5 ms·

The intrinsic value is in all the trade going on that isn’t illegal. It is a huge deal for the FX markets for example among other things. Cross boarder trade a

The intrinsic value is in all the trade going on that isn’t illegal. It is a huge deal for the FX markets for example among other things. Cross boarder trade as well. The transaction rate issue is 99% political in fighting and that has basically been solved or will be by mid November.

beefield 9y ago
Sorry, I have not been following Bitcoin news lately. Could you give a comparison of the expected transaction capacity, expected fees and expected time to confirm a transaction by mid November against typical credit card company? That would give some basis to estimate the value bitcoin is creating against the competitors.
- pmorici 9y ago
  They are doubling transaction capacity. Pennies to move millions for a simple transaction.
  - beefield 9y ago
    and doubling the capacity solves all scalability problems? That is still minuscule capacity to enable any serious use of bitcoin as means of payment. And if the simple transaction is me purchasing a pizza instead of transferring a million from one speculator to another? How much does it cost and how much it takes time?
    - once_inc 9y ago
      Bitcoin doesn't easily scale in its current form. For that, people have invented the Lightning Network (https://lightning.network https://lightning.network). LN is a layer 2 solution which sacrifices a modicum of trustlessness in favor of fewer on-chain transactions. Suppose you want to buy a cup of coffee every day with the same vendor. You could agree to do all transactions in the Lightning Network, reducing the number of on-chain transactions from 30 to 2. This cuts fees and increases usability.
raducu 9y ago
Genuinely curious -- as far as I know, the current 7 transactions per second is a limitation of the 1Mb block size and the proposal was for a 8Mb block size, would that mean 56 transactions per second(that still doesn't sound too impressive to me)?
- flashdance 9y ago
  Bitcoin's block size should begin to approach 1.8MB (with a super theoretical maximum of 4MB IIRC) now that the segregated witness upgrade has been activated. In the long term, additional scalability can be done using the lightning network and/or sidechains. In dirt-simple terms, the lightning network allows you to squash several transactions taking place over a long period of time into one of a much smaller size. It also allows instant payments. [1] Another way to scale is using sidechains, which shift the transaction burden onto a complementing chain that has a two-way peg to bitcoin. [2] Neither of these are production-ready yet, but should help improve scalability by a couple of orders of magnitude in the long run. That being said the current price bubble is out of control and I would strongly warn you away from buying any--and for the sake of full disclosure and identifying my bias I do hold some cryptocurrency. [1] https://lightning.network/ https://lightning.network/ [2] https://blockstream.com/technology/sidechains.pdf https://blockstream.com/technology/sidechains.pdf
  - beefield 9y ago
    Who/what I trust if I make a transaction in these solutions? Obviously it is not bitcon blockchain that I can be trusting?
    - flashdance 9y ago
      With lightning it's still ultimately settled on the bitcoin network. Here's a lazy copy/paste from the site: > The Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed. > Bidirectional Payment Channels. Two participants create a ledger entry on the blockchain which requires both participants to sign off on any spending of funds. Both parties create transactions which refund the ledger entry to their individual allocation, but do not broadcast them to the blockchain. They can update their individual allocations for the ledger entry by creating many transactions spending from the current ledger entry output. Only the most recent version is valid, which is enforced by blockchain-parsable smart-contract scripting. This entry can be closed out at any time by either party without any trust or custodianship by broadcasting the most recent version to the blockchain. > Lightning Network. By creating a network of these two-party ledger entries, it is possible to find a path across the network similar to routing packets on the internet. The nodes along the path are not trusted, as the payment is enforced using a script which enforces the atomicity (either the entire payment succeeds or fails) via decrementing time-locks. > Blockchain as Arbiter. As a result, it is possible to conduct transactions off-blockchain without limitations. Transactions can be made off-chain with confidence of on-blockchain enforceability. This is similar to how one makes many legal contracts with others, but one does not go to court every time a contract is made. By making the transactions and scripts parsable, the smart-contract can be enforced on-blockchain. Only in the event of non-cooperation is the court involved – but with the blockchain, the result is deterministic. I haven't explored sidechains enough to give you a competent tl;dr but the security model is discussed in the whitepaper I linked.

beefield 9y ago

Sorry, I have not been following Bitcoin news lately. Could you give a comparison of the expected transaction capacity, expected fees and expected time to confirm a transaction by mid November against typical credit card company? That would give some basis to estimate the value bitcoin is creating against the competitors.

pmorici 9y ago
They are doubling transaction capacity. Pennies to move millions for a simple transaction.
- beefield 9y ago
  and doubling the capacity solves all scalability problems? That is still minuscule capacity to enable any serious use of bitcoin as means of payment. And if the simple transaction is me purchasing a pizza instead of transferring a million from one speculator to another? How much does it cost and how much it takes time?
  - once_inc 9y ago
    Bitcoin doesn't easily scale in its current form. For that, people have invented the Lightning Network (https://lightning.network https://lightning.network). LN is a layer 2 solution which sacrifices a modicum of trustlessness in favor of fewer on-chain transactions. Suppose you want to buy a cup of coffee every day with the same vendor. You could agree to do all transactions in the Lightning Network, reducing the number of on-chain transactions from 30 to 2. This cuts fees and increases usability.

raducu 9y ago

Genuinely curious -- as far as I know, the current 7 transactions per second is a limitation of the 1Mb block size and the proposal was for a 8Mb block size, would that mean 56 transactions per second(that still doesn't sound too impressive to me)?

flashdance 9y ago
Bitcoin's block size should begin to approach 1.8MB (with a super theoretical maximum of 4MB IIRC) now that the segregated witness upgrade has been activated. In the long term, additional scalability can be done using the lightning network and/or sidechains. In dirt-simple terms, the lightning network allows you to squash several transactions taking place over a long period of time into one of a much smaller size. It also allows instant payments. [1] Another way to scale is using sidechains, which shift the transaction burden onto a complementing chain that has a two-way peg to bitcoin. [2] Neither of these are production-ready yet, but should help improve scalability by a couple of orders of magnitude in the long run. That being said the current price bubble is out of control and I would strongly warn you away from buying any--and for the sake of full disclosure and identifying my bias I do hold some cryptocurrency. [1] https://lightning.network/ https://lightning.network/ [2] https://blockstream.com/technology/sidechains.pdf https://blockstream.com/technology/sidechains.pdf
- beefield 9y ago
  Who/what I trust if I make a transaction in these solutions? Obviously it is not bitcon blockchain that I can be trusting?
  - flashdance 9y ago
    With lightning it's still ultimately settled on the bitcoin network. Here's a lazy copy/paste from the site: > The Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed. > Bidirectional Payment Channels. Two participants create a ledger entry on the blockchain which requires both participants to sign off on any spending of funds. Both parties create transactions which refund the ledger entry to their individual allocation, but do not broadcast them to the blockchain. They can update their individual allocations for the ledger entry by creating many transactions spending from the current ledger entry output. Only the most recent version is valid, which is enforced by blockchain-parsable smart-contract scripting. This entry can be closed out at any time by either party without any trust or custodianship by broadcasting the most recent version to the blockchain. > Lightning Network. By creating a network of these two-party ledger entries, it is possible to find a path across the network similar to routing packets on the internet. The nodes along the path are not trusted, as the payment is enforced using a script which enforces the atomicity (either the entire payment succeeds or fails) via decrementing time-locks. > Blockchain as Arbiter. As a result, it is possible to conduct transactions off-blockchain without limitations. Transactions can be made off-chain with confidence of on-blockchain enforceability. This is similar to how one makes many legal contracts with others, but one does not go to court every time a contract is made. By making the transactions and scripts parsable, the smart-contract can be enforced on-blockchain. Only in the event of non-cooperation is the court involved – but with the blockchain, the result is deterministic. I haven't explored sidechains enough to give you a competent tl;dr but the security model is discussed in the whitepaper I linked.