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Bitcoin has >200k [1] unconfirmed transactions in the mempool, summing up 4.3m us$ of fees alone. fee to get your transaction into the next block is around 22$

by ce4 9y ago

Bitcoin has >200k [1] unconfirmed transactions in the mempool, summing up 4.3m us$ of fees alone. fee to get your transaction into the next block is around 22$ [2] right now. Starting to look less and lesser like a currency, becoming more and more a security. edit add links: [1] https://blockchain.info/unconfirmed-transactions [2]: https://bitcoinfees.earn.com/

Retric 9y ago
Looking less like a security and more like a scam.
- sumedh 9y ago
  How is it a scam?
  - Retric 9y ago
    Other than a currency, what gives it value? Artworks for example are unique, but that does not inherently make them valuable.
    - adventured 9y ago
      There are many outlier things that are only of a certain value because some group of people decide that they are: art, baseball cards, collectible postage stamps, brand label clothing goods ($3,000 purses or shoes), venture capital valuations, and so on. Why is a new Ferrari so expensive? Ferrari could manufacture a lot more cars if they wanted to. They could also charge less, their margins are tremendous. It's an obvious function of supply and demand. The price is so high because people say it's worth paying that. It's that simple. If all of their customers suddenly decided it wasn't worth paying that, Ferrari would either lower their prices or go out of business. Even bond ratings are often open to significant subjectivism that can swing their value considerably. If enough people decide that a Bitcoin is worth $100,000, then that is what they will be worth. That is in fact how most things in the world are valued. Bitcoin's scarcity and the fact that in the near future it will become almost impossible to mine new coins, adds to the premise. The question is: does Bitcoin's low utility value and ease of trading in proportion to its market cap, particularly open it up to dramatic whims of the mob? Yes, which you see in its volatility. That won't change until or unless it finds greater baselining usefulness.
      - Retric 9y ago
        Ferrari cars charge a premium, much like Apple does but they are a hell of a lot faster than a Honda Civic. Baseball cards started as a thing outside of rarity, they had information and a picture which was more valuable pre Internet. Now you can argue that Antiques should not gain value from age, but old junk is not valueable, old pristine stuff is. So your argument is people overvalue something they have a rational reason to value, which is different than placing clause on something without inherent value. I am not saying Bitcoins shpuld be worth zero today, I am saying they will be worth zero in 100 years after the fad ends unless they fix the inherent problems with the protocol so it can be used as a medium of exchange.
    - sumedh 9y ago
      > Other than a currency You answered the question there is nothing more than that. Which bring us back to the question, just because it's a currency, its a scam?
      - Retric 9y ago
        No, the 22+$ transaction fees are the problem. People are saying that it's no longer a currency because of them, but that just makes it a security. IMO it's currency or scam not currency or security, because there is no inherent value beyond currency.
        sumedh 9y ago
        So its a scam because there are transaction fees?
        Retric 9y ago
        It's become a scam because of the incentive structure. The miners control the currency and are trying to maximize the money they extract not grow the usage of Bitcoin.
        sumedh 9y ago
        Why would the miners mine Bitcoin in the first place if there was no incentive? Once the mining stops, they make money by transaction fees. Do you expect people to work for free?
        Retric 9y ago
        I don't expect people in multi level marketing aka pyramid scheme to work for free either. But, their are plenty of incentive structures with good and bad rewards. One option for a hypothetical digital currency is to stagger payments so a miner gets say 1/2 of their reward in 10 years. I am only saying the current structure ends up as a scam, not that the eventual successful currency can't solve these problems.
joering2 9y ago
That still boggles my mind. I thought the whole idea was to remove middle man that not only authorize (or not transaction) but also charge hefty fees? I was told for long time it is free to buy or sell with bitcoin. What am I missing?
- deleted 9y ago
  [deleted]
- sah2ed 9y ago
  The Bitcoin network doesn't do away with the concept of a middle man completely, it merely replaces one mutually trusted middle man (like the Visa card network) with several untrusted middle men (anyone that can afford a mining rig). If one untrusted middle man produces a proof of work for a transaction request, the other untrusted middle men verify the PoW to be valid, if there is consensus §, they collectively agree to append the transaction to the next block on the blockchain. The untrusted middle man is then rewarded for their efforts by being paid the mining fee that was accruable for the transaction. [§] If 2 or more untrusted middle men solve the PoW for a transaction request independently, i.e. they are competing to be rewarded with the same mining fee, then the untrusted middle man with the longest confirmations from other nodes on the network is the one whose block will be appended to the blockchain, the others will be discarded. Would appreciate any corrections to my gross simplification.

by ce4 9y ago

Retric 9y ago

Looking less like a security and more like a scam.

sumedh 9y ago
How is it a scam?
- Retric 9y ago
  Other than a currency, what gives it value? Artworks for example are unique, but that does not inherently make them valuable.
  - adventured 9y ago
    There are many outlier things that are only of a certain value because some group of people decide that they are: art, baseball cards, collectible postage stamps, brand label clothing goods ($3,000 purses or shoes), venture capital valuations, and so on. Why is a new Ferrari so expensive? Ferrari could manufacture a lot more cars if they wanted to. They could also charge less, their margins are tremendous. It's an obvious function of supply and demand. The price is so high because people say it's worth paying that. It's that simple. If all of their customers suddenly decided it wasn't worth paying that, Ferrari would either lower their prices or go out of business. Even bond ratings are often open to significant subjectivism that can swing their value considerably. If enough people decide that a Bitcoin is worth $100,000, then that is what they will be worth. That is in fact how most things in the world are valued. Bitcoin's scarcity and the fact that in the near future it will become almost impossible to mine new coins, adds to the premise. The question is: does Bitcoin's low utility value and ease of trading in proportion to its market cap, particularly open it up to dramatic whims of the mob? Yes, which you see in its volatility. That won't change until or unless it finds greater baselining usefulness.
    - Retric 9y ago
      Ferrari cars charge a premium, much like Apple does but they are a hell of a lot faster than a Honda Civic. Baseball cards started as a thing outside of rarity, they had information and a picture which was more valuable pre Internet. Now you can argue that Antiques should not gain value from age, but old junk is not valueable, old pristine stuff is. So your argument is people overvalue something they have a rational reason to value, which is different than placing clause on something without inherent value. I am not saying Bitcoins shpuld be worth zero today, I am saying they will be worth zero in 100 years after the fad ends unless they fix the inherent problems with the protocol so it can be used as a medium of exchange.
  - sumedh 9y ago
    > Other than a currency You answered the question there is nothing more than that. Which bring us back to the question, just because it's a currency, its a scam?
    - Retric 9y ago
      No, the 22+$ transaction fees are the problem. People are saying that it's no longer a currency because of them, but that just makes it a security. IMO it's currency or scam not currency or security, because there is no inherent value beyond currency.
      - sumedh 9y ago
        So its a scam because there are transaction fees?
        Retric 9y ago
        It's become a scam because of the incentive structure. The miners control the currency and are trying to maximize the money they extract not grow the usage of Bitcoin.
        sumedh 9y ago
        Why would the miners mine Bitcoin in the first place if there was no incentive? Once the mining stops, they make money by transaction fees. Do you expect people to work for free?
        Retric 9y ago
        I don't expect people in multi level marketing aka pyramid scheme to work for free either. But, their are plenty of incentive structures with good and bad rewards. One option for a hypothetical digital currency is to stagger payments so a miner gets say 1/2 of their reward in 10 years. I am only saying the current structure ends up as a scam, not that the eventual successful currency can't solve these problems.

joering2 9y ago

That still boggles my mind. I thought the whole idea was to remove middle man that not only authorize (or not transaction) but also charge hefty fees? I was told for long time it is free to buy or sell with bitcoin. What am I missing?

deleted 9y ago
[deleted]
sah2ed 9y ago
The Bitcoin network doesn't do away with the concept of a middle man completely, it merely replaces one mutually trusted middle man (like the Visa card network) with several untrusted middle men (anyone that can afford a mining rig). If one untrusted middle man produces a proof of work for a transaction request, the other untrusted middle men verify the PoW to be valid, if there is consensus §, they collectively agree to append the transaction to the next block on the blockchain. The untrusted middle man is then rewarded for their efforts by being paid the mining fee that was accruable for the transaction. [§] If 2 or more untrusted middle men solve the PoW for a transaction request independently, i.e. they are competing to be rewarded with the same mining fee, then the untrusted middle man with the longest confirmations from other nodes on the network is the one whose block will be appended to the blockchain, the others will be discarded. Would appreciate any corrections to my gross simplification.