I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity.
Bitcoin is getting "weaker" every year for several reasons:
- emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3.
- energy usage due to Proof of Work is growing astronomically, and the higher the price of bitcoin, the less incentive there is to use renewable energy. Bitcoin uses more energy than the country of Argentina.
- transaction times are SLOW, and expensive. The lightning network is incredibly buggy and won't actually solve the problems it's promising.
There is a better alternative. RaiBlocks, named nano since 2018. It got a bad rap due to the BitGrail hack, but it's picking up steam again. The developer community is great, the main dev team on the Nano protocol has been consistently chugging along regardless of the 3 years of crypto winter on a shoestring budget and the nano community is made up of users, not speculators.
> The lightning network is incredibly buggy and won't actually solve the problems it's promising.
it's actually worse than that - lightning only works in the context of centralized banking. It presumes there is some other entity with whom you can hold a channel open, who you do roughly equivalent amounts of deposits and withdrawals from. If that criterion is not met, then you have to keep closing channels and re-opening new ones, each of which incurs a new transaction fee just like if you did it yourself. So it is still expensive to send arbitrary transactions, it is just now relatively cheap to do "banking" with a single entity.
That entity sending money for you may still be expensive as well. If they have another entity who they do roughly equal amounts of transactions and withdrawals from then yes, they can nominally transact that for free, but they will still probably charge you for the service, and having that bank send a payment to an arbitrary user with whom they don't have balanced deposits/withdrawals incurs the normal bitcoin transaction fee. You can see where all of this is going - Lightning doesn't really solve anything, it still is only optimized for transactions between large, centralized entities.
Oh, and if you ever lose power or internet then your channel has to be closed and resolved, then reopened if you want to do further business. So you have to pay a transaction fee every time you lose internet (or there is a routing problem somewhere on the net) or power.
This is incorrect and highly misleading. You don't have to open and close channels like that. Instead you keep them open and do circular rebalances when your channels are imbalanced. As an experiment I've been running an lnd node for the last 6 months. During this time I've routed 1445 transactions totalling 4.68249963 BTC (~223K USD currently) and only closed a handful of channels, using single digit sat/vB as it's not urgent. Lightning transaction fees in general are negligible at today's btc price. You transact with all your peers for free while you usually pay a fraction of a cent for sending transactions anywhere in the graph. Transactions are pretty much instant.
After running it for 6 months, I could certainly criticise various aspects of lnd but none of what you have written falls into the valid criticism category.
This sounds cool, do you have any recommended resources to get started with running a lnd node and getting it connected to a larger network? And, just curious, do you make any money from lighting fees?
Connecting to others is simple. What's more difficult is getting inbound connections, ie. others connecting to you. Historically you asked people to connect to you but recently you have https://pool.lightning.engineering/ (integrated into Raspiblitz) with which you can buy incoming connections easily.
> do you make any money from lighting fees?
In short no. I made ~$30 from routing fees in 6 months and spent around the same on on-chain fees (opening/closing channels). It's just an experiment for me (same with bitcoin itself) to see how it all works not something i expect to generate money.
> It presumes there is some other entity with whom you can hold a channel open, who you do roughly equivalent amounts of deposits and withdrawals from.
I don't get how you go from there to "centralised banking".
Contrary to a bank, you do not need to trust this entity with your money. Also it is not centralised, there can be many such entity and they connect together.
> you have to keep closing channels and re-opening new ones, each of which incurs a new transaction fee just like if you did it yourself.
Channel factories will significantly reduce the need to go to the blockchain to open and close channels.
> if you ever lose power or internet then your channel has to be closed and resolved
This is complete non-sense, your channel lives on as long as you don't close it, if you're concerned about counterparty risk, you can use a watchtower.
> The lightning network is incredibly buggy and won't actually solve the problems it's promising.
Not an expert but I found that a readable summary of different layer 2 scaling strategies and why Ethereum developers prefer Rollups instead of Channels (like Lightning):
(edit) re: n-layer solutions: The https://interledger.org/ RFCs and something like Transaction Permission Layer (TPL) will probably be helpful for interchain compliance.
> Interledger is not tied to a single company, blockchain, or currency.
> The challenge: Current blockchain-based protocols lack an effective governance mechanism that ensures token transfers comply with requirements set by the project that issued the token.
> Projects need to set requirements for a variety of reasons. For instance, remaining compliant with securities laws, limiting transfer to beta testers, or limiting transfer to a particular geo-spatial location. Whatever your reason, if a requirement can be verified by a third-party, TPL will be able to help.
In the US, S-Corps can't have international or more than n shareholders, for example; so if firms even wanted to issue securities on a first-layer network, they'd need an extra-chain compliance mechanism to ensure that their issuance is legal pursuant to local, sovereign, necessary policies. Re-issuing stock certificates is something that has to be done sometimes. When is it possible to cancel outstanding tokens?
The sibling comments show just how difficult it is to talk constructively about these things even at a place like HN. I have no idea about the technical merits of Nano but the emotionally charged reactions with little argumentation aren't helping anyone. Is there a place online where people actually discusss cryptocurrencies on a technical/economic merit? That kind of discussion certainly isn't happening on reddit, and sadly not on HN either.
The difference is that Bitcoin success was largely accidental. People are very touchy about others getting a head start. Miners got their Bitcoins by burning electricity, this makes it a "fair deal" despite destroying the environment. Satoshi disappeared and never moved his coins, which removes the "pre-mine" aspect.
Bitcoin is technologically obsolete but that doesn't matter. As the very first coin, its history is the main reason it's still relevant today. It's very well known and that makes its position as the number one cryptocurrency extremely hard to shake even though we have much better coins now such as Monero.
Perhaps. Due to high transaction fees and processing times, Bitcoin is unsuitable for use as an exchange medium. It's become an investment, a speculative asset. The value will exist for as long as people believe it is valuable. Brand and hype do help create this value in people's eyes.
Says someone who is using 1970s technology called ACH and SWIFT to send money over. At least be aware of what is happening around you before attacking other technologies.
> Says someone who is using 1970s technology called ACH and SWIFT to send money over. At least be aware of what is happening around you before attacking other technologies.
Technology isn't a linear tech tree with newer == better. In some very real ways, Bitcoin is like a a new car design with some interesting new technologies (e.g. a satellite radio receiver) but that doesn't support other technologies like seatbelts.
Dismissing something as "<past-time-period> technology" is lazy. You really need to compare explicit pros and cons.
> Says someone who is using 1970s technology called ACH and SWIFT to send money over.
In Europe SEPA Instant requires transfers take less than 10 seconds in anything other than exceptional circumstances, and costs the same to transfer between any of the 36 member countries.
> At least be aware of what is happening around you before attacking other technologies.
Ironic. So many discussions of Bitcoin's utility implicitly assume that the rest of the world also has the same sort of antiquated banking and payment systems used in the US.
Keep in mind that a lot of lightning end-users would have private channels that are truly peer-to-peer, so number of users is likely much higher than any public stats you could gather.
That's hardly relevant for someone looking at them in 2021, of for choosing a "global reserve currency" which involves a staggering appreciation of both. Bitcoin 2021 has been 85% "premined", the only difference is that it is (much) more widely distributed.
Bitcoin was being distributed for a decade, nano was “distributed” in a matter of months and there is no way to tell what is the real distribution, for all its worth a single entity could be in control of 95% of it.
Suppose I create a new coin that I also call Nano. I create a bunch of bots and websites and post on message boards so it looks like my version is more popular and has more participants.
There are people and organizations attempting to do this with Bitcoin right now. How do people tell the difference? Sometimes they don't and they get scammed.
You won't. This is why Bitcoin is valuable since it has stood the test of time and has gained more acceptability. Nanos and other nonsense coins are just trying to attack the emperor in the hope that they come close to it and thus make the speculators a lot of money.
It's weird how hard you go against literally anything except Bitcoin because of your rabid obsession with whatever paltry sum of money you've made over this one dated technologically is. You're literally like a cancer-ridden coal miner coughing his last lung to keep the mines open. Good riddance.
I missed this at the time, but this sort of personal attack is absolutely not ok on HN and will get you banned for obvious reasons. You've unfortunately been breaking the site guidelines in a bunch of your other comments too.
> they [the central banks] can expand the money supply to keep the system propped up.
They have to expand money supply to keep the value of the currencies stable as long as most money is not spent. The economy depends not on the supply of money but on the stability of the money.
By which force do central banks have to keep increasing the money supply once people start spending? There is no reason to do so and thus no reason for fiat currencies to collapse.
It's more likely that they increase interest rates when people start spending again, and thus reduce supply and as a consequence, keep the value of money stable.
> The economy depends not on the supply of money but on the stability of the money.
The supply of money is adjusted to match how much is needed, it's the entire reason why countries switched to fiat currencies. Everything else being equal, if the GDP is growing 5% each year you need 5% more money each year to keep the same velocity of money i.e. how much is being used in the economy.
That's by design, if you use a proof of work that's validated outside of the blockchain, the work could be valid for multiple forks, thus being a really bad proof of work system.
But a 51% attack (with e.g. a double spend) will be easily spotted by the community, right? What would be the incentive for an actor with such a vast amount of specialised hardware just for Bitcoin mining, to undermine its security? Its not that I'm saying it is not possible but its your usage of "likely" that I would argue against
I see the ideological foundation for a theoretical 51% attack more aligned with causing mass disruption & chaos than some kind of financial gain. Yes, it would likely be detected. But it would undermine BTC, lots of people would lose lots of money, lots of businesses would go under, portions of the global banking system would be disrupted and likely pushed back to more centralized alternatives. The most likely threat actor for such an attack would therefore be a nation-state.
China is the only country pushing that kind of hash rate at the moment, so we should analyze whether the move would be beneficial to them in order to determine the risk.
You are assuming that the attacker would not gain more from a general loss of faith in Bitcoin than they would gain from controlling Bitcoin itself. That is a bad assumption. What if the attacker is trying to push a competing system? What if the attacker holds short Bitcoin futures contracts?
> But a 51% attack (with e.g. a double spend) will be easily spotted by the community, right?
The real problem is that if it happens once, it's proven to be both possible and practical. And once it's proven to be possible and practical, how do you know it won't happen again and again?
> What would be the incentive for an actor with such a vast amount of specialised hardware just for Bitcoin mining, to undermine its security?
Most mining hardware is specific to hashing, not Bitcoin specifically.
The obvious attack is something like this: Imagine someone invents a Bitcoin competitor that is somehow more resistant to these types of attacks, yet can use the same mining hardware. To convince everyone to switch to their new alternative (which they have accumulated significant amounts of, similar to Satoshi), they spend the money to crash Bitcoin, while advertising themselves as the more secure alternative to Bitcoin.
A hacker that was able to hijack the mining pool just for malicious reasons could do it. Maybe they are motivated by not liking Bitcoin energy use.
The better argument here is that 98% of cryptocurrencies are very cheap to 51% attack, and they are attacked successfully. One would expect these to be exploited aggressively before a successful Bitcoin attack. Hints of unmanageable abuse would be exchanges de-listing alternative cryptocurrencies due to mounting losses.
The bottom line is if Bitcoin can't survive a 51% attack, then everything else below it is non-viable.
Personally I think the gaping vulnerabilities of altcoins and the scalability of Ethereum is a bigger issue than what may happen to Bitcoin over the next decade+. Major catastrophes with any of the other stuff could go a long way toward causing loss of trust, interest, and value in Bitcoin.
It suffers from all the same problems. The only advantage it has is that they chose a slightly larger arbitrary constant. It still does not and can not scale. One order of magnitude makes little difference when we're dealing with something that is four orders of magnitude slower and four orders of magnitude more power-hungry than the competition.
100 maximum transactions per second is still orders of magnitude too low to be useful on a daily basis outside of niche uses (read: drugs). Ten minutes confirmation time is still orders of magnitude worse than credit cards or cash.
Obviously, what we need is the REAL Bitcoin from the confirmed legitimate Satoshi Nakamoto: Bitcoin SV.
"The Nakamoto coefficient is a way to quantify the decentralization of a blockchain or other decentralized system. It's the number of entities you need to compromise at least one essential subsystem."
If a 51% attack occurs, the bitcoin full nodes are still fundamentally in control. Full nodes decide whether or not to accept a blockchain, they socially decide whether to accept a 51% attack. They can hard fork and change the hashing algorithm, firing all current miners.
How does Nano prevent me from setting up two servers, sending the money to different nodes, and double-spending the money?
Yep, Nano is all the things bitcoin was attempting to be initially. Using Nano is a breeze, it feels like the future, especially compared to bitcoin in terms of speed.
What is the incentive for a 51% attack (on Bitcoin specifically)
Wouldn't it take a large number of resources and coordinated effort to do this? And then the result of a successful attack means that the value essentially drops to zero ... so why invest the effort?
Seems like the only entity to have this incentive would be central banks / fiat regimes.
Given that Bitcoin has become quite liquid, there might also be ways to short it. But yes, governments doing it for political reasons would seem like the most obvious incentive.
> What is the incentive for a 51% attack (on Bitcoin specifically)
Besides trying to destroy bitcoin, couldn't such an attack be used to simply drive up transaction fees for anyone who wanted to use it? For instance, if they refuse to process transactions with a fee below a threshold, they'd leave money on the table in the sort term, but eventually the higher fee requirement would have to be discovered and transactions reissued to pay it.
It doesn't follow. Bitcoin chases cheap energy, so wherever green is cheaper than carbon that's where Bitcoin will be mined. Eventually carbon will be more expensive everywhere.
I think the idea is that, as mining fees and power generation requirements increase, you have less incentive to build the most efficient power generation (renewables) and increasing incentives to build financially reliable proven technologies. Coal power plants, though less efficient than solar, have a much better known lifecycle and are easier to plan around.
not sure what you mean by "weaker". If you mean the security, then, I would think that would be a result of energy use going down, not energy use going up. (but as someone else pointed out, the power use seems to be steady, and neither trending up nor down)
(that being said, it becoming more centralized might be an issue for security, yes. I don't know how (de)centralized it currently is though)
Also, isn't there a rule or guideline or something discouraging talking about how getting downvoted?
If you want to see a real Decentralized Central Bank I highly recommend digging into SORA Network.
It's a self-funded project by the founder (No VC's, No ICO, No Presale, etc.) with a fair launch and the team has already developed a live central bank digital currency called Bakong in Cambodia.
It's really sad to see the current state of bitcoin. We can't really justify the current energy consumption while mainly being used as a financial instrument to speculate on.
Nano has been on my eye for a while now. I hope Nano will get the attention it deserves. Sub second feeless money settlement transactions is such a game changer. Nano just works.
Cardano is the daddy of shitcoins. It is the Ripple of this bull run. Literally the only thing it is being used for is speculation. Everything else is "coming soon".
Nano is a scam. Nano fanboys don’t even get the concept of latency on the internet, forget anything more complex like recovery from network partitions. There are reasons behind most of the things that you consider drawbacks in bitcoin, shitcoin proponents don’t understand those reasons and simply copy bitcoin with some parameter changed, completely oblivious to the fact that it makes their shitcoin worthless.
Stop shilling. And to have the galls to say something like Nano has the ability to take on Bitcoin just indicates that you very new to this market - and thus want to make a quick buck by shilling your random shitcoin. The thing which Bitcoin has, and that few others can match, is acceptability from a large swatch of investors and predictable security/emission schedule.
And, just fyi, Nano is not made of users. Go to its reddit and you will see everyone shilling it and having price targets on it. Stop giving such these weak arguments - most of us are in here for the money and don't give two hoots of the technology.
Attacking another user like this will get you banned here. Accusations of shillage are not ok unless you have specific evidence and in that case you should be sending it to hn@ycombinator.com so we can investigate. Internet cheap shots about astroturfing and shillage are explicitly against the site guidelines because they're so common, so toxic, and typically so completely wrong.
> most of us are in here for the money and don't give two hoots of the technology.
Nice to hear someone say the quiet part loud. Could you tell all the rest of the most-of-us to be honest about that too? It'd save me a lot of time in conversations where people refuse to consider any Bitcoin alternatives because they'd lose money if people started to switch.
> most of us are in here for the money and don't give two hoots of the technology
Monero's technology enables private and untraceable transactions. It's amazing and I own some just because of that property. Seems to be the only cryptocurrency that still aims to be an actual currency.
>Monero's technology enables private and untraceable transactions
Not exactly. The decoy inputs/outputs provide some plausible deniability when you look at a transaction in isolation, but over repeated transactions it gets gradually lost. It's not enough to pin you as a criminal with 100% certainty, but it's enough for the police to keep an eye on you and wait for you to slip up.
Doesn't this require an exchange to provide external information? It is my understanding that it's impossible to correlate transactions using blockchain analysis alone.
>Doesn't this require an exchange to provide external information
or a donation address, or a cooperative counterparty when you buy/sell something (think darknet market that got radided, or a payment processor that sells its transaction information).
No - not necessarily. IN crypto, it is quite possible to multiply your money when investing in altcoins - purely based on shilling and positioning with no technology to speak of. This is what the OP likely is trying to do here.
That's because the problem is endemic to the cryptocurrency space. There has been very little serious work done on making any cryptocurrency usable as a medium of exchange, even for projects which claim to have that as a goal. Speculation is about the only activity that's possible for most coins, so that's what people do.
This is a bit off topic, but if you were here for the money shouldn't you just be in the stock market? It seems like the people who really try and analyze it (like in quantitative trading) do extremely well and if you don't have the time for that (who does outside of work), then mutual funds have a great return on investment and are significantly less risky and have a way lower barrier to entry. I am a bit ignorant on the economics of bitcoin (though I have built a miner and did all the merkle tree stuff), but its unclear how bitcoin is better unless you have a lot of capital already and can stomach the risk.
Bitcoin is getting "weaker" every year for several reasons:
- emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3.
- energy usage due to Proof of Work is growing astronomically, and the higher the price of bitcoin, the less incentive there is to use renewable energy. Bitcoin uses more energy than the country of Argentina.
- transaction times are SLOW, and expensive. The lightning network is incredibly buggy and won't actually solve the problems it's promising.
There is a better alternative. RaiBlocks, named nano since 2018. It got a bad rap due to the BitGrail hack, but it's picking up steam again. The developer community is great, the main dev team on the Nano protocol has been consistently chugging along regardless of the 3 years of crypto winter on a shoestring budget and the nano community is made up of users, not speculators.
This article sums it up quite nicely: https://senatusspqr.medium.com/why-nano-is-the-ultimate-stor...
I'm happy to receive downvotes, but all I ask in return is that you give it a read with an open mind.