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Bitcoin.org removes “fast” and “low fees” from Bitcoin description page (github.com)
249 points by verroq on Jan 22, 2018 | hide | past | web | favorite | 245 comments

I am still struggling to understand the whole crypto currency thing. I just don't get it. Clearly, it has become a tool for speculation and quick money for most people. Everyone is trying to get on the crypto bandwagon but to speculate. What is the point ? I thought it was supposed to decentralize currency and make it easy to "transact" with low fees and less redtape. Also I could be really dumb but isn't centralized wallets/exchanges like coinbase defeating the entire purpose of crypto currency ? Weren't we supposed to manage it peer to peer so that anyone could get paid anytime without worrying about borders and boundaries ?

Here's the best possible view of crypto:

When the internet first got going, everything worked with protocols. Protocols are open, decentralized, interopable. Think email. Anyone can send an email as long as they follow the protocol.

Then people figured out that you can't make any money from protocols. Instead we got platforms: closed, centralized, and most importantly monetizable. Think facebook.

Cryptocurrencies are a way to combine open protocols with making money. Instead of building a cloud-storage business, you build a cloud-storage protocol and make money on the coin that is used within that protocol. ICOs are how you fund development of these protocols.

Now, in reality, a huge number of coins are borderline useless or outright scams, and the current valuations are absurd. But long-term I think it's a very valuable technology.

Instead of building a cloud-storage business, you build a cloud-storage protocol and make money on the coin

But this makes zero sense! What purpose does the coin serve here? Imagine coins had somehow gotten tied in with email protocols. The person who came up with the protocol somehow gets to magically siphon off money every time someone sends an email? Why? How?

Because a protocol with a finite number of coins has an inherent value to it, by virtue of the fact that other people are there and you can only use it if you have a token. Imagine I have a club, and it costs $5 to enter. You can always just create your own club for $2, but it's not a given that people will come. This is how a completely open-source protocol can monetize.

The same is true with Bitcoin or Ethereum. You can fork it and make your own, but the majority of the people want to use one of the original protocols, and you can only use the protocol if you pay with the proper protocol token (either BTC or ETH).

Because a protocol with a finite number of coins has an inherent value to it.

But not value that can be captured by the creator of the protocol. Let's go back to cloud storage. Sellers of storage sell 1GB-Month for 1 token (or whatever). Buyers of storage eventually run out of tokens because they've given them all to sellers. So they have to purchase the tokens back from sellers for dollars. How much will sellers charge? The cost of storage (plus whatever profit they can get away with).

At that point buyers of storage are paying exactly what they'd pay for storage if the token system didn't exist. It's just this goofy middle layer of scrip. There's no magical extra money that the protocol creator can siphon off.

Step back and look at the big picture. The only way for a protocol creator to make money is for either sellers of storage to charge less than they otherwise would or for buyers of storage to pay more. Why would either of those two groups ever want to do that?

If a distributed cloud storage protocol became as ubiquitous as e-mail, the difference would be that buyers could buy tokens from anyone and not concern themselves with who actually stores their data. Also, anyone with spare storage capacity could join the network to squeeze a small amount of value from it until they have something more productive to do with it.

That's also how proof-of-work systems should have worked with surplus compute cycles, except ... ASICs. I basically consider Bitcoin broken because of this.

As to how the protocol creator makes money, they can sell storage like everyone else, but creating a protocol doesn't require the same initial capital as starting a whole cloud storage company.

...uhh, or people could rent storage and get paid a token fee, thus generating revenue

Yes, sellers (or renters) of storage can make money. Sure.

I'm saying that the creator of the protocol won't.

The creator of the protocol makes money because they issue 20% of all tokens to themselves, and then wait until later to sell it (once the token is in high demand).

I don't see how that works either. People know that 20% is out there just waiting to move the market so that has to have an impact on spot prices which either means that buyers or sellers of storage (or both) are getting a bad deal. Again, why would they do this?

I think its rather like the owner gives the storage to people for some money and from thereon it's your storage. You can keep and use it or sell it to whatever value you (and probably the market) thinks it is worth for.

Even if there is a finite number of coins, at that point it's just speculation and economics of supply and demand. That still doesn't explain any "value" added attribute to it. Oil has a finite number of supply, that affects its pricing and supply and demand, but it also serves a purpose( which would explain its value. Someone coming up with an ICO to fund a project that has no benefit or value whatsoever other than to say here's a finite number of coins well that's clearly speculation and if anything pump and dump 101.

The value of the token comes from the value and purpose of the protocol the token is used for. For example, Etherium's value itself is backed by the ability to run "smart contracts" on the Etherium platform itself. Most of the classic (hash) coins are pretty much fiat currency, the value coming from the ability to speculate, trade, and spend, like with any real-world currency. Et cetera.

Except when the smart contract with 1/2 the ether in it, does exactly what it's programmed to do, then you hard fork and pretend it didn't happen.

Because? Value?

Sorry, I really lost a lot of faith after that one.

"Because a protocol with a finite number of coins has an inherent value to it"

No, it doesn't. Being scarce, by itself, is not valuable at all. Being useful is was gives something value. In fact, I'd argue a protocol that I have to have a coin for is much, much, much less useful, and therefore less valuable, than one that doesn't.

The person who came up with the protocol needn’t profit. In theory Satoshi hasn’t profited off Bitcoin. To our knowledge the coins they mined to bootstrap the chain haven’t been sold.

The only people who need to be magically paid are the ones executing the contract... miners, signers, etc.

In FoodCoin the cooks would get paid, the health inspectors would get paid, the poisoning investigators would get paid, the underwriters would get paid when those people do their jobs and lose their stakes when they don’t. The eaters would pay.

These people are paid for doing work in alignment with the contract incentives. A good cryptocontract makes it hard to get rewarded for work that goes against the planned incentive scheme. A bad one fails at this.

In order for this to work without a centralized payment gateway like PayPal, you need to issue tokens. Those tokens will have a value of TOTAL_TRANSACTED_PER_AVERAGE_HOLDING_PERIOD. Their price will depend on speculation about that value over time. Contracts finding more use will tend to have a bigger TOTAL_TRANSACTED_PER_AVERAGE_HOLDING_PERIOD.

>But this makes zero sense! What purpose does the coin serve here? Imagine coins had somehow gotten tied in with email protocols. The person who came up with the protocol somehow gets to magically siphon off money every time someone sends an email? Why? How?

They don't, why would they?

If the protocol is open, why do you need to use a certain coin to use it? Isn't that just the definition of another type of 'closed'?

Its not closed, since the data and code is out for anyone to use typically, you could even fork and create your own. What is different is the incentive to provide storage and compute for others. Over simplified, you lend your storage and compute (that's called mining) and get paid in crypto tokens in return.

Because mostly its all about the coin, there are no users, only speculators... ahhh but build it and they will come mentality rules here!

> Think email. Anyone can send an email as long as they follow the protocol.

Email is not centralized under a single authority, but I disagree that it's so decentralized that "anyone" can do it.

The openness worked so well in the short-term that spammers and scammers started using it, so all the major email providers started running serious spam filtering. As an individual, I can't realistically set up a mail server to send email to anyone, like I could in 1995, since Gmail will reject it.

SMTP is a pretty simple protocol but now I have to use major third-party services for both sending and receiving internet email.

In the case of email, that's fine, because there was never a centralized alternative. In the case of currency, what's the point? Isn't it just going to circle back around to (mostly) centralization again, and so what was the point?

> As an individual, I can't realistically set up a mail server to send email to anyone, like I could in 1995, since Gmail will reject it.

I'm an individual who runs his own mailserver and all emails are accepted by Gmail.

Sure, today a mailserver must be absolutely properly configured. Not just to play with Gmail, but with all other players as well. The HELO string, DNS settings and especially reverse DNS settings must be correct. Don't run it in a non-dynamic IP range. And for IPv6, better have correct SPF/whatever records.

This is initial effort, for sure, but absolutely doable for an idividual who plays with their own server/VM anyway. Pro tip: It is more fun if you share the infrastructure with friends.

And there are properly configured projects with ready-to-use VM images and good tutorials out there.

In some sense it is even easier than HTTPS, because for SMTP+TLS and IMAP+TLS a self-signed certificate is sufficient, you don't need Let's Encrypt certificates, let alone pay dubious CAs for certs if you are commercially active.

I am too individual running my own mail server and gmail don't reject my mails. I don't even have SPF or DKIM on my domains. I think most common mistake is making mail server out of cheap VPS. Don't do that. Your IP reputation depends your digital neighborhood. Blocks happen even /16 level, entire VPS provider networks are on special lists in some mailservice providers. Additionally, those IP-s are reused, so there is nice chance to get some hit-and-run spammer IP and that is lots of work do clean that up.

Maybe I'm dumb but I don't follow. If I invent a new messenger protocol, how does a cryptocurrency enable me to make money on that protocol better than any other method? Just because I make an ICO for my new protocol?

Seems like a bit of wand waving going on in your description there.

You can issue the ICO first, and then when the money pours in, disappear and you don't have to bother with that pesky "work" part.

> If I invent a new messenger protocol, how does a cryptocurrency enable me to make money on that protocol better than any other method?

This is my limited understanding:

1) You want to allow users to send and businesses to receive (micro-)payments within your messenger/protocol.

2) You want to allow users donate/vote/gift/award other users/groups/posts with their tokens within your messenger.

3) You want to allow users create custom (chat-)bots which could apply some scripted logic to send/receive tokens; etc.

Inventing a new distributed messenger/protocol with cryptocurrency, you essentially create (and own) a new platform with services operating on "virtual money". Rules of money (tokens) distribution in theory must be guaranteed by your protocol implementation (usually presented via whitepaper).

If potential future users like your idea (whitepaper), they may invest into your new shiny platform via ICO (with other cryptocurrencies) to get some of your initial (limited) tokens. They want to get them while they cost less than they potentially will cost later, if your platform becomes popular. It's assumed that in the case of an open distributed blockchain platform, amount and belonging of tokens won't be able to be painted by you, but guaranteed by algorithms and public network.

We've seen how it works on totally scam projects. And apparently, we'll have a chance to witness how this works out in case of the already popular platform[1].

[1] https://techcrunch.com/2018/01/15/inside-telegrams-ambitious...

Telegram is a great example for me to finally start understanding how this is supposed to work.

It seems like a bit of a chicken-and-egg problem (at least in the way I keep seeing it described): you fund your project/app/scam with money from your ICO, but you only get money from your ICO when people believe in your project enough to put ("real") money in it prematurely.

At best, this is basically the Kickstarter model that everybody likes to trash, is it not?

Your assumption is wrong, that is why you do not understand. The inventor could, or could not receive money. This is the beauty of an open and decentralizes invention. The inventor is not the owner.

But people who participate and invest from the start can make money if the project succeeds. So the economic incentives for those involved are greater than the incentives in a walled garden.

The guy I'm replying to was saying that crypto coins enables someone who invents a protocol to get paid, my dude. It's not an assumption on my part, I was replying to what he said.

You certainly have a point: it doesn't make sense for all kinds of protocols. I would say that coins are a good fit for contexts that involve decentralized service provision of some sort. Also in situations that could benefit from a decentralized database (blockchain), though those are surprisingly rare.

There actually already exists a coin connected to messaging protocols, Kin. I don't see much practical use for it however.

This feels like it’s going to provide a horrible amount of friction as a user. It’s basically adding multiple use specific currencies to everyday life. I predominately work across pounds, dollars, euros and Icelandic krona the latter for day to day and the rest for occasional transactions. If I have to add to that multiple service tokens just to access storage or chat or services x, y and z it adds a whole lot of trading and market following overhead. Particularly given the volatility we’ve seen in crypto currencies, especially amongst those with niche uses. Further following Bitcoin it seems like the decentralisation aspects are theoretical rather than practical as those able to provide a service such as mining seem to do better at scale and end up centralising anyway.

but why would you pay for the protocol and bother with switching, if you have a good-enough solution with free protocols and paying for services with ad money.

The main goal I had heard is that the incentivized structure of most crypto-assets will lead to everyone collaborating together - the alternate being the state/government mandating collaboration. The solution is the later, if blockchain and an immutable ledger is the real value and goal, and the problem with the first is the same incentive structure leads to a lot of bad behaviour and unreasonably transfers wealth (or could say distributes or could say steals from uneducated people) weighted towards the earlier adopters; it mimics a decentralized and global Ponzi and Pyramid scheme, the decentralized and global part are what has made it reach the point it has and has allowed marketers and schemers from around the world to collaborate - the truth if ignoring the whitewashing done by spouting all of the supposed benefits.

The missing symmetry in your own analogy is that Cryptocurrencies themselves are protocols with their own inherent (if not requisite) platform problems.

In theory, protocols like the blockchain are open, decentralized, interoperable. Yet in current practice a cryptocurrency only works with platform lock in: if you don't lock people into your platform it isn't monetizable. Market forces push toward closed (artificial scarcity, rising costs for new players to enter the market versus entrenched players/miners/etc) and centralized (central wallets/brokers/exchanges on the one side, complex miner unions as complex political boundaries form on the other side).

I'm not sure cryptocurrencies can save the internet from platform problems when they themselves are platforms.

Except that no what Bitcoin tried to be it wants to be a currency or a value store it doesn’t rely on the internet nor does it need an open internet bitcoin would work just as well for 99.9999% of its users including the mining syndicates if it would run on a completely closed network.

Exactly. A huge amount of excitement about moving away from closed monolithic platforms to distributed protocol operators paid in tokens.

For example, the little guy might be able to make a small income from IPFS/Filecoin that would otherwise be strictly the domain of AWS and other giants.

I imagine the little guy is going to have a hard time beibg price-competitive with companies that can buy HDDs by the truckload.

> build a cloud-storage protocol and make money on the coin that is used within that protocol

In that case it is not an open protocol (at least not in spirit). It is better to go with platforms.

Why is it better?

What Ethereum for instance did is genius. It distributes storage and compute across the world to those willing to share their resources and you get paid by doing so. It's a way to drive decentralization, because there is an incentive for mining. Is it perfect? Not quite yet for various reasons (performance, privacy), but its an interesting new paradigm.

For those of us still trying to wrap our heads around the value you described here (btw I do like the level of simplification you've introduced), can you explain how the coin would effectively be used in the cloud-storage protocol you suggested? I'm just not connecting the dots yet.

Protocol operators running "full nodes" are paid in tokens for performing the service outlined in the protocol. The protocols are ultimately developer tools for user facing apps. Most of the user facing apps aren't mature enough to be notable, just like the internet wasn't all that exciting in the early 90s.

> just like the internet wasn't all that exciting in the early 90s.

Anyone who believes this probably wasn’t alive then.

Everything we take for granted is built on open and free (as in beer) protocols. The people who created and supported TCP/IP, HTTP, XMPP, etc. figured out ways to have successful careers without a micropayment scheme for basic participation.

That is true. And then we ended up with Facebook, Amazon and Google et al to handle the rest. I'll take micropayment schemes over centralized megacorps. At least for now.

And personally, I remember a simultaneous mix of excitement and disappointment from the internet of the 90s.

In bitcoin, miners receive coins in proportion to their computational power. A cloud storage protocol might work by paying out coins to miners in proportion to the storage they provide. Storage users get storage by paying coins to the "miners".

I really like your description - it's easy to understand and is brutally honest.

This explains your point about protocols vs. platforms pretty well I think: https://key2.bluematrix.com/docs/pdf/34dda769-d83d-4504-beed...

The long-term value will be in the ability to send censorship-proof funds anywhere there's an internet connection. The Lightning Network (yet to be deployed in production) is supposedly going to reduce transaction fees and confirmation times.

>but isn't centralized wallets/exchanges like coinbase defeating the entire purpose of crypto currency

This is true. This is my biggest problem with the current ecosystem. If history is any guide, they'll eventually suffer from some sort of scandal and/or run that drives customers to a superior competitor. This only kicks the can, I realize, and is far from the original vision. But at least each centralized service learns from the costly mistakes of previous ones.

I don't understand how this holds true though, because to actually send someone money you need to actually... get them the money. A great counter-example of this is that the exchanges in Zimbabwe were trading at a 100% premium when you actually wanted to settle a transaction in cash.

So whilst you can transfer money censorship free, you and the recipient need to then handle the transfer into and out of crypto which seems to be in many cases more difficult than actually transferring money other ways.

Not to mention the fact that that purpose is an astonishingly niche thing to want to do - at least in first world countries.

Are you suggesting crypto has no long-term value in the west?

Does purchasing goods or services directly with bitcoin count as "handl[ing] the transfer into and out of crypto"? Doesn't "crypto" then simply become "money"?

Don't get me wrong. That vision of the future isn't here yet. Far too few vendors accept bitcoin today for it to be a viable closed loop system.

Nobody's going to be using crypto for direct purchases when you still have to pay taxes in local currency and the friction to get cash from crypto is just as high as today's friction in interbanking transfers or worse.

I see this argument about censorship resistance a lot but I don't really understand it. If the main purpose of the technology is to evade law enforcement is this not a massive reason for governments to ban cryptocurrencies? The user of the technology is presumably committing a crime.

Not necessarily. Online payment is currently mediated by a few large companies, the largest of them having their headquarters in a single country. There have been cases where these companies made things difficult for certain classes of sellers (for instance, erotica/pornography), or where pressure from that country's government made these companies block all payments to a specific recipient. In these cases I have read about, the person making the payment (and the person receiving the payment) would be breaking no laws.

I'm certainly not an expert in this domain, but how exactly would a government ban bitcoin? Is it possible to do without banning the Internet? Governments can eliminate centralized services like Coinbase. But that only makes Bitcoin stronger as OP indicated.

You may misunderstand how laws work. The government can make anything illegal. (Within the constraints of the various checks and balances, but those mechanisms do not turn quickly.)

The most obvious way is to make it a crime to exchange bitcoin for USD, goods, or services. (Doesn't even have to be bitcoin specifically; they can say "blockchain-backed digital resources" or whatever.) Scope it under interstate commerce, in the US; who's going to stop them? Obviously that wouldn't kill BTC overnight, but it would kill any legitimate market. If they're really worked up they can compel financial entities to disclose or block payments to/from known BTC exchanges, or compel telcos to do the same for blockchain mining traffic. They could even ban owning bitcoin; delete your keys or you're committing a felony.

How wouldn't they ban bitcoin, really?

Well when you put it that way...

In that scenario I suppose bitcoin's only hope would be that the countries of the world wouldn't coordinate to enforce a global ban. Seems unlikely that they would. But, back to your point, a total US ban might be enough to eventually kill the ecosystem.

Step 1: eliminate centralized services. This would only make Bitcoin stronger if it's already a functioning economy that doesn't depend on connections to the existing financial system. If you can't buy and sell Bitcoin with traditional currency, it becomes far less practical.

Step 2: make use of Bitcoin illegal. You know, "ban" it. It's a plaintext P2P protocol, not exactly magic. If you control the network, you can identify Bitcoin nodes and charge their owners, exactly how law enforcement can enforce laws against other illicit P2P traffic. This would drive any remaining die-hard users to services like Tor.

Step 3: if Bitcoin is somehow still popular enough to be considered a problem, block Tor.

Helpful. Thanks.

In this scenario where your Government is doing this do you leave? Subvert? Comply? If your answer is comply, congratulations for your obedience.

Would love to understand the rationale for the down voting here. It would seem to be that the suggesting of disobedience to Government is immediately wrong.

“One has a moral responsibility to disobey unjust laws.” ― Martin Luther King Jr.

You can't 100% eliminate speeding or child poverty or drugs or car accidents or corruption or gambling or unsafe working conditions or prostitution - but that doesn't stop governments trying for a reduction.

Oh, I'm pretty sure that governments will try to ban bitcoin, given that it gets more traction as an actual medium of exchange. I'm trying to assess if they'll succeed, and if so, "how?"

Ban Bitcoin, but leave the futures exchange and taxes. OK.

There are 100 lightning nodes running in production currently.

I stand corrected.

"The long-term value will be in the ability to send censorship-proof funds anywhere there's an internet connection."

So, how does this work if I'm, say, trying to support the protests in Iran, who just shuts the internet off?

Same here. I’m also worried that a lot of people around the globe will lose their hard earned savings. Think about, it’s the first time in human history that a Ponzi scheme can go global thanks to modern communication tools and low barriers to participate. Most coins/ICOs are currently selling a dream. Nothing more

Not to be nitpicking, but Charles Ponzi and Madoff did fraud at global scale.

Good catch. I’m not familiar with the original Ponzi scheme, but as far as I know Madoff was targeting rich people. The crypto scheme has reached the gambling masses at scale

Where Bitcoin really innovates in the Ponzi-space is decentralization. You could arrest Madoff and put an end to his scam, there is no easy way to shut down Bitcoin. It is like HYDRA.

Shutdown exchanges in the US, South Korea, China and Japan and you'll see how quickly everything explodes. Just the mere suggestion that South Korea was about to do this tanked the market.

That was the point, according to the original Bitcoin paper:


It's just not reality for today's Bitcoin. We'll need better scaling in production to make it reality, either on Bitcoin or other cryptocurrencies.

The dream lives on in Bitcoin Cash.

Edited to provide additional information:

- low fees ($0.01) to have your transaction confirmed in next block

- zero confirmation transactions safe for most users

- same pre-fork ledger

- businesses are starting to integrate with the technology because it's usable again (e.g. yours.org)

Litecoin has cheap fees, expanded capacity, brand name recognition, widescale adoption, segwit, lightning network, competent developers, and upcoming features with NONE of the scandals surrounding bcash.

Litecoin is philosophically a small-block currency. The moment the blocks fill up, your money will be trapped by high transaction fees in the same way that they would be on bitcoin core. Not to mention the creator sold his entire stash. That's a pretty clear sell signal--I would never develop around a dying open source project, so why would I trust my money to one.

> surrounding bcash

... if you have to result to namecalling, you'll probably a shill.

The bitcoin innovations that work for a currency, but not for a store of value are moving to bitcoin cash. Colored coins, weak blocks for fast confirmations, scripting, graphene... There's a lot of dev work going on. I am 100% convinced that currency + store of value > store of value. The degree to which Lightning "fixes" anything is exactly the degree to which it is centralized.

There's an anti-miner narrative that bitcoin core is selling, but in the end, the market will decide.

Yeah, but the volatility is still a nonstarter. A quick glance at the price chart shows the price has dropped 50% in the past month. A longer view shows something like a 1,700% difference between the six month low and high. Meanwhile first-world fiat currencies consider it a bad year if they can't maintain a constant inflation rate between 2% and 3%.

There's always going to be niche markets for people who can't use fiat currencies for one reason or another (international commerce, failed states, black markets, etc.), and there's probably going to be some number of hobbyists who want to transact in crypto as a political or technical end in itself.

But why would the median consumer possibly want to migrate to a world where their real net worth could halve or double literally overnight, repeatedly, at any time, for reasons they can neither predict nor control?

The AUD against USD dropped close to 50% in a couple of weeks in 2008. It sucked having all of my wealth in AUD at that time. Recently a similar thing happened with BTC, but at least it was after a rapid gain. Diversification is the key.


No that was just a scam to avoid the implementation of segwit and off chain transactions.

Even satoshi(before you try to cite him) himself said off chain might be needed.

If Bitcoin Cash is still going strong in a year, with businesses continuing to build on it, would you still consider it a scam?

Yes i will, there are some other terrible coins still going(tron, IOTA).It's survival doesn't make it not a scam.

Doge coin is still going even though the creator did it as a joke.

Bitcoin cash has by forking from bitcoin itself also guaranteed it would have users as it gave everyone who had bitcoin some bitcoin cash. It's a clone of bitcoin with the brakes removed.

What would change your mind about Bitcoin Cash being a scam?

For me, it would be its value plummeting to near-zero. If no one values it or uses it for anything, I'll be convinced it was a scam. Now, your turn.

snikeris, When you find that no evidence would convince the person you're arguing with, it is actually a good sign--It raises the probability that your opinion is correct! This scenario is very different than the introspection needed when you encounter someone rational and open minded with a different opinion.

But just by being adopted and mined it can't go to zero. It's a scam because it was designed to keep all transactions on chain so miners would benefit from high fees(and they would be high if it replaced bitcoin)

It was designed to avoid a fix that would prevent the use of asicboost.

You're goalpost of a zero or near zero value is bad. Even fake art can be sold.

How is it a scam to keep it working like it was intended to work? I did not buy into Bitcoin to hold it forever, I bought it to use it as cash. Therefore I do feel defrauded by the current developers, until just yesterday they advertised one thing on their website but delivered something different.

I have kind of mixed feelings about removing ASIC boost. I do feel it is everyones right to innovate and get an advantage, then patent that advantage. It takes money to do that R&D, so it should be protected. Others can do so as well, or operate from countries where these patents are not respected. On the other hand, others have so far been unable to get their own advantages, so maybe it is time to hardfork (yes, hardfork, SegWit does not fix it, not until > 90% of transactions are using SegWit) to prevent getting this advantage.

The "purpose" of whoever started it is irrelevant, just as it is with Bitcoin core. It can be forked. It is an offering with a different approach to scaling. Nothing you described says "scam" to me. The only reason core promoters fight so hard against it is because it is threatening because it works!

I'm not a miner, but I want my transactions on chain.

Also, I'm happy to pay a (reasonable) fee to miners to compensate them for the resources they spend in keeping the network secure for me.

> It's a clone of bitcoin with the brakes removed.

Actually... I like that, just phrased a little different - Bitcoin Cash - it's bitcoin with the parking break disengaged!

(I downvoted the parent comment not because I believe it is wrong or without merit, but because it doesn't describe the why or the how.)

Zero-confirmation transactions on Bitcoin Cash can't even be relied on if the sender, the receiver and all of the miners are trustworthy because transaction malleability can cause them to just vanish. The developers intentionally removed the proposed fix for malleability to break the Lightning Network, because they failed to realise it was actually a broader problem. This broke withdrawals for at least one exchange; their withdrawal transactions disappeared and had to be very carefully manually redone. (The reason supporters had to push zero-confirmation transactions so hard is because the original design had a flawed difficulty adjustment algorithm that led to block times over an hour a lot of the time, so the supposed benefit of being faster than Bitcoin fell apart the moment you needed even a single confirmation.)

Transaction malleability has nothing to do with the security properties of zero conf, it only allows you to change the signature of a transaction, not the contents. So if you malleated a transaction, you would still end up with a transaction paying the merchant, in no way vanishing like you describe. What does affect the security is if miners violate the first seen rule, which is not a consensus rule, to include transactions that were seen later but have higher fees into their blocks. This allows you to essentially replace a transaction by bribing a miner with a higher fee. Generally the risk of this is seen as low, generally lower than the risk of credit card fraud, so for low value transactions it is generally fine. Malleability breaking the withdrawals of an exchange is a problem with that exchange, not with Bitcoin Cash.

As for developers removing the malleability fix (SegWit) to break the LN, that is just a plain lie. First, SegWit was removed because it is just an hack that can be achieved in much better ways. SegWit is such technical debt because it did in a soft fork what should have been done in a hard fork. Second, you can see on the development mailing list that fixing it has been discussed well, and a fix for third party malleability is actually already active. You can also see that nobody is against 2nd layer systems like Lightning Network, and it will be supported if and when it is actually useful.

The EDA that was in place in the first 3 months was indeed a big mistake and has since been replaced with a well performing fast acting DAA, but it is not the reason people push for 0-conf. 0-conf was a pretty well used and working feature of BTC before the blocks first became full. It is only logical to use it again on a chain that does not intend to let its blocks become full.

I was under the impression that transaction malleability is more of an issue on the legacy chain. Where can I read more about the issues you mention?

Have a look at my reply here: https://news.ycombinator.com/item?id=16210897

Last week when I used BCH, it was slow as hell.

3rd gen tech is here, with instant transactions and 0 fees. Look at RaiBlocks and IOTA, these things make microtransactions a reality.

I passed funds with RaiBlocks the other day, fast as hell, 0 fees. Try to beat that.

BCH for small transactions with 0-conf is not slow as hell. When you require confirmations a system like Bitcoin has a quite random time between blocks, but 10 minutes on average.

IOTA has an absolutely unprofessional development team, doing things like saying critical security vulnerabilities are there on purpose so they can point it out when someone forks or saying that the network being unusable due to a DOS attack is fine because they can use it for testing. Don't forget the time they turned off the network for 2 days without any prior notice (yes, they can do that). I'm all for new technology, but Bitcoin is 9 year old proven technology at this point, while IOTA and RaiBlocks are both new and unproven. Let them mature a bit before suggesting people rely on them. Would be quite bad if someone turned off IOTA when you need your money, wouldn't it?

I was shifting both bitcoin and bitcoin cash from an old wallet. I didn't notice any real difference in transaction time.

I agree with you that bitcoin derivatives (with blockchain) have proven themselves with a robust security implementation. But if you look at adoption, none of the cryptocurrencies really proved itself. Bitcoin was even dropped by some (such as Steam). And with the high transaction fees, you couldn't really blame them, it just makes no sense.

I also agree with you that RaiBlocks hasn't proved itself yet in security and scaling. But in my opinion, instant and free transactions is a total game changer. If these technologies are able to stand, it's a total game changer for all cryptocurrencies that focus on fast transactions and low fees. That includes Bitcoin Cash and Litecoin.

As for IOTA, I consider that tech in alpha stage. They are not trying hard to make it usable, but it seems they are putting all their focus on trying to build up a standard for the industry. All the partnerships and relations they have going on make sense. Is it usable for end users? No. But RaiBlocks is. And instant feeless transactions indeed could have nice synergy with IOT.

These are definitely interesting times. But I wish more focus would be put on applications and use cases than on the market cap of each coin.

Here's my take:

We rely on many central authorities because that was the only way to get safety, security, dependability. Governments enforce ownership, banks maintained records. When the systems were created it was the only way, short of physical ownership of all of your money (who wants $100,000 under their bed?).

Blockchains and related technologies offer an alternative. You can have all the same things, but without the need for central authority. That appeals to some people.

The centralized wallets and exchanges are indeed a potential problem, but you can always switch your money elsewhere, choose a different central authority or choose none. And whatever you choose, the underlying system is still free from central authority. No one can control what you own except you.

The problem that I think is overlooked is that central authorities like governments do more than just that small list of things. They offer protection from inflation and deflation. They offer protection from scams (rollback of the transaction, if you will). They can use physical violence (arrest, confinement, and so on) to enforce their central authority. They can enforce, to some degree, that illegal actions aren't occurring using their centrally controlled currencies. Blockchains do not offer that- for better or worse, you decide.

> We rely on many central authorities because that was the only way to get safety, security, dependability. Governments enforce ownership, banks maintained records. When the systems were created it was the only way, short of physical ownership of all of your money (who wants $100,000 under their bed?).

It most likely still is, and forever will be, in any practical sense.

Bitcoin, et al. provide an alternative through literally flushing humongous amounts of energy down the toilet (ironically, at the very moment in history, when we can't afford to do that). Energy requirements for maintaining the integrity of blockchains is unbounded and scales up with network use. If we were to accept Bitcoin as the primary world currency and use the network for the next hundred+ years, I'm confident we'd had to eventually (within couple of centuries) start sucking stars dry to keep up with the energy requirements.

Compare with the "traditional" economic system, which prefers to minimize waste and exploits benefits of centralization to improve efficiency, while still delivering mostly the same thing Bitcoin promises.

(In fact, all this gives me an idea for a sci-fi story: humanity is visited by aliens and encouraged to join an interstellar trade empire; only too late they realize that the friendly aliens are going to suck the Sun dry within couple hundred years, in the process of maintaining a blockchain-based interstellar currency.)

you should edit "some central authorities" in my country for example the central authority inflates the money without shame.

well said. You know what makes me really sad? This money ($Billions+) is being stored in cryptocurrencies instead of being put to good use, such as investing in companies that actually build things... Am I seeing it wrong? Tell me!

Note: I am not a big fan of the stock market either (it's pretty much a fake investment), we need investing 2.0, we have the tools, we just need the "Elon Musk" of finance

Note #2: I don't do what i'm preaching. I do own Ethereum because i'm hoping the smart contract layer might actually become useful someday (right now there are about 1000 DApps and they aren't that useful just yet IMHO)

What do you mean "stored"? The fiat used to buy bitcoins went to sellers, so they have it.

The current "valuation" suffers from the same issues as the valuation of any asset.

A significant part (literal billions of dollars) of fiat used to buy bitcoins went to miners direct electricity expenses, and those extreme amounts of resources were permanently spent, possibly wasted. It's not a zero-sum game, as sustaining the current system costs a lot.

A quick, rough calculation - if ~30 TWh were spent on mining Bitcoin, and the marginal rate of death for electricity generation is at least 100 per TWh (https://www.forbes.com/sites/jamesconca/2012/06/10/energys-d... or https://www.nextbigfuture.com/2016/06/update-of-death-per-te...), this means that we have sacrificed the lives of at least 3000 people to make this happen. Are the benefits worth this cost?

The problem is the death rate of electricity generation. Because you are killing as many people playing computer games, or turning on your microwave, or ...

Or, said another way: what service does bitcoin provide, as opposed to say banking? Because that is what it is "trying" to replace. How many deaths does banking produce? Will replacing a part of the banking activities with bitcoin increase or decrease the death rate?

Bitcoin is not trying to replace banking - the set of services that it's trying to replace is a (not so big) part of payments processing, and a tiny part of whole banking (for example, lending is a much larger function than payments).

If I look at the headcount structure of a typical bank or at the tasks where the wider financial industry employs people, the settlement of payments takes 1%, perhaps 2% depending on how widely you interpret the area. So total worldwide adoption of Bitcoin (or some newcoin) might replace at most 1%-2% of the current banking employment and energy cost. As far as I understand, this energy cost is already smaller than Bitcoin's despite processing multiple orders of magnitude more transactions.

First, what bitcoin tries to replace in the banking industry is not so clear cut. It could be payments, but also investment (value store), funding, and even credit. This very much depends on how successful and flexible the technology turns out to be. It is very early to say.

Second, the resources used by the banking industry to provide the services they do are not limited to the direct associated costs: we also have technology development, personnel costs (including energy used by the banking personnel to reach their workplace, the costs of turning on the lights in all the bank offices, and the fuel consumed by the bank managers to attend the party on the other side of the country without which the industry can not function, since, you know, you need some fun in order to sign the required contracts), the fuel consumed by the customers to reach the branch where, for the third time, they are going to evaluate their mortgage application, ... A long list.

In summary, yes, you are probably right that bitcoin is currently inefficient, and that currently it is not providing much value. But the sector is ripe for disruption, it is easy to disrupt, and any change in the current status quo will be an improvement, since the banking industry is so hugely inefficient for society as a whole.

At the core, the banking industry is just information processing, and that is the cake that technology is eating at the moment.

Are the costs of the current paradigm any different?

Yes, any other international electronic payment system (Fedwire, SEPA, SWIFT, Visa, Mastercard, etc) requires much, much less (Thousandfold? more? It's tricky to estimate) energy resources per transaction. Bitcoin consumes more electricity than whole small nations, and in each of those small nations that electricity is sufficient to run a financial industry that processes much more transactions than Bitcoin, and leaves enough energy for other industries as well. Bitcoin proof-of-work principle means that the power wasted (intentionally, to prove that work has been done) on a single transaction is absolutely ridiculous.

Clearing transactions, the (comparably small) part of a financial transfer that Bitcoin does, is comparably simple and easy and constitutes a minority of both the effort and cost of financial transactions. Things like dispute resolution, fraud control, client-side tools, customer service and acquisition, etc take more than that, but that's not included in the standard Bitcoin transaction fee / miner's expense.

Just to play devil's advocate on this, the money in the stock market (i.e. any stock transaction outside of a public offering) is generally not being invested in companies that actually build things, it's getting stored.

i totally agree, i am not a big fan of the stock market, we need investing 2.0, we have the tools, we just need the "Elon Musk" of finance

It's stored, but isn't it also being loaned out as well? Isn't that part of how the money supply grows - fractional reserve?

"isn't it also being loaned out as well"

Hm? In the stock market, you pay a current stockholder for their share(s). The company sees no money from the transaction. It sounds like what you're thinking of is banking, which is something different.

I was mostly thinking about brokers. If I buy stock and hold it in my brokerage account, doesn't the brokerage use that money and stock to generate even more wealth? For example, they might loan my stock to somebody that wants to short that company.

incorrect. the company sees money from the transaction in several indirect ways. the existence of the market is what enabled the company to go public in the first place.

They also see money from the increased valuation of the stock they are still holding. This can be used to be borrowed against or sold.

not really true, your broker will often lend out your shares for a fee or use them as collateral for their own business

There's beginning to be a lot of movement in the alt-coin space where people are trying to DO things with the blockchain, far beyond just a store of value.

There's not a lot of love here on HN for a lot of that effort, but it's not terribly controversial to say that there are a large number of dev teams working on products in a multitude of fields that are putting the blockchain to work.

The controversy seems to be whether blockchain tech is a sensible solution to some of these problems (that is, people ARE actually building lots of things, but the verdict is contentiously out on how sensible/lasting those things will be).

I guess it depends on how you define "blockchain". If it's a system that involves distributed, untrusted participants and the need for proof-of-work, then I too wonder how useful that ends up being in the general case.

The general case is: federation of individuals can compete with single large corporation because cryptocontracts provide equivalent operational stability to what a single controlling entity can provide.

When corporate bylaws are written in code, you can replace a single legal entity with thousands of former employees operating as sole proprietorships.

Sure, but you don't need proof-of-work for that. All you need is for every participant to ratify the bylaws-as-code, which you can do with simple public/private signing. The only reason that proof-of-work is needed for a currency is that the ledger is changing constantly. For something that changes infrequently, the double-spend problem (or the contractual equivalent) isn't nearly as big of a deal.

Like I said, it depends on how you define "the blockchain". Many problems don't involve an open set of untrusted peers, and many problems don't require proof-of-work. So if you include those in the definition, then the blockchain isn't appropriate for a lot of those problems. And if you exclude those aspects, then what do you have left? A chain of cryptographically signed nodes that each point to their predecessor? That's been an underpinning of x.509 for, what, over 20 years? It's nothing new.

How do you verify the ratifications without a blockchain? You’d need to meet in person ahead of time right?

(I do agree that 99% of the decentralization of protocols can happen off the blockchain, amongst trusted parties... just saying that doesn’t get you all the way to “McDonalds Corp Replacement”.)

The people that got the money probably didn't put it under their bed.

I don't think you're seeing it entirely wrong, but there are other effects this is having other than locking away money.

One positive effect this is possibly having (I haven't seen a direct analysis of this) is to boost GPU R&D. Right now it sucks for people who want to use GPUs for other things, because it's causing shortages, but that's presumably not a permanent state of affairs. And better GPUs will be good for a lot of other fields, particularly AI.

Part of the reason Bitcoin's value exploded the way it did is probably because stock market valuations have been looking rather frothy lately; there's a lot more money out there looking for good uses to which it can be put than there is actual investments.

Do you have the same complaint about gold? To me, they seem very similar from a gambling perspective.

Gold has been used as a store of value for countries which do not trust their fiat.

It's also used to speculate.

It's also used in industry.

It's actually pretty easy to turn gold into fiat and vice versa outside of north America. It's also fairly easy to do it in North America as well. The spread between buy/sell is also quite low.

Is gold used as an investment/speculation vehicle? My impression was that generally was quite ill advised to 'invest' into gold.

yes, i'd rather buy a farm and no gold (someday i'll buy a urban farm)

That's why the BCH fork was created. The BTC chain's devs mostly work for Blockstream, who's business model is to create layer 2 payment solutions, so it's in their interest to choke off the main chain.

> The BTC chain's devs mostly work for Blockstream

This is not true, at all. Only one of the regular Bitcoin Core contributors, Pieter Wuille, works at Blockstream. Other companies, Chaincode in particular (http://chaincode.com/#team) have many more Bitcoin Core developers.

If you are going to correct someone you shouldn't lie:

Current and former Blockstream employees that work on core or have worked on core:

* Dr. Pieter Wuille

* Greg Maxwell (CTO)

* Andrew Poelstra

* Mark Friedenbach (Founder)

* Luke Jr (Contractor for Blockstream)'

* Jorge Timón (Founder)

* Patrick Strateman (core tech engineer)

* ฿tcDrak (anonymous dev, but publicly support blockstream)

The list is more extensive than this, but I can't be bothered to waste my time. Your propaganda and lies are disgusting.

Wow, I was going by who currently works for Blockstream, and who contributes to Core. Your list is not that. Luke was never an employee at Blockstream, Poelstra doesn't contribute to Core, Maxwell has left, BtcDrak only "supports" Blockstream, in your opinion etc. Perhaps Timón is still there, and I'm very sorry if I forgot him. I assure you it was not on purpose, and I'm sorry to see that you assume bad faith. I didn't mean to be "disgusting".

Luke works for Blockstream as a contractor. Does that not count? Still seems like a conflict of interest.

Maxwell JUST left a few days ago and spent plenty of time at both Blockstream and Bitcoin Core simultaneously.

Timon is still there.

You also left out Strateman.

In any case, your strong assertion that only one contributor works at Blockstream is flat out wrong and easily shown to be wrong by anyone with 2 minutes to google.

You seem to know all these people, which indicates intentional deception rather than ignorance.

I use the word "disgusting" because the choking off of BTC is an intentional play to further a greedy business model and not just an act of stupidity.

I get it a little, but still think this article summarizes the deficiencies well, and concurs with your confusion:

Bitcoin Is None Of The Things It Was Supposed To Be


Forget about speculations, market caps and all those investment strategies such as hodl.

After you forget about that, take a look at the posibilities this new tech has to offer.

3rd gen crypto is here, with instant transactions and 0 fees. It's working today. Try RaiBlocks if you don't believe me.

Imagine that you own a fully automated Tesla. When you're not driving it, it's making money, driving Lyft and Uber passengers. When it needs to recharge, it goes to the most advantaged station and recharges.

The cool thing about this device is that it's a real actor in the economy, making money, and paying for things it needs.

If you give this device some pocket money such as IOTA, it can receive payments from anyone, and pay for electricity in any station. Each coin that goes over budget is passed to your account, or maybe to multiple if it's co-owned. Remember 0 fees and instant transactions.

In such a wold, why would you work with wire transfers from a bank account, if you can let machines work with "cash" internet money?

If such internet money is worth $0.000001, it has value, because you can make instant, feeless transactions with it. A corrupt state is also not able to mess with your money.

So yeah, I see a bright future for cryptocurrency. Even when the market crashes, it will still have value and plenty of usecases where it dominates all other options.

It comes down to trust and funding. Distributed ledgers, blockchains, smart contracts seem like the only way to operate certain schemes that would typically take a government or other authority to implement in a way that provided parties guarantees about its fairness. The other aspect is that funding for some projects are not going to be achievable through traditional means because the profits from the network are too diffuse and are not concentrated in a single company's share holders. One such scheme is SONM, a soon-to-be network of computers that act like AWS, but in the fog. The network pays suppliers and hubs, while the value of their SNM coin finances the operation of the developers. The value of the coin is that it is the only way to get access to the compute, storage and network your company needs. The prices will be better than AWS.

This. I was following bitcoin(not mined or owned it) from the beginning but these days, people don't run full node or not even have a wallet in their local storage. They just relies on convenient online wallet services. It just ruins the whole point of bitcoin.

Centralized wallets are so that clients don't need to download the whole blockchain locally; this will always remain a challenge for blockchain tech, unless there's a p2p version where everyone in the network only needs part of the blockchain, or there's some other form of smart sharding.

Centralized exchanges will remain a thing for rapid and cheap exchange; Bitcoin in particular has the flaw that it's slow and expensive to transfer between wallets, so the exchanges provide a fast alternative. You give up the decentralized nature in favor of fast and cheap transfers between wallets and currencies. This is more for the traders though.

So perhaps you can help clarify one thing. In the absence of an exchange, if I wanted to pay you $20, how exactly would this establish itself as truth on the block chain?

In theory, we could either have one of us run a mining node for long enough to confirm the transaction or we could find a third-party miner to do it for us on whatever terms we could negotiate directly with them.

In practice, running a mining node without specialized equipment is prohibitively expensive so we're stuck finding a third party. Most of those third parties are looking to do a volume business and aren't interested in one-off small dollar transactions, so it's centralized exchanges or nothing.

No, that isn't how it works at all. You would broadcast a transaction to your friend for $20. It would sit in the mempool and eventually get picked up by miner and would then be forever logged in the blockchain.

So is it possible to broadcast a transaction saying "they paid me X", or is it limited to broadcasting transactions saying "I paid them X"?

Just the latter really. Your unspent transaction outputs (UXTO) would move to your friends address. Bitcoins are really UXTOs.

One of the reasons centralized wallets/exchange exist is because the technology is difficult to use. This is also in part most of the talk around cryptocurrency is full of jargon, even for simple things which normal people would be able to understand.

On that note, shameless self promotion in case someone wants to understand how transaction and fees work in bitcoin and most cryptocurrencies, I have written this post:


They keep moving the goalposts. At this point Crypto is just "whatever gets people to invest money into it."

Imo it's an experiment in a decentralized privatized currency. And what we're learning is the benefits of centralized banking may outweigh the potential costs (namely inflation, a fairly justified fear depending on where you live).

You need a point where the cryptocurrency changes to fiat (e.g. USD). At certain scale, you cannot meet at a venue and do face-to-face cash transactions. That is why those exist. Also, those are friction points where anti-money laundering programs and (light) anti-fraud regulations exist.

The crypto people who claim to "get it" say it's a game theoretic hack to bootstrap the development of a global distributed ecosystem which will ultimately allow for internet technologies we haven't conceived of yet.

Remember the Pet Rock? Well.....

I've been running e-commerce stores for 12+ years.

The main business I work for started to accept bitcoins for our physical goods in 2014ish. I did the integration.

I adopted Bitcoin because I'm not a huge fan of payment processors, I'm a cryptonerd and because I wanted to provide a use case for a technology I believe in, which wasn't illegal. I've also helped chime in with devs on open Bazaar and assist them with issues people who run stores have.

Over the years we've processed ~10,000 dollars worth of Bitcoin transactions.

We've ran into issues where confirmations take longer than our fulfilment center are used to, so we needed to wait to ship out orders.

We've run into issues where refunds get weird due to price fluctuations.

I've always noticed customers buying our products when the price of Bitcoin was too high and due for a crash, but since it's run up over $2000 I've noticed barely any transactions.

This is a fundamental change in how people are using it, and due to the high fees and slow confirmation times, it's no longer useful for us and it seems people would rather HODL than use.

Personally I enjoy the tech, but never cared for it as a speculative asset, which now I believe it has become (but kinda always was).

Have fun with your digital gold.

It is a combination of HODLing, long transaction times and high fees. At least the latter two can (and hopefully will) be lowered by improving the tech. And HODLing should lessen if Bitcoin become less volatile. It might still take a while though. In the meantime will/do you try any altcoins?

There was interesting discussion here about disk usage over time: https://news.ycombinator.com/item?id=16154682

I wanted to ask again here, directly to Bitcoin techies: How can BTC survive 100 years if no one can download the massive blockchain? Most residential IPs enforce a 1TB/mo cap. Much of the internet is also on slow connections (Australia).

The BTC whitepaper is surprisingly hand wavey on this one subject, and the more I think about it, the more it seems like an Achilles' heel.

Can we eventually reboot BTC back to the genesis block, but with all current BTC pre-mined and allocated to current holders? Kind of like a manual GC, or hard reset back to initial commit.

But it doesn't seem that simple. Millions of people have certain quantities of BTC, and even tiny ones add up. You have to track that data somewhere. It doesn't seem possible to encode the whole state of the world into a 1MB genesis block.

So the question becomes, at what point to we reboot, how, and by what mechanism can we achieve community consensus?

This is combined with the fact that BTC is deflationary, so eventually miners will charge nothing but tx fees. No more block reward = the TX fees must be at least as high as the current block reward. That is a staggering cost since a 1MB block can only encode a couple thousand tx.

That leads to the difficulty death spiral: difficulty re adjusts every 2016 blocks. Two weeks when every block mines at ten minutes. But if miners leave en masse, then suddenly it will take a very long time to mine blocks. It could be months before the difficulty readjusts down.

This must sound identical to all the previous BTC naysayers, but believe me when I say I believe this can work. I'm trying to discuss the technical merits and set aside the question of whether it will fail.

> I wanted to ask again here, directly to Bitcoin techies: How can BTC survive 100 years if no one can download the massive blockchain? Most residential IPs enforce a 1TB/mo cap. Much of the internet is also on slow connections (Australia).

Presumably in 100 years, your cap will be larger, and your internet will be faster.

Short story is that bitcoin is a ledger that keeps track of where coins go.

So if I give you a coin, and you give it back, 1 trillion times, we have a huge database with two trillion transactions. But at the end of the day, nothing changed, I still have a coin and you don't, because you gave it back each time.

Much of that data (i.e. 99.9999% of it, in this case) can be reliably thrown away for all practical intents and purposes.

That's the gist of it. I'll spare you the technicalities (which I'm not intimately familiar with anymore myself, in any case), but the basic idea is that you don't need all data to run the network reliably.

That, plus moore's law's equivalents for storage and networking, google them. They're not as strong as for CPU, but they're quite good anyway.

Here's hoping!

As well -- only the last few blocks really needed rather than the whole chain.

One way to reduce the Blockchain size is pruning: https://en.bitcoin.it/wiki/Scalability#Storage

>How can BTC survive 100 years if no one can download the massive blockchain? Most residential IPs enforce a 1TB/mo cap

This is specifically why the bulk of the community has stayed on a chain that limits blocks to 1 MB blocks. If you increase the shared resource, blockspace that everyone has to store, you increase free-rider problems and the tragedy of commons that goes with them. Given your question, and the properties of the Bitcoin blockchain size today, the rate of blocks being issued, it would take ~13 years before the blockchain would reach 1 TB.

Since there is no central authority in bitcoin, there isn't a process where one can screen out "spam" and legitimate uses. The only way to do it this is to rate limit transactions. Periodically you'll see people come on to the network and try to issue large volumes of incredibly low-value transactions into the mempool queue. Are those spam transactions? I'll let you decide.

See here:


Second chart shows that there's about 16 BTC worth of outstanding transactions in the queue for inclusion in a block (about 1 PPM of total coins in circulation). The third chart shows that there is about 170 MB of transactions and you can see large number of low-fee, low value transactions being dumped on to the network.

The simple fact that a currency like Bitcoin is technically limited to a set number of transactions per second should be proof to anyone with a brain that it is fundamentally flawed.

There are over 7 billion people in the world. A good crypto-currency should be able to handle millions of transactions a second, indefinitely. It should be as ubiquitous and as easy to use as the internet itself. In an ideal scenario, the cost to run the currency network should be cheap enough that there should be virtually no transaction fees other than participation alone (think bittorrent), and the entire thing should be secure and un-hackable. It should be stable in value, or at least slightly inflationary (so people actually spend it instead of just holding onto it and treating it as an investment vehicle).

Bitcoin doesn't even come close to meeting these goals. It's so incredibly flawed, it boggles my mind how people don't see the glaring problems.

The wheel is moving, though! Bitcoin may not be the end-all, be-all solution, but it has certainly got people thinking.

Bitcoin is limited in the number of on-chain transactions it will allow but effectively limitless on-chain enforceable transactions. So yes, it can handle millions of transactions per second:


You're talking about the Lightning network which is not bitcoin. It's some other thing entirely, which happens to be built on top of bitcoin. For all intents and purposes, it might as well be a different crypto currency. I was directly talking about bitcoin, as it exists today.

> Since there is no central authority in bitcoin, there isn't a process where one can screen out "spam" and legitimate uses.

That's exactly what fees are

> blockspace that everyone has to store

Only people who sync with the chain have to store the blocks, not everyone who uses it. The vast majority of people don't sync with the chain and still reap all the benefits.

> Are those spam transactions? I'll let you decide

The miners decide

In 100 years the blockchain, (assuming ~2mb segwit blocks) will be about 10 Terabytes, sounds like a lot now but will it be in 100 years?

It's currently about 150 gigs.

so first of all, you don't need to store all historical data to operate bitcoin node. it needs to be bootstrapped, but after that there is a thing called UTXO set which tracks unspent outputs (basically account balances), so you don't need to go all the way back to verify you can spend something from a tx in year 2010.

so basically as you bootstrap and verify you can prune older blocks without sacrificing security.

also there were some proposals related to utxo set commitments, where utxo set signature is recorded in the blockchain, so bootstrapping node can just download it from anyone and verify starting from the commitment block. this would solve the problem entirely.

second - storage and bandwidth are still a concern out of which a whole bitcoin cash altcoin was born - some people thought it would be good idea to go with even larger blocks justifying it by even more handwaving.

third - there is a strong push towards developing upper layers of the network, so called payment channels. one solution that already exists on mainnet in alpha stage is Lightning Network, is basically a protocol for routing payments between multiple channels kademlia-like. these channel transactions are not recorded in the blockchain, you only need to pay fees for opening and closing a channel, so two on-chain transactions, and then you use your channel funds like a debit card, paying for low cost things.

and your last point - yes, halving is a significant event during which miners lost almost half the revenue. on original bitcoin network this is offset by a working fee market: right now about 20%+ of block rewards come from tx fees. obviously miners know the schedule of halvenings and those that will become unprofitable will try to get rid of their infrastructure investments beforehand - this will lower network hashrate which will send tx fees higher, which will somewhat offset losses as well. we've already been through couple halvenings, they didn't really affect much, i think next one will be crucial test for bitcoin's survivability.

of course people pushing for zero fee transactions are trying to have their cake and eat it too, storage is a scarce resource and nobody can sustainably to offer it for free.

bottom line is - blockchain cannot scale to micro transactions, most of economic activity will be done in payment channels, on chain transactions will be mostly for high-value settlements between larger players (banks, exchanges, etc).

edit: word

I've always considered BTC an alpha release and a prototype. Kind of amazing it's gotten this far.

I've always considered these comments as taking the easy route of skepticism since you can never be wrong on a long enough time scale. "Hah, knew it wouldn't pan out!"

My proof is that I didn't buy any Bitcoin.

well IMO its silly to assume in 100 years the internet will be the same speed as today

In the long term you can't have fast and low fees with decentralized and censorship-resistance you have to chose one or the other.

Bitcoin Cash is fast and as low fees but if it manages to scale to something like a Visa network number of transactions, it will be centralized and then some geographical jurisdiction or miner cartel will try to have control over it lowering the censorship-resistance characteristic.

I think is great to have to different paths on Bitcoin BTC vs BCH so we have opportunity to see own they evolve.

> Bitcoin Cash is fast and as low fees but if it manages to scale to something like a Visa network number of transactions, it will be centralized

This just isn't true. Today's commodity hardware can already process gigabyte blocks[1], which corresponds to approximately 3000 tx/s globally. In addition, Moore's and Nielsen's laws will bring down the cost of cpu power and bandwidth, and will enable terrabyte-sized blocks within the next decade or two - all while still running on commodity hardware.

[1] https://news.bitcoin.com/gigablock-testnet-researchers-mine-...

A big problem is latency even today anything above 3s is unacceptable for mining, half of miners are not validating blocks before starting to mine because it takes to "long", miners spy on other miners and then try to mine empty blocks, Bitcoin doesn't have a lot of orphan blocks today because mining is centralised in China, do you think increasing the block size will help with any of these problems?

One thing is to test on a controlled environment another completely diferent thing is to test on real world.

This was a highly contrived test - an interesting point to note is that they don't talk about how long it would take new nodes to perform an initial sync if there were weeks / months / years worth of gigablocks in the chain.

Check RaiBlocks: instant transactions, feeless, scalable.

Basically each adress has its own blockchain, and proof of share is done with directed acyclic graphs.

Maybe it will be true again someday... Here's a cool map of mainnet lightning network node: https://lnmainnet.gaben.win/

Going to get popcorn, when it will hit news BTC will drop another 30%.

It's not news for anyone already in bitcoin. It's been clear that this is (currently) the case for awhile.

Did anyone make a bitcoin miner that doubles as a popcorn machine? That would be fitting, and would at least put electricity to some more reasonable use.

I don't think anyone's done popcorn, but perhaps you would care for some delicious (filthy) rigberries?


This is not news; we adjusted the bitcoin.org site to match reality.

But this is good for Bitcoin.

I'm the author of the pull request that made this change; feel free to AMA related to it.

Why did you do it? Fast and low are relative terms when it comes to marketing, isnt?

Anyone has an idea as to when the lightning network will get out and how good it is?

I'm sure it's still months away but they're already performing test transactions such as buying coffee with the tech.

There are experimental lightning network nodes on mainnet now and the first transaction has been made: https://cointelegraph.com/news/lightning-networks-pizza-day-...

Here's a map of the LN network. So far there are about 100 nodes: https://lnmainnet.gaben.win/

I'm extremely skeptical that they can solve the double spending problem in a trustless way, without all the same scalability drawbacks of the blockchain.

Once you insert trust and centralization, then all of the supposed benefits of the blockchain are gone, but all the shady behavior will remain and almost certainly get worse.

My understanding is that it is a bit like IOUs redeemable for bitcoin. But just like with Tether and so many other supposedly-redeemable IOUs on the blockchain, there's always going to be serious doubts about whether there really is anything backing them.

The lightning network is(can be) trustless and decentralized. It uses time based transactions to transfer bitcoin. It does have complications though.

If you send money with the LN you have to regularly(about once a week) connect and verify that no one is trying to cheat you. If you only receive through a channel you don't have to do this. In principle it's possible to delegate this to a third party.

Another complication is that sending funds to an arbitrary party involves finding a path through a graph of nodes. We'll see how this works out in practice.

No its not like IOUS -- thats just FUD that those big blocker bcash dweebs keep saying.

LN tx's are actually bitcoin tx's. Micro ones! Proper real bitcoin segwittx's! Secured by the network. Its just they are not registered on chain until the payment channel is closed.

> LN tx's are actually bitcoin tx's.

This is an oversimplification. LN transactions have much different properties than regular bitcoin transactions. Most notably, LN transactions require the user (or someone they trust) to be online in order to verify that they aren't being defrauded by someone broadcasting and earlier state of the payment channel.

> require the user (or someone they trust) to be online in order to verify that they aren't being defrauded

You're right but to clarify, the user getting online once a week or so is enough. They don't have to continuously be online.

If they are not registered, then what is validating their uniqueness?

Someone correct me if I'm wrong, but my understanding is: they are not unique, they are overwritten by later transactions in the same channel (if I send you $10, then you send me $5, the final transaction is equivalent to one with me sending you just $5). But the transactions are "time-locked" so they can't be registered on the chain immediately, and in such a way that if one side misbehaves, the other side can send to the chain a transaction with an earlier "time-lock"; the "time-locks" are ordered such that none of the parties involved benefit from cheating.

And who verifies the order? A trusted intermediary?

Why not do some actual research before acting like you know it can't work?

Nobody verifies the order, but if you try to broadcast an intermediate state without your counterparty's permission, you can't actually spend it for 1000 (?) blocks.

If your counterparty is able to present a proof that that was an intermediate state rather than the latest state then he gets to spend all of the money in the channel immediately.

So all you need to do is monitor for transactions that are spending old channel states, and take all of the money if your counterparty tries to do it. This is even out-sourceable, so you could have a third-party monitoring the blockchain for old channel states and spending the money to you if anything goes wrong.

This doesn't answer the question. It reminds me of "homunculus argument" that consciousness comes from a tiny human inside our brains. The question of consciousness is not solved by this explanation, because it just means we now need to explain how the homunculus derives conciousness.

There is an "off-chain" network that we are being assured is trustless, and you say nobody verifies the ordering of transactions. It just doesn't make sense. Either it requires trust or requires some alternative non-scalable consensus mechanism. There is no magic algorithm that doesn't have tradeoffs.

If bitcoin core agreed to ensure that opening a channel freezes both wallets until the channel is closed, then that would prevent one kind of fraud. But there's still other kinds of fraud, like double spending, or changing the ordering.

You say that a counterparty can "present a proof" but to whom? Isn't timestamping itself a hard problem, and one that it is said only the blockchain can solve in a trustless way?

> You say that a counterparty can "present a proof" but to whom?

It's a hash timelocked contract[0]. You "present the proof" by spending the UTXO. I was reading up on this quite a while ago so I'm fuzzy about the exact details, but the hashes are created as part of the LN transaction.

The transaction can be broadcast immediately by a malicious party, but won't be spendable until 1000 (?) blocks have passed.

If you can prove that there was a subsequent channel state signed by both parties (i.e. the tx that was maliciously broadcast was not the most recent state of the channel), then that can be used to spend the UTXO immediately instead of waiting for the 1000 blocks.

Like I said, do some research before asserting that it can't work.

[0] https://bitcoinmagazine.com/articles/understanding-the-light...

Ok, thanks for helping me think some of this through, but I'm still skeptical.

It sounds like this wouldn't be very useful for just one or two transactions, because to open a channel it requires a real bitcoin transaction, and then LN transaction fees on top of that.

So instead, it would only be useful if people plunk down a large amount of bitcoin in order to conduct a large amount of transactions. So you'd have a huge amount of money tied up in this network, and people would be spending it as if it were real bitcoin when it isn't, and the double spending problem is truly only solved when the channels are closed.

The only guarantee against double spending is the blockchain.

> you'd have a huge amount of money tied up in this network, and people would be spending it as if it were real bitcoin when it isn't

Note that when you have 1 LN channel open, that doesn't mean you can only transact with 1 person. You only need 1 channel open to get on the network, and then you can transact with everybody else on the network.

How is it not "real bitcoin"?

> the double spending problem is truly only solved when the channels are closed.

How are you going to double-spend on a LN channel? Your counterparty knows the state of the channel just as well as you do. You physically can't update the channel state without your counterparty's approval. Part of updating the channel state is revealing to your counterparty the secret hash that will allow them to steal the money from the previous state if you broadcast that previous state's HTLC instead of the updated state.

The double-spending problem is solved by it being possible to settle the channel on the blockchain. The blockchain is still required, but it's not like you can cheaply or easily double-spend a channel at any point in time before it's settled on the chain. If you try to do that, your counterparty will just take all of the money.

Any change on the Bitcoin protocol seems to be extremely slowly adopted so it will probably take at least 2 more years to get any kind of adoption, Segwit adoption is currently only around 16%.

LN does not need any changes to the bitcoin protocol, it is already out and working on mainnet even if in pre-alpha state.

It needs changes to usage patterns, similar to segwit.

99% of people won't be able to run their own nodes, so a huge amount of infrastructure and services needs to built around it before it's useful for more than a few percent of people.

I'd guess in a years time we'll still be hearing about how lightning will save us from fees soon

99% of people won't be able to run their own nodes

Can you elaborate on this please. Why is that? Sorry for my lack of technical knowledge.

all LN needs is segwit address, which is single tx if your BTC is still in legacy address.

> 99% of people won't be able to run their own nodes

99% don't need to run full nodes, they can (and mostly do) use SPV wallets. full nodes are important to network connectivity, but running a full node right now is not expensive - i run one on rpi3.

Level with me guys. Is there any chance bitcoin can survive? How might it happen?

Has there ever been a technology that had a first mover advantage and large network effect but still got bested by a superior technology?

When was the last time you played a VHS tape. For that matter, when was the last time you played a DVD?

The comments there make me sad.

The pull request was brigaded by folks from /r/btc who were not interested in positively contributing to the discussion; they just wanted to waste our time rehashing the past 3 years of scaling debate.

Bitcoin is too energy intensive, slow, and the fees are crazy. It served a good purpose for educating the market, but I think a second-mover might end up taking over

The only truly 0 fee, virtually instant cryptocurrency i have encountered so far is raiblocks. It only achieves this by using block-lattice, not blockchain. The whitepaper is pretty interesting.

There is no such thing as a free lunch.

No, but there is such a thing as morally repugnant dish you should abstain from, no matter the price. For instance, one that promises to waste unbounded amounts of energy just to make some anti-authoritarians and some scammers rich.

energy spent is proportional to the amount of security people need in their transaction platform.

Security does not scale linearly; blockchains are way in the "diminishing returns" territory of real-life security.

I never said there was such thing as a free lunch, I just said that the only crypto currency I have encountered with no fees on transactions is raiblocks

Stop pumping on HN.

what magical machine does raiblocks run on that doesn't consume energy?

I thought bitcoin was 'legit' until I actually bought some in the summer of 2017. Before ever purchasing any Bitcoin, I assumed that transactions were either free, or the fees were extremely low. However, after actually purchasing some Bitcoin and trying to move it between wallets, I found that the fees to make a transaction with Bitcoin are extremely high! In August of 2017 it cost me around $5 to make a single transaction using Bitcoin. At this point I knew for certain that Bitcoin would go to $0. Convenience store owners hate the $0.30 transaction fees currently associated with VISA debit cards, how do you suppose consumers and merchants are going to feel about $5 transaction fees? And the technology behind Bitcoin, blockchain, is equally ridiculous. In order to make a single transaction, one has to process a record of every other transaction that has ever occurred? That is a horrible idea.

You did 0 research before buying.

I bought $10 worth, and that was my 'research'.

And furthermore, that shit is going to $0.

Well, I mean, these are not and never have been the main benefits of Bitcoin.

EDIT: Thanks for the downvotes (please check out their purpose, it's not to disagree with people). You guys should go and read the Bitcoin Whitepaper.

So looking at the updated site, I see:

1) Peer-to-Peer transactions

Thats's nice, but so do Square Cash, Venmo, Paypal, etc... and they currently do it cheaper.

2) Borderless payments

How do we define borders? They're just arbitrary demarcation lines regulated by governments, so wouldn't the developing regulations in South Korea and China be creating borders for bitcoin?

3) Fraud Protection

Maybe someone can explain this to me. If any weird activity happens on my bank account, my bank contacts me and shuts down my card until I verify transactions. If I make a purchase with my CC and the seller is fraudulent, I can charge-back and have the CC deal with the seller. How does Bitcoin even come close to that level of fraud protection? I assume multi-sig is their way of defining "fraud protection"?

Is it the decentralization? Because isn't the bulk of the mining being done by large pools that can then be regulated and controlled by the governments of the countries in which they operate? I just checked the mining breakdown[0] and the two top mining pools (BTC.COM and AntPool) are owned by Bitmain[1], which is a Chinese company, and the next two (BTC.TOP and ViaBTC) also look they're controlled by Chinese companies. I'm not anti-chinese, but lets not pretend that companies operating in China aren't in some way beholden to their highly centralized and non-democratic government.

So what are, and have always been, the main benefits of bitcoin again?

[0] https://blockchain.info/pools [1] https://en.bitcoin.it/wiki/Bitmain

> Thats's nice, but so do Square Cash, Venmo, Paypal, etc... and they currently do it cheaper.

With the difference that your wallet and means of transferring funds is centralized; you can't transfer money from your Paypal wallet without using Paypal's services. With crypto all you need is a connection to the network and your private key.

> How do we define borders? They're just arbitrary demarcation lines regulated by governments, so wouldn't the developing regulations in South Korea and China be creating borders for bitcoin?

They are, plenty of countries where crypto tech is not officially allowed. Or well, they can block the exchanges; in theory, using a VPN service people could still get on the network. But that too can be blocked. So you have a point there, while transferring coins is a global thing, there will be countries without an open internet where it won't be possible.

Re: fraud protection, that's a tough one indeed. I think that implies that you can't get hit by a malicious bank? I'd argue it's more insecure than regular currencies, and like you said, official banks and currencies have a guarantee system, that is, if e.g. a bank gets hacked, or even when, due to your own fault, you get scammed, banks and credit card companies will reimburse you, often backed by national / global banks and systems.

Fraud protection is referring to protection against double spending and protection against chargebacks - it's not the same type of consumer protection that folks are used to with credit cards. However, it's worth noting that this type of consumer protection /is/ possible and can be built on top of the system using reputation and escrow services.

>> Thats's nice, but so do Square Cash, Venmo, Paypal, etc... and they currently do it cheaper.

No they don't. Any one of those services can freeze your money or worse, go into your banking account and reverse transactions. That's not peer-to-peer. There's a centralized governor.

It protects the seller against the fraud of malicious chargeacks. i.e. it provides surety of funds.

They were absolutely the main features of Bitcoin when it first came around.

Definitely not. Check out the whitepaper.

White paper doesn't really matter in this regard. Bitcoin has been praised for years as a potential replacement for fiat currency, and the people doing the praising would use speed and low cost transactions as the hallmark of Bitcoin. The white paper is nice for getting an idea of how Bitcoin works.

You know that the people doing the praising are not affiliated with Bitcoin itself, right?

> never have been the main benefits of Bitcoin

Then why the $#@! did they include "fast" and "low fee" as 2 of the 3 main points on their website.

Don't know. Probably because they wanted to have something catchy there. It changes nothing about my point. Don't forget that Bitcoin.org doesn't represent the Bitcoin "society". It's operated by a very small group of very opinionated people that aren't doing what the community tells them, but whatever they wish (I don't mean to say that they go against the community - but they don't ask about everything, like this). If this group wants to do a change in the Bitcoin itself, it first needs an approval of the community.

This was absolutely proselytized as a core tenet of cryptocurrency, starting with bitcoin. Obviously, it has not remained true.

Some people proselytized it, sure. And they're generally the folks who are upset with the current situation and have switched to various altcoins that will suffer from the same scalability issues if they ever become particularly popular.

Apart from the first 8 and a half years when speculators were predicting it would replace fiat for everyday transactions, you mean?

Their prediction wasn't based on speed and low cost.

Every single piece I read or heard on Bitcoin talked (only) about how Visa et al skim off excessive fees and Bitcoin would be so much cheaper. I don't remember hearing anything about speed, probably because at the time nobody realized Bitcoin wouldn't be transaction latency-competitive with traditional payment solutions.

See and everything I saw was about decentralization and other blockchain/cryptography-related things. I of course saw some people talk about Bitcoin as "cheaper than bankwire", but I definitely wouldn't say that was the main driving point of all Bitcoin adopters; not even a significant minority.

Um, bitcoin was for years touted as "free and instant".

The low-fee, fast transactions were absolutely the main benefits of bitcoin, especially in comparison to Visa or PayPal.

Oh really? Can I have a quote from the whitepaper then, please? It says nothing like that.

Clearly you never actually read it start here:

"The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions"

Clearly lowering transaction cost is one of the basic ideas behind Bitcoin that has now failed.

Nope, it doesn't mean that. There is one point you seem to miss: relative to Bitcoin, the transaction fee is nonexistent. Yeah, it's high when converted to dollars, but still, the promise is fulfilled.

limiting the minimum practical transaction size

If the minimum transaction fee is X then the minimum reasonable transaction is ~10-20x. Based on current fees you can't do 0.0001 BtC transactions, thus it fails one of the primary goals and the entire value from irreversible transactions.

Really this get's to the hart of irreversible transactions. Without artificial limits like the current 1MB block size transactions take meaningless amounts of computation and bandwidth and so they should basically be free. It's really oversight which is why Visa can get away with 30cents or more for what take a computers well under 1/1,000th's of a cent to maintain.

I believe your fundamentalist accounting of history has error.

I agree, this is good for bitcoin!

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