Doesn't this kind of put a dent in the whole micro transaction argument? Once we hit peak Bitcoin, if I want to tip you a penny for your HN comment, I'm not going to pay a nickel in transaction fees to do so.
Red herring: Bitcoin was not particularly designed for any use case at all. The thing in the white paper is the cardboard-and-string proof of concept that something like Bitcoin could exist at all, and the white paper talks about improving the protocol in due course. Of course, nobody did.
It is, however, true that microtransactions were heavily touted by Bitcoin advocates, until of course it became blindingly obvious that Bitcoin didn't scale.
Bitcoin can still allow for microtipping using something like ChangeTip. These third party services can handle millions of transactions and only needs the blockchain when a user loads/withdraws from their wallet.
Likewise if there was a ubiquitous browser plugin to micropay bloggers for access to their articles and it was compatible with WP, Tumblr, etc, users could microtip to their hearts content and only need to reload once month via the blockchain.
This doesn't actually supply any reason to use Bitcoin over dollars. If you're dependent on a centralised third party, there's no reason for it not to be Paypal, etc.
How would you transfer micropayments if not Bitcoin? I don't believe there are any other solutions that don't require an inordinate burden on all persons involved...
As opposed to creating changetip accounts, coinbase accounts, giving them your id and complete personal info, paying exchange fees, paying txn fees, installing bitcoin, waiting for confirmations, being exposed to volatility, etc.
You're talking about using bitcoins to transfer USD. Bitcoin provides a good way to transfer bitcoins between people, USD doesn't have a similar mechanism.
Even for a bitcoin to bitcoin transfer, you need 1) a changetip account, 2) verifying it, 3) downloading bitcoin client + installing it, 4) understanding wallet security. Much less work than paypal accounts (which most people have at this point, anyway).
Plus, bitcoin is not much use unless its converted to fiat.
If you really want to use changetip, sure. There's no need to download or install a bitcoin client when options such as blockchain.info and xapo are available.
Wallet security is pretty much the same you'd be practicing with your bank accounts, which you pretty much need to actually utilize paypal (And to be honest, sometimes to get bitcoins too).
Paypal barely has enough users worldwide to cover half of US population, so most people definitely don't have it. Of course bitcoin has even less users.
Pretty much 100% of my income is in bitcoins, about 90% of my expenses are paid for in bitcoins. I use bitcoins to pay for flights, groceries, rent and so on.
Of course my situation is rather unique, but it does go to prove that bitcoins aren't completely useless by themselves.
> There's no need to download or install a magic bean client when options such as blockchain.info and xapo are available.
You mean the same blockchain.info which was making http requests to random.org to generate their rng, and when the http requests became a 301 redirect to https, it just used the first 32 bytes of the redirect message to generate the rng, hence producing the same random seed for all their wallets since may 2014 or such?
And all other online wallets also have problems. From what I've seen, using an online wallet is highly discouraged due to security risks.
> Wallet security is pretty much the same you'd be practicing with your bank accounts,
Frankly, that's bullshit. Wallet security is a really complicated topic, which often starts with, 'get a laptop disconnected from the net, and do a blank install of a linux VM'.
Maybe you should look more into the blockchain bug, it was caused by fucked up android phones having broken /dev/urandom for whatever reason. IMO it's a pretty fair assumption to make that all modern linux distributions would ship with /dev/urandom.
How exactly is wallet security any different from bank security? Bank transactions don't tend to be reversible either.
"[SECURITY ADVISORY] All addresses made with the Android Blockchain.info wallet application since 1 May 2014 are potentially compromised, your funds are at a direct risk of theft."
I've answered your 2nd question already:
> I don't need to start by installing a blank linux VM on a permanently offline computer, to have a secure bank account.
>[SECURITY ADVISORY] All addresses made with the Android Blockchain.info wallet application since 1 May 2014 are potentially compromised, your funds are at a direct risk of theft.
This is incorrect, posted by some random guy on reddit. Check out the source code he links to, it should be obvious that on any sane platform the random.org generator is used in conjunction with /dev/urandom.
> I don't need to start by installing a blank linux VM on a permanently offline computer, to have a secure bank account.
I don't even know where to begin here, why would you have to do this with bitcoins? How is storing your bitcoins on your computer any different than using online banking? In both scenarios you risk losing everything if you get hacked.
It does do micropayments fairly well via bonding. It wasn't designed for micropayments, but look into the hub and spoke payment channels for some fun reading on the matter
I have never bought btc, there is a fee? This is a function the wallet provides? Who gets the fee? I have bought dogecoins as a joke, and I have a wallet for that, which I send a few coins here and there to others, which cost me nothing. Not quite following what I thought was the basic principles of how this works now.
Fees are in most cryptocurrencies. They go the miner that finds that block which includes your transaction. The miner gets a standard block reward (currently 25btc) plus the fees from all transactions included in that block.
The idea is that in the long term as the block reward tends toward 0, the value of bitcoins rise and a tiny fee from each transaction compensates the miners as much or more than the current block reward does which will continue to incentivize them to be honest.
Currently, fees are essentially an anti-spam measure to keep people from creating millions of transactions with the same coin and DDoSing other transactions. I.e. without fees a single person could be issuing more transactions than this stress test did, for free, non-stop.
There is a fee, it goes to the person who processes your transaction (a bitcoin "miner").
Dogecoin has the same thing. It was likely not free for you to send those coins (unless it was an off-chain transfer via a hosted wallet [think transferring money between checking accounts at USBANK])
