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Did Bitcoin just prove it can't scale?

• chrischen 9y ago
  Bitcoin can be used for transactions? And here I thought it was just used as free money!
• TD-Linux 9y ago
  I don't know what you mean by "prove". People have known about the block size limit for years. It's been increased, but most haven't updated their software to make use of it yet. Lightning now works on mainnet, but no one is using that either. Maybe it's more proof that no one cares?
  • cocktailpeanuts 9y ago
    I think I'm living in a different world than yours. Where I live, it's all different that what you said. The block size hasn't increased. Instead, a new chain forked out with an 8MB block size, it's called Bitcoin cash. Lightning network hasn't launched yet. A few people are testing alpha on the main net and that's it. (Btw I'm a skeptic of lightning network so i'm not advocating lightning network here).
    • garmaine 9y ago
      Segwit was a 4x block size increase. Lightning works. You can go download the repo and make apps with it today.
      • cocktailpeanuts 9y ago
        > Segwit was a 4x block size increase. I am starting to feel like you guys all live in a different earth than me. On the earth I live, SegWit did not increase 4x block size. > Lightning works. You can go download the repo and make apps with it today. Everyone I know who has ACTUALLY downloaded and run the node thinks is extremely underwhelmed. I suggest you follow your own advice and go download lightning network client and run it yourself and try to use it and see what happens. Then we can talk.
    • zorked 9y ago
      I think he referred to SegWit, which increases the block size a bit under special conditions. That's the thing about bitcoin scaling: instead of improving scaling by increasing the block size (which will be required anyway even with Lightning), a solution that requires only changing the thousands of full nodes, they go for SegWit, which requires changing millions of wallets. Then everybody wonders why adoption isn't instant. And Lightning, yup. I tried to use two Lightning implementations on the test net and neither worked, but they have been declared "ready!" by fans. And Lightning deserves skepticism. Releasing software 1.0 means nothing: it requires a totally new infrastructure, with new wallets (again) which have to be online to receive money, hubs which don't exist at all today, liquidity providers willing to leave money locked in channels, (but hey, at least we didn't have to upgrade full nodes) and has completely different failure modes than the blockchain on top of the failure modes that are already there. As far as I understand it isn't even possible to receive more money than you already have with Lightning, and any part you open a channel with can block your funds for as long as the channel timeout has been set (and you don't want short/underfunded channels or you may end up paying more in transactions than you would have with a pure blockchain). Also the opening and closing of channels means that if Lightning is actually successful the current block sizes won't be sufficient. It's at least one transaction to open the channel and another to close it, and because you want to keep a warm channel so you can buy coffee, you will want to do that whether you end up using the channel or not, but you also don't want it very long otherwise your money will be stuck if the channel goes down. So essentially you need to pay subscription fees to the blockchain for using the channels as well as well as commission to the channels for providing liquidity to you. Maybe some super-centralized thing will come out of it and we'll all connect to the Coinbase Channel or something to do trustless centralized off-chain transactions (as opposed to trusted centralized off-chain transactions that they provide now) but even that has a host of problems when you think about it. It's... a complicated system. It's cool and very interesting but it won't happen overnight and it's not guaranteed to actually work.
      • tyler33 9y ago
        I think lighting is more to trading webs, if you want to transfer from bittrex to blockchain.info it would be trough light so all this kind of transactions would free the blockchain
  • xg15 9y ago
    "No one cares" is interesting. That's as if there was a frenzy to buy a new brand of car and no-one cared that the cars' engines actually break down after 50 meters. That being said, I think it's true - but it's a hint that the current "mass adoption" is mainly fueled by speculators and not by people who genuinely believe in it's purpose as a currency.
  • lawn 9y ago
    Segwit isn't a a block size increase. It allows for a tiny amount more transactions but it's very clear it's not enough. An actual block size increase (say to 8MB) would solve the current problems. LN is years from being actually usable by the masses. This is from their developers themselves. > Maybe it's more proof that no one cares? That's a pretty idiotic thing to say. The technology isn't ready yet despite the developers being aware of the problem for, as you say, years.
    • jon_smark 9y ago
      > Segwit isn't a a block size increase. It allows for a tiny amount more transactions but it's very clear it's not enough. An actual block size increase (say to 8MB) would solve the current problems. But what about the new problems it would introduce? I run a full node and even now it eats a significant portion of my bandwidth. With even larger blocks I would probably drop off the network altogether. And I'm sure I'm not the only one out there in this situation. Therefore, I don't think Core developers are exaggerating in their concerns about the centralization pressure caused by overly large blocks. Moreover, wouldn't increasing the block size simply kick the can down the road? One advantage of the current fee pressure is that it strongly encourages the development of 2nd layer solutions. There are right now at least three independent teams working on Lightning Network implementations and they seem to be making quick progress...
      • lawn 9y ago
        > But what about the new problems it would introduce? I run a full node and even now it eats a significant portion of my bandwidth. Not everyone need to run a full node. > Moreover, wouldn't increasing the block size simply kick the can down the road? If you see it only as a temporary measure then sure. But it would for the time being solve Bitcoin's very urgent current problems. Also any 2nd layer solutions require a blocksize increase, so the argument is kinda backwards. > One advantage of the current fee pressure is that it strongly encourages the development of 2nd layer solutions. Which is basically Core/Blocktream's plan. 2nd layer solutions is their whole business model... But why opt out of something that we know works for a solution which isn't ready and may not even work? Scaling should be done both on-chain and off-chain. Favoring one to the exclusion of the other is just wrong.
• jen729w 9y ago
  IMHO (because to claim to "know" anything about how this is all going to turn out is to be a fraud), Bitcoin is the proof of concept for this whole crypto thing. It was the first. It was the genesis idea. But good lord, do we think it's the actual solution? What would be the odds? I imagine that Bitcoin will play its part as the public face of the blockchain revolution, but something else - or many other somethings - will be the successors that we actually use in the future. (Pick your own alt-coin as the successor; good luck.) If I had a large holding in Bitcoin now I would be cashing out or I'd be nervous. I'm not saying it won't go higher, I'm saying that at some point its demise is inevitable. Might be quick, might be slow, but it'll happen because Bitcoin is not the technically best solution in this incredibly exciting field. It's not even close.
  • kybernetikos 9y ago
    > it'll happen because Bitcoin is not the technically best solution in this incredibly exciting field Not only that, but it's shown that it doesn't have the ability to make the changes necessary to innovate and stay current.
    • solotronics 9y ago
      It has evolved to be a store of value and it's doing an amazing job at that. Thinking from the perspective of the developers (many of whom have very large amounts of BTC) a slow and deliberate rate of changes is a very good thing. Making a mistake here would mean hundreds of billions of dollars would be lost. I am all for other cryptos moving quickly and breaking things to test out new ideas. Who in their right mind would take the same mentality on Bitcoin?
      • newfoundglory 9y ago
        Why is this praiseworthy in bitcoin and seen as delaying progress and selfishly holding onto gains in taxi companies?
      • ComputerGuru 9y ago
        Bitcoin is absolutely not a good store of value. A good store of value is a reliable store of value: one where you can place your assets and go back and get them at any later time. As a deflationary currency, bitcoin would be a hypothetically good store of value if a bitcoin actually had any intrinsic or even just de facto value. But it clearly doesn’t: it’s only the conversion to and from USD (and others) that has given it any value at all as an investment vehicle to some. And _that_ value isn’t guaranteed preserved one bit.
• MichaelBurge 9y ago
  It's not really designed to handle every little transaction. I would expect it to be used by exchanges and banks as a settlement layer, with most transactions happening off-chain. It's a mistake to look at recent news, because this has been known since the very beginning.
  • cwyers 9y ago
    There is a thread on the site with the original Bitcoin paper right now. The first sentence of the abstract: > A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. A peer-to-peer network without going through a financial institution. The design was certainly intended to scale up to large numbers of small transactions.
    • sdwisely 9y ago
      it would and it will imo. I just don't think bitcoin is it. It has however bootstrapped a few potentials. Until its decided which that might be, bitcoin kinda serves its purpose.
      • snodnipper 9y ago
        root DNS services do not service _every_ lookup _but_ they back delegated authorities, which does scale. Same for blockchain tech.
        • philipwhiuk 9y ago
          So you're saying Bitcoin needs banks like every other currency then? So what's the point of it again?
    • lawn 9y ago
      There is a group of people who want to alter the purpose of Bitcoin away from the original goal away from "p2p cash" to purely a "store of value". The design can of course support more transactions than it currently does but that is being worked against by this group.
• aSockPuppeteer 9y ago
  You may place too much value in the transactions of fiat currency. You can still do an in-person trade. Credit payments may seem instantaneous but they are not. Research the gold standard and who actually stores the gold not the paper receipts for it. The endgame for bitcoin...Transaction fees? Popup currencies ala private currency? I hope we are solving some fun math problems with all this distributed hash power.
• andrewtbham 9y ago
  My understanding is... There is a scaling problem. It could be help by increasing the block size (like segwit2x) But the miners don't want to fix it because they like the high transaction fees.
  • dawhizkid 9y ago
    I thought the big miners were the ones pushing for increasing block sizes b/c it would create an even higher barrier to entry to successfully mine a block that would allow the big miners to get bigger and consolidate power...
  • bpicolo 9y ago
    A global currency controlled by a few warehouses in china sure does sound optimal.
  • gruez 9y ago
    You have it flipped. Recall that most miners (by hash rate) supported segwit2x. Miners want bigger blocks because they can make more through volume.
  • jon_smark 9y ago
    As others have pointed out, your understanding is backwards. Mining is heavily centralised already (in China of all places!), and larger block sizes would only exacerbate the mining centralisation, which is probably why the biggest fans of larger blocks are the Chinese miners.
• reefoctopus 9y ago
  “A Fast and Scalable Payment Network with Bitcoin Duplex Micropayment Channels” https://www.tik.ee.ethz.ch/file/716b955c130e6c703fac336ea17b1670/duplex-micropayment-channels.pdf https://www.tik.ee.ethz.ch/file/716b955c130e6c703fac336ea17b...
  • KirinDave 9y ago
    Why do you think this fixes the transaction speed problem?
• soyboysam 9y ago
  Someone should take the word 'hacker' out of this sites name. I have never seen a discussion between highly competent experts on here before.
  • coolio2657 9y ago
    You clearly failed to understand what 'hacker' means in this site's context, which is here a general term for a tech-savvy, overall outside-of-the-box thinker that desires to read a variety of interesting things (and maybe discuss them).
    • soyboysam 9y ago
      hn started getting interested in bitcoin the same time as my parents.
      • jen729w 9y ago
        Demonstrably incorrect. https://www.google.com.au/search?q=bitcoin+site:news.ycombinator.com&client=safari&rls=en&dcr=0&tbs=cdr:1,cd_max:12/6/2012&ei=OZsrWuezGYnG0gTAm43wAQ&start=0&sa=N&biw=1490&bih=967 https://www.google.com.au/search?q=bitcoin+site:news.ycombin...
        • MikeTheGreat 9y ago
          Sorry to nitpick, but - Your link shows some early posts on HN about BitCoin How do you know when his parents got interested in BitCoin? (Otherwise, how can you demonstrate his statement is incorrect?)
      • rdiddly 9y ago
        I stopped mentioning my parents the same time I moved out of my childhood room.
        • thanatropism 9y ago
          I moved out of my childhood's room but still have an active conversation (if by WhatsApp only) with the folks. We have been discussing Israel a lot this week, for example. You should appreciate your parents while they're there, they are finite beings.
• vexangel 9y ago
  I use electrum wallet and never had a problem with the default settings - transactions appears after 20 mins.
  • mynewtb 9y ago
    That's about 19 minutes and 59 seconds longer than what would be acceptable for a digital cash system.
    • deleted 9y ago
      [deleted]
    • svet_0 9y ago
      You just need to wait for a few seconds for the transaction to be "pending" though, which is enough for small-medium payments. Unless you're worried the guy buying a 5$ burrito from you will mine a block with his double-spent transaction.
      • alanfalcon 9y ago
        A service could pop up that offers to double spend your $5 transaction and refund you a percentage of the amount. If they mine the block you scam a few bucks, if they don’t you paid full price. It would be profitable for the miner and for the burrito buyer at the expense of the burrito seller. If such a service becomes common, that seller is going to start making you pre-order your burrito 20 minutes in advance – at which point people will just switch to cash, credit, or a blockchain without these problems.
        • solotronics 9y ago
          you can also walk out of the store with the burrito without paying but that is also stealing. this small transaction issue will be solved technologically but the changes are incremental because of the risks involved.
• soyboysam 9y ago
  Step 1: talk down bitcoin to stop buying Step 2: buy up bitcoin Step 3: wall street has all the wealth again
  • jen729w 9y ago
    Dude, the Winklevoss twins are Bitcoin billionaires. This is hardly the currency of the proletariat.
• partycoder 9y ago
  The idea is that bitcoin is decentralized. But common sense tells you that by having an append only system, eventually you will need a supercomputer to deal with the blockchain. Naturally, the blockchain will have to be hierarchical, or find ways to compact it.
  • zhte415 9y ago
    Cash is decentralised.
    • gt_ 9y ago
      In America, cash production is only legally done by one centralized entity, and it is done by them on a regular basis. As far as I know, this holds true in all developed nations.
      • partycoder 9y ago
        However, let's say I run a dollar store. Can I afford to do an exhaustive verification for every dollar I receive? maybe not. There are security features built into each bill that help me establishing if it's legit or not, that I can do myself without third parties.
      • eecc 9y ago
        Banks are allowed to emit debt at the condition that a fraction of it is backed by some liquidity. Banks decide where and when to create this debt so yes, money production is indeed decentralized. If you’re referring to actual coinage and notes then yes, facilities are indeed centralized, but with electronic debit cards the lines are blurred further
  • asddkk 9y ago
    This has always seemed to me to be the elephant in the room to me. I brought this up with some ethereum devs at one point in a forum a year or two ago, and they addressed the questions pretty openly and graciously, but I still wonder about it. Essentially, they talked about the presumption of branches, subchains, etc. When that happens it seems the system would be a little more complicated than the classic crypto-libertarian currency model. These chains get pretty large, and the overhead in terms of time and storage space seems well beyond what most people are used to now. Maybe people just have to get used to 15 minute payments, and having an extra drive or computer for financial transactions, as the cost of decentralized finance and economics, but from the current vantage point it seems burdensome to me, and only more so as adoption would grow.
• soyboysam 9y ago
  One EMP strike could take down this tulip bubble ponzi bonzi garden scheme.
  • tedeh 9y ago
    Well, would that happen we would have a lot more to worry about than the price of a virtual coin...
    • deleted 9y ago
      [deleted]
• rdiddly 9y ago
  I don't think you're wrong and there are other problems too. Widespread Bitcoin adoption would require more energy for mining coins than the entire world can currently produce.
  • seabrookmx 9y ago
    Yeah it's amazing how little people complain about this issue, especially when alternatives exist that leave the idea of a blockchain intact (proof of stake, for instance).
  • tarsinge 9y ago
    How is energy consumption correlated to adoption? Thought it was the result of the mining “competition”, as the difficulty adjusts to the mining power
  • runeks 9y ago
    Bitcoin has no particular requirement for energy, it’s an arbitrage involving the prices of three components: 1) a bitcoin 2) a KWh of power 3) mining hardware. As long as the value of newly minted bitcoins makes it profitable to buy mining hardware and burn off power to earn them, the amount of power used by bitcoin miners will increase. So, way before Bitcoin miners consume all of the world’s energy, either energy prices or mining hardware prices will increase, or the bitcoin price will fall, to make mining unprofitable.
    • codecamper 9y ago
      And a kWh of power is of course done with coal. How pathetic.
      • runeks 9y ago
        I believe most mining operations make use of hydro-electric power, simply because it’s much cheaper than burning off coal.
        • 9y ago
• freekh 9y ago
  My view of BTC is as digital gold, in that, it is the standard to which other easier-to-trade (digital or fiat or not) currencies are anchored in (so like gold standard). Ever since I started reading about it, this was how it was sold. The new gold standard. In this regard, high transaction fees/times was expected. POW is a feature, not a bug.
• barnacs 9y ago
  > How is this expected to work with 7 billion people using it for every tiny financial transaction? https://lightning.network/ https://lightning.network/ tl;dr: a network of off-chain, transitive payment channels. two on-chain transactions (to fund and settle channel) allow for ~unlimited, ~free, ~instant transactions across a p2p network of nodes off-chain
  • runeks 9y ago
    Payment channels (which Lightning Network uses) allows for unlimited transactions, but not an unlimited number of users, because — as you say — two on-chain transactions (deposit+withdrawal) are required to initiate and finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M transaction per month, this means only 20M people can deposit to/withdraw from the Lightning Network (LN) per month. To this critique, some reply that merchants will just start trading unsettled (off-chain) LN transactions to pay their suppliers, but no one has presented any model of how this would work in a real economy, with merchants needing to pay suppliers, who need to pay their suppliers, who need to pay their employees.
    • gst 9y ago
      ~20M transaction per month are an arbitrary limit. The economic majority recently decided against increasing that limit, but this doesn't mean it's not going to get increased at some later point.
      • KirinDave 9y ago
        There are very good technical reasons for that limit. It is not as simple a problem as "voting".
        • gst 9y ago
          Of course there are technical reasons for that limit. But whatever the correct size of the limit is - the current limit is almost certainly too low. The Ethereum blockchain is able to handle a significantly higher amount of transactions without implementing all of the performance optimizations that Bitcoin has (such as compact blocks).
• ericsoderstrom 9y ago
  People now envision bitcoin as 'store of value', and less like an actual currency. I imagine there are many technical and financial reasons why it will never be suitable as a currency. (Deflationary by design, technical limitations on size of blocks leading to slowness of transactions) Does being unsuitable as a currency mean it's also unsuitable as a 'store of value'? The answer to that isn't obvious to me. The value of the US dollar comes in part from our ability to pay taxes with it (and perhaps ultimately from the US military). Cryptocurrency has no central authority to enforce its value via taxes or military, and isn't particularly suitable for day-to-day transactions. Without either of those properties, I have a hard to imagining it being a particularly good store of value. But we'll see. I think we're all watching an interesting experiment unfold in real time. I don't think the current price of btc has anything to do with whatever utility it may or may not have as a currency or store of value. The price is entirely informed by speculators hoping to sell it the following day for 100% ROI. I think a collapse is inevitable.
  • WA 9y ago
    And the store of value vision is built on the idea that it'll be possible to convert BTC into any other currency at any time. The other way around: If you can't buy most stuff with it (the case right now) and can't convert it into your everyday currency (maybe happens if the exchanges suddenly go down for some reason, even only temporarily), what's the value of Bitcoin?
    • seppin 9y ago
      > what's the value of Bitcoin? Selling it to someone else for more than you paid next week.
      • chakalakasp 9y ago
        You're evading the question. If you can't at some point in the chain trade your fancy bitcoin beads for services or goods, then how is it any different than monopoly money? Right now it is useful because it can be easily traded for currencies that can purchase those things.
• neilwilson 9y ago
  Bitcoin, like gold, is useless as a currency. humans trade on credit not by exchange. Always have done.
  • dibbsonline 9y ago
    Seems pretty popular in places like India.
• runeks 9y ago
  > How is this expected to work with 7 billion people using it for every tiny financial transaction? I don't think it can. Give it ~30 years, for the cost of CPU time/storage space/internet speed to cost 0.1% of what it does today, and — in combination with off-chain clearing — this becomes feasible. For Bitcoin to even work as money in the first place, people need to store their savings in bitcoins. This transition will take at least ~30 years anyway, which leaves ample time for computing costs to fall to a level where 1GB blocks are realistic. Combined with an off-chain clearing protocol (like Stroem[1]) for consumer-to-merchant payments, this should allow Bitcoin to scale to ~10bn people. [1] https://www.strawpay.com/docs/stroem-payment-system.pdf https://www.strawpay.com/docs/stroem-payment-system.pdf
• thisisit 9y ago
  Two popular refrains on scaling: a. Block size - This was increased in bitcoin cash. What many people are not aware of is the paper 'Information propagation in the bitcoin network' by Decker and Wattenhofer in 2013. The average time for a block to be seen by a node is ~13 secs. As per the paper: "For blocks, whose size is larger than 20kB, each kilobyte costs an additional 80ms delay until a majority knows about the block." -'Information propagation in the bitcoin network. So, increasing the block without increasing the block time actually increases chances of double spending. But, increasing block time is well simply delaying the payments. b. Lightning network - Off-chain transactions. Fascinating idea. The problem is it goes to a form of centralization. And if things hold the companies running these channels will invariably meddle in some transactions. But the stated goal of bitcoin was - Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party
  • jstanley 9y ago
    Anybody can run a lightning node. I intend to do so. It's not like PayPal where if you want to pay using PayPal you have to use PayPal-the-company. With Lightning, if you want to pay using Lightning you can use any route you like over the Lightning Network to reach the recipient of the payment.
    • magnat 9y ago
      If you run your own LN node, your channel is associated with your IP, and your transactions are associated with your channel. It is the same as reusing a single bitcoin address for all your transactions, with all the consequences [1], except this time you can tracked down to your physical location. In vanilla bitcoin you can at least generate addresses at will, while opening and closing payment channels every now and then undermines the whole idea of the off-chain transaction layer. [1] - https://en.bitcoin.it/wiki/Address_reuse https://en.bitcoin.it/wiki/Address_reuse
• lawn 9y ago
  You are both right and wrong. There have been multiple attempts at scaling Bitcoin on-chain by raising the blocksize. They have all been unsuccessful because they have been blocked by the Core developers and their supporters using censorship, troll campaigns, ddos and abuse. It's not due to technical reasons but because they want to redirect scaling off-chain, using technology they coveniently develop. The very same developers actually supported bigger blocks a couple of years ago but changed their tone to support the scaling approach their company favors. After the last attempt (Segwit2x) it's clear Bitcoin won't scale on-chain. However the technical limits of the technology ha never been reached, tested or even been fully researched. Bitcoin Cash is for example a fork which aims to scale on-chain by increasing the block size. If all transactions from Bitcoin would be done on Bitcoin Cash the network would work fine today. Where the actual limit is we don't know. It's probably not possible to support every financial transaction for everyone. For that we do need off-chain scaling in addition to many other improvements.
  • gruez 9y ago
    >It's not due to technical reasons but because they want to redirect scaling off-chain, using technology they coveniently develop. But how does that benefit them? Lightning network is open source, so it's not like they can make money on transaction fees.
    • etherael 9y ago
      https://mobile.twitter.com/adam3us/status/923309367260274688 https://mobile.twitter.com/adam3us/status/923309367260274688 Good reason to believe the entire thing was simply the old system attempting to hijack bitcoin. https://www.reddit.com/r/btc/comments/7fsbw5/divorcing_the_settlement_and_transaction_layers/?utm_content=title&utm_medium=user&utm_source=reddit&utm_name=frontpage https://www.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s...
      • gruez 9y ago
        >https://mobile.twitter.com/adam3us/status/923309367260274688 https://mobile.twitter.com/adam3us/status/923309367260274688 selling a SaaS (presumably with support) to enterprises is a bad thing now? >Good reason to believe the entire thing was simply the old system attempting to hijack bitcoin. >https://www.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s.. https://www.reddit.com/r/btc/comments/7fsbw5/divorcing_the_s.... most of the post wasn't really relevant to the on-chain vs off-chain discussion, so i'm going to quote (what i think is) the relevant bits >The divorce of the transaction layer from the settlement layer enables corrupt influence and tampering within the system in much the exact same way as the fiat system. [...] The core treachery that has been inflicted upon the project is what? You guessed it; to divorce the settlement and transaction layers from one another, which makes it once again subject to the exact same weaknesses as gold in the modern world with its laughable 542 to 1 paper to physical transaction to settlement layer. how i'm understanding the argument it is that by separating the transaction/settlement layer, it would lead to fractional reserve banking, as seen in fiat currencies. how does lighting network achieve that? to start a payment channel that can handle x BTC in net transactions, you have to lock x BTC beforehand, so it's not like using lighting network is equivalent to issuing IOUs for bitcoin. am i missing something?
• greg_____ory 9y ago
  Litecoin is the solution.
• greg_____ory 9y ago
  Litecoin is the solution. It was not designed to be a Bitcoin replacement, but rather to handle this exactly.
  • dangero 9y ago
    No it wasn't. It's 99% a copy of Bitcoin with small configuration file differences. It is configured for one order of magnitude more transactions, but it provides no architectural scaling innovations. It's just like Bitcoin -- can only be used at scale as a settlement layer.
    • zeep 9y ago
      Litecoin is similar to Bitcoin, but it was the first to make some of the changes that were made to both, like Segwit ...
• moduspol 9y ago
  Others here are touching on Bitcoin being like the "1.0" of cryptocurrency, but it's actually a lot more than that. In the public eye, it's a symbol of what cryptocurrencies can be. You're suggesting Bitcoin just proved it can't scale, but it actually just proved it did--just not with transaction volume. The network continued to process transactions averaging one block every ten minutes exactly as it was built to do, despite the heavy load. To put it differently: A different online payment system could have stopped accepting transactions, or run out of resources, allow transactions it shouldn't have, disallow ones it should, or something else terrible. But Bitcoin didn't. If you wanted into the next block, you'd need to pay more, but that's (from a technical perspective) entirely by design. What Bitcoin is proving is that it has clear and well-understood limits and continues to work well within them, and that's incredibly important for public perception. IMO, if Bitcoin's transaction capacity never scales, it'll still be a huge technological success. Other cryptocurrencies can try their hand at scaling, but Bitcoin needs to be rock solid to the extent possible for all cryptocurrencies' sake.
  • mchristen 9y ago
    The size of blocks is not core to the algorithm of Bitcoin though. What would you say to the person trying to send $30 only to have $20 of it eaten up in fees? Come back later when you can afford to use Bitcoin?
    • thatcat 9y ago
      I'd say stop storing your spending money as btc, it's an asset not cash. Can you liquidate your 30$ peice of gold in < 4 hours for market value? Probably not.
      • Shaanie 9y ago
        Indeed, what part of the name "cryptocurrency" would lead someone to believe it to be like cash?
        • BrianGraggg 9y ago
• yeukhon 9y ago
  Bitcoin has always been slow compared to other alt-coins such as Litecoin.
• grandalf 9y ago
  Maybe we learned that coinbase can't scale its website, but that has nothing to do with the ability of BTC to scale.
  • drexlspivey 9y ago
    Did you try to make a BTC transaction lately?
• rwaliany 9y ago
  Bitcoin is Myspace.
• keith_analog 9y ago
  What would concern me is, for example, if the cost of a transaction grows faster than the price of a given bitcoin in dollars. If that trend would continue for too long, then I suppose my bitcoin could get trapped in the system for an indefinite period of time, that is, from the time I no longer can justify moving the bitcoin because of high transaction fees to the time I can. It seems that this situation suggests a lower bound on the amount that makes sense to store in a bitcoin wallet. I wonder what that lower bound is today.
  • wmf 9y ago
    That has already happened as transaction fees have increased from less than 1 cent to $5.
• davidmetcalfe 9y ago
  Betteridge's law of headlines.
• CPLX 9y ago
  Bitcoin is a quasi-legal worldwide distributed mechanism for financial gambling that everyday people can now participate in from their smartphone. Clearly it has scaled well, it is now one of the more successful means of gambling extant. The fact that it is becoming unusable for any other purpose could have implications, but it's self evident that this use case has scaled considerably.
• betterunix2 9y ago
  Bitcoin involves broadcasting all transactions; that is obviously not scalable, regardless of block size, regardless of PoW, regardless of other design details.
  • programmarchy 9y ago
    You don't have to broadcast all transactions to all parties. Merkle trees can summarize past transactions, so not everyone needs a copy of the entire blockchain.
• busyra 9y ago
  Off Topic: Is anyone else creeped out by having an open ledger? As soon as I transact with someone or an entity, they now have access to view my wallet's holding/transactions via pub key. I don't know how I feel about Overstock having that information.
  • jiggunjer 9y ago
    You never use the same address twice. scatter received coins over other addresses.
    • busyra 9y ago
      The fees to move the coins to another wallet just to pay for coffee would be 4x the coffee.
      • jiggunjer 9y ago
        you don't have to pay fees to transfer to yourself, assuming there is no rush.
  • omio 9y ago
    Like all tech it's a double edged sword.
• bsvalley 9y ago
  Same question back in 1994 about the internet. "build things that don't scale. PG".
  • KirinDave 9y ago
    "Then sell them to sucker companies who will throw out all your work and redo it better." was the rest of the quote, right?
• blondie9x 9y ago
  As engineers and technologists we must always be mindful of our impact on the planet. Bitcoin has been a disaster when it comes to environmental concerns. It is a shadow on techs efforts to lead the way toward a sustainable future. We need to figure out a way to solve this issue, especially if cryptocurrency utilization is to increase, in particular through Bitcoin: Bitcoin uses about 32 terawatts of energy every year, enough to power about three million U.S. households, according to the Bitcoin Energy Consumption Index published by Digiconomist, a website focused on digital currencies. By comparison, processing the billions of Visa (V) transactions that take place each year consumes the same amount of power as just 50,000 American homes, according to Digiconomist.
  • polock 9y ago
    You're wasting energy for posting comments too. If we think a way like this, we can't no anything.
    • goialoq 9y ago
      The dose makes the poison.
      • ComputerGuru 9y ago
        Except Bitcoin is inefficient by design (it’s what proof of work is) and the dosage is the market cap and transaction load. So what you’re really saying is bitcoin at the scale it was meant to operate at is poison.
        • drdrey 9y ago
          No, the dosage is the hash rate (if more hash rate joins, the difficulty is automatically adjusted to keep it at 1 blocks / 10 min). The transaction output is constant, and market cap is irrelevant to the energy inefficiency discussion.
    • rdruxn 9y ago
      This is needlessly pedantic. OP is advocating for mindfulness, and lists a number of statistics for reasonable context.
• wmnwmn 9y ago
  Not only is BTC epicly badly designed (energy consumption=Denmark) but it doesn't solve a problem that anyone actually has (and neither do any of the other cryptos). Nobody uses them to pay for things, and nobody has any incentive to start doing so, because paying for things is not currently a problem. Compare with the Internet boom: along with the stock bubble, millions of people began using this new tool which changed their lives forever. Compare with the housing boom: tons of people got something, at least temporarily, that changed their lives, namely a house. Now look at cryptocurrencies. They having zero effect on ordinary life because they don't solve a problem that anyone has.
  • jiggunjer 9y ago
    You must not have any experience with international transfers or currencies other than euro and USD.
    • nigealj 9y ago
      Trouble is it's still not mainstream enough for everyone to start accepting it as a form of payment but that will change with time. For instance visit amazonbitcoin.com and see what happens!
      • wmnwmn 9y ago
        Sure, I can buy some btc and go buy something with it in some places. But where is my incentive to do that, rather than just go use my credit card or an ACH transfer? Btc is not more convenient, it's not cheaper, and whatever gain in privacy there currently is will not survive a transition to mainstream usage...although the first two problems ensure that there never will be mainstream usage.
    • wmnwmn 9y ago
      Indeed I don't. Nor do most other people. That's one of the reasons why, to first approximation, zero people are using them. And even if lots more people suddenly begin needing to transfer non-reserve currencies internationally, these transfers are going to run into legal issues which, despite fantasies of bitcoin enthusiasts, are not going to be evaded just by putting "crypto" in a prefix.
• JAdamMoore 9y ago
  You are not wrong. The same math that created BitCoin necessarily ignores the basis for the value is a sociopathic waste of time.
• scotty79 9y ago
  Couldn't bitcoin blocks be 100 times larger? What's the drawback of huge blocks?
• mrgordon 9y ago
  I’m not sure why so many people ignore that Bitcoin and all other serious cryptocurrencies are focused on their next generation scalability improvements. Several of the most viable blockchains like EOS are built to be scalable and the legacy coins like Bitcoin are working to adopt similar ideas. When the entire 2018 roadmap is about scalability, it gets boring reading these same posts about how it’s too slow and doesn’t scale without any reference to their work in progress.
  • Jasper_ 9y ago
    Because the whole 2016 roadmap and the whole 2017 roadmap was also about scalability. All they've done so far is throw their hands up and say "it's a really hard problem trust us guys". And nobody has shown any sort of traction on a solution: the developers admitted Lightning Network won't solve scalability concerns. Some people are getting a little tired of the pony show.
    • mrgordon 9y ago
      Then people will move to Ethereum and EOS (or whatever competing blockchains get scalability first). With interoperability of blockchains, transactions can be done on alt blockchains that are cheap and fast instead of on the Bitcoin chain.
  • joeschmoecad 9y ago
    this. it's like calling Twitter/Facebook a failure when they were scaling up to meet demand. So many people are trying to use Bitcoin that it is overloaded (Coinbase is the #1 app in the AppStore btw) - what a great problem to have!
• sillysaurus3 9y ago
  How is this expected to work with 7 billion people using it for every tiny financial transaction? I don't think it can. It's not meant to. It stores wealth. Nothing more.
• pmorici 9y ago
  The piece you are missing is that this problem is a direct result of the Core dev teams deliberate choice not to scale. They have a strangle hold on development and vehemently opposed any proposal to scale through block size increases as was the original intent. Bitcoin Cash isn't having these problems and won't have these problems in the future. Many people aren't aware of the underlying issues driving the transaction backlog in part because the historically important forums where Bitcoin is discussed have suppressed any discussion of this issue for a couple years now. https://www.yours.org/content/a-roadmap-for-scaling-bitcoin-cash-b11efae5ef9d/ https://www.yours.org/content/a-roadmap-for-scaling-bitcoin-...
  • grubles 9y ago
    There was an instance of SatoshiDice taking up half of a Bcash block consolidating UTXOs the other day. Congestion will happen on Bcash, as will a hard fork to infinite inflation due to lack of transaction fees to supplant block rewards.
    • pmorici 9y ago
      I'm talking about Bitcoin Cash. You must be confused "Bcash" is a fork of zcash that hasn't launched yet.
      • grubles 9y ago
        Didn't you hear there's an existing fork of Bitcoin called Bcash too? This new altcoin you're talking about will have to change their name, because we all know starting an altcoin with the same name as an existing one doesn't go so well.
        • pmorici 9y ago
          Either way neither of those "bcash"'s are What I'm talking about Bitcoin Cash. I think you are confused.
          • 9y ago
• grubles 9y ago
  Have you seen any announcements from merchants, businesses, exchanges regarding downtime due to congestion? Probably not, because the spam-prevention mechanism built into Bitcoin by Satoshi themselves is working as intended. On the flipside, you have Ethereum with more or less unbounded block sizes having issues with Cryptokitties congesting the entire network. Numerous entities using Ethereum are unable to do business due to the equivalent of Beanie Babies clogging the network [0][1]. [0] https://www.coindesk.com/ethereums-cryptokitties-blockchain-deluge-sparks-ico-delay/ https://www.coindesk.com/ethereums-cryptokitties-blockchain-... [1] https://twitter.com/myetherwallet/status/874285733707526145 https://twitter.com/myetherwallet/status/874285733707526145
  • heptathorp 9y ago
    It's the same case for Ethereum. Blocks are bound by total gas, and you can ensure your transaction is included into a block quicker by paying a higher gas fee, if you are willing. For about $0.40 you can get an ETH transfer into a block in a couple of minutes. https://ethgasstation.info/ https://ethgasstation.info/
• crispytx 9y ago
  I think you're right. Bitcoin sucks. It cost around $5 to make a single transaction back in August, and that was when Bitcoin was at 1/3 of its current price in US Dollars. Does anyone know what the cost to make a single transaction is today (in US Dollars)?
• adangert 9y ago
  Many say that Bitcoin's primary use is a store of value and a horrible medium of exchange. In that light, being unable to make small transactions makes sense, you store your wealth in Bitcoin and leave it there, kind of like a savings account, the high fees and slow transactions don't matter because you are not moving funds. High fees also reduce the amount of transactions in kind of an equilibrium,the higher fees go, the less people are willing to transact, thus lowering fees to the point of usability. The other camp that wants to use Bitcoin for small transactions is either in the illusory lightning network camp, or more realisticly investing in bitcoin cash. In my opinion, bitcoin has proven itself to be a great store of value but a poor medium of exchange, so just treat it as such.
  • ascorbic 9y ago
    Anything that fluctuates in value by 20% of more in a day can't be called a store of value.
  • djhworld 9y ago
    It makes me a bit sad the way bitcoin has gone, I remember buying things with BTC a few years ago. Some sites even built "order status" page that gave direct feedback of the transaction e.g. confirmations. I thought that was really cool.
• crispytx 9y ago
  Crypto-neckbeards be like "Bitcoin is going to $500,000!"
• taysic 9y ago
  The rally is partly because it can’t scale and people are unable to get their bitcoin to an exchange to sell it. Instead it is stuck in the mempool... and there is an increasing amount of bitcoin that can’t be moved because fees surpass its value. For a bitcoin that has scaled see Bitcoin Cash.
  • gruez 9y ago
    >The rally is partly because it can’t scale and people are unable to get their bitcoin to an exchange to sell it. that's demonstrably false. there's plenty room of you're willing to pay enough in transaction fees. if you don't want to pay $5 in transaction fees to cash out $5000, that's your problem. either that or you don't want to pay $5 to cash out $10, but in that case that has no appreciable impact on trading volume. >For a bitcoin that has scaled see Bitcoin Cash. if you mean bitcoin with block size limit lifted, then yes. but right now it's handling less transactions than bitcoin so it's not fair to say it has scaled.
    • deleted 9y ago
      [deleted]
    • taysic 9y ago
      The median fee is currently $15 and there have been around 200k unconfirmed transactions for days. Is it false in addition to this that around half of all bitcoin addresses hold less bitcoin than the current fee? That’s a massive constriction of supply. Very few people are transacting at amounts of $5000 where the fee might make sense.
• fungusow 9y ago
  Etherium
• freqn 9y ago
  Not sure if it will ever scale. Look into Iota.
• Blazespinnaker 9y ago
  Bitcoin is competing with gold, not visa.
• KaiserPro 9y ago
  You are correct. One interesting point to note is the high disparity between prices on different exchanges. COinbase shot through the roof, but other notable exchanges were sometimes $5k out for a number of hours. This proves that either people couldn't cross trade (i.e. buy cheap on one market and sell high on the other) or didn't know how to (which is suspect) this could be because the transaction speed stalled trades, meaning that effectively each exchange became its own global market, either way, having large disparities between exchanges is problematic.
• donjoy 9y ago
  I believe ripple has solved the problem with scaling. It can handle more than 1500 tps and the throughput can be increased upto 50k tps
• adamzk 9y ago
  Not just BTC. iota, which is supposedly scalable, has come to a screeching halt over the last few days as well
  • lawn 9y ago
    IOTA is however fundamentally flawed. It can never be decentralized if it ever even becomes useable.
• bossx 9y ago
  What are the best resources for staying up to date with Bitcoin and Ethereum development?
• anonymous5133 9y ago
  That's why I tell you guys to just use bitcoin cash instead. Bitcoin cash uses bigger blocks that can accommodate more transactions per second. We are going to increase it as more people use it. Right now the transactions are nearly free.
  • _tulpa 9y ago
    Ok. We'll just ignore the issues associated with increasing full-node storage requirements even faster than they're already increasing. And lower transaction fees lead to lower block rewards which lowers mining profitability. Both of these things result in more centralization. While we're at it we'll forget the post-fork difficulty adjustment faisco brought to us by the Bitcoin cash devs. We'll just trust their competancy and good will. Also we won't think about the legitimate off-chain solutions for transaction rate scaling, or how the side-chain concept dates back to early Satoshi emails. There are better alt coins for cheap and fast transactions. Besides, recommending something based entirely on those two factors is a massive oversimplification.
    • sgspace 9y ago
      Lower transaction fees leads to more volume of transactions. They’re going for the amazon approach of razor thin margins which should lead to more transactions overall. They plan to keep transaction fees around 1 penny by increasing the block size as it fills up. Next fork for Bitcoin Cash will give it 32mb blocks.
      • _tulpa 9y ago
        Yeah I realise that. Even if it does work (noting currently most BCH blocks are tiny) then the chain will grow by ~135Gb per month (the entire Bitcoin chain is ~145Gb). Running a full node means you now have to buy a hard-drive (or two) and hope your internet connection isn't capped. You also have to be OK with really slow block propagation (which you really shouldn't be). There are some very good reasons for small blocks and higher on-chain transaction fees.
• sgspace 9y ago
  Check out Bitcoin Cash if you want a scalable on chain crypto currency. Bitcoin Cash has the same history as Bitcoin up until August 1st, 2017 when they forked off the majority chain. Bitcoin Cash allows you to send any amount of money to anyone in the world for about 1 penny per transaction.
  • fullshark 9y ago
    And if its transaction volume were equal to bitcoin what would happen?
    • sgspace 9y ago
      Well right now Bitcoin Cash has 8x the capacity for on chain scaling 1mb blocks on BTC vs 8mb on BCH. Next Bitcoin Cash fork gives us 32mb blocks or 32x transaction capacity. Simplified a little bit I know you can pack segwit transactions into 1.7mb blocks on BTC.
• juicyfroot 9y ago
  Bitcoin Cash is Bitcoin. And it can scale up to 320GB blocks. Bitcoin Core is no longer following the Bitcoin protocol , and is therefore not p2p electronic cash. It is Segwit coin
• celticninja 9y ago
  I sent $30k for less than $5 and the transaction was confirmed within 15 minutes (second block), the network is fine. Yes it isn't free transfers but they are still possible if you don't mind waiting and your transaction is reasonably sized you are fine.
• chisleu 9y ago
  Bitcoin is like gold, has always been. It's pretty bad for routine payments.
• Ajedi32 9y ago
  Obviously no, the current version of Bitcoin does not scale. I don't see why you think that means Bitcoin _can't_ scale though. In order to convincingly make that claim, you'd need to be able to prove that all existing proposed solutions for scaling the network (lightning, block size increases, etc) cannot possibly work.
• WheelsAtLarge 9y ago
  Growing pains. Think about it, it's been less than ten years since bitcoin was created. Give it time. The code will change and it will be able to scale. We now have multi-millionaires that have a very strong incentive to make sure it never fails. 20 years from now the bitcoin code and network will be very different and many of the bugs will be worked out. I was a disbeliever but now I am a true believer. Bitcoin is here to stay. The only danger is that countries will make it illegal. It really is a danger to the way countries manages their economies. But only time will tell. Keep the coins and enjoy the ride. You won't be sorry. Lucky you.
• TimJRobinson 9y ago
  This video: https://youtu.be/GtKhYx2Vlb4 https://youtu.be/GtKhYx2Vlb4 helps explain and address the thought process you're going through now. Bitcoin scaling issues are analogous to many internet technologies such as Ethernet. With Ethernet people initially thought there was no way it could scale to support the whole world because the tech just couldnt support anything more than 1mbps, yet people found a way. They built new technology on top of it, they changed packet routing algorithms and they even changed the underlying physical hardware used. The only thing that remains is the name and the brand, Bitcoin will probably go through a similar development process. In upcoming Bitcoin technology, the lightning network is really exciting. It's a layer that runs on top of Bitcoin which allows thousands or possibly millions of transactions per second, performed instantly, with almost zero fees. It may have bottlenecks of its own, but I'm sure we can overcome them.
• wyldfire 9y ago
  Yes, BTC has weaknesses. No, it cannot scale up to "7 billion people using it for every tiny financial transaction" likely even with Lightning. It doesn't need to and you should please ignore the people who say it will. I love BTC, I think it's great. I think other cryptocoins innovate where BTC can't. But the BTC zealots who act like BTC will displace general purpose banking (or zanier still, the entire financial industry) make this conversation so frustrating. BTC can be a success without this all-or-nothing campaign. In fact, it is a success because it will continue to exist/store value, and operate as a medium of exchange. It will have hiccups and scaling challenges and we will entertain proposals like segwit and LN which don't radically alter the coin's design. Unfortunately they alter enough of the design to disturb the economics/incentives for the different roles. Those different roles have had well-aligned incentives for a long time and hopefully they don't continue to drift apart. This is the greatest risk facing Bitcoin IMO. For a long time I was worried about a weakness in the signature hash. But the bounty for that has been so enormous for so long that I'm doubtful one will ever be discovered. So Bitcoin is truly a robust coin, and it can continue to serve us well. If the 15000USD value is based on "7 billion people using it for every tiny financial transaction" then people should probably start shorting BTC (maybe tomorrow evening w/CBOE/Gemini).
• xHopen 9y ago
  Buy Ethereum
• weissy 9y ago
  The idea seems to be that BTC is a store of value (eg: gold) and payments is something to be implemented on a different layer.
• alfios 9y ago
  and what happens if Governments decide by law that bitcoin is illegal?
• curyous 9y ago
  Bitcoin Cash can easily scale. There never was a "scaling problem." The only problem is "people that don't want Bitcoin to scale." https://www.reddit.com/r/Bitcoincash/comments/7gmn8t/there_never_was_a_scaling_problem_the_only/ https://www.reddit.com/r/Bitcoincash/comments/7gmn8t/there_n...
• polock 9y ago
  Watch this prediction. https://us.teamblind.com/article/update-from-block---btc-futures-hodl-and-moving-funds-into-fiat-4c0jpDZV https://us.teamblind.com/article/update-from-block---btc-fut...
• ethftw 9y ago
  > have owned BTC for 5 years and I am enjoying the rally, but with the high transaction fees, back ... That sir is a first world problem!
• CryptoPunk 9y ago
  Of course it can't scale. Blocks can't grow larger than 1 MB, which means no more than three transactions per second. If you want scale, you have to look to Bitcoin Cash (which carries on Bitcoin's original vision of being a massively scalable peer-to-peer electronic cash) or Ethereum.
• obfk 9y ago
  Quantum computation will prove much more about the limitations of these cryptocurrencies that we expect. #shorsalgorithm
• arisAlexis 9y ago
  There are altcoin solving all these problems
• oldsklgdfth 9y ago
  One of the questions I have is why is that a requirement? Why does one network need to support the entire global populations? I mean if it's to be used as fiat currency then I only need it to pay for things roughly in my extended community. Why aren't there seperate networks developing in distinct geographic areas?