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Bitcoin faces serious barriers in scaling to high volumes. As you say, transactions are limited to ~10/s. A side effect of this is that transaction fees are now

Bitcoin faces serious barriers in scaling to high volumes. As you say, transactions are limited to ~10/s. A side effect of this is that transaction fees are now $2 per transaction (and rising). Furthermore, the blockchain has now exceeded 100 GB in size. At high volumes, this will approach the petabyte scale. Only data centers will be able to store the blockchain, and power will be concentrated in the few players able to build/rent blockchain data centers. However, these barriers do not mean Bitcoin is doomed to fail. Logically, there are two paths to success: (1) Bitcoin is rearchitected to handle high volumes or (2) Bitcoin succeeds in low-volume applications.

bitL 9y ago
So BTC is more like gold then, but with "fiat" value. It's an amazing experiment from computational/cryptographic point of view for sure. The greedy madness around it will cause a lot of troubles though; I've heard people taking 2nd mortgages and going heavily in debt to buy BTCs...
- sp821543 9y ago
  Exactly. Nobody complains about the transaction capacity of gold. Bitcoin is a store of value - especially useful if our financial system sours again.
  - hackernudes 9y ago
    Gold is hard to transact with due to physics, but ideally a digital currency should be capable of micro-transactions. Here is a quote from the bitcoin.pdf white paper: The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions... If your vision of the future of Bitcoin is simply "a store of value" then I think you are missing out. There is a lot more value to disrupt by making transactions more efficient, and I hope the Bitcoin of the future will evolve to tackle this problem.
nordsieck 9y ago
transactions are limited to ~10/s [...] At high volumes, this will approach the petabyte scale This is a big reason why many people want to keep the transaction size small. Currently, hard drive size is expanding faster than the block chain.
- rothbardrand 9y ago
  MAST is in discussion now and will dramatically reduce transaction sizes (SEgwit already did it too, and segwit is still being deployed).... with MAST bitcoin will be more of a smart contract system, and even very complex transactions will be tiny.
Retric 9y ago
Bitcoin has massive long term issues of value storage vs. 50.01% attacks. With capped coins, transaction fees must be large enough to prevent major miners from defecting. So, they need to support large number of transactions to have a stable value store.
dageshi 9y ago
Bitcoin now serves the same purpose as digital gold. Some other crypto currency will probably end up as the equivalent of "digital cash", one which is suited for the purpose, people will be able to shift back and forth between the two in the same way they can now with gold and cash.
CraigRood 9y ago
I believe that more 'transactions' will happen off-chain rather than on. I expect to see a rise in merchants and gateways - similar to what PayPal does.
rothbardrand 9y ago
Transaction fees were $0 last week. A bit higher now due to the ATH and high numbers of transactions... most of the "high bitcoin fees" claims are from spammers who were spamming transactions to drive up fees. Chinese miners are able to do this profitably, unfortunately, and this is an issue that is going to need addressing. Segwit makes it a lot harder, and as segwit adoption happens it will be a lot cheaper to transact, even when the spammers are spamming.

bitL 9y ago

So BTC is more like gold then, but with "fiat" value. It's an amazing experiment from computational/cryptographic point of view for sure. The greedy madness around it will cause a lot of troubles though; I've heard people taking 2nd mortgages and going heavily in debt to buy BTCs...

sp821543 9y ago
Exactly. Nobody complains about the transaction capacity of gold. Bitcoin is a store of value - especially useful if our financial system sours again.
- hackernudes 9y ago
  Gold is hard to transact with due to physics, but ideally a digital currency should be capable of micro-transactions. Here is a quote from the bitcoin.pdf white paper: The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions... If your vision of the future of Bitcoin is simply "a store of value" then I think you are missing out. There is a lot more value to disrupt by making transactions more efficient, and I hope the Bitcoin of the future will evolve to tackle this problem.

nordsieck 9y ago

transactions are limited to ~10/s [...] At high volumes, this will approach the petabyte scale This is a big reason why many people want to keep the transaction size small. Currently, hard drive size is expanding faster than the block chain.

rothbardrand 9y ago
MAST is in discussion now and will dramatically reduce transaction sizes (SEgwit already did it too, and segwit is still being deployed).... with MAST bitcoin will be more of a smart contract system, and even very complex transactions will be tiny.

Retric 9y ago

Bitcoin has massive long term issues of value storage vs. 50.01% attacks. With capped coins, transaction fees must be large enough to prevent major miners from defecting. So, they need to support large number of transactions to have a stable value store.

dageshi 9y ago

Bitcoin now serves the same purpose as digital gold. Some other crypto currency will probably end up as the equivalent of "digital cash", one which is suited for the purpose, people will be able to shift back and forth between the two in the same way they can now with gold and cash.

CraigRood 9y ago

I believe that more 'transactions' will happen off-chain rather than on. I expect to see a rise in merchants and gateways - similar to what PayPal does.

rothbardrand 9y ago

Transaction fees were $0 last week. A bit higher now due to the ATH and high numbers of transactions... most of the "high bitcoin fees" claims are from spammers who were spamming transactions to drive up fees. Chinese miners are able to do this profitably, unfortunately, and this is an issue that is going to need addressing. Segwit makes it a lot harder, and as segwit adoption happens it will be a lot cheaper to transact, even when the spammers are spamming.