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Bitcoin isn't a payment processor. It can't handle the tiniest fraction of Visa's transaction volume natively. Of course you can work around this by having thi

by lukev 9y ago

Bitcoin isn't a payment processor. It can't handle the tiniest fraction of Visa's transaction volume natively. Of course you can work around this by having third party payment processors that sit between customers and the raw blockchain. But because Visa already does much of that, you need to include the cost of those as well, in order to get an apples-to-apples comparison.

brink 9y ago
Right, don't think of Bitcoin as digital dollars. Bitcoin is more like digital gold. Use it to hedge the digital markets, but don't use it to buy coffee. Granted, some coffee shops will take your "digital gold" as they would take a sliver of actual gold, but logistically it doesn't make sense.
lawn 9y ago
That's true. However the transaction throughput doesn't depend on the hashrate. The network could for example handle 10x or 100x the number of transaction with the same hashrate as today.
sillysaurus3 9y ago
It can't handle the tiniest fraction of Visa's transaction volume natively. Not actually true. See the Lightning proposal.
- lawn 9y ago
  1. It's not Bitcoin, it's a sidechain utilizing Bitcoin 2. It's not certain it can work in a decentralized way
  - sillysaurus3 9y ago
    It's bitcoin. It uses bitcoin, it's powered by bitcoin, it's bitcoin. The sidechain distinction isn't a helpful one if people end up using it by default. Yes, it's uncertain it will work, but the point is that it's not inherently obvious that bitcoin can't accommodate Visa's transaction volume. The above comment made it seem like that's a given.
    - lawn 9y ago
      It uses Bitcoin but it is not Bitcoin. It has different security considerations, usage and it's fundamentally different. That it settles to Bitcoin does not make it become Bitcoin. Beef isn't a cow even though it uses (parts of) a cow. The second part I agree with. According to Satoshi: > Bitcoin can scale larger than the Visa Network It's not obvious that this is false.
  - AgentME 9y ago
    > 1. It's not Bitcoin, it's a sidechain utilizing Bitcoin I think you're mixing lightning up with something else; lightning is not a sidechain[0]. In lightning, at every step participants create standard Bitcoin transactions that can be finalized and settled at any time by just publicly broadcasting them on the Bitcoin network. The participants hold off on broadcasting the transactions until they're done with the payment channel so that they save on transaction fees (and avoid bloating the blockchain). They're immune to counterparty risk like normal transactions are, and it doesn't rely on any central or trusted authorities. [0] https://bitcoinmagazine.com/articles/greg-maxwell-lightning-network-better-than-sidechains-for-scaling-bitcoin-1461077424/ https://bitcoinmagazine.com/articles/greg-maxwell-lightning-...
    - lawn 9y ago
      Maybe sidechain isn't the best term but I don't know a better one. You're saying it yourself, it creates standard Bitcoin transactions (not lightning transactions). They hold off on broadcasting them, but that may mean if they both go offline they loose their state. It's using Bitcoin as a settlement layer but it's still not interchangeable with Bitcoin. It still has not been shown that LN can even work in a decentralized fashion. It uses Bitcoin and it may even become the default way to transact and be better in any way. But it doesn't matter, Lightning is not, and will never be, Bitcoin. How can this distinction not be clear?
      - AgentME 9y ago
        >You're saying it yourself, it creates standard Bitcoin transactions (not lightning transactions). They hold off on broadcasting them, but that may mean if they both go offline they loose their state. Yeah, the guarantees aren't exactly the same. Personally I expect that the risks will be for the most part smoothed over by things like lightning software that automatically syncs the state of payment channels between all of your devices for redundancy. >It's using Bitcoin as a settlement layer but it's still not interchangeable with Bitcoin. When a payment channel is settled by any of the participants, it's normal Bitcoin that comes out. >It uses Bitcoin and it may even become the default way to transact and be better in any way. But it doesn't matter, Lightning is not, and will never be, Bitcoin. I really think that's splitting hairs. If it becomes the standard way to send Bitcoin around, such that nearly everyone talking about making or receiving payments in Bitcoin is using Lightning, and if it does end up working very well in practice with many transactions per second, then I think it's more than fair to argue against statements like "Bitcoin can't scale up to VISA volume". Are you insisting on always explicitly referring to them as a combination ("Bitcoin/Lightning")? Kind of reminds me of the losing battle fought by some to correct all references to Linux as "GNU/Linux"...
AgentME 9y ago
>Of course you can work around this by having third party payment processors that sit between customers and the raw blockchain. There are decentralized solutions that don't involve trusted 3rd party payment processors. Payment channels and the lightning network will allow many transactions to happen between users that eventually and safely get settled onto the blockchain as only a few transactions containing the net transfer. These systems are decentralized without relying on trusted 3rd party payment processors, and the users are safe from counterparty risk like they are with normal transactions. (I know another reply mentioned Lightning. I just wanted to do more explanation and emphasis on parts.)

by lukev 9y ago

brink 9y ago

Right, don't think of Bitcoin as digital dollars. Bitcoin is more like digital gold. Use it to hedge the digital markets, but don't use it to buy coffee. Granted, some coffee shops will take your "digital gold" as they would take a sliver of actual gold, but logistically it doesn't make sense.

lawn 9y ago

That's true. However the transaction throughput doesn't depend on the hashrate. The network could for example handle 10x or 100x the number of transaction with the same hashrate as today.

sillysaurus3 9y ago

It can't handle the tiniest fraction of Visa's transaction volume natively. Not actually true. See the Lightning proposal.

lawn 9y ago
1. It's not Bitcoin, it's a sidechain utilizing Bitcoin 2. It's not certain it can work in a decentralized way
- sillysaurus3 9y ago
  It's bitcoin. It uses bitcoin, it's powered by bitcoin, it's bitcoin. The sidechain distinction isn't a helpful one if people end up using it by default. Yes, it's uncertain it will work, but the point is that it's not inherently obvious that bitcoin can't accommodate Visa's transaction volume. The above comment made it seem like that's a given.
  - lawn 9y ago
    It uses Bitcoin but it is not Bitcoin. It has different security considerations, usage and it's fundamentally different. That it settles to Bitcoin does not make it become Bitcoin. Beef isn't a cow even though it uses (parts of) a cow. The second part I agree with. According to Satoshi: > Bitcoin can scale larger than the Visa Network It's not obvious that this is false.
- AgentME 9y ago
  > 1. It's not Bitcoin, it's a sidechain utilizing Bitcoin I think you're mixing lightning up with something else; lightning is not a sidechain[0]. In lightning, at every step participants create standard Bitcoin transactions that can be finalized and settled at any time by just publicly broadcasting them on the Bitcoin network. The participants hold off on broadcasting the transactions until they're done with the payment channel so that they save on transaction fees (and avoid bloating the blockchain). They're immune to counterparty risk like normal transactions are, and it doesn't rely on any central or trusted authorities. [0] https://bitcoinmagazine.com/articles/greg-maxwell-lightning-network-better-than-sidechains-for-scaling-bitcoin-1461077424/ https://bitcoinmagazine.com/articles/greg-maxwell-lightning-...
  - lawn 9y ago
    Maybe sidechain isn't the best term but I don't know a better one. You're saying it yourself, it creates standard Bitcoin transactions (not lightning transactions). They hold off on broadcasting them, but that may mean if they both go offline they loose their state. It's using Bitcoin as a settlement layer but it's still not interchangeable with Bitcoin. It still has not been shown that LN can even work in a decentralized fashion. It uses Bitcoin and it may even become the default way to transact and be better in any way. But it doesn't matter, Lightning is not, and will never be, Bitcoin. How can this distinction not be clear?
    - AgentME 9y ago
      >You're saying it yourself, it creates standard Bitcoin transactions (not lightning transactions). They hold off on broadcasting them, but that may mean if they both go offline they loose their state. Yeah, the guarantees aren't exactly the same. Personally I expect that the risks will be for the most part smoothed over by things like lightning software that automatically syncs the state of payment channels between all of your devices for redundancy. >It's using Bitcoin as a settlement layer but it's still not interchangeable with Bitcoin. When a payment channel is settled by any of the participants, it's normal Bitcoin that comes out. >It uses Bitcoin and it may even become the default way to transact and be better in any way. But it doesn't matter, Lightning is not, and will never be, Bitcoin. I really think that's splitting hairs. If it becomes the standard way to send Bitcoin around, such that nearly everyone talking about making or receiving payments in Bitcoin is using Lightning, and if it does end up working very well in practice with many transactions per second, then I think it's more than fair to argue against statements like "Bitcoin can't scale up to VISA volume". Are you insisting on always explicitly referring to them as a combination ("Bitcoin/Lightning")? Kind of reminds me of the losing battle fought by some to correct all references to Linux as "GNU/Linux"...

AgentME 9y ago

>Of course you can work around this by having third party payment processors that sit between customers and the raw blockchain. There are decentralized solutions that don't involve trusted 3rd party payment processors. Payment channels and the lightning network will allow many transactions to happen between users that eventually and safely get settled onto the blockchain as only a few transactions containing the net transfer. These systems are decentralized without relying on trusted 3rd party payment processors, and the users are safe from counterparty risk like they are with normal transactions. (I know another reply mentioned Lightning. I just wanted to do more explanation and emphasis on parts.)