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The paper describes the problems inherent to bitcoin. I think blockchain might be a good fit for some things, but bitcoin makes a terrible currency. The releva

The paper describes the problems inherent to bitcoin. I think blockchain might be a good fit for some things, but bitcoin makes a terrible currency. The relevant section: >Today’s representative blockchain such as Bitcoin takes 10 min or longer to confirm transactions, achieves 7 transactions/sec maximum throughput. In comparison, a mainstream payment processor such as Visa credit card confirms a transaction within seconds, and processes 2000 transactions/sec on average, with a peak rate of 56,000 transactions/secnsactions/sec on average, with a peak rate of 56,000 transactions/sec

icelancer 8y ago
The blockchain is not comparable to the Visa network as you use it as a consumer. It is comparable to the Visa network regarding settlement, which is extremely slow and periodic, just like the blockchain. Your bank has a series of pending charges that settles 24-48 hours later, which is similar to a dual-layer model - for example, Bitcoin's blockchain (settlement layer) and the Lightning network (consumer Visa network).
seibelj 8y ago
That doesn't mean it's useless, it's just that the current state of the technology does not have the same throughput as other technologies in regards to payment processing. Bitcoin has many other aspects that make it more than a "useless commodity", which wasn't implied by the linked article or the fact you quoted.
- omegaworks 8y ago
  >it's just that the current state of the technology does not have the same throughput as other technologies in regards to payment processing. This makes it an extremely poor currency. It is also an extremely poor distributed linked list with that throughput. If you use the energy resources of a small country just to get 7 transactions per second max recorded in a ledger, you've failed as a system designer. If the intent was to create a currency, Satoshi failed. If the intent was to create a white elephant, Satoshi succeeded beyond their wildest dreams. If our largest institutions are buying in, we will be collectively saddled with the maintenance of the network for the foreseeable future.
DINKDINK 8y ago
Bringing up a comparison to Visa is immaterial: Bitcoin isn't competing with Visa. Visa's purpose is to update the bank accounts of distrusting parties (and credit and quality dispute issues). You need FedWire and an entire banking apparatus to use Visa. Bitcoin is competing with central banks with a state-backed monopoly on currency creation, and the court systems that enforce settlement. If you live in a first-world country where those banking systems work relatively well (Read require bailouts every 10-20 years, never innovated, leach value) and are subsidized by industry great for you but for bitcoin to offer such a service, for fractions of what it would cost a lawyer to do, to the rest of the world. Do you honestly believe the government has a magic/economic-violating ability to create $100 worth of value when it spends $0.13 printing a new paper bill? [1] Or even less when it's digitally inflated? How much consumptive waste is created by artificial demand induced by central banks? Bitcoin has already has a compelling solution to its layer 1 scaling bottleneck with reasonable trade offs: Layer 2 payments that are layer 1 enforceable, inflation proof, cryptography enforced. [1] https://www.federalreserve.gov/faqs/currency_12771.htm https://www.federalreserve.gov/faqs/currency_12771.htm
- stephen_g 8y ago
  > Do you honestly believe the government has a magic/economic-violating ability to create $100 worth of value when it spends $0.13 printing a new paper bill? [1] Or even less when it's digitally inflated? That's basically a complete misunderstanding of what money is. The fact that money is a store of value is (and mostly has always been) an emergent property. This is part of why when systems that try to tie value to things like gold pop up every now and then, they always eventually fail and the peg breaks - because it's just not how it actually works. The primary purpose of money is to represent an obligation to provide a good or service at a later time. In the Government's case, their spending from money they create is actually putting money into the economy so they can tax it back later. It's actually around the requirement of a population to pay tax in a certain currency that the wider economy emerges around it (this is called 'baseline demand' for a currency). Now, to the question of 'does the Government magically create $100 of value when they issue a banknote?' No. But the if the economy has produced $100 of new value, then it actually needs somebody to create $100 more money to operate in a non-deflationary way. At the moment, a lot of that comes from banks, which also expand the money supply when they create new loans, but at the same time create private debt. And it's actually when you get too much private debt and something happens in the economy that stops enough people being able to pay up that banks require bailouts.

icelancer 8y ago

The blockchain is not comparable to the Visa network as you use it as a consumer. It is comparable to the Visa network regarding settlement, which is extremely slow and periodic, just like the blockchain. Your bank has a series of pending charges that settles 24-48 hours later, which is similar to a dual-layer model - for example, Bitcoin's blockchain (settlement layer) and the Lightning network (consumer Visa network).

seibelj 8y ago

That doesn't mean it's useless, it's just that the current state of the technology does not have the same throughput as other technologies in regards to payment processing. Bitcoin has many other aspects that make it more than a "useless commodity", which wasn't implied by the linked article or the fact you quoted.

omegaworks 8y ago
>it's just that the current state of the technology does not have the same throughput as other technologies in regards to payment processing. This makes it an extremely poor currency. It is also an extremely poor distributed linked list with that throughput. If you use the energy resources of a small country just to get 7 transactions per second max recorded in a ledger, you've failed as a system designer. If the intent was to create a currency, Satoshi failed. If the intent was to create a white elephant, Satoshi succeeded beyond their wildest dreams. If our largest institutions are buying in, we will be collectively saddled with the maintenance of the network for the foreseeable future.

DINKDINK 8y ago

Bringing up a comparison to Visa is immaterial: Bitcoin isn't competing with Visa. Visa's purpose is to update the bank accounts of distrusting parties (and credit and quality dispute issues). You need FedWire and an entire banking apparatus to use Visa. Bitcoin is competing with central banks with a state-backed monopoly on currency creation, and the court systems that enforce settlement. If you live in a first-world country where those banking systems work relatively well (Read require bailouts every 10-20 years, never innovated, leach value) and are subsidized by industry great for you but for bitcoin to offer such a service, for fractions of what it would cost a lawyer to do, to the rest of the world. Do you honestly believe the government has a magic/economic-violating ability to create $100 worth of value when it spends $0.13 printing a new paper bill? [1] Or even less when it's digitally inflated? How much consumptive waste is created by artificial demand induced by central banks? Bitcoin has already has a compelling solution to its layer 1 scaling bottleneck with reasonable trade offs: Layer 2 payments that are layer 1 enforceable, inflation proof, cryptography enforced. [1] https://www.federalreserve.gov/faqs/currency_12771.htm https://www.federalreserve.gov/faqs/currency_12771.htm

stephen_g 8y ago
> Do you honestly believe the government has a magic/economic-violating ability to create $100 worth of value when it spends $0.13 printing a new paper bill? [1] Or even less when it's digitally inflated? That's basically a complete misunderstanding of what money is. The fact that money is a store of value is (and mostly has always been) an emergent property. This is part of why when systems that try to tie value to things like gold pop up every now and then, they always eventually fail and the peg breaks - because it's just not how it actually works. The primary purpose of money is to represent an obligation to provide a good or service at a later time. In the Government's case, their spending from money they create is actually putting money into the economy so they can tax it back later. It's actually around the requirement of a population to pay tax in a certain currency that the wider economy emerges around it (this is called 'baseline demand' for a currency). Now, to the question of 'does the Government magically create $100 of value when they issue a banknote?' No. But the if the economy has produced $100 of new value, then it actually needs somebody to create $100 more money to operate in a non-deflationary way. At the moment, a lot of that comes from banks, which also expand the money supply when they create new loans, but at the same time create private debt. And it's actually when you get too much private debt and something happens in the economy that stops enough people being able to pay up that banks require bailouts.