9 ms·

Bitcoin is Eating Itself

105 points by okket 9y ago

okket 9y ago
Previous discussion: https://news.ycombinator.com/item?id=14241065 https://news.ycombinator.com/item?id=14241065
rednerrus 9y ago
How useful is a currency where the transaction fee is $6 at the current price? This is much cheaper than last week when it was $25/transactions? Gone are the days of gambling on Satoshi Dice and buying things on Silk Road. Now we are to believe that Bitcoin is an inherent store of wealth?!? Edit: The fees are above $20 now.
- delbel 9y ago
  Tried to send bitcoin yesterday ($120) to an online retailer, the fee was $31.50 which I did not have. So I went to buy more bitcoin and realized it would cost additional $31.50 to transfer the new bitcoins just to cover the other network fees. Had to do it, then for whatever reason my account was put on 72 hour hold. So I just gave up, literally out $200 with nothing to show. Bitcoin is a complete joke if you can't actually use it.
  - brokensegue 9y ago
    I would've thought having to pay a $31 txn fee on a $100 purchase would've been enough to dissuade you.
    - Johnny555 9y ago
      If it's a product he really wants and is only available via bitcoin payment, it could well be worth it. I've paid $30 shipping for a < $100 item before when I really needed it to be delivered on time, so I can see paying a $30 surcharge to purchase an item.
      - Buttes6 9y ago
        >If it's a product he really wants and is only available via bitcoin payment, it could well be worth it. cough drugs cough
        s0rce 9y ago
        Doesn't that use Monero or something, I don't know, not a big black market cryptocurrency drug connoisseur.
      - goldenkey 9y ago
        Sounds like shilling for Bitcoin. Even if we all sometimes pay exorbitant amounts for priority shipping, doesn't mean we want to do that and get _no reward_ because "Bitcoin." The fees on Bitcoin currently make it practically unusable. If you want to argue for edge cases, go ahead. But please don't try to give these edge cases any mediocrum of regularity and sensibility...
        Johnny555 9y ago
        It seems like common sense, not shilling: if what you're buying is only available with Bitcoin, then you get more of a reward than when you pay for expensive shipping -- if you don't pay whatever the transaction fees end up being, then you won't get the product at all.
        goldenkey 9y ago
        You don't get a reward when you buy something - you get your purchased goods. The mental yoga necessary to consider a purchased good as a reward is absolutely baffling.
      - brokensegue 9y ago
        there are barely products for sale with bitcoin much less bitcoin exclusive products. only things i can think of are ransoms and drugs. i'm sure there are others but this isn't super common.
  - aaronm14 9y ago
    I had a similar fee when I tried to send a friend $30 of BTC to a paper wallet for Christmas. Ended up just walking him through setting up a Coinbase account and gave him $30 cash and he just link his own credit card (although he was never able to get past the pending account verification)
  - StavrosK 9y ago
    You can set your own fees. I paid $3 for a transaction today (but it obviously still hasn't verified, and I don't know when it will). That's kind of the tradeoff, unfortunately. These days, I find Bitcoin completely unsuitable for sending money. I use Bitcoin Cash, which verifies in ten minutes for something like one cent of fees (first block), but I guess that's because nobody uses it. Still, Bitcoin itself is out of the question for me personally, I'm not paying $30 for a transaction for anything.
    - dannyw 9y ago
      Bitcoin cash doesn’t have artificially low constraints on capacity. 10 years ago, it was 1MB. Despite all the advancements of storage and networking, it’s still essentially 1MB to a maximum of 1.8MB if everyone implements a complicated and costly to develop system called SegWit, and to fully use SegWit you have to use backwards incompatible addresses.
    - zeep 9y ago
      Bitcoin Cash has enough space in it's blocks to cover all of Bitcoin's and Bitcoin Cash' transactions.... for now. Your $3 Bitcoin transaction might get cancelled before it gets written to the blockchain...
  - anonymous5133 9y ago
    That's why you should use bitcoin cash instead. Cost me 1 penny to send any amount. I get confirmation within first block too.
- aeternus 9y ago
  Depends on the use-case. Definitely not useful for small transactions but $6-20 is still relatively cheap compared to other options for sending funds in cases where both parties do not have USD (or similar) bank accounts. As far as store-of-wealth it has a different risk profile than both fiat currencies & physical stores like gold: more independent of government monetary policy, possibly harder to take by force, possibly more plausible-deniability, more liquid and lower txn-cost than gold, more volatile than both. That risk-profile is not perfect but is clearly useful to some. Finally there's the value that it can provide as the trusted base for other off-chain solutions (like lightning-network).
- snissn 9y ago
  Think about it another way - the market cap of bitcoin is now $274,103,408,466. A 10E-11 fee ratio is outstanding and all you need to get it down to. Bitcoin has become more of a large balance settlement layer and smaller channels are emerging on top of it.
  - FireBeyond 9y ago
    The market cap of the USD is $10.5T, and I can send money for $3 to another person (with my middling BOA account) which is around a 10E-14 ratio. So in other words, all those Bitcoin cheerleaders mocking Western Union, the traditional banks for their excessive fees... Bitcoin is 1,000 times as expensive? And this is a selling point? I've never heard of fee ratios in economics or finance - this sounds more like one of these things that people 'create' to justify things... "oh, it's an outstanding fee ratio!".
    - snissn 9y ago
      But you can only have the fdic insurance limit in your boa account before the solvency of boa becomes an issue - also doesn't your boa transfer take a few days to clear?
      - perl4ever 9y ago
        How is the fdic insurance limit a disadvantage? Is there someone currently that will insure your bitcoins deposited with them?
        snissn 9y ago
        I could buy insurance on my bitcoins - i'm not required to hope for a single institution however on a bitcoin - it's decentralized (fdic insurance isn't free, ultimately it's funded by taxes)
        perl4ever 9y ago
        I vaguely think (not being in the insurance industry) that in order to be efficient, or even viable at all, insurers have to have some control over what they underwrite, which in turn requires knowledge about it. Does it make sense that someone would be willing or able to quantify the risk of my losing a bitcoin deposit held by a third party? Is there someone selling such insurance now? The FDIC has some ability to control and regulate the banks that it insures, including dealing with a failed bank. If somebody random claims to provide insurance, it doesn't inherently imply they have the same powers/information.
thefreeman 9y ago
Ok, every time they refer to "coins" in this article they really mean wallet addresses right? Is this a common way to refer to them now? It really took away from the point of the article for me.
- subway 9y ago
  Yeah, this definitely left me with a questionable impression of the author's understanding of bitcoin.
  - konschubert 9y ago
    I think his understanding of the technology is fine, he's just referring to transaction outputs as coins.
- olalonde 9y ago
  Technically, they're (or should be) referring to "txouts" or "outputs". An address with a large balance could still be unspendable if it is composed of many small outputs. A single address can be the recipient of multiple payments (outputs) and a transaction spends those outputs. Since each output must be referenced in a transaction, each output takes up some space and fees are calculated based on the size of the transaction in bytes, not its value in BTC. This diagram I made a few years ago might help visualise: https://github.com/olalonde/bitcoin-notes/blob/master/svg/transaction.svg https://github.com/olalonde/bitcoin-notes/blob/master/svg/tr...
  - konschubert 9y ago
    So we're going to run into some sort of fragmentation problem? Ever-growing transaction size coupled with already-to-small block size. I knew the scaling problem was bad, but I didn't realize it gets worse as Bitcoin ages!
    - Dylan16807 9y ago
      It doesn't really get worse over time. The amount of fragmentation is generally going to be proportional to the average transaction size. In general, expect transactions to have two outputs. The payment, and the extra. And since outputs become inputs, transactions will average about two inputs too. A few shavings might get orphaned here or there, but that doesn't have a huge effect on the operation of the rest of the coins.
olalonde 9y ago
> Over 3000 BTC, worth over $4M 3000 BTC is worth over $40M, not $4M. edit: oops, article dates from April.
- Alupis 9y ago
  Article is from April
- ivanbakel 9y ago
  This article was written in April. Besides which, making up-to-date corrections on such volatile prices is a pedant's joy: you might be corrected next week, but you wouldn't have been wrong today. There's a joke going around at the moment: "Dad, can I borrow a Bitcoin?" "$15000? Why should I give you $14000? What do you need $16000 for?"
nlperguiy 9y ago
Bitcoin is an early stage technology that still hasn't solved its scaling problem. Bitcoin is also not governed as a product, so incremental scaling improvements are left for the user to use, and not to forced by protocol. Bitcoin is currently not usable as currency, and is of course, not store of wealth - thing is not a liquid asset at all. Proposed scaling solutions were scientific research years ago, and research is still being done. The implementation obviously takes years to finetune and the scaling solution might not work as well as research predicted. All other coins are early stage tech and research too. People were enjoying the tech when it was less popular and seemed like magic, now when big numbers come into play it is obvious things where blown out of proportion way too early.
- anonemouse145 9y ago
  Speaking of quote unquote improvements, the community act like bad actors influencing the forks aren't an expected outcome. Somehow only the correct improvements will happen, because reasons. Nobody will subvert Bitcoin, and if they do, well they weren't true believers anyway so ignore that and HODL. ...Even though a lot of the community seem to agree the major figures who pushed for Bitcoin Cash were Judases trying to cash in so major subversion of the code/market has happened at least once already. There may be a way to make a real, usable currency out of these ideas. It doesn't exist yet in reality.
  - zitterbewegung 9y ago
    Yes, but blockchain technology is being investigated by a bunch of the large banks. If the banks figure out that the technology is useless we should be able to see that within 1-2 years.
- 0wing 9y ago
  Bitcoin is an early stage technology that still hasn't solved its scaling problem. It's almost 10 years old, and they knew about blocksize bandwidth limitations early on. Bitcoin used to have a variable blocksize that would accommodate increased usage, but at a certain point they set a hard limit at 1MB. Petty bickering and control of the main discussion forums by a very small group of people (owners of bitcointalk, moderators of /r/bitcoin and blockstream investors and marketing team) shifted the goal posts and gave talking points to divert the concerns over technical limitations and possible solutions with no real implementations for years. The proposed lightening network is based on an unsolved problem in computer science (routing optimization, LN thus maintains a map of all nodes be broadcast to all nodes), not to mention the LN design would rely heavily on centralized hubs of "liquidity providers" i.e. paypal style KYC payment processors - completely antithetical to the concept of "A purely peer-to-peer version of electronic cash allowing online payments to be sent directly from one party to another without going through a financial institution". LN conveniently favors large centralized liquidity provider payment hubs as the siphon for fees, which only becomes palatable when the alternative is excessive fees to miners on the underlying network. https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800 https://medium.com/@jonaldfyookball/mathematical-proof-that-... and they've been claiming it's just around the corner since 2015: https://twitter.com/starkness/status/676599570898419712 https://twitter.com/starkness/status/676599570898419712 Bitcoin is also not governed as a product, so incremental scaling improvements are left for the user to use, and not to forced by protocol. This is false. Users are subject to the developers, the moderated discussion forums, and the selfish incentive of miners/devs to extract financial value from users. Bitcoin is suffering from a toxic cult like community, and questionable developer team. Other crypto-currencies are working on solving the issues while BTC is being sold off to fund LN investors.
txsh 9y ago
Just a couple of years ago Bitcoin users were mocking Western Union for their $5 fee: https://i.imgur.com/bjRILt4.png https://i.imgur.com/bjRILt4.png Now, a mere mention of this will get you banned from /r/bitcoin. It's amazing how quickly the anti-authoritarian spirit of Bitcoin turned on its head.
- chipperyman573 9y ago
  It's more that the anti-authoritarian spirit of /r/Bitcoin (and from what I hear /r/btc as well) turned on its head, not really bitcoin users as a whole.
  - pmorici 9y ago
    /r/btc is not censored like /r/Bitcoin. Bitcoin Cash carries on the original Bitcoin vision of low fees and massive scaling through increasing blocksize.
    - clarents 9y ago
      The "vision" of low fees isn't really distinct to either chain. Low fees are due to a low amount of traffic on the network and blocks that are not full. Bitcoin Cash certainly scales better than BTC with 8x block sizes, but if it had traffic anywhere near the magnitude of Visa then it too would have high fees.
      - pmorici 9y ago
        They are focused on the right things. Bitcoin Cash can grow to Visa levels on chain with today’s tech. Bitcoin Core devs are focused on a pipe dream while the reality in front of them is ignored. https://m.youtube.com/watch?v=sbD0kiTddEs https://m.youtube.com/watch?v=sbD0kiTddEs
  - CyberDildonics 9y ago
    /r/btc doesnt censor on keywords and ban users. It also has open moderation logs. It isn't even in the same league as /r/Bitcoin. Post the word 'censorship' on /r/Bitcoin and your comment will be deleted.
noncoml 9y ago
Bitcoin is a ponzy scheme at the moment, but the block chain and the eCurrencies is the perfect platform for a Universal Income experiment. All we need is a way so that the “coins” do not go to the one with the most computing power, or the one who got in first, but distributed equally among the population.
- gizmo686 9y ago
  Ponzy scheme has a technical meaning, and Bitcoin is not it. Bubble is the word you are looking for. >but distributed equally among the population. I am aware of no blockchain based technology that offers a solution to this problem. Central to the problem that blockchains are intended to solve is that there is no good way of identifying individuals. That is to say, there is nothing to stop me from opening a million accounts in the system and acting as if I was a million different people. The insight behind POW style blockchains is that it does not matter if I claim to be a million people, because that would not give me any more compute power, and so will not allow for an attack on the system. If we could come up with a way of providing some sort of proof of individuality we would solve alot of problems.
  - konschubert 9y ago
    > If we could come up with a way of providing some sort of proof of individuality we would solve alot of problems. I've been thinking about this in the past weeks because I find the energy consumption hard to justify. Proof of individuality still would allow people of power to use an army of identity soldiers... but the same people can buy hash rate today, so that would not be a regression.
    - j1vms 9y ago
      > Proof of individuality still would allow people of power to use an army of identity soldiers (...) Which would point toward some form of Proof of (Human Free Will + Random Selection) being the "ideal" mining scheme (at least theoretically). And all other schemes, being practical attempts to approach that as much as possible.
    - 9y ago
JepZ 9y ago
Isn't layer two supposed to solve the fee problem? Anybody knows if thats right and when we can expect to see layer two in the wild?
- anonymous5133 9y ago
  It is, yes, but we aren't sure exactly how it will go implementation wise. layer two is a little more complicated to use compared to bitcoin which is somewhat user friendly in comparison.
  - notsrg 9y ago
    Even with wallets using Bitcoin is not user friendly in any sense of the word. If you already use PGP, sure. If not, good luck securing those keys. Oh and hope you made backups.
    - JepZ 9y ago
      Well, Bitcoin doesn't have to be so complicated to use. In fact, once you set up an account, sending and receiving money with coinbase is pretty simple. But yes, setting up an account with all the verification stuff isn't neat in the first place and storing your keys at an online provider is unacceptable for any sane person. On the other hand, there are some very easy to use desktop wallets like Exodus and making offline backups of your keys by writing down a few words (BIP-39) is pretty simple too. Sadly, not all wallets support BIP-39 (for various reasons), and e.g. Exodus complicates the matter by asking you for a password before telling you the words which is completely unrelated to BIP-39. So Bitcoin itself could be very easy to use. In my eyes the only real problem is obtaining them. I mean for everything else you just need to download some software and off you go. But to buy bitcoins you still need to register yourself with some institution which takes a few hours at least. It would be so much simpler if you could just buy some bitcoins at ebay/amazon/steam/...
- notsrg 9y ago
  Obviously can't give you a date but they recently hit a milestone with all integration tests passing: https://cdecker.github.io/lightning-integration/ https://cdecker.github.io/lightning-integration/
fortythirteen 9y ago
I bought into cloud mining a few years ago and my micro deposits are worthless because of the cost to consolidate the wallet. Really glad I didn’t sink too much into it, but I’m still pissed when it’s several grand worth of coin that I can’t ever withdraw.
dannyw 9y ago
This article is fairly outdated. According to bitcoinfees.earn.com, the fastest and cheapest fee is 690 Satoshi per byte. 3.5x what it was in May.
DenisM 9y ago
Exchange fees go up: - when the prices shoot up, attracting speculators - when the prices crash down, spooking speculators - when bigger players move in and pay for quicker transaction clearance - when time passes Exchange fees go down: - when it's calm and quiet, and there is no frenzy So a bit like a fishhook, then?
avenoir 9y ago
I personally think that Bitcoin will eventually be taken out by Ethereum, which will then give way to the likes of Cardano or something similar that will figure out issues with scaling, sustainability, governance (ie civil resolution of conflicts and end of hard-forks) and interoperability with legacy financial systems (ie Banks). It's really quite amazing to follow the innovation in this space, once you get through all the shit coins and ICO scams that is.

105 points by okket 9y ago

Previous discussion: https://news.ycombinator.com/item?id=14241065 https://news.ycombinator.com/item?id=14241065

How useful is a currency where the transaction fee is $6 at the current price? This is much cheaper than last week when it was $25/transactions? Gone are the days of gambling on Satoshi Dice and buying things on Silk Road. Now we are to believe that Bitcoin is an inherent store of wealth?!? Edit: The fees are above $20 now.

delbel 9y ago
Tried to send bitcoin yesterday ($120) to an online retailer, the fee was $31.50 which I did not have. So I went to buy more bitcoin and realized it would cost additional $31.50 to transfer the new bitcoins just to cover the other network fees. Had to do it, then for whatever reason my account was put on 72 hour hold. So I just gave up, literally out $200 with nothing to show. Bitcoin is a complete joke if you can't actually use it.
- brokensegue 9y ago
  I would've thought having to pay a $31 txn fee on a $100 purchase would've been enough to dissuade you.
  - Johnny555 9y ago
    If it's a product he really wants and is only available via bitcoin payment, it could well be worth it. I've paid $30 shipping for a < $100 item before when I really needed it to be delivered on time, so I can see paying a $30 surcharge to purchase an item.
    - Buttes6 9y ago
      >If it's a product he really wants and is only available via bitcoin payment, it could well be worth it. cough drugs cough
      - s0rce 9y ago
        Doesn't that use Monero or something, I don't know, not a big black market cryptocurrency drug connoisseur.
    - goldenkey 9y ago
      Sounds like shilling for Bitcoin. Even if we all sometimes pay exorbitant amounts for priority shipping, doesn't mean we want to do that and get _no reward_ because "Bitcoin." The fees on Bitcoin currently make it practically unusable. If you want to argue for edge cases, go ahead. But please don't try to give these edge cases any mediocrum of regularity and sensibility...
      - Johnny555 9y ago
        It seems like common sense, not shilling: if what you're buying is only available with Bitcoin, then you get more of a reward than when you pay for expensive shipping -- if you don't pay whatever the transaction fees end up being, then you won't get the product at all.
        goldenkey 9y ago
        You don't get a reward when you buy something - you get your purchased goods. The mental yoga necessary to consider a purchased good as a reward is absolutely baffling.
    - brokensegue 9y ago
      there are barely products for sale with bitcoin much less bitcoin exclusive products. only things i can think of are ransoms and drugs. i'm sure there are others but this isn't super common.
- aaronm14 9y ago
  I had a similar fee when I tried to send a friend $30 of BTC to a paper wallet for Christmas. Ended up just walking him through setting up a Coinbase account and gave him $30 cash and he just link his own credit card (although he was never able to get past the pending account verification)
- StavrosK 9y ago
  You can set your own fees. I paid $3 for a transaction today (but it obviously still hasn't verified, and I don't know when it will). That's kind of the tradeoff, unfortunately. These days, I find Bitcoin completely unsuitable for sending money. I use Bitcoin Cash, which verifies in ten minutes for something like one cent of fees (first block), but I guess that's because nobody uses it. Still, Bitcoin itself is out of the question for me personally, I'm not paying $30 for a transaction for anything.
  - dannyw 9y ago
    Bitcoin cash doesn’t have artificially low constraints on capacity. 10 years ago, it was 1MB. Despite all the advancements of storage and networking, it’s still essentially 1MB to a maximum of 1.8MB if everyone implements a complicated and costly to develop system called SegWit, and to fully use SegWit you have to use backwards incompatible addresses.
  - zeep 9y ago
    Bitcoin Cash has enough space in it's blocks to cover all of Bitcoin's and Bitcoin Cash' transactions.... for now. Your $3 Bitcoin transaction might get cancelled before it gets written to the blockchain...
- anonymous5133 9y ago
  That's why you should use bitcoin cash instead. Cost me 1 penny to send any amount. I get confirmation within first block too.
aeternus 9y ago
Depends on the use-case. Definitely not useful for small transactions but $6-20 is still relatively cheap compared to other options for sending funds in cases where both parties do not have USD (or similar) bank accounts. As far as store-of-wealth it has a different risk profile than both fiat currencies & physical stores like gold: more independent of government monetary policy, possibly harder to take by force, possibly more plausible-deniability, more liquid and lower txn-cost than gold, more volatile than both. That risk-profile is not perfect but is clearly useful to some. Finally there's the value that it can provide as the trusted base for other off-chain solutions (like lightning-network).
snissn 9y ago
Think about it another way - the market cap of bitcoin is now $274,103,408,466. A 10E-11 fee ratio is outstanding and all you need to get it down to. Bitcoin has become more of a large balance settlement layer and smaller channels are emerging on top of it.
- FireBeyond 9y ago
  The market cap of the USD is $10.5T, and I can send money for $3 to another person (with my middling BOA account) which is around a 10E-14 ratio. So in other words, all those Bitcoin cheerleaders mocking Western Union, the traditional banks for their excessive fees... Bitcoin is 1,000 times as expensive? And this is a selling point? I've never heard of fee ratios in economics or finance - this sounds more like one of these things that people 'create' to justify things... "oh, it's an outstanding fee ratio!".
  - snissn 9y ago
    But you can only have the fdic insurance limit in your boa account before the solvency of boa becomes an issue - also doesn't your boa transfer take a few days to clear?
    - perl4ever 9y ago
      How is the fdic insurance limit a disadvantage? Is there someone currently that will insure your bitcoins deposited with them?
      - snissn 9y ago
        I could buy insurance on my bitcoins - i'm not required to hope for a single institution however on a bitcoin - it's decentralized (fdic insurance isn't free, ultimately it's funded by taxes)
        perl4ever 9y ago
        I vaguely think (not being in the insurance industry) that in order to be efficient, or even viable at all, insurers have to have some control over what they underwrite, which in turn requires knowledge about it. Does it make sense that someone would be willing or able to quantify the risk of my losing a bitcoin deposit held by a third party? Is there someone selling such insurance now? The FDIC has some ability to control and regulate the banks that it insures, including dealing with a failed bank. If somebody random claims to provide insurance, it doesn't inherently imply they have the same powers/information.

thefreeman 9y ago

Ok, every time they refer to "coins" in this article they really mean wallet addresses right? Is this a common way to refer to them now? It really took away from the point of the article for me.

subway 9y ago
Yeah, this definitely left me with a questionable impression of the author's understanding of bitcoin.
- konschubert 9y ago
  I think his understanding of the technology is fine, he's just referring to transaction outputs as coins.
olalonde 9y ago
Technically, they're (or should be) referring to "txouts" or "outputs". An address with a large balance could still be unspendable if it is composed of many small outputs. A single address can be the recipient of multiple payments (outputs) and a transaction spends those outputs. Since each output must be referenced in a transaction, each output takes up some space and fees are calculated based on the size of the transaction in bytes, not its value in BTC. This diagram I made a few years ago might help visualise: https://github.com/olalonde/bitcoin-notes/blob/master/svg/transaction.svg https://github.com/olalonde/bitcoin-notes/blob/master/svg/tr...
- konschubert 9y ago
  So we're going to run into some sort of fragmentation problem? Ever-growing transaction size coupled with already-to-small block size. I knew the scaling problem was bad, but I didn't realize it gets worse as Bitcoin ages!
  - Dylan16807 9y ago
    It doesn't really get worse over time. The amount of fragmentation is generally going to be proportional to the average transaction size. In general, expect transactions to have two outputs. The payment, and the extra. And since outputs become inputs, transactions will average about two inputs too. A few shavings might get orphaned here or there, but that doesn't have a huge effect on the operation of the rest of the coins.

olalonde 9y ago

> Over 3000 BTC, worth over $4M 3000 BTC is worth over $40M, not $4M. edit: oops, article dates from April.

Alupis 9y ago
Article is from April
ivanbakel 9y ago
This article was written in April. Besides which, making up-to-date corrections on such volatile prices is a pedant's joy: you might be corrected next week, but you wouldn't have been wrong today. There's a joke going around at the moment: "Dad, can I borrow a Bitcoin?" "$15000? Why should I give you $14000? What do you need $16000 for?"

nlperguiy 9y ago

Bitcoin is an early stage technology that still hasn't solved its scaling problem. Bitcoin is also not governed as a product, so incremental scaling improvements are left for the user to use, and not to forced by protocol. Bitcoin is currently not usable as currency, and is of course, not store of wealth - thing is not a liquid asset at all. Proposed scaling solutions were scientific research years ago, and research is still being done. The implementation obviously takes years to finetune and the scaling solution might not work as well as research predicted. All other coins are early stage tech and research too. People were enjoying the tech when it was less popular and seemed like magic, now when big numbers come into play it is obvious things where blown out of proportion way too early.

anonemouse145 9y ago
Speaking of quote unquote improvements, the community act like bad actors influencing the forks aren't an expected outcome. Somehow only the correct improvements will happen, because reasons. Nobody will subvert Bitcoin, and if they do, well they weren't true believers anyway so ignore that and HODL. ...Even though a lot of the community seem to agree the major figures who pushed for Bitcoin Cash were Judases trying to cash in so major subversion of the code/market has happened at least once already. There may be a way to make a real, usable currency out of these ideas. It doesn't exist yet in reality.
- zitterbewegung 9y ago
  Yes, but blockchain technology is being investigated by a bunch of the large banks. If the banks figure out that the technology is useless we should be able to see that within 1-2 years.
0wing 9y ago
Bitcoin is an early stage technology that still hasn't solved its scaling problem. It's almost 10 years old, and they knew about blocksize bandwidth limitations early on. Bitcoin used to have a variable blocksize that would accommodate increased usage, but at a certain point they set a hard limit at 1MB. Petty bickering and control of the main discussion forums by a very small group of people (owners of bitcointalk, moderators of /r/bitcoin and blockstream investors and marketing team) shifted the goal posts and gave talking points to divert the concerns over technical limitations and possible solutions with no real implementations for years. The proposed lightening network is based on an unsolved problem in computer science (routing optimization, LN thus maintains a map of all nodes be broadcast to all nodes), not to mention the LN design would rely heavily on centralized hubs of "liquidity providers" i.e. paypal style KYC payment processors - completely antithetical to the concept of "A purely peer-to-peer version of electronic cash allowing online payments to be sent directly from one party to another without going through a financial institution". LN conveniently favors large centralized liquidity provider payment hubs as the siphon for fees, which only becomes palatable when the alternative is excessive fees to miners on the underlying network. https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800 https://medium.com/@jonaldfyookball/mathematical-proof-that-... and they've been claiming it's just around the corner since 2015: https://twitter.com/starkness/status/676599570898419712 https://twitter.com/starkness/status/676599570898419712 Bitcoin is also not governed as a product, so incremental scaling improvements are left for the user to use, and not to forced by protocol. This is false. Users are subject to the developers, the moderated discussion forums, and the selfish incentive of miners/devs to extract financial value from users. Bitcoin is suffering from a toxic cult like community, and questionable developer team. Other crypto-currencies are working on solving the issues while BTC is being sold off to fund LN investors.

txsh 9y ago

Just a couple of years ago Bitcoin users were mocking Western Union for their $5 fee: https://i.imgur.com/bjRILt4.png https://i.imgur.com/bjRILt4.png Now, a mere mention of this will get you banned from /r/bitcoin. It's amazing how quickly the anti-authoritarian spirit of Bitcoin turned on its head.

chipperyman573 9y ago
It's more that the anti-authoritarian spirit of /r/Bitcoin (and from what I hear /r/btc as well) turned on its head, not really bitcoin users as a whole.
- pmorici 9y ago
  /r/btc is not censored like /r/Bitcoin. Bitcoin Cash carries on the original Bitcoin vision of low fees and massive scaling through increasing blocksize.
  - clarents 9y ago
    The "vision" of low fees isn't really distinct to either chain. Low fees are due to a low amount of traffic on the network and blocks that are not full. Bitcoin Cash certainly scales better than BTC with 8x block sizes, but if it had traffic anywhere near the magnitude of Visa then it too would have high fees.
    - pmorici 9y ago
      They are focused on the right things. Bitcoin Cash can grow to Visa levels on chain with today’s tech. Bitcoin Core devs are focused on a pipe dream while the reality in front of them is ignored. https://m.youtube.com/watch?v=sbD0kiTddEs https://m.youtube.com/watch?v=sbD0kiTddEs
- CyberDildonics 9y ago
  /r/btc doesnt censor on keywords and ban users. It also has open moderation logs. It isn't even in the same league as /r/Bitcoin. Post the word 'censorship' on /r/Bitcoin and your comment will be deleted.

noncoml 9y ago

Bitcoin is a ponzy scheme at the moment, but the block chain and the eCurrencies is the perfect platform for a Universal Income experiment. All we need is a way so that the “coins” do not go to the one with the most computing power, or the one who got in first, but distributed equally among the population.

gizmo686 9y ago
Ponzy scheme has a technical meaning, and Bitcoin is not it. Bubble is the word you are looking for. >but distributed equally among the population. I am aware of no blockchain based technology that offers a solution to this problem. Central to the problem that blockchains are intended to solve is that there is no good way of identifying individuals. That is to say, there is nothing to stop me from opening a million accounts in the system and acting as if I was a million different people. The insight behind POW style blockchains is that it does not matter if I claim to be a million people, because that would not give me any more compute power, and so will not allow for an attack on the system. If we could come up with a way of providing some sort of proof of individuality we would solve alot of problems.
- konschubert 9y ago
  > If we could come up with a way of providing some sort of proof of individuality we would solve alot of problems. I've been thinking about this in the past weeks because I find the energy consumption hard to justify. Proof of individuality still would allow people of power to use an army of identity soldiers... but the same people can buy hash rate today, so that would not be a regression.
  - j1vms 9y ago
    > Proof of individuality still would allow people of power to use an army of identity soldiers (...) Which would point toward some form of Proof of (Human Free Will + Random Selection) being the "ideal" mining scheme (at least theoretically). And all other schemes, being practical attempts to approach that as much as possible.
  - 9y ago

JepZ 9y ago

Isn't layer two supposed to solve the fee problem? Anybody knows if thats right and when we can expect to see layer two in the wild?

anonymous5133 9y ago
It is, yes, but we aren't sure exactly how it will go implementation wise. layer two is a little more complicated to use compared to bitcoin which is somewhat user friendly in comparison.
- notsrg 9y ago
  Even with wallets using Bitcoin is not user friendly in any sense of the word. If you already use PGP, sure. If not, good luck securing those keys. Oh and hope you made backups.
  - JepZ 9y ago
    Well, Bitcoin doesn't have to be so complicated to use. In fact, once you set up an account, sending and receiving money with coinbase is pretty simple. But yes, setting up an account with all the verification stuff isn't neat in the first place and storing your keys at an online provider is unacceptable for any sane person. On the other hand, there are some very easy to use desktop wallets like Exodus and making offline backups of your keys by writing down a few words (BIP-39) is pretty simple too. Sadly, not all wallets support BIP-39 (for various reasons), and e.g. Exodus complicates the matter by asking you for a password before telling you the words which is completely unrelated to BIP-39. So Bitcoin itself could be very easy to use. In my eyes the only real problem is obtaining them. I mean for everything else you just need to download some software and off you go. But to buy bitcoins you still need to register yourself with some institution which takes a few hours at least. It would be so much simpler if you could just buy some bitcoins at ebay/amazon/steam/...
notsrg 9y ago
Obviously can't give you a date but they recently hit a milestone with all integration tests passing: https://cdecker.github.io/lightning-integration/ https://cdecker.github.io/lightning-integration/

fortythirteen 9y ago

I bought into cloud mining a few years ago and my micro deposits are worthless because of the cost to consolidate the wallet. Really glad I didn’t sink too much into it, but I’m still pissed when it’s several grand worth of coin that I can’t ever withdraw.

dannyw 9y ago

This article is fairly outdated. According to bitcoinfees.earn.com, the fastest and cheapest fee is 690 Satoshi per byte. 3.5x what it was in May.

DenisM 9y ago

Exchange fees go up: - when the prices shoot up, attracting speculators - when the prices crash down, spooking speculators - when bigger players move in and pay for quicker transaction clearance - when time passes Exchange fees go down: - when it's calm and quiet, and there is no frenzy So a bit like a fishhook, then?

avenoir 9y ago

I personally think that Bitcoin will eventually be taken out by Ethereum, which will then give way to the likes of Cardano or something similar that will figure out issues with scaling, sustainability, governance (ie civil resolution of conflicts and end of hard-forks) and interoperability with legacy financial systems (ie Banks). It's really quite amazing to follow the innovation in this space, once you get through all the shit coins and ICO scams that is.