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Looks like the flaws are: 1. "overstatement of activity" 2. 7 transactions/second 3. constrained currency supply (21 M) 4. fraud in exchanges Odd that only

by apo 8y ago

Looks like the flaws are: 1. "overstatement of activity" 2. 7 transactions/second 3. constrained currency supply (21 M) 4. fraud in exchanges Odd that only one of these points (2, scaling) relates to Bitcoin the protocol itself. And that scaling issue has raged from Bitcoin's first public disclosure. This clock has been stuck at noon forever. The remaining three points have little to do with Bitcoin the technology and more to do with how Bitcoin is being used. All can be viewed as either a feature or bug, depending on your worldview. Consider the counterpoints: - Nobody knows exactly how often Bitcoin is used for payments or what it's used to buy. As such, its users can enjoy much more privacy than they can with other payment methods. - Constrained supply means protection against inflationist central banks. - A currency that isn't used to commit fraud isn't very useful. Therefore, to say that Bitcoin has failed because of fraud is dishonest at best. The article does to mention Lightning Network, but doesn't give enough context to make anything of. It's operational now and there's been a flurry of development activity in the last year. LN has the potential to: - increase transaction throughput well beyond 7 transactions/second - increase user privacy - increase usability I don't expect journalists reporting on Bitcoin to go very deep. But it would be nice if they changed the playbook every once in awhile.

not-satoshi 8y ago
The root problem with Lightning Network is that it is not settlement. Money must be settled to be useful. Worst case, a client or protocol flaw is found, and everyone in the world is expected to close their channels (settle) at 7 transactions per second? Please. Bitcoin Cash is the large block scaling we've needed all along.
- dane-pgp 8y ago
  Not only is the worst case a disaster, but even the best case is: Imagine the usability of trying to onboard another 7 billion Lightning Network users at 7 transactions per second.
  - stdcli 8y ago
    Compared to what kind of payment onboarding system? Outside of free cash, anything related to setting up a bank account, or a credit card can take up to 7-10 business days if not more, post an application to do so. Do you know of any onboarding system of payment that is faster? It seems like this is just a random statement by itself that is not in the context of all the other onboarding mechanisms of every payment system currently used. Care to calibrate Lightening onboarding with any other mass payment system? Even if you use square, paypal, venmo etc, they need to be linked to real checking accounts, credit card, other verified (with long onbaording) payment systems etc. Furthermore, 2-3% of all transactions on many of these systems are fraudulent, but the payment systems ACCEPT This as an acceptable level of fraud and cover the expenses, in order for faster transactions. Square knows for example it won't be used in coffee shops over another competitor if Square on average takes 20 seconds longer to process metadata in conjunction with the transaction itself to see if its an attempt/fraudulent charge, so they consciously cut corners here and accept this liability so we can all get coffee 8x a day. This is why bitcoin has industry standard confirmation blocks so the network can address and blacklist attempts at doubles spends and keep a master chain. This is basic blockchain 101 compared to standard knowledge of onboarding to every en masse payment system we all anecdotally have experience with layered digital transaction technology and the losses associated with that. The lightening network is as mentioned above with links, rapidly evolving to expediate this while still maintaining the underlying benefits of transaction consensus that avoids fraud. You may deal with fraudulent exchanges as you will do with fraud around any new technology (heard of the internet before? there were lots of sites for fraud, and much worse when it came out, and still are, we just all get smarter about what we click, and hopefully in this case, who we throw our money at, which you should be doing anyways for any new technology...) but the fraud here is associated with like top ranked comment said, not the protocol but the flurry of business activity around it, and is really null and void to the technical conversation itself, which is really what evolves communities like this past these handwavy statements... I really don't mind constructive criticism of blockchain based technologies, but the issue is the conversation rarely evolved because of cargo culting statements like this that ignorethe very benefits of moving to a blockchain based payment system.
    - 8y ago
- just_one_time_ 8y ago
  Agree, you will get downvoted here though, HN hates Bitcoin and now that Bitcoin Cash is Bitcoin, they really hate it.
- homakov 8y ago
  You just need to support economic majority, not everyone who lives on $2 a day. The channels can be closed in a reasonable time. Big blockers are new flat earthers.
  - n0t-satoshi 8y ago
    Three week wait, or pay $30 to settle. That was December 2017. The channels will freeze and a lot of people will wish they had money that works when they need it. Like Cash.
    - homakov 8y ago
      With 1m tx per day you need 3 weeks to close 21m channels. Reasonable for a protocol bug. If just one hub goes down however, it will sort out in a few days. Like I said it only should cater to economic majority aka 1% so 70m wealthy users need 2 months. Btc’s current limits are far from optimal but layer2 itself is working great especially on other chains.
      - imtringued 8y ago
        Your numbers are incorrect. 1m transactions per day is almost twice as fast as the theoretical capacity of Bitcoin. (~600k transactions per day assuming 7tps)
        homakov 8y ago
        I was citing eth's ones. Bitcoin is a poor platform for doing layer2 due to unfixable restrictions. What matters is it's about 600k~1000k (not 100m) and even with these it supports quite a lot of users. Supporting more than 1% is desirable but not mission critical.
        not-satoshi 8y ago
        That's not Bitcoin. Bitcoin is electronic cash for everyone on the internet. See www.bitcoin.com/bitcoin.pdf
cromulent 8y ago
Are you saying that point 3 is incorrect? Will there be more than 21M Bitcoin?
- monsterbash506 8y ago
  It's not scheduled or anything but it could still happen if it were desired.
- schmichael 8y ago
  If a majority of miners (hash power) decide to mint more, there will be more. The code change is a simple one. The politics and economics are, as always, much more complex.
  - martindale 8y ago
    If a majority of full nodes (validators) reject blocks from those miners, their chain will be orphaned and the block reward will fall to the subsidy they've created for themselves (where block_reward = block_subsidy + block_fees). Bitcoin has value because this just isn't possible, in practice.
    - schmichael 8y ago
      > just isn't possible It's absolutely possible. Who runs nodes? There's no way to know that the majority of hash power doesn't already control a majority of nodes.
      - martindale 8y ago
        As long as you run your own node, it doesn't really matter who runs the rest. If a peer relays an invalid block to you, disconnect from that peer and defer to the chain with the most work. Have you read the paper?
        schmichael 8y ago
Macross8299 8y ago
>Nobody knows exactly how often Bitcoin is used for payments or what it's used to buy. I wouldn't go that far. This is much more related to Bitcoin's relative "newness" and lack of mature AML tools than anything inherent in the protocol. There are a number of startups that offer blockchain tracking and forensic analysis capable of tracking the kind of money flows you describe. Your statement seems much more applicable to something like Monero or other obfuscated ledger intentionally designed for privacy. It is an open ledger, after all.
- deleted 8y ago
  [deleted]
jaekwon 8y ago
Lightning is one way. There are some issues with capital lockup costs, so other level-2 scaling solutions are also required. There's been more discussion of a Bitcoin bridge for Cosmos, as well as Ethereum. Tendermint sidechains is what crypto needs. Tezos recently announced plans Tendermint adoption, as well as Binance w/ the Cosmos SDK. Disclaimer, I'm a longtime lurker & cofounder of Tendermint/Cosmos. Cosmos is coming.
- just_one_time_ 8y ago
  Adam? LN is vaporware at best, its been 18 months away for 3 years. Bitcoin Cash is the closest thing to Bitcoin at this point.
- homakov 8y ago
  Bridge downgrades your security to sidechain validator set, when a payment channel keeps it on the level of your root chain. If a sidechain is compromised their validators can double spend, and some users lose assets. Cant happen to channels by design.
Barrin92 8y ago
>the remaining three points have little to do with Bitcoin the technology what bitcoin is as a technology isn't as relevant compared to what it is as a means of exchange. people don't care about the protocol, they care about the value bitcoin provides to them. To make technology the most important sales pitch of a currency is an ideological choice on part of the people pushing for bitcoin adoption, not some sort of obvious or intuitive insight. > Constrained supply means protection against inflationist central banks. This again, is a non-issue for consumers and everyone who isn't ideologically invested in crypto-technology. As long as you don't park your money under the mattress for a hundred years but actually spend it the stability that existing currencies provide is sufficient (and much preferable to the volatility of bitcoin.) > A currency that isn't used to commit fraud isn't very useful. Therefore, to say that Bitcoin has failed because of fraud is dishonest at best. That's obviously not the point. What is worrisome about bitcoin isn't that it's used for fraud at all, it's that fraudulent activity and weird con-like schemes constitute a significant, if not majority of activity. Which isn't surprising if the two points above are taken into account, it simply is not particularly useful for anything else.
- mindcandy 8y ago
  Constrained supply is a non-issue until it becomes an issue. But, this is a whole new currency being set up. Making inflation a non-issue from the start is a feature. However, I think you are trying to compare Bitcoin to the US Dollar. US Dollar inflation has been reasonable if you live paycheck to paycheck. But, remember Bitcoin is not just for people living in the Bay Area. It’s also for Venezuelans, Zimbabweans, etc...
- easymodex 8y ago
  >What is worrisome about bitcoin isn't that it's used for fraud at all, it's that fraudulent activity and weird con-like schemes constitute a significant, if not majority of activity. Sorry but it's not 2015 anymore. I mean yes it does happen but not nearly as much as people think, probably not even much more than with regular currencies. It's true though that people fall for crypto cons more easily since a lot jumped in hoping for miracle money without even understand what they're doing. Thankfully this isn't the case anymore since hopefully enough people have learned about it and will pass that knowledge to others.
nosuchthing 8y ago
Consider what happens when another software hack/bug is found in Bitcoin/Ethereum/cryptocoin client wallet software, allowing an attacker to double spend (rob exchanges/OTC trader/dark pools), or generate more BTC for free. This could be done by any of the few developers using obfuscation techniques. See how easy it is to hide malicious code even in open source projects, there's several underhanded obfuscation contests that demonstrate open source code can hide malicious backdoors even with vigilant audits. A Bitcoin bug happened a few weeks ago allowing any attacker to generate infinite free BTC, but the network survived only because an honest researcher chose not to exploit it. [1] Constrained supply means protection against inflationist central banks. Bitcoin's inflation rate is higher than USD: The current inflation rate for the United States is 1.9% for the 12 months ended December 2018, as published on January 11, 2019 by the U.S. Labor Department. Bitcoin inflation rate per annum: 3.83% [2] 4. fraud in exchanges This is unraveling right now with Tether and Bitfinex. [3] It should be assumed any and all cryptocoin exchanges are operating as fractional reserves, and front running customers, unless they can prove otherwise. [1] https://hackernoon.com/bitcoin-core-bug-cve-2018-17144-an-analysis-f80d9d373362?gi=ad82a96b0d11 https://hackernoon.com/bitcoin-core-bug-cve-2018-17144-an-an... https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposures https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu... [2] https://www.bitcoinblockhalf.com/ https://www.bitcoinblockhalf.com/ [3] https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87?source=---------21------------------ https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t... https://medium.com/@bitfinexed/the-mystery-of-the-bitfinex-tether-bank-and-why-this-is-suspicious-a8a6407a1241 https://medium.com/@bitfinexed/the-mystery-of-the-bitfinex-t...
- darawk 8y ago
  Bitcoin has a supply inflation rate. It's inflation rate with respect to price over its history, which is what you're comparing with USD, is quite negative. People have been predicting the collapse of Tether for several years now, and yet, it still trades nearly 1:1 with USD. Funny that the people who actually have skin in the game seem to disagree.
tbabb 8y ago
> - Constrained supply means protection against inflationist central banks. This keeps being touted as a feature, but unless you are Zimbabwe it is a bug. "Supply-constrained" means "demand-driven price" which means "volatile." A useful currency is one that measures wealth consistency, like a meter stick. You don't want your money to mis-count your wealth. Hoping that it will mis-count your wealth in your favor is speculation, which is a bad, dangerous role for currency. You want to know that you can afford rent/bread next month (to say nothing of being able to pay your workers or business partners). These are more fatal, fundamental design problems than low transaction rates or questionable usage-- they are built into the very philosophy of cryptocurrency. Explained in more detail here: https://www.bzarg.com/p/what-bitcoin-shows-us-about-how-money-works/ https://www.bzarg.com/p/what-bitcoin-shows-us-about-how-mone...
- roenxi 8y ago
  > A useful currency is one that measures wealth consistency, like a meter stick Currency doesn't measure wealth consistently, and makes a terrible measuring stick. That is a great analogy to take literally - most of the developed world cuts 2% off our monetary measuring stick per annum as a matter of policy. or people who aren't unusually interested in maths and finance (ie, most people) that is highly confusing, because they set their expectations then think that somehow they are getting ahead if they get a 1-2% pay raise.
  - tbabb 8y ago
    That is yet another feature which is mistaken by crypto advocates for a bug. The 2% per annum is deliberate and useful; it means you have economic incentive to put your wealth to work on creating things-- new businesses, technology, public infrastructure-- by investing it, rather than passively sitting on it. Imagine the reverse: a deflationary currency, which becomes more valuable over time. You would have little choice but to hold on to your wealth to avoid missing out on the gains. Why would you spend your money building a business or hiring workers? That would be a losing proposition compared to keeping a bank account which grows if it just sits there. Deflationary circumstances were, in fact, what precipitated the great depression. 2% is a gentle nudge to participate in the economy. This is addressed and elucidated in the linked article.
heimatau 8y ago
LN is a half baked idea. Only your main point is potentially valid for LN. And even that I'd be highly skeptical. Years ago, LN was used to buy two pizzas. Today? Only two. Talk about scale! Second, user privacy is utter untrue mainly due to all the hubs (of the hub/spoke network) are KYCs. That's the opposite of privacy. Third, usability currently you need hot wallets which are a terrible UI/UX. Even the beloved LN Trust experiment is having hiccups [1]. [1] https://twitter.com/paul_ferguson/status/1111097073510699008 https://twitter.com/paul_ferguson/status/1111097073510699008
- xur17 8y ago
  > Years ago, LN was used to buy two pizzas. Today? Only two. Talk about scale! I'm not sure I follow your point here. Are you implying that only 2 pizzas have been purchased using LN?
  - n0t-satoshi 8y ago
    The channels are too small to be viable. There is too much at risk if you can't settle your money. Only the blockchain is settlement, which is why Bitcoin Cash made throughput a priority worth forking over.
    - aceat64 8y ago
      I've literally bought $50 Amazon gift cards from Bitrefil multiple times, with the same channel. You should maybe take a fresh look at LN.
- siwatanejo 8y ago
  I'm sorry but... what a load of bullshit. 1) Years ago? LN is barely a year old. You're mixing shit. And if you're referring to the fact that no pizza restaurants accept LN yet, well, that's criticising adoption, not the technology. 2) Hahahaha, KYC? I haven't found any LN payment hub that required me to show them who I am. What FUD are you spreading? This statement alone reveals you already as some kind of shill, trying to spread misinformation by deceiving. 3) The OP is already saying that it was not LN that failed, maybe something on his side (internet connection?). Anyway it could be true that UI/UX is not the best at the moment, but we all know this takes time to polish. There's no design flaw that prevents LN to have a decent UI/UX. This is just the equivalent times for when Linux OS didn't have a GUI, did that mean that Linux was useless?
smsm42 8y ago
> A currency that isn't used to commit fraud isn't very useful. I think the mistake here is to think about currency purely in a technological way (what can I do with it?). Money is ultimately a social phenomenon. People use money to do stuff in a society, and have evolved ways to make these transactions safe and convenient enough for everyday use. If you store your salary in a bank in USD, there are multiple societal mechanisms that ensure the money are not going to disappear. Can they break down? Sure. Are they likely to break down? Not very, unless all the rest of the society already did. Now what if you stored your salary in bitcoins instead? None of these societal mechanisms work for you anymore. I am not even talking about taxation and hassles you'd have to overcome to manage a legal business in bitcoins, but what about fraud prevention? Insurance? Safety of transactions? Knowing your money aren't going to disappear overnight? This not something Bitcoin user can have. Maybe with time the society would build such mechanisms, but until it happened, Bitcoin remains a failure as common currency (as opposed to a toy, a speculative investment or a means to transfer money in a private way between parties that are for one reason or another are reluctant to use the banking system).
- easymodex 8y ago
  Just want to point out a lot of people's money DID disappear over night during the 2008 crisis. Some banks actually went under during that time, along with anyone's money sitting in it. People lost all savings.
  - smsm42 8y ago
    > Some banks actually went under during that time, along with anyone's money sitting in it That's not true, unless it either a) wasn't money deposited in the bank (i.e. it was an investment in bank stock - an inherently risky activity) or b) were deposits over FDIC insurance limits. That's $250K per account. What's bitcoin deposit insurance limits? Ah yes, $0 per account. Is there any insurance company daring to insure bitcoin deposits? I haven't heard of any.
bradleyhb 8y ago
I wonder if there was a proposal to make the time an equal split between GMT+
127 8y ago
Constrained currency supply is definitely a problem. It rewards the early adopters by many orders of magnitude, making Bitcoin look more like a Ponzi than a real currency. Constant issuance for eternity would have been a much better solution. For example 1 BTC per minute, for an eternity. Rewards early adopters because low price, but still doesn't restrict the use of the technology as a form of money as it's not a constantly diminishing pool, but has reasonable tail emission, possibly reaching an equilibrium, unlike Bitcoin. No doubt there will be a big fight about this in the future.
- jerguismi 8y ago
  There are actually lot of cryptocurrencies with issuance for eternity: dogecoin, grin comes to mind at least. The inflation parameters are the easiest to change, if for Bitcoin those are a problem, some other cryptocurrency with better parameters can take over. The market will decide, as no one forces anyone to use specific cryptocurrency, there is pretty much free competition.
  - millettjon 8y ago
    Exactly! We can all learn from multiple parallel experiments in progress and we have choice!
  - tromp 8y ago
    I wouldn't say there are a lot. Among pure PoW coins I only know of Dogecoin, Monero, and Grin. Of those, Dogecoin and Monero have tail rewards at 1% and 1.7% (respectively) of initial rewards, while Grin has an eternal emission of 1 Grin per second. Kind of shocking how it took more than 10 years for the simplest possible emission to be tried...
Nursie 8y ago
> 4. fraud in exchanges Actually fraud and cons in general, aided by irreversability, is the point made in the article. If you can't undo the fraud, that's a huge boon to fraudsters.
diogenescynic 8y ago
You don’t understand how currency works. A deflationary currency will encourage people to horde it instead of using it for commerce, so it becomes “digital gold” rather than a payment network. Your argument is that they are repeating known flaws, but so what? None of the flaws have been fixed or will be. Bitcoin is dead. I think it’s sad how people are still trying to hype it. I wonder how many people threw away life savings on this fad.
diogenescynic 8y ago
You don’t understand how currency works. A deflationary currency will encourage people to horde it instead of using it for commerce, so it becomes “digital gold” rather than a means of exchange so immediately it’s no longer a currency. Your argument is that they are repeating known flaws, but so what? None of the flaws have been fixed or will be. Bitcoin is dead. I think it’s sad how people are still trying to hype it. I wonder how many people threw away life savings on this fad.

by apo 8y ago

not-satoshi 8y ago

The root problem with Lightning Network is that it is not settlement. Money must be settled to be useful. Worst case, a client or protocol flaw is found, and everyone in the world is expected to close their channels (settle) at 7 transactions per second? Please. Bitcoin Cash is the large block scaling we've needed all along.

dane-pgp 8y ago
Not only is the worst case a disaster, but even the best case is: Imagine the usability of trying to onboard another 7 billion Lightning Network users at 7 transactions per second.
- stdcli 8y ago
  Compared to what kind of payment onboarding system? Outside of free cash, anything related to setting up a bank account, or a credit card can take up to 7-10 business days if not more, post an application to do so. Do you know of any onboarding system of payment that is faster? It seems like this is just a random statement by itself that is not in the context of all the other onboarding mechanisms of every payment system currently used. Care to calibrate Lightening onboarding with any other mass payment system? Even if you use square, paypal, venmo etc, they need to be linked to real checking accounts, credit card, other verified (with long onbaording) payment systems etc. Furthermore, 2-3% of all transactions on many of these systems are fraudulent, but the payment systems ACCEPT This as an acceptable level of fraud and cover the expenses, in order for faster transactions. Square knows for example it won't be used in coffee shops over another competitor if Square on average takes 20 seconds longer to process metadata in conjunction with the transaction itself to see if its an attempt/fraudulent charge, so they consciously cut corners here and accept this liability so we can all get coffee 8x a day. This is why bitcoin has industry standard confirmation blocks so the network can address and blacklist attempts at doubles spends and keep a master chain. This is basic blockchain 101 compared to standard knowledge of onboarding to every en masse payment system we all anecdotally have experience with layered digital transaction technology and the losses associated with that. The lightening network is as mentioned above with links, rapidly evolving to expediate this while still maintaining the underlying benefits of transaction consensus that avoids fraud. You may deal with fraudulent exchanges as you will do with fraud around any new technology (heard of the internet before? there were lots of sites for fraud, and much worse when it came out, and still are, we just all get smarter about what we click, and hopefully in this case, who we throw our money at, which you should be doing anyways for any new technology...) but the fraud here is associated with like top ranked comment said, not the protocol but the flurry of business activity around it, and is really null and void to the technical conversation itself, which is really what evolves communities like this past these handwavy statements... I really don't mind constructive criticism of blockchain based technologies, but the issue is the conversation rarely evolved because of cargo culting statements like this that ignorethe very benefits of moving to a blockchain based payment system.
  - 8y ago
just_one_time_ 8y ago
Agree, you will get downvoted here though, HN hates Bitcoin and now that Bitcoin Cash is Bitcoin, they really hate it.
homakov 8y ago
You just need to support economic majority, not everyone who lives on $2 a day. The channels can be closed in a reasonable time. Big blockers are new flat earthers.
- n0t-satoshi 8y ago
  Three week wait, or pay $30 to settle. That was December 2017. The channels will freeze and a lot of people will wish they had money that works when they need it. Like Cash.
  - homakov 8y ago
    With 1m tx per day you need 3 weeks to close 21m channels. Reasonable for a protocol bug. If just one hub goes down however, it will sort out in a few days. Like I said it only should cater to economic majority aka 1% so 70m wealthy users need 2 months. Btc’s current limits are far from optimal but layer2 itself is working great especially on other chains.
    - imtringued 8y ago
      Your numbers are incorrect. 1m transactions per day is almost twice as fast as the theoretical capacity of Bitcoin. (~600k transactions per day assuming 7tps)
      - homakov 8y ago
        I was citing eth's ones. Bitcoin is a poor platform for doing layer2 due to unfixable restrictions. What matters is it's about 600k~1000k (not 100m) and even with these it supports quite a lot of users. Supporting more than 1% is desirable but not mission critical.
        not-satoshi 8y ago
        That's not Bitcoin. Bitcoin is electronic cash for everyone on the internet. See www.bitcoin.com/bitcoin.pdf

cromulent 8y ago

Are you saying that point 3 is incorrect? Will there be more than 21M Bitcoin?

monsterbash506 8y ago
It's not scheduled or anything but it could still happen if it were desired.
schmichael 8y ago
If a majority of miners (hash power) decide to mint more, there will be more. The code change is a simple one. The politics and economics are, as always, much more complex.
- martindale 8y ago
  If a majority of full nodes (validators) reject blocks from those miners, their chain will be orphaned and the block reward will fall to the subsidy they've created for themselves (where block_reward = block_subsidy + block_fees). Bitcoin has value because this just isn't possible, in practice.
  - schmichael 8y ago
    > just isn't possible It's absolutely possible. Who runs nodes? There's no way to know that the majority of hash power doesn't already control a majority of nodes.
    - martindale 8y ago
      As long as you run your own node, it doesn't really matter who runs the rest. If a peer relays an invalid block to you, disconnect from that peer and defer to the chain with the most work. Have you read the paper?
      - schmichael 8y ago

Macross8299 8y ago

>Nobody knows exactly how often Bitcoin is used for payments or what it's used to buy. I wouldn't go that far. This is much more related to Bitcoin's relative "newness" and lack of mature AML tools than anything inherent in the protocol. There are a number of startups that offer blockchain tracking and forensic analysis capable of tracking the kind of money flows you describe. Your statement seems much more applicable to something like Monero or other obfuscated ledger intentionally designed for privacy. It is an open ledger, after all.

deleted 8y ago
[deleted]

jaekwon 8y ago

Lightning is one way. There are some issues with capital lockup costs, so other level-2 scaling solutions are also required. There's been more discussion of a Bitcoin bridge for Cosmos, as well as Ethereum. Tendermint sidechains is what crypto needs. Tezos recently announced plans Tendermint adoption, as well as Binance w/ the Cosmos SDK. Disclaimer, I'm a longtime lurker & cofounder of Tendermint/Cosmos. Cosmos is coming.

just_one_time_ 8y ago
Adam? LN is vaporware at best, its been 18 months away for 3 years. Bitcoin Cash is the closest thing to Bitcoin at this point.
homakov 8y ago
Bridge downgrades your security to sidechain validator set, when a payment channel keeps it on the level of your root chain. If a sidechain is compromised their validators can double spend, and some users lose assets. Cant happen to channels by design.

Barrin92 8y ago

>the remaining three points have little to do with Bitcoin the technology what bitcoin is as a technology isn't as relevant compared to what it is as a means of exchange. people don't care about the protocol, they care about the value bitcoin provides to them. To make technology the most important sales pitch of a currency is an ideological choice on part of the people pushing for bitcoin adoption, not some sort of obvious or intuitive insight. > Constrained supply means protection against inflationist central banks. This again, is a non-issue for consumers and everyone who isn't ideologically invested in crypto-technology. As long as you don't park your money under the mattress for a hundred years but actually spend it the stability that existing currencies provide is sufficient (and much preferable to the volatility of bitcoin.) > A currency that isn't used to commit fraud isn't very useful. Therefore, to say that Bitcoin has failed because of fraud is dishonest at best. That's obviously not the point. What is worrisome about bitcoin isn't that it's used for fraud at all, it's that fraudulent activity and weird con-like schemes constitute a significant, if not majority of activity. Which isn't surprising if the two points above are taken into account, it simply is not particularly useful for anything else.

mindcandy 8y ago
Constrained supply is a non-issue until it becomes an issue. But, this is a whole new currency being set up. Making inflation a non-issue from the start is a feature. However, I think you are trying to compare Bitcoin to the US Dollar. US Dollar inflation has been reasonable if you live paycheck to paycheck. But, remember Bitcoin is not just for people living in the Bay Area. It’s also for Venezuelans, Zimbabweans, etc...
easymodex 8y ago
>What is worrisome about bitcoin isn't that it's used for fraud at all, it's that fraudulent activity and weird con-like schemes constitute a significant, if not majority of activity. Sorry but it's not 2015 anymore. I mean yes it does happen but not nearly as much as people think, probably not even much more than with regular currencies. It's true though that people fall for crypto cons more easily since a lot jumped in hoping for miracle money without even understand what they're doing. Thankfully this isn't the case anymore since hopefully enough people have learned about it and will pass that knowledge to others.

nosuchthing 8y ago

Consider what happens when another software hack/bug is found in Bitcoin/Ethereum/cryptocoin client wallet software, allowing an attacker to double spend (rob exchanges/OTC trader/dark pools), or generate more BTC for free. This could be done by any of the few developers using obfuscation techniques. See how easy it is to hide malicious code even in open source projects, there's several underhanded obfuscation contests that demonstrate open source code can hide malicious backdoors even with vigilant audits. A Bitcoin bug happened a few weeks ago allowing any attacker to generate infinite free BTC, but the network survived only because an honest researcher chose not to exploit it. [1] Constrained supply means protection against inflationist central banks. Bitcoin's inflation rate is higher than USD: The current inflation rate for the United States is 1.9% for the 12 months ended December 2018, as published on January 11, 2019 by the U.S. Labor Department. Bitcoin inflation rate per annum: 3.83% [2] 4. fraud in exchanges This is unraveling right now with Tether and Bitfinex. [3] It should be assumed any and all cryptocoin exchanges are operating as fractional reserves, and front running customers, unless they can prove otherwise. [1] https://hackernoon.com/bitcoin-core-bug-cve-2018-17144-an-analysis-f80d9d373362?gi=ad82a96b0d11 https://hackernoon.com/bitcoin-core-bug-cve-2018-17144-an-an... https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposures https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu... [2] https://www.bitcoinblockhalf.com/ https://www.bitcoinblockhalf.com/ [3] https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87?source=---------21------------------ https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t... https://medium.com/@bitfinexed/the-mystery-of-the-bitfinex-tether-bank-and-why-this-is-suspicious-a8a6407a1241 https://medium.com/@bitfinexed/the-mystery-of-the-bitfinex-t...

darawk 8y ago
Bitcoin has a supply inflation rate. It's inflation rate with respect to price over its history, which is what you're comparing with USD, is quite negative. People have been predicting the collapse of Tether for several years now, and yet, it still trades nearly 1:1 with USD. Funny that the people who actually have skin in the game seem to disagree.

tbabb 8y ago

> - Constrained supply means protection against inflationist central banks. This keeps being touted as a feature, but unless you are Zimbabwe it is a bug. "Supply-constrained" means "demand-driven price" which means "volatile." A useful currency is one that measures wealth consistency, like a meter stick. You don't want your money to mis-count your wealth. Hoping that it will mis-count your wealth in your favor is speculation, which is a bad, dangerous role for currency. You want to know that you can afford rent/bread next month (to say nothing of being able to pay your workers or business partners). These are more fatal, fundamental design problems than low transaction rates or questionable usage-- they are built into the very philosophy of cryptocurrency. Explained in more detail here: https://www.bzarg.com/p/what-bitcoin-shows-us-about-how-money-works/ https://www.bzarg.com/p/what-bitcoin-shows-us-about-how-mone...

roenxi 8y ago
> A useful currency is one that measures wealth consistency, like a meter stick Currency doesn't measure wealth consistently, and makes a terrible measuring stick. That is a great analogy to take literally - most of the developed world cuts 2% off our monetary measuring stick per annum as a matter of policy. or people who aren't unusually interested in maths and finance (ie, most people) that is highly confusing, because they set their expectations then think that somehow they are getting ahead if they get a 1-2% pay raise.
- tbabb 8y ago
  That is yet another feature which is mistaken by crypto advocates for a bug. The 2% per annum is deliberate and useful; it means you have economic incentive to put your wealth to work on creating things-- new businesses, technology, public infrastructure-- by investing it, rather than passively sitting on it. Imagine the reverse: a deflationary currency, which becomes more valuable over time. You would have little choice but to hold on to your wealth to avoid missing out on the gains. Why would you spend your money building a business or hiring workers? That would be a losing proposition compared to keeping a bank account which grows if it just sits there. Deflationary circumstances were, in fact, what precipitated the great depression. 2% is a gentle nudge to participate in the economy. This is addressed and elucidated in the linked article.

heimatau 8y ago

LN is a half baked idea. Only your main point is potentially valid for LN. And even that I'd be highly skeptical. Years ago, LN was used to buy two pizzas. Today? Only two. Talk about scale! Second, user privacy is utter untrue mainly due to all the hubs (of the hub/spoke network) are KYCs. That's the opposite of privacy. Third, usability currently you need hot wallets which are a terrible UI/UX. Even the beloved LN Trust experiment is having hiccups [1]. [1] https://twitter.com/paul_ferguson/status/1111097073510699008 https://twitter.com/paul_ferguson/status/1111097073510699008

xur17 8y ago
> Years ago, LN was used to buy two pizzas. Today? Only two. Talk about scale! I'm not sure I follow your point here. Are you implying that only 2 pizzas have been purchased using LN?
- n0t-satoshi 8y ago
  The channels are too small to be viable. There is too much at risk if you can't settle your money. Only the blockchain is settlement, which is why Bitcoin Cash made throughput a priority worth forking over.
  - aceat64 8y ago
    I've literally bought $50 Amazon gift cards from Bitrefil multiple times, with the same channel. You should maybe take a fresh look at LN.
siwatanejo 8y ago
I'm sorry but... what a load of bullshit. 1) Years ago? LN is barely a year old. You're mixing shit. And if you're referring to the fact that no pizza restaurants accept LN yet, well, that's criticising adoption, not the technology. 2) Hahahaha, KYC? I haven't found any LN payment hub that required me to show them who I am. What FUD are you spreading? This statement alone reveals you already as some kind of shill, trying to spread misinformation by deceiving. 3) The OP is already saying that it was not LN that failed, maybe something on his side (internet connection?). Anyway it could be true that UI/UX is not the best at the moment, but we all know this takes time to polish. There's no design flaw that prevents LN to have a decent UI/UX. This is just the equivalent times for when Linux OS didn't have a GUI, did that mean that Linux was useless?

smsm42 8y ago

> A currency that isn't used to commit fraud isn't very useful. I think the mistake here is to think about currency purely in a technological way (what can I do with it?). Money is ultimately a social phenomenon. People use money to do stuff in a society, and have evolved ways to make these transactions safe and convenient enough for everyday use. If you store your salary in a bank in USD, there are multiple societal mechanisms that ensure the money are not going to disappear. Can they break down? Sure. Are they likely to break down? Not very, unless all the rest of the society already did. Now what if you stored your salary in bitcoins instead? None of these societal mechanisms work for you anymore. I am not even talking about taxation and hassles you'd have to overcome to manage a legal business in bitcoins, but what about fraud prevention? Insurance? Safety of transactions? Knowing your money aren't going to disappear overnight? This not something Bitcoin user can have. Maybe with time the society would build such mechanisms, but until it happened, Bitcoin remains a failure as common currency (as opposed to a toy, a speculative investment or a means to transfer money in a private way between parties that are for one reason or another are reluctant to use the banking system).

easymodex 8y ago
Just want to point out a lot of people's money DID disappear over night during the 2008 crisis. Some banks actually went under during that time, along with anyone's money sitting in it. People lost all savings.
- smsm42 8y ago
  > Some banks actually went under during that time, along with anyone's money sitting in it That's not true, unless it either a) wasn't money deposited in the bank (i.e. it was an investment in bank stock - an inherently risky activity) or b) were deposits over FDIC insurance limits. That's $250K per account. What's bitcoin deposit insurance limits? Ah yes, $0 per account. Is there any insurance company daring to insure bitcoin deposits? I haven't heard of any.

bradleyhb 8y ago

I wonder if there was a proposal to make the time an equal split between GMT+

127 8y ago

Constrained currency supply is definitely a problem. It rewards the early adopters by many orders of magnitude, making Bitcoin look more like a Ponzi than a real currency. Constant issuance for eternity would have been a much better solution. For example 1 BTC per minute, for an eternity. Rewards early adopters because low price, but still doesn't restrict the use of the technology as a form of money as it's not a constantly diminishing pool, but has reasonable tail emission, possibly reaching an equilibrium, unlike Bitcoin. No doubt there will be a big fight about this in the future.

jerguismi 8y ago
There are actually lot of cryptocurrencies with issuance for eternity: dogecoin, grin comes to mind at least. The inflation parameters are the easiest to change, if for Bitcoin those are a problem, some other cryptocurrency with better parameters can take over. The market will decide, as no one forces anyone to use specific cryptocurrency, there is pretty much free competition.
- millettjon 8y ago
  Exactly! We can all learn from multiple parallel experiments in progress and we have choice!
- tromp 8y ago
  I wouldn't say there are a lot. Among pure PoW coins I only know of Dogecoin, Monero, and Grin. Of those, Dogecoin and Monero have tail rewards at 1% and 1.7% (respectively) of initial rewards, while Grin has an eternal emission of 1 Grin per second. Kind of shocking how it took more than 10 years for the simplest possible emission to be tried...

Nursie 8y ago

> 4. fraud in exchanges Actually fraud and cons in general, aided by irreversability, is the point made in the article. If you can't undo the fraud, that's a huge boon to fraudsters.

diogenescynic 8y ago

You don’t understand how currency works. A deflationary currency will encourage people to horde it instead of using it for commerce, so it becomes “digital gold” rather than a payment network. Your argument is that they are repeating known flaws, but so what? None of the flaws have been fixed or will be. Bitcoin is dead. I think it’s sad how people are still trying to hype it. I wonder how many people threw away life savings on this fad.

diogenescynic 8y ago

You don’t understand how currency works. A deflationary currency will encourage people to horde it instead of using it for commerce, so it becomes “digital gold” rather than a means of exchange so immediately it’s no longer a currency. Your argument is that they are repeating known flaws, but so what? None of the flaws have been fixed or will be. Bitcoin is dead. I think it’s sad how people are still trying to hype it. I wonder how many people threw away life savings on this fad.