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This paper is a reasonable attempt to model bitcoin by people who only see the surface of what bitcoin is. Bitcoin is like an Onion- it has layers, and makes y
by rothbardrand 9y ago
This paper is a reasonable attempt to model bitcoin by people who only see the surface of what bitcoin is.
Bitcoin is like an Onion- it has layers, and makes you cry.
As I have come to understand it there are many layers- both in technology and economics- at work here.
Most obvious is layer 2 tech like lightening network, side chains, and segwit. (which is a second layer inside the blockchain.)
But as you come to understand it better you realize, for instance, that the network has been under attack and the cost of fees is mainly due to that (when its not under attack because the attackers are moving their bitcoins) you can do micropayments-- like $1.50 sent for $0.05 transaction fee with 3 hours clearing-- which is faster and cheaper than credit cards. You get censorship resistance for free!
- quickthrower2 9y agoI can buy a coffee with a CC immediately but Bitcoin I need to wait 3 hrs?
- clarkmoody 9y agoBitcoin clears and settles within a few blocks. Credit cards may reverse a transaction for 90 days. The merchant could also let you leave after sending Bitcoin if the risk of double-spending was low enough (and network congestion was down). Lightning Network will enable instant transactions without needing to wait for block confirmation, which is a true payments solution.
- trophycase 9y agoYou don't need a globally redundant ledger to store your coffee purchases. The benefits of a blockchain over traditional financial systems is borderlessness and censorship resistance. Nobody is stopping you from buying coffee, why would you need a blockchain?
- dajohnson89 9y agoExpand from coffee to hamburgers, to gas station purchases, to groceries, etc, and soon you have ruled out a major percentage of the consumer economy. Not a deal breaker, but lots of hype for crypto is how it can replace fiat transactions wholesale or damn near it.
- quickthrower2 9y ago> The benefits of a blockchain over traditional financial systems is borderlessness and censorship resistance. That's a subjective viewpoint. I might just want to earn my salary in Bitcoin and spend it, like a currency.