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Such an incredible waste of power and hardware, for a payment system that does something like 3 transactions per second globally. Off the top of my head idea:

Such an incredible waste of power and hardware, for a payment system that does something like 3 transactions per second globally. Off the top of my head idea: What about a system that uses a bit of real-world, legal responsibility to generate consensus. Something a bit like ICANN and the domain name system. Take 10 or so trusted people or organistions worldwide, get them to each run a node, each of which coordinate via the Raft protocol or whatever. A distributed ledger is agreed on by each of those 10 nodes. This should use far less power and be able to handle more transactions per sec than bitcoin.

JohnJamesRambo 9y ago
Or we could all switch to Ethereum, which will have Proof of Stake (low electricity costs) instead of Proof of Work (insanely high electricity costs) mining soon.
- JustAnotherPat 9y ago
  POS networks already exist. No need to way 3+ years while the Ethereum team reinvents the wheel.
  - xtracto 9y ago
    See PeerCoin ( https://peercoin.net/ https://peercoin.net/ ) which has been around for quite some time and has a POS/POW combination.
- runeks 9y ago
  High electricity costs needed to rewrite the blockchain is a feature of proof-of-work, not a bug. We could all switch to proof-of-stake, but then anyone would be able to create a valid-looking blockchain in a few minutes, and the only way to get the right chain would be to connect to nodes you know or trust, at which point a blockchain becomes meaningless in the first place. The challenge is about coming to agreement. Reaching agreement on information which determines how much money people own is hard. Proof-of-work reaches consensus by having a vote -- on which transaction history is correct -- constitute something that cannot be forged: energy.
puranjay 9y ago
Bitcoin feels like one of the biggest scams around. It feels like it's propped entirely by speculators at this point.
petertodd 9y ago
> Such an incredible waste of power and hardware, for a payment system that does something like 3 transactions per second globally. Bitcoin does a few transactions per second on-chain, however those few transactions per second support many more transactions per second on systems built on top of Bitcoin in a similar way to how the tx-per-second Canada's inter-bank transfer system does is quite low, but those settlement transactions support orders of magnitude more transactions per second on systems built on top of that settlement system. An example of exactly what you proposed is Blockstream's Liquid sidechain technology, which maintains a high-speed ledger secured via multi-party signing between various exchanges to allow high speed, highly efficient, off-chain transactions backed by on-chain Bitcoins.
- kuschku 9y ago
  So, we should use a system that’s inferior to actual simple wire transfers, which are less than 20 seconds, free transactions, directly via the ledger? I’m sorry, but I don’t see the value in Bitcoin if it is worse than SEPA transfers.
  - stale2002 9y ago
    It is not worse.... That the point. There are significant advantages over a wire transfer. With bitcoin you can send money to anywhere in the world for 20cents. Thats cheaper than a 30$ wire transfer. Also, the censorship resistant part of bitcoin is really important, and is being used by the Venezuelans right now. And there are technologies being built on top of it that will make it even better. This is like 1994 internet right now. Even though it works, and has significant benefits, there are still a whole lot more stuff to come that is being worked on.
    - kuschku 9y ago
      That's the thing, I can send money with bitcoin for 20ct, or with a SEPA transfer for free. 0ct. And it's faster.
    - placeybordeaux 9y ago
dis-sys 9y ago
> Take 10 or so trusted people or organistions worldwide, get them to each run a node, each of which coordinate via the Raft protocol or whatever. A distributed ledger is agreed on by each of those 10 nodes. then I'd argue it is still centralized - you have this 10 nodes acting as the traditional bank.
quotha 9y ago
Where were you 8 years ago?
45h34jh53k4j 9y ago
check out bitshares, steemit and eventually EOS. Their DPoS model uses exactly that -- users vote on the witnesses that will produce blocks. Every witness gets a shot at producing the next block. If the witness fails to produce a block, they will be voted out by the users. Scales to 100k tx/sec, supposedly.
- runeks 9y ago
  I wonder if it would be possible for 90% of users to come to agreement on assigning the balance of the wealthiest account to themselves. Without proof-of-work, there'd be no way to prove this has happened, since it would be easy to create a new blockchain copy which just assigns the coins from the wealthiest account to all other accounts.
runeks 9y ago
Bitcoin is not a payment system. It's essentially a digital commodity with built-in ownership transfer. Bitcoin payments can be cleared off-chain, like VISA payments can be cleared without using SWIFT. Most importantly, though, it's decentralized. It's simple to implement a fast, centralized currency and payment system. But Bitcoin's main attraction is that it values decentralization greater than efficiency and throughput, thus making it, primarily, a store of value, as opposed to a means of payment.
- kuschku 9y ago
  > Bitcoin payments can be cleared off-chain, like VISA payments can be cleared without using SWIFT. The whole point of SEPA transfers was to move all transfers to be cleared directly via the main ledger, in a matter of seconds, across different countries and currencies. If Bitcoin is inferior to an existing payment system used by 500 million people, then it’s worthless.
  - runeks 9y ago
    Bitcoin is global and decentralized while SEPA is EU-only and centralized. The two are not in competition; neither is an alternative to the other.
  - placeybordeaux 9y ago
    > If Bitcoin is inferior to an existing payment system used by 500 million people, then it’s worthless. If Bitcoin is strictly inferior to an existing payment system used by 500 million, then it's worthless. IMO the major value proposition of bitcoin is that no one can exert influence to invalidate tx or blacklist certain users. Payment systems that have this property will always have some utility for organizations that nation state actors are trying to stop, e.g. ransomware, any darknet market provider, political dissidents, freedom fighters/terrorists, people trying to participate in a market in a controlled economy etc.
- Jach 9y ago
  https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf makes it clear that Bitcoin is definitely a payment system, a distributed one. But it's not only a payment system, and using it like one right now is pretty dumb because of the absurdly high transaction fees, but high fees are entirely a temporary artifact as the system scales. (Edit: removed hostility.)
drngdds 9y ago
Don't you lose decentralization then?
- runeks 9y ago
  Nothing is as decentralized as proof-of-work when it comes to cryptocurrencies. It ensures you can know what the right chain is as long as only a single node you connect to tells the truth.
campbelltown 9y ago
Efficiency was and never will be the primary goal of bitcoin. It is meant to provide you with permissionless ownership. In a permissionless system if what you own_ is worth X dollars, than it will take some amount, say Y, dollars to secure this ownership. In the case of bitcoin we do not have a way to arbitrarily stake y dollars in the system (see proposed proof of stake in ethereum). Instead you can indirectly assume that Y is supplied by the miner investment in hardware and electricity. By stressing known hardware limitations, we can force miners to act more and more and more competitively as more total value is held on the network. So the increasing cost has nothing to do with use (aka transactions). It is a consequence of providing security to a growing amount of value on the network. There is simply no better way to do this currently assuming you want a permissionless architecture. It is step 1 towards creating an open finance system. Other steps like proof of stake will eventually solve this problem.

JohnJamesRambo 9y ago

Or we could all switch to Ethereum, which will have Proof of Stake (low electricity costs) instead of Proof of Work (insanely high electricity costs) mining soon.

JustAnotherPat 9y ago
POS networks already exist. No need to way 3+ years while the Ethereum team reinvents the wheel.
- xtracto 9y ago
  See PeerCoin ( https://peercoin.net/ https://peercoin.net/ ) which has been around for quite some time and has a POS/POW combination.
runeks 9y ago
High electricity costs needed to rewrite the blockchain is a feature of proof-of-work, not a bug. We could all switch to proof-of-stake, but then anyone would be able to create a valid-looking blockchain in a few minutes, and the only way to get the right chain would be to connect to nodes you know or trust, at which point a blockchain becomes meaningless in the first place. The challenge is about coming to agreement. Reaching agreement on information which determines how much money people own is hard. Proof-of-work reaches consensus by having a vote -- on which transaction history is correct -- constitute something that cannot be forged: energy.

puranjay 9y ago

Bitcoin feels like one of the biggest scams around. It feels like it's propped entirely by speculators at this point.

petertodd 9y ago

> Such an incredible waste of power and hardware, for a payment system that does something like 3 transactions per second globally. Bitcoin does a few transactions per second on-chain, however those few transactions per second support many more transactions per second on systems built on top of Bitcoin in a similar way to how the tx-per-second Canada's inter-bank transfer system does is quite low, but those settlement transactions support orders of magnitude more transactions per second on systems built on top of that settlement system. An example of exactly what you proposed is Blockstream's Liquid sidechain technology, which maintains a high-speed ledger secured via multi-party signing between various exchanges to allow high speed, highly efficient, off-chain transactions backed by on-chain Bitcoins.

kuschku 9y ago
So, we should use a system that’s inferior to actual simple wire transfers, which are less than 20 seconds, free transactions, directly via the ledger? I’m sorry, but I don’t see the value in Bitcoin if it is worse than SEPA transfers.
- stale2002 9y ago
  It is not worse.... That the point. There are significant advantages over a wire transfer. With bitcoin you can send money to anywhere in the world for 20cents. Thats cheaper than a 30$ wire transfer. Also, the censorship resistant part of bitcoin is really important, and is being used by the Venezuelans right now. And there are technologies being built on top of it that will make it even better. This is like 1994 internet right now. Even though it works, and has significant benefits, there are still a whole lot more stuff to come that is being worked on.
  - kuschku 9y ago
    That's the thing, I can send money with bitcoin for 20ct, or with a SEPA transfer for free. 0ct. And it's faster.
  - placeybordeaux 9y ago

dis-sys 9y ago

> Take 10 or so trusted people or organistions worldwide, get them to each run a node, each of which coordinate via the Raft protocol or whatever. A distributed ledger is agreed on by each of those 10 nodes. then I'd argue it is still centralized - you have this 10 nodes acting as the traditional bank.

quotha 9y ago

Where were you 8 years ago?

45h34jh53k4j 9y ago

check out bitshares, steemit and eventually EOS. Their DPoS model uses exactly that -- users vote on the witnesses that will produce blocks. Every witness gets a shot at producing the next block. If the witness fails to produce a block, they will be voted out by the users. Scales to 100k tx/sec, supposedly.

runeks 9y ago
I wonder if it would be possible for 90% of users to come to agreement on assigning the balance of the wealthiest account to themselves. Without proof-of-work, there'd be no way to prove this has happened, since it would be easy to create a new blockchain copy which just assigns the coins from the wealthiest account to all other accounts.

runeks 9y ago

Bitcoin is not a payment system. It's essentially a digital commodity with built-in ownership transfer. Bitcoin payments can be cleared off-chain, like VISA payments can be cleared without using SWIFT. Most importantly, though, it's decentralized. It's simple to implement a fast, centralized currency and payment system. But Bitcoin's main attraction is that it values decentralization greater than efficiency and throughput, thus making it, primarily, a store of value, as opposed to a means of payment.

kuschku 9y ago
> Bitcoin payments can be cleared off-chain, like VISA payments can be cleared without using SWIFT. The whole point of SEPA transfers was to move all transfers to be cleared directly via the main ledger, in a matter of seconds, across different countries and currencies. If Bitcoin is inferior to an existing payment system used by 500 million people, then it’s worthless.
- runeks 9y ago
  Bitcoin is global and decentralized while SEPA is EU-only and centralized. The two are not in competition; neither is an alternative to the other.
- placeybordeaux 9y ago
  > If Bitcoin is inferior to an existing payment system used by 500 million people, then it’s worthless. If Bitcoin is strictly inferior to an existing payment system used by 500 million, then it's worthless. IMO the major value proposition of bitcoin is that no one can exert influence to invalidate tx or blacklist certain users. Payment systems that have this property will always have some utility for organizations that nation state actors are trying to stop, e.g. ransomware, any darknet market provider, political dissidents, freedom fighters/terrorists, people trying to participate in a market in a controlled economy etc.
Jach 9y ago
https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf makes it clear that Bitcoin is definitely a payment system, a distributed one. But it's not only a payment system, and using it like one right now is pretty dumb because of the absurdly high transaction fees, but high fees are entirely a temporary artifact as the system scales. (Edit: removed hostility.)

drngdds 9y ago

Don't you lose decentralization then?

runeks 9y ago
Nothing is as decentralized as proof-of-work when it comes to cryptocurrencies. It ensures you can know what the right chain is as long as only a single node you connect to tells the truth.

campbelltown 9y ago

Efficiency was and never will be the primary goal of bitcoin. It is meant to provide you with permissionless ownership. In a permissionless system if what you own_ is worth X dollars, than it will take some amount, say Y, dollars to secure this ownership. In the case of bitcoin we do not have a way to arbitrarily stake y dollars in the system (see proposed proof of stake in ethereum). Instead you can indirectly assume that Y is supplied by the miner investment in hardware and electricity. By stressing known hardware limitations, we can force miners to act more and more and more competitively as more total value is held on the network. So the increasing cost has nothing to do with use (aka transactions). It is a consequence of providing security to a growing amount of value on the network. There is simply no better way to do this currently assuming you want a permissionless architecture. It is step 1 towards creating an open finance system. Other steps like proof of stake will eventually solve this problem.