6 ms·

I don't want to start the usual bitcoin scaling debate, but aren't the fees extremely high now? Using [1] an average transaction costs about 10$, this is parti

I don't want to start the usual bitcoin scaling debate, but aren't the fees extremely high now? Using [1] an average transaction costs about 10$, this is particularly bad in a poor country. I wonder if using a cryptocurrency is really the best option in this case. [1]: https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/

nikcub 9y ago
The 137,000 satoshi price quoted isn't an average - it's the price to have your transaction almost guaranteed to be accepted in the next block It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction
- bduerst 9y ago
  For POS transactions though don't you want it to be instant? 3-12 blocks is half a hour to two hours wait. The chart shows 30 satoshis/byte to take 40 minutes to a 19 hours total wait.
  - gruez 9y ago
    i think that's strawman at this point. even if bitcoin had 1GB block sizes, bringing the wait time to 1 block (10 minutes), it's still not going to be acceptable for POS. it's either going to be on-chain with no confirmations, or through layer2 protocols.
    - xorcist 9y ago
      Orphan blocks are common, one block has never been considered secure. Early in Bitcoin, a best practice emerged to consider six blocks secure. So that takes an hour, best case. (Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.) So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.
  - thephyber 9y ago
    I think it's important to consider the alternative. In Zimbabwe, you could lose a significant percentage of your cash's value if you delay a purchase. Taking a risk that the other side of the transaction might not be as big of a problem if you can look at their account balance before the transaction begins. Sure, you risk getting caught in a double-spend that is rejected from the blockchain, but if the alternative is to hold onto cash or to lose out on a transaction in a tough economy, you might be willing to take on that risk.
  - nikcub 9y ago
    Accepting zero confirmation transactions at POS is a different problem to fees (which are atm admitantly high but that should improve) Merchant picks a solution based on who they integrate with - something like BitGo Instant[0], GreenAddress[1] or an analytics/fraud API provider that adds a risk score to a tx no different to a credit card transaction [0] https://www.bitgo.com/solutions#instant https://www.bitgo.com/solutions#instant
  - SilasX 9y ago
    You definitely do want it to be instant, but this isn't quite an apples-to-apples comparison. That two-hour figure is the amount to get the transaction to the point of irreversibility so it can be re-spent without worry. The equivalent figure for credit cards is ~45 days and checks can take a week to clear. But you're right, making transactions on chain is not going to be practical in an untrusted environment and it still depends on intermediaries.
    - uncoder0 9y ago
      What you're describing sounds like zero confirmation transactions which bitcoin used to support before RBF. You can't reliably take zero-conf in btc anymore though. So you have to wait for settlement to turn over goods or services.
      - xorcist 9y ago
        Zero conf was never secure. Many did demonstrate double spends long before RBF was thought of. Still, that argument was made against RBF and was enough of a hindrade to consensus that RBF was made opt-in. And it still is. So you are absolutely free to accept zero conf transactions, and take the risk, as long as you don't accept those who flag for RBF. Most wallets won't even make them by default (which in my opinion is stupid with the fees we have today). The argument for a golden age before RBF isn't a good one. It was never reliable. And what little reliability it had is unchanged.
- drdaeman 9y ago
  I believe, dust collection is prohibitively costly. And if one's using Bitcoin any actively, they'll end up generating a lot of dust, I think. At the current BTC/USD rates, I have a few dollars worth of dust. However, it's spread over 17 inputs, so it's basically unspendable. It would require ~3.1KB transaction so even at 30sat/byte the fees would be, like, 0.00093 BTC ($6.5 at $7K/BTC). For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money.
  - freeloop3 9y ago
    > For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money. Or ten... You're a little out of touch for whom you speak for.
    - drdaeman 9y ago
      Yes. You're right.
  - nikcub 9y ago
    Many wallets and users don't do dust sweeps anymore since it associates all the utxo's with a single user and reduces your privacy Theres nothing wrong with having many utxo's of varying sizes - good wallets will give you a choice on how to select them when composing a transaction (such as Electrum) and you can sweep part of it back to yourself in what would otherwise look like any other transaction
gowld 9y ago
Wow, so that's maybe OK for moving in/out of a >$1000 position, but horrid for spending as a currency.
- PKop 9y ago
  That's why you don't spend it. You save it. See Their's Law, good money drives out bad.[0] People will hodl Bitcoin and spend fiat, driving up the price of BTC in terms of fiat until it absorbs some significant portion of global currency value. There are only 21 M coins; a deflationary crypto currency isn't for buying coffee or micro-payments. It is displaying similar qualities to Gold in countries where governments have debased the currency. [0] http://nakamotoinstitute.org/mempool/speculative-attack/ http://nakamotoinstitute.org/mempool/speculative-attack/
  - gowld 9y ago
    How can this be? BTC is deflating far faster than USD is inflating, considering USD purchasing power. So BTC can't be picking up USD's weakness, it must be a speculative bubble. Were Beanie Babies good money driving out bad? https://qz.com/114753/meet-the-family-who-lost-100000-when-the-beanie-baby-bubble-burst/ https://qz.com/114753/meet-the-family-who-lost-100000-when-t...
    - aqsheehy 9y ago
      Bitcoin is for the dark net markets; for everything else, there's MasterCard
    - PKop 9y ago
      Because it's not at a steady state yet. At what price did you expect it to reach some semblance of stability? 0.10.. $10, $100... ? Well, there are some broad metrics we can think about. If Bitcoin become a sort of reserve currency, or a digital gold, or a combination of both, shouldn't its total market value be a proportion of what currently occupies that title? So, do the math. X% of Gold, or X% of reserve currency. Inject that value into 21 million Bitcoin (or the circulating supply at a given moment). Here's a valuation prediction applying Bitcoin daily trade volume of 10% of foreign exchanges which are $5 Trillion[0]. This would price BTC at $100,000. Only after it approaches somewhere close to these numbers, would you expect to see appreciation in the range of fiat inflation. That's how it can be. [0] https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-100000-in-10-years.html https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-1...
johnvonneumann 9y ago
Average transaction cost has been shown to be a bad metric, context: https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newbery_responds_to_erik_voorhees_10_average/ https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newber...
- colemannugent 9y ago
  This is a very good explanation of the scaling issues Bitcoin is having and how many could be solved if people understood more about how Bitcoin actually works (and SegWit for that matter).
- Kiro 9y ago
  24 hours? I want it to confirm in 1 second for even less fee than that. How else can Bitcoin become a serious mean of payment?
  - ryanlol 9y ago
    How else can wire transfers become a serious means of payment??
    - Kiro 9y ago
      Do you pay online with wire transfer? My vision is a decentralised coin that is as fast as VISA is perceived but a lot cheaper to transact. Obviously that's not the vision of Bitcoin though?
      - ryanlol 9y ago
        I pay salaries with bitcoin, compared to wire transfers it is just amazing.
      - johnvonneumann 9y ago
        Please don't start on the "Vision" rhetoric, look at the pipeline of core, there is a clear path to VISA scale tx but it is an engineering challenge, unfortunately the majority of people complaining and talking about scaling blocksize (right now, with a terrible straight-up hard-fork) are (bad) Operations people who are more than happy to shitcan half the benefits of a decentralised, privacy focused system for a frankenstein system that in reality still won't compete with VISA. Protip, if you're competing against a behemoth incumbent, it's not enough to simply match their capabilities, you have to surpass them. Lightning network fees will be cheaper than VISA, a lot cheaper. Scaling a $120b financial network on a whim without a real engineering team is not only a bad idea, it's downright fucking deplorable to put users at risk.
deleted 9y ago
[deleted]
paulmd 9y ago
There is little reason to prefer Bitcoin to US Dollars or Euros for those looking to avoid the effects of inflation. There is nothing uniquely difficult about getting hard currencies on the black market in such places, it's simply that most people cannot afford it - and will not be able to afford Bitcoin either. It's a dumb suggestion from breathless fanboys who didn't really think about the actual problem before pushing their solution.
- freeloop3 9y ago
  You can't confiscate a brain wallet
  - paulmd 9y ago
    This $5 wrench says otherwise. https://xkcd.com/538/ https://xkcd.com/538/
    - freeloop3 9y ago
      Torture only works if you are sure of the existence of such a thing. It's easy to order the police to go from home to home, confiscating valuables. It's a lot harder to know if someone has bitcoin, and if so how much they have. Even if you can get them to admit they have it, and give you access to n wallets, they may always have n+1
      - zaarn 9y ago
        You don' need evidence, just hit them with a wrench until bitcoins come out or they stop moving.
      - paulmd 9y ago
        > Torture only works if you are sure of the existence of such a thing. I don't think you comprehend the workings of "mass terror". Here's how it goes: we'll make you watch while we beat up your wife and kids until you tell us something worth knowing. No evidence necessary. Pretty much everybody has some valuables, or knows someone who does, and if not who cares? It's your funeral. Once again, the nerdy preconception that thugs somehow operate on a legalistic or technical basis is just completely wrong. You'll be the one "giving" the valuables to them, to make it stop.
narrator 9y ago
People in these countries don't use Bitcoin for daily purposes. The poor don't use Bitcoin. The middle upper class business owners who can't get access to large amounts of U.S dollars use Bitcoin. They can have offshore bank accounts but getting the physical cash into and out of the country is tied up in mountains of bureaucracy and corruption. I met a guy in Panama who had to spend half his money getting the other half out of Venezuela. With Bitcoin it is actually possible to save and transfer Bitcoin to cash as needed. Carrying suitcases of hundred dollar bills around is not practical and getting cash in and out of a country like that is almost impossible.

nikcub 9y ago

The 137,000 satoshi price quoted isn't an average - it's the price to have your transaction almost guaranteed to be accepted in the next block It also shows 30 satoshi a byte gets you transaction accepted in 3-80 blocks, which based on experience is usually 3-12 blocks - and that works out to be 50c for the average transaction

bduerst 9y ago
For POS transactions though don't you want it to be instant? 3-12 blocks is half a hour to two hours wait. The chart shows 30 satoshis/byte to take 40 minutes to a 19 hours total wait.
- gruez 9y ago
  i think that's strawman at this point. even if bitcoin had 1GB block sizes, bringing the wait time to 1 block (10 minutes), it's still not going to be acceptable for POS. it's either going to be on-chain with no confirmations, or through layer2 protocols.
  - xorcist 9y ago
    Orphan blocks are common, one block has never been considered secure. Early in Bitcoin, a best practice emerged to consider six blocks secure. So that takes an hour, best case. (Given the insane hash power now maybe that standard can be lowered, but on the other hand it's not common to get a spot in the next block anymore.) So point of sale was never a good fit for Bitcoin. What most real world merchants do when the amount is small enough is to eat the risk. Even if it's easy to double spend in practice most customers won't bother for a can of coke.
- thephyber 9y ago
  I think it's important to consider the alternative. In Zimbabwe, you could lose a significant percentage of your cash's value if you delay a purchase. Taking a risk that the other side of the transaction might not be as big of a problem if you can look at their account balance before the transaction begins. Sure, you risk getting caught in a double-spend that is rejected from the blockchain, but if the alternative is to hold onto cash or to lose out on a transaction in a tough economy, you might be willing to take on that risk.
- nikcub 9y ago
  Accepting zero confirmation transactions at POS is a different problem to fees (which are atm admitantly high but that should improve) Merchant picks a solution based on who they integrate with - something like BitGo Instant[0], GreenAddress[1] or an analytics/fraud API provider that adds a risk score to a tx no different to a credit card transaction [0] https://www.bitgo.com/solutions#instant https://www.bitgo.com/solutions#instant
- SilasX 9y ago
  You definitely do want it to be instant, but this isn't quite an apples-to-apples comparison. That two-hour figure is the amount to get the transaction to the point of irreversibility so it can be re-spent without worry. The equivalent figure for credit cards is ~45 days and checks can take a week to clear. But you're right, making transactions on chain is not going to be practical in an untrusted environment and it still depends on intermediaries.
  - uncoder0 9y ago
    What you're describing sounds like zero confirmation transactions which bitcoin used to support before RBF. You can't reliably take zero-conf in btc anymore though. So you have to wait for settlement to turn over goods or services.
    - xorcist 9y ago
      Zero conf was never secure. Many did demonstrate double spends long before RBF was thought of. Still, that argument was made against RBF and was enough of a hindrade to consensus that RBF was made opt-in. And it still is. So you are absolutely free to accept zero conf transactions, and take the risk, as long as you don't accept those who flag for RBF. Most wallets won't even make them by default (which in my opinion is stupid with the fees we have today). The argument for a golden age before RBF isn't a good one. It was never reliable. And what little reliability it had is unchanged.
drdaeman 9y ago
I believe, dust collection is prohibitively costly. And if one's using Bitcoin any actively, they'll end up generating a lot of dust, I think. At the current BTC/USD rates, I have a few dollars worth of dust. However, it's spread over 17 inputs, so it's basically unspendable. It would require ~3.1KB transaction so even at 30sat/byte the fees would be, like, 0.00093 BTC ($6.5 at $7K/BTC). For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money.
- freeloop3 9y ago
  > For poorer countries even $2-5 could be a well significant amount. One can probably have a meal for that money. Or ten... You're a little out of touch for whom you speak for.
  - drdaeman 9y ago
    Yes. You're right.
- nikcub 9y ago
  Many wallets and users don't do dust sweeps anymore since it associates all the utxo's with a single user and reduces your privacy Theres nothing wrong with having many utxo's of varying sizes - good wallets will give you a choice on how to select them when composing a transaction (such as Electrum) and you can sweep part of it back to yourself in what would otherwise look like any other transaction

gowld 9y ago

Wow, so that's maybe OK for moving in/out of a >$1000 position, but horrid for spending as a currency.

PKop 9y ago
That's why you don't spend it. You save it. See Their's Law, good money drives out bad.[0] People will hodl Bitcoin and spend fiat, driving up the price of BTC in terms of fiat until it absorbs some significant portion of global currency value. There are only 21 M coins; a deflationary crypto currency isn't for buying coffee or micro-payments. It is displaying similar qualities to Gold in countries where governments have debased the currency. [0] http://nakamotoinstitute.org/mempool/speculative-attack/ http://nakamotoinstitute.org/mempool/speculative-attack/
- gowld 9y ago
  How can this be? BTC is deflating far faster than USD is inflating, considering USD purchasing power. So BTC can't be picking up USD's weakness, it must be a speculative bubble. Were Beanie Babies good money driving out bad? https://qz.com/114753/meet-the-family-who-lost-100000-when-the-beanie-baby-bubble-burst/ https://qz.com/114753/meet-the-family-who-lost-100000-when-t...
  - aqsheehy 9y ago
    Bitcoin is for the dark net markets; for everything else, there's MasterCard
  - PKop 9y ago
    Because it's not at a steady state yet. At what price did you expect it to reach some semblance of stability? 0.10.. $10, $100... ? Well, there are some broad metrics we can think about. If Bitcoin become a sort of reserve currency, or a digital gold, or a combination of both, shouldn't its total market value be a proportion of what currently occupies that title? So, do the math. X% of Gold, or X% of reserve currency. Inject that value into 21 million Bitcoin (or the circulating supply at a given moment). Here's a valuation prediction applying Bitcoin daily trade volume of 10% of foreign exchanges which are $5 Trillion[0]. This would price BTC at $100,000. Only after it approaches somewhere close to these numbers, would you expect to see appreciation in the range of fiat inflation. That's how it can be. [0] https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-100000-in-10-years.html https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-1...

johnvonneumann 9y ago

Average transaction cost has been shown to be a bad metric, context: https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newbery_responds_to_erik_voorhees_10_average/ https://www.reddit.com/r/Bitcoin/comments/7b7jj1/john_newber...

colemannugent 9y ago
This is a very good explanation of the scaling issues Bitcoin is having and how many could be solved if people understood more about how Bitcoin actually works (and SegWit for that matter).
Kiro 9y ago
24 hours? I want it to confirm in 1 second for even less fee than that. How else can Bitcoin become a serious mean of payment?
- ryanlol 9y ago
  How else can wire transfers become a serious means of payment??
  - Kiro 9y ago
    Do you pay online with wire transfer? My vision is a decentralised coin that is as fast as VISA is perceived but a lot cheaper to transact. Obviously that's not the vision of Bitcoin though?
    - ryanlol 9y ago
      I pay salaries with bitcoin, compared to wire transfers it is just amazing.
    - johnvonneumann 9y ago
      Please don't start on the "Vision" rhetoric, look at the pipeline of core, there is a clear path to VISA scale tx but it is an engineering challenge, unfortunately the majority of people complaining and talking about scaling blocksize (right now, with a terrible straight-up hard-fork) are (bad) Operations people who are more than happy to shitcan half the benefits of a decentralised, privacy focused system for a frankenstein system that in reality still won't compete with VISA. Protip, if you're competing against a behemoth incumbent, it's not enough to simply match their capabilities, you have to surpass them. Lightning network fees will be cheaper than VISA, a lot cheaper. Scaling a $120b financial network on a whim without a real engineering team is not only a bad idea, it's downright fucking deplorable to put users at risk.

deleted 9y ago

[deleted]

paulmd 9y ago

There is little reason to prefer Bitcoin to US Dollars or Euros for those looking to avoid the effects of inflation. There is nothing uniquely difficult about getting hard currencies on the black market in such places, it's simply that most people cannot afford it - and will not be able to afford Bitcoin either. It's a dumb suggestion from breathless fanboys who didn't really think about the actual problem before pushing their solution.

freeloop3 9y ago
You can't confiscate a brain wallet
- paulmd 9y ago
  This $5 wrench says otherwise. https://xkcd.com/538/ https://xkcd.com/538/
  - freeloop3 9y ago
    Torture only works if you are sure of the existence of such a thing. It's easy to order the police to go from home to home, confiscating valuables. It's a lot harder to know if someone has bitcoin, and if so how much they have. Even if you can get them to admit they have it, and give you access to n wallets, they may always have n+1
    - zaarn 9y ago
      You don' need evidence, just hit them with a wrench until bitcoins come out or they stop moving.
    - paulmd 9y ago
      > Torture only works if you are sure of the existence of such a thing. I don't think you comprehend the workings of "mass terror". Here's how it goes: we'll make you watch while we beat up your wife and kids until you tell us something worth knowing. No evidence necessary. Pretty much everybody has some valuables, or knows someone who does, and if not who cares? It's your funeral. Once again, the nerdy preconception that thugs somehow operate on a legalistic or technical basis is just completely wrong. You'll be the one "giving" the valuables to them, to make it stop.

narrator 9y ago

People in these countries don't use Bitcoin for daily purposes. The poor don't use Bitcoin. The middle upper class business owners who can't get access to large amounts of U.S dollars use Bitcoin. They can have offshore bank accounts but getting the physical cash into and out of the country is tied up in mountains of bureaucracy and corruption. I met a guy in Panama who had to spend half his money getting the other half out of Venezuela. With Bitcoin it is actually possible to save and transfer Bitcoin to cash as needed. Carrying suitcases of hundred dollar bills around is not practical and getting cash in and out of a country like that is almost impossible.