10 ms·

Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes, often times over an hour for

Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes, often times over an hour for shops that are paranoid and require 3+ confirmations. During the peak bubble time, I remember buying something with bitcoin taking 2 hours!! This technical problem has not been solved and the "lightning network" just turns exchanges like Coinbase into a bank or Paypal that can be shut down or run away with your money, which basically ruins the entire point of using Bitcoin. Until Bitcoin can scale without "lightning network", I don't see people using it outside illegal activities. And from what I can see, the core concept of Bitcoin (and other cryptocoins) is fundamentally at odds with fast transactions. If you make confirmations 2x faster, then it just becomes 2x easier to fake a transaction. So paranoid merchants will just require double the confirmations.

kadoban 7y ago
That does not sound correct on the lightning network. I cannot find any reason it would allow someone to run off with your funds. Can you explain the attack?
- codexon 7y ago
  In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it. Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
  - kadoban 7y ago
    Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
    - codexon 7y ago
      Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
      - kadoban 7y ago
        That's not lightning. That's just how exchanges work now.
        codexon 7y ago
        That is how exchanges have always worked, but the lightning network encourages people to use centralized exchanges that already have lightning network channels between all other exchanges and sellers so they don't have to waste time committing unknown amounts of bitcoins between 100+ vendors.
        Mate2Mate 7y ago
        These complexities are why Lightning Network adoption is failing. Nano fixes this, superbly, securely, instantly, simply.
  - xur17 7y ago
    > If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend. And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.
mikekchar 7y ago
Thanks for writing this. It's the first time I've understood a "lightning won't solve scaling problems" argument. If you need a payment processor to process your payments, then you might as well use a payment processor in an existing fiat currency... It's a fair point.
- topmonk 7y ago
  You've been misled... Edit: Here is an example of a lightning network enabled wallet that works as a lightning node itself. No payment processor needed: https://lightning-wallet.com https://lightning-wallet.com
  - mikekchar 7y ago
    I'm not sure how this helps. Clearly I can always run my own lightning node, but the person I'm paying has to accept the off network payment from me. That's fine for some kinds of transactions (like my employer paying my salary). But how am I supposed to convince a retailer to accept my off network payment? Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it? I mean, we can't even set up VOIP connections without a middleman these days because of firewall issues. I think there is a fair amount of logistics to work out here. I may be wrong, and that would be great, but at the moment I'm not quite seeing how this is going to work in practice.
    - kyledrake 7y ago
      It won't work, it's already done. There used to be support from major companies like Dell, and "core" blew all that support on a convoluted, over-engineered nightmare while choking the main network. The momentum is gone and it's never coming back. I'll be deeply surprised if lightning is ever used at the retail level by more than a couple shady internet casinos and John Galt themed vape stores.
    - topmonk 7y ago
      > But how am I supposed to convince a retailer to accept my off network payment? Because you're both connected to a common lightning node, at least indirectly. There are several public lightning nodes that accept connections and they are joined together. Connect to one and you have access to their network. > Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it? Same as above. The lightning network is, of course, only going to work with other nodes who are also connected, but there is an incentive to join, since when you do, you can transact with all of its peers.
fastball 7y ago
Ethereum is already a lot faster than that, and will probably get to Eth2.0 with sharding and PoS in the not too distant future. Then your ETH transactions will be blazing fast, secure, and cheap as chips. Of course, they've been saying all of that is not so far away for a couple years now, but we will see. I'm tentatively optimistic.
- codexon 7y ago
  Ethereum is still on proof of work, so it has the same problem as bitcoin. If they made confirmations take 1 minute instead of 10 minutes, that just means their confirmations are 1/10th as reliable as Bitcoin's confirmations. Nothing was solved there. And PoS has been "not so far away for a couple years now" because they keep finding problems with it.
  - DennisP 7y ago
    Ethereum uses a variant of GHOST, which is why they get away with 15-second block times. https://github.com/ethereum/wiki/wiki/White-Paper#modified-ghost-implementation https://github.com/ethereum/wiki/wiki/White-Paper#modified-g... Ethereum's PoS is currently implemented in seven independent and fully interoperating clients. Multi-client testnet should roll out soon, and production is expected first quarter 2020.
    - codexon 7y ago
      Even if the block time can be lower, ethereum supports a comically low amount of transactions per second. https://ethstats.net/ https://ethstats.net/ 9943589 (gas limit) / 21000 (minimum price of a ethereum transaction) / 14.57 (average block time) = 32.5 transactions per second.
      - fastball 7y ago
        What's your point, exactly? My initial comment was that ETH is faster (15tx/s vs 3-5tx/s) than BTC and that layer1 scaling solutions for ETH are probably coming soon. Everyone that has replied to you is just providing more info than I did. And your response is "ethereum's transactions per second are comically low right now"?
trixie_ 7y ago
10 minutes is nothing. A wire transfer can take hours. A bank transfer can take days. A wire transfer might cost you 20 bucks as well. Bitcoin is amazing at transferring large sums of money quickly, internationally, for a low overhead cost. It's extremely useful for a lot of people.
- oneplane 7y ago
  Where in the world would a wire transfer cost 20 bucks? It's practically free here unless you do something that makes the bank do extra work.
  - xfer 7y ago
    International transfers?
    - oneplane 7y ago
      Even those are like 9 euros if you send over 1k.
  - Ut_Pwnsim 7y ago
    USA: https://www.wellsfargo.com/online-banking/service-fees https://www.wellsfargo.com/online-banking/service-fees $30 to send a wire transfer, just within the country. And $15 to receive one too.
    - oneplane 7y ago
      Why the heck do people use those kinds banks over there? Seems to me it takes away all the usefulness of one. It's a money bucket where you put money in and take money out. As soon as one of those three aspects is not there, then what is the point?
      - Ut_Pwnsim 7y ago
        https://www.nerdwallet.com/blog/banking/wire-transfers-what-banks-charge/ https://www.nerdwallet.com/blog/banking/wire-transfers-what-... There really isn't any low cost option for wire transfers in the US. ACH is the free transfer option, and it takes 1-3 days. Wire transfers are the "pay a lot for immediate confirmation" option just for the very few transfers it's worth it on. The average person is unlikely to ever make or receive a wire transfer. There are consumer-level alternatives for personal transfers like Venmo: https://venmo.com/about/product/ https://venmo.com/about/product/
tuesdayrain 7y ago
I'm not sure why you group BTC with "all other cryptocoins" when it's clear that your arguments are specific to BTC and its clones. There are many other cryptocurrencies with vastly different approaches to scaling that your post does not cover.
_Kristijan_ 7y ago
"Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes" Anybody here know the currency Nano? The ORV (Open Representative Voting) consensus mechanism makes it possible to find decentralized consensus in ms without the power-intensive PoW. For a first impression, you can perform a real on-chain transaction here: https://nanospeed.live/ https://nanospeed.live/

kadoban 7y ago

That does not sound correct on the lightning network. I cannot find any reason it would allow someone to run off with your funds. Can you explain the attack?

codexon 7y ago
In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it. Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
- kadoban 7y ago
  Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
  - codexon 7y ago
    Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
    - kadoban 7y ago
      That's not lightning. That's just how exchanges work now.
      - codexon 7y ago
        That is how exchanges have always worked, but the lightning network encourages people to use centralized exchanges that already have lightning network channels between all other exchanges and sellers so they don't have to waste time committing unknown amounts of bitcoins between 100+ vendors.
        Mate2Mate 7y ago
        These complexities are why Lightning Network adoption is failing. Nano fixes this, superbly, securely, instantly, simply.
- xur17 7y ago
  > If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend. And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.

mikekchar 7y ago

Thanks for writing this. It's the first time I've understood a "lightning won't solve scaling problems" argument. If you need a payment processor to process your payments, then you might as well use a payment processor in an existing fiat currency... It's a fair point.

topmonk 7y ago
You've been misled... Edit: Here is an example of a lightning network enabled wallet that works as a lightning node itself. No payment processor needed: https://lightning-wallet.com https://lightning-wallet.com
- mikekchar 7y ago
  I'm not sure how this helps. Clearly I can always run my own lightning node, but the person I'm paying has to accept the off network payment from me. That's fine for some kinds of transactions (like my employer paying my salary). But how am I supposed to convince a retailer to accept my off network payment? Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it? I mean, we can't even set up VOIP connections without a middleman these days because of firewall issues. I think there is a fair amount of logistics to work out here. I may be wrong, and that would be great, but at the moment I'm not quite seeing how this is going to work in practice.
  - kyledrake 7y ago
    It won't work, it's already done. There used to be support from major companies like Dell, and "core" blew all that support on a convoluted, over-engineered nightmare while choking the main network. The momentum is gone and it's never coming back. I'll be deeply surprised if lightning is ever used at the retail level by more than a couple shady internet casinos and John Galt themed vape stores.
  - topmonk 7y ago
    > But how am I supposed to convince a retailer to accept my off network payment? Because you're both connected to a common lightning node, at least indirectly. There are several public lightning nodes that accept connections and they are joined together. Connect to one and you have access to their network. > Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it? Same as above. The lightning network is, of course, only going to work with other nodes who are also connected, but there is an incentive to join, since when you do, you can transact with all of its peers.

fastball 7y ago

Ethereum is already a lot faster than that, and will probably get to Eth2.0 with sharding and PoS in the not too distant future. Then your ETH transactions will be blazing fast, secure, and cheap as chips. Of course, they've been saying all of that is not so far away for a couple years now, but we will see. I'm tentatively optimistic.

codexon 7y ago
Ethereum is still on proof of work, so it has the same problem as bitcoin. If they made confirmations take 1 minute instead of 10 minutes, that just means their confirmations are 1/10th as reliable as Bitcoin's confirmations. Nothing was solved there. And PoS has been "not so far away for a couple years now" because they keep finding problems with it.
- DennisP 7y ago
  Ethereum uses a variant of GHOST, which is why they get away with 15-second block times. https://github.com/ethereum/wiki/wiki/White-Paper#modified-ghost-implementation https://github.com/ethereum/wiki/wiki/White-Paper#modified-g... Ethereum's PoS is currently implemented in seven independent and fully interoperating clients. Multi-client testnet should roll out soon, and production is expected first quarter 2020.
  - codexon 7y ago
    Even if the block time can be lower, ethereum supports a comically low amount of transactions per second. https://ethstats.net/ https://ethstats.net/ 9943589 (gas limit) / 21000 (minimum price of a ethereum transaction) / 14.57 (average block time) = 32.5 transactions per second.
    - fastball 7y ago
      What's your point, exactly? My initial comment was that ETH is faster (15tx/s vs 3-5tx/s) than BTC and that layer1 scaling solutions for ETH are probably coming soon. Everyone that has replied to you is just providing more info than I did. And your response is "ethereum's transactions per second are comically low right now"?

trixie_ 7y ago

10 minutes is nothing. A wire transfer can take hours. A bank transfer can take days. A wire transfer might cost you 20 bucks as well. Bitcoin is amazing at transferring large sums of money quickly, internationally, for a low overhead cost. It's extremely useful for a lot of people.

oneplane 7y ago
Where in the world would a wire transfer cost 20 bucks? It's practically free here unless you do something that makes the bank do extra work.
- xfer 7y ago
  International transfers?
  - oneplane 7y ago
    Even those are like 9 euros if you send over 1k.
- Ut_Pwnsim 7y ago
  USA: https://www.wellsfargo.com/online-banking/service-fees https://www.wellsfargo.com/online-banking/service-fees $30 to send a wire transfer, just within the country. And $15 to receive one too.
  - oneplane 7y ago
    Why the heck do people use those kinds banks over there? Seems to me it takes away all the usefulness of one. It's a money bucket where you put money in and take money out. As soon as one of those three aspects is not there, then what is the point?
    - Ut_Pwnsim 7y ago
      https://www.nerdwallet.com/blog/banking/wire-transfers-what-banks-charge/ https://www.nerdwallet.com/blog/banking/wire-transfers-what-... There really isn't any low cost option for wire transfers in the US. ACH is the free transfer option, and it takes 1-3 days. Wire transfers are the "pay a lot for immediate confirmation" option just for the very few transfers it's worth it on. The average person is unlikely to ever make or receive a wire transfer. There are consumer-level alternatives for personal transfers like Venmo: https://venmo.com/about/product/ https://venmo.com/about/product/

tuesdayrain 7y ago

I'm not sure why you group BTC with "all other cryptocoins" when it's clear that your arguments are specific to BTC and its clones. There are many other cryptocurrencies with vastly different approaches to scaling that your post does not cover.

_Kristijan_ 7y ago

"Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes" Anybody here know the currency Nano? The ORV (Open Representative Voting) consensus mechanism makes it possible to find decentralized consensus in ms without the power-intensive PoW. For a first impression, you can perform a real on-chain transaction here: https://nanospeed.live/ https://nanospeed.live/