyone gets there in the end there are only 20 seats.

You are right although I don't fully understand your analogy but bitcoin never guaranteed all transactions will go through because it couldn't because noone could make a system with infinite capacity.

20$ transaction fee is an incentive for the users to restrain themselves to smaller number of larger transfers.

Is the limit too strict? Probably. Miners still get a lot from mining rewards and don't need to be incentivised with fees yet, but there must be some limit that will force people pay for transactions because when mining rewards end there will be nothing to keep miners mining.

Visa manages to make all of its transactions go through. Mastercard doesn't seem to run into scaling problems. Paypal can transfer money at pretty much any time. Why is bitcoin exempt as a transaction layer?

I don't know how many times I couldn't pay with my Visa because system is down or slow today or transaction gets rejected for whatever reason. I believe there's a subset of whole Visa thing that always works, does what it supposed to do and processes everything it supposed to (while cashing in few percents on each purchase) but it is far from perfect from the point of view of the user.

The real difference is that visa has percentage fees on volume and bitcoin has fees dependent on number of transactions want to do at the moment. It's sensible since to avoid trusting single party bitcoin nodes all keep all thansactions that ever happened. Incentivising people to limit their number is a good thing for bitcoin network.

But thanks to that bitcoin won't ever be Visa 2.0

For me bitcoin for payments should work similarily to how prepaid phones work. You land in another country, you buy a card from local provider, you charge it with bitcoins and you usr it to shop.

I think bitpay is already doing something like that.

> 20$ transaction fee is an incentive for the users to restrain themselves to smaller number of larger transfers.

In my country (the Philippines) everyone is buying from high school kids to office workers.

The current minimum transaction fee is around $40. To exchange your bitcoin to Philippine Peso (PHP), the fixed conversion fee is 5%. If those don't seem a lot, get this: 83% of Filipinos earn below $400 a month. Most of whom I know are HODLing their bitcoin because it's too expensive to move their money. They would rather wait for their investment to reap huge gains before they cash out.

Bitcoin here is branded as a "get rich quick" investment scheme, and that's understandable, bitcoin doesn't have a valuable use case here. You can't buy anything here with bitcoin.

5% is a ripoff. In Poland I can trade bitcoin to local currency at pretty much no cost except bitcoin neteork fee. Maybe additional 0.10%-0.30% for transaction at the exchange and 0.50$ for bank transfer.

OP saying that it was designed that way. We can disagree about whether or not the intended design is practical or not, but it's "technically" successful because it's operating exactly as it was designed.

True that, at times 10$

Citation needed.

Bitcoin could become a payment system for the rich but it will never be an all-purpose decentralized payment system.

There are hard physical transaction limits which cannot be surpassed without seriously compromising decentralization... To the point that what would be left of the network would essentially no longer be 'Bitcoin'. Any attempt to abstract away from the blockchain through some kind of batching or delayed settlement would completely undermine the trustless nature of Bitcoin... What would be left would be no better than the current banking system.

The whole point of a cryptocurrency is that you can have your own wallet from which you can spend without going through any intermediaries... All potential Bitcoin scalability solutions that I've heard of rely on exchanges being given more power/trust in order to abstract away from the Blockchain.

Not sure what is going on in this thread, but every comment defending lightning or current bitcoin implementation or bitcoin-core is being massively downvoted... And they are substantive or at least informative comments.

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.

> it'll happen because Bitcoin is not the technically best solution in this incredibly exciting field

Not only that, but it's shown that it doesn't have the ability to make the changes necessary to innovate and stay current.

In fairness (I'm personally not a Bitcoin supporter) from the outside, it seemed more like the problem is no one can agree on who should be pushing changes and innovation: Core Dev or the coalition of miners?

> In fairness (I'm personally not a Bitcoin supporter) from the outside, it seemed more like the problem is no one can agree on who should be pushing changes and innovation: Core Dev or the coalition of miners?

If you step back and look at any kind of "libertarian" driven project this becomes a problem. When everybody who makes something inherently distrusts authority or having anybody "in charge", you can never really build anything big. I'd say bitcoin provides good evidence that to make any big change in a system the buck always has to stop with some individual.

With nobody in charge, you'll just drift around at the same local maximum--sometimes going up a bit, sometimes going down a bit, but never moving to an even larger but different source of value.

I dunno... just a thought....

Your thoughts are fine, don't undermine yourself by saying "I dunno... just a thought" like that.

It has evolved to be a store of value and it's doing an amazing job at that. Thinking from the perspective of the developers (many of whom have very large amounts of BTC) a slow and deliberate rate of changes is a very good thing. Making a mistake here would mean hundreds of billions of dollars would be lost. I am all for other cryptos moving quickly and breaking things to test out new ideas. Who in their right mind would take the same mentality on Bitcoin?

Why is this praiseworthy in bitcoin and seen as delaying progress and selfishly holding onto gains in taxi companies?

Bitcoin is absolutely not a good store of value. A good store of value is a reliable store of value: one where you can place your assets and go back and get them at any later time.

As a deflationary currency, bitcoin would be a hypothetically good store of value if a bitcoin actually had any intrinsic or even just de facto value. But it clearly doesn’t: it’s only the conversion to and from USD (and others) that has given it any value at all as an investment vehicle to some. And _that_ value isn’t guaranteed preserved one bit.

Most asset classes look like that, though. Gold has some intrinsic value as a good conductor/reflector of heat. But it's not really so very much superior to aluminium or copper or whatever to make it worth what it is worth. It is expensive because it is scarce. That's it. Bitcoin is the same. (They are obviously very different in other ways, but you get the point.) Things don't need to have intrinsic value to be valuable. They simply need to be desired by the market.

I agree with you - I actually implicitly meant everything you said.

The crux of the matter lies with your last sentence: "They simply need to be desired by the market"

Ergo, the quality of an asset as a "store of value" (the point of contention I was addressing in my comment) is directly mapped to the desire. BTC's desire is insanely volatile, automatically making it a poor store of value.

My point is precisely that all assets used as currency are oftentimes intrinsically worthless. It's the demand - and the liquidity it provides converting to and fro said currency from other goods or currencies - that makes it a value storage vehicle. BTC, as a "value storage vehicle," is a very poor choice. Gold isn't.

Gold isn't even in the same realm of volatility as BC, though. You put money in Gold and you're pretty sure if the world burns it's still worth something. You put money in BC at breakfast and you may be a pauper by lunch.

What is being missed by your analysis is that the value in a blockchain comes more from the network than the tech. There are thousands upon thousands of blockchains of no value. You could fork bitcoin or some other chain right now and start it on your laptop. Doesn't mean anything - the network is the value.

So taking this into account, when the shackles of Bitcoin's simplicity and limitations become unbearable, the network will evolve through protocol upgrades or through a contentious fork where the hash power and development resources will move to. In either case your coins and value are retained.

If humanity decides to walk the path of the worser tech, you can build a metropolis from diamond and light elsewhere as much as you want- nobody is going to migrate. They are going to pay outrageous sums, to upgrade the path the group is already heading down, the will pay to bribe and cast aside tech that holds them back. Alternative standards, no matter how pure and clean from a technical point of perspective, will be ignored.

Linux vs Windows allover, in fintech infrastructure and protocolls.

Jep, that's why you just invest in bitcoin if you want to make money

> What is being missed by your analysis is that the value in a blockchain comes more from the network than the tech.

That is the reason why anyone can't just create a new coin and expect everyone else to value it, but that doesn't mean there can't be any viable competitors. And if a competitor with a sufficient advantage got popular enough, it could take the lead.

For example, the hack Bitcoin used to become popular was to be deflationary, which encourages speculation. That got the value up before it was cool, but it stays deflationary -- even gets more so -- once it's popular, and the consequent speculation causes high volatility. Once you're popular, being deflationary becomes a liability instead of an asset.

It's possible for a coin not to be deflationary and have the supply set by computing costs. If the value of the coin falls below the energy cost of creating them, people stop creating more of them and the value stabilizes there (so it doesn't keep going down). But as demand for the coin increases the value rises above the threshold and people start mining again (so it doesn't keep going up).

That stability would be a huge advantage. But it's not possible to convert Bitcoin to that because its deflationary nature is priced into its value. Making it non-deflationary would make it worthless to speculators, which would eliminate most of its current valuation.

So all it would take is for a non-deflationary coin to become popular enough for people to trust it not to disappear overnight and the people using it for transactions rather than speculation would prefer it over Bitcoin.

That wouldn't work because mining blocks also validates transactions.

Difficulty is adjusted approximately every two weeks, so the network would self adjust to a reduced mining rate.

Mining isn’t used to validate transactions. You can validate transactions without mining. It’s purpose is to secure the network. The network validates transactions using asynchronous cryptography and nodes only transmit valid transactions. Mining secures those transactions from being overwritten.

> That wouldn't work because mining blocks also validates transactions.

It's possible to validate transactions with proof of work and compensate the work with transaction fees rather than the creation of new coins.

> creation of new coins.

If your crypto-coin starts life with all the coins instantly sprung into existence, that means everybody gets to buy their coins from you--the founder. There is a name for this--it is a pre-mine scam. All you do is mine most of the coins yourself, then go pimp your coin so it gets some buyers, and sell them all off for a sweet profit.

It isn't that new coins can't be created, a coin may be worth e.g. $100 and it costs $101 in electricity to create another one so nobody does until the demand for coins increases.

But the amount of work required to validate a transaction need not be as much as it takes to create a coin, and people will continue to be willing to pay someone 5c to do 4c worth of computation to validate their transaction.

Yep, a non deflationary currency would be precisely one that has its coins created all the time, instead of in a predefined amount as bitcoins. (You can think of mining as "discovering" one of the predefined bitcoins instead of creating a new one). The problem is that for a currency to be slightly inflationary, as it should be, you need to tie it to an economy and make political decisions about it- and then you're back at square one.

With atomic swaps and other innovations in the space, the cost of switching networks is becoming smaller. It’s hard to say how all of this will pan out, but I’m guessing we’ll see a much more diverse space than what you’re picturing.

> 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.

My guess is that this is less of factor than you think. I don't think that HTML/CSS/JS is the best technical solution for creating websites, and yet that is what all browsers use and there are few signs that that is changing anytime soon.

> something else - or many other somethings - will be the successors that we actually use in the future.

Right now, the top 3 crypto-tokens are Ethereum-based, as are 89 of the Top 100:


Word-find "token" here to see what the word means in this context:


This is my thought as well, and I don't understand why it isn't more commonly stated. The sheer chances that the very first implementation of this technology turns out to not only be viable for long-term success, but is actually adopted as such, seems extraordinarily low.

There's what I call the "football" effect. The player jumps on the football after a fumble, and while he's the first to grab it, there's a handful of 250 pound guys about to jump on top of him.

Bitcoin is the first to the football, but over the long term I think it's going to get inevitably crushed.

There's also something called "first mover advantage", which kind of contradicts your "football effect". There have been a ton of altcoins created, none of which have crushed Bitcoin. Bitcoin is still holding on to the football quite handily.

Also, the first person to jump on the football does get possession of the ball for the team, so there's that.

I'm personally skeptical that incumbency is a significant advantage, particularly given that Bitcoin now is impractical to use directly for most transactions. If your transactions are being done off the blockchain and it's trivial to switch to denominating them in a non-Bitcoin currency, and there's no particularly strong reason for people to accept Bitcoin as payment over a different currency, what's the barrier to entry for a new crypto-currency?

The barrier to entry is low. The barrier to mass adoption is high. Bitcoin is winning that war handily compared to any other cryptocurrency. There are definitely flaws with Bitcoin that will need to be ironed out, but the world's most elegant cryptocurrency is useless if no one has heard of it or uses it. First mover and marketing often trumps technological advantage. A non-techie doesn't care about Ethereum or Monero, but they do care about Bitcoin when the news is talking about how valuable it is everyday. Bitcoin is changing the mindset of what money is to the masses, this can't be said for other cryptocurrencies.

Perhaps Bitcoin will fail at some point in the distant future, but for the time being it is absolutely the most influential cryptocurrency, this can easily be seen by all altcoins' value being pegged to their BTC conversion rate.

Their are a few examples where the first impomentaion adapts and wins. However, email needed to change over time and adapt, but Bitcoin is very resistant to change which is going to kill it.

I see this as the 1.0 era of blockchain. There may yet be an amazon or a google lurking amidst all of the pets.com ICOs out there. If I had to guess who would survive, I would say SAFE.

Somebody who feels compelled to sell their Bitcoins because the technology is not ready has probably not acquired any in the first place.

Whatever technology replaces Bitcoin is likely something you can buy with Bitcoin. That's why people rush to buy something which obviously isn't "ready" (but maybe "good enough"). It's speculative, but do not think that people who invested a lot in this didn't think this through at least as much as you have.

> do not think that people who invested a lot in this didn't think this through at least as much as you have.

Yeah, it's not like I can go on to /r/bitcoin and read multiple dedicated screeds along the lines of "I'm recommending my friends to invest savings in BTC for retirement". Whereupon someone replies "They should keep something in a Roth IRA for diversity", and the OP comments, "What's a Roth IRA?"

Yes, there are sophisticated investors.

But in a lot of cases, the only thoughts going through peoples heads is "Get Rich Quick". There's more discussion of "what color Lamborghini am I buying?" than anything else on those forums right now than anything else. Well, beside 'HODL! HODL! Even if the market corrects $10,000 tomorrow, HODL!'.

Is the argument that you think Reddit users are representative of Bitcoin investors?

Most of the time it feels like these discussions are stuck rehashing old arguments in circles, but this was truly innovative. Thank you for not being predictable.

As for the argument itself, I think you are correct not to make any investment decisions based on what you described.

With 520,000 subscribers, is your argument that Reddit is -not- a statistically notable segment of Bitcoin investors?

Just because someone is subscribed to a public forum doesn’t necessarily mean they’re holding or investing in bitcoin, just as easy to observe.

> Whatever technology replaces Bitcoin is likely something you can buy with Bitcoin.

Now THAT is the speculation to end all speculations.

Moving from bitcoin to another crypto currency is still chasing out, unless I misssed your point.

You do realize bitcoin is constantly evolving and can change its code right? If another crypto creates a better scaling tech, bitcoin can incorporate that idea.

Can, but won’t as has been proven repeatedly.

libsecp256k1, which was developed for Bitcoin, uncovered bugs in OpenSSL. It also increased signature validation speed by 5x.


Proven when? He said better tech,not bigger blocks.

SegWit, Mimble Wimble, Schnorr Signatures, Lightning Network, and Rootstock all prove you're talking out of your ass.

> 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?

If superior technology comes along, what will prevent Bitcoin from adopting this, and using its network effect to outmaneuver a competing blockchain?

A couple of months ago, the Bitcoin network adopted the SegWit protocol change, which could be considered a minor fix (no major improvements to scalability). If the Bitcoin network can agree to adopt a minor fix, why wouldn’t it be able to agree to adopt a major scalability improvement as well?

Adoption of Segwit (a minor change) was neither quick, easy or without controversy. It does not lend much faith in the Bitcoin community ability to deploy big changes in a timely manner.

The consensus rules of bitcoin are supposed to be incredibly difficult to change. That's a feature, not a bug.

Changing consensus rules is only easy if the network is centralized. That's not something I want to have in my money.

If new technology demonstrates it's value beyond doubt, upgrading the network will have vast consensus.

> 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?

I'd argue some of the cryptocash ideas thrown around in the 90s were vastly superior on the technical front. We've had the schematics for instantanous, high transaction volume, offline, double-spend resistant, completely untraceable and anonymous, digital cash for 25 years... with no blockchain or energy crazy energy consumption requirements.

Why didn't these technologies succeed? Because none of those properties have any business advantage over boring, simple, centralized credit-card processing and back then everything was sealed up in patents until it missed the boat.

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.

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.

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

One can argue that Dash is superior for payment. But because of network effects and bitcoin's battle tested security (and utility as store of value or settlement layer) even I as a big (but not fanatic) Dash fan hold more Bitcoin than Dash (BTC 55%, DASH: 21%, EOS:24%) If Dash becomes mainstream, then that 21% of mine will be enough for me. :)

bitcoin is already used in pseudo reserve de-facto currency to trade other currencies. perhaps it will stay that way - a way into crypto world.

If you have a bitcoin and cash out the amount you make us fixed/limited to the current value if a bitcoin. If you don't cash out the maximum you could possibly lose is 1 bitcoin but that amount you could make is largely unlimited. Your bitcoin could triple or 100x in value.

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