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The bitcoin network isn't as mighty and powerful as you make it out to be. The hashing power you talk about is spent doing redundant work, and the network caps

by bduerst 11y ago

The bitcoin network isn't as mighty and powerful as you make it out to be. The hashing power you talk about is spent doing redundant work, and the network caps at 7 transactions a second (by design). Hashing power is moot when organizations can (and routinely do) bring down the network by spamming it with "stress tests". Just because there haven't been any wildly successful block chain implementations doesn't mean that the technology can't be employed elsewhere. Many technologies are in play today that were once deemed as not being useful, and even though I'm critical of block chain, I can still think of a few validation use cases for big banks with it.

empath75 11y ago
>the network caps at 7 transactions a second (by design). That's going to be changed fairly soon. I suspect that a lot of people are just going to use the bitcoin blockchain out of inertia, just because it's easier to use a proven platform than something you build yourself. Unless someone needs a feature that bitcoin doesn't provide, I don't see any competing blockchain taking its place.
- bduerst 11y ago
  >That's going to be changed fairly soon. No, it's not. We have already seen four individual proposals to the network to increase the block size. Each requires a consensus by the miners and each was shot down. The miners are incentivized not to increase the transaction rate, because they profit from the increased competition and fees from smaller blocks. By design, the decentralized control of bitcoin is actually what is preventing it from improving itself.
  - CydeWeys 11y ago
    The miners are incentivized to do whatever is best for the value of Bitcoin, because that's what their block rewards and transaction fees are paid off in. Maximizing the block fee in a way that hurts Bitcoin itself would be myopic and irrational, and they aren't doing that. Most pools are on board with increasing the block size.
    - bduerst 11y ago
      >The miners are incentivized to do whatever is best for the value of Bitcoin No they aren't. The miners are rational actors and incentivized to do what's best for themselves, not Bitcoin. The entire network is built on the premise that the miners are rational, and it has been demonstrated four times already. Bitcoin is an example of how Tragedy of the Commons applies to digital networks.
- CydeWeys 11y ago
  And thanks to side-chains, which Blockstream and others are working on, you can add arbitrary functionality on top of Bitcoin while still maintaining the benefits of having its large secure network. In my view, anything using blockchain technology that isn't actually using Bitcoin's blockchain is a nonstarter. It's a fundamental misunderstanding of what Bitcoin's strengths are. It'd be like trying to come out with a new model of car that can't run on the existing roads (which actually has instructive parallels to the complete failure of earlier self-driving car attempts of the 60s that needed specialized roads).
  - bduerst 11y ago
    Side chains are centralized I.O.U.s that still need bitcoin transactions in order to be fulfilled. They remove the benefits of using the decentralized bitcoin network while still using the network. If 10 m people used side chains (just for today), it would take some of their transactions up to 40 days to fulfill. If 10 m used it again (just tomorrow), it would take almost 3 months for some transactions to fulfill. Most merchants will not wait that long for an I.O.U., especially with fluctuating BTC exchange rates, making side chains much worse and less competitive than ACH.
- deleted 11y ago
  [deleted]

by bduerst 11y ago

empath75 11y ago

>the network caps at 7 transactions a second (by design). That's going to be changed fairly soon. I suspect that a lot of people are just going to use the bitcoin blockchain out of inertia, just because it's easier to use a proven platform than something you build yourself. Unless someone needs a feature that bitcoin doesn't provide, I don't see any competing blockchain taking its place.

bduerst 11y ago
>That's going to be changed fairly soon. No, it's not. We have already seen four individual proposals to the network to increase the block size. Each requires a consensus by the miners and each was shot down. The miners are incentivized not to increase the transaction rate, because they profit from the increased competition and fees from smaller blocks. By design, the decentralized control of bitcoin is actually what is preventing it from improving itself.
- CydeWeys 11y ago
  The miners are incentivized to do whatever is best for the value of Bitcoin, because that's what their block rewards and transaction fees are paid off in. Maximizing the block fee in a way that hurts Bitcoin itself would be myopic and irrational, and they aren't doing that. Most pools are on board with increasing the block size.
  - bduerst 11y ago
    >The miners are incentivized to do whatever is best for the value of Bitcoin No they aren't. The miners are rational actors and incentivized to do what's best for themselves, not Bitcoin. The entire network is built on the premise that the miners are rational, and it has been demonstrated four times already. Bitcoin is an example of how Tragedy of the Commons applies to digital networks.
CydeWeys 11y ago
And thanks to side-chains, which Blockstream and others are working on, you can add arbitrary functionality on top of Bitcoin while still maintaining the benefits of having its large secure network. In my view, anything using blockchain technology that isn't actually using Bitcoin's blockchain is a nonstarter. It's a fundamental misunderstanding of what Bitcoin's strengths are. It'd be like trying to come out with a new model of car that can't run on the existing roads (which actually has instructive parallels to the complete failure of earlier self-driving car attempts of the 60s that needed specialized roads).
- bduerst 11y ago
  Side chains are centralized I.O.U.s that still need bitcoin transactions in order to be fulfilled. They remove the benefits of using the decentralized bitcoin network while still using the network. If 10 m people used side chains (just for today), it would take some of their transactions up to 40 days to fulfill. If 10 m used it again (just tomorrow), it would take almost 3 months for some transactions to fulfill. Most merchants will not wait that long for an I.O.U., especially with fluctuating BTC exchange rates, making side chains much worse and less competitive than ACH.
deleted 11y ago
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