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I find it hilarious you think Coinbase CEO Brian Armstrong doesn't "know what Bitcoin is for." Maybe you don't know what it is for. People that are sane like

I find it hilarious you think Coinbase CEO Brian Armstrong doesn't "know what Bitcoin is for." Maybe you don't know what it is for. People that are sane like Mr. Armstrong and Satoshi Nakamoto intended it to be used as a currency. If Satoshi is still alive I'm sure he was quite disappointed when Bitcoin decided to not scale past its blistering 7 transactions per second. "Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling." -Satoshi Nakamoto https://steemit.com/bitcoin/@cryptodailyuk/bitcoin-broke-coinbase-ceo-brian-armstrong-s-heart-so-he-s-now-focused-on-ethereum https://steemit.com/bitcoin/@cryptodailyuk/bitcoin-broke-coi...

esotericn 7y ago
He's the chair of a very public company with investors and whatnot. Inevitably that hamstrings permissible opinions. Not only that, the purpose of his company is to profit from cryptocurrency in a specific way, whether or not that's the 'right thing' for the space or not. Their business model basically falls apart, for example, if people stop using fiat currencies and atomic swaps allow trades to happen without a clearing house. All over this thread you can see waffle about money laundering or whatever else; which Coinbase cannot sidestep because they're forced to interface with banks that will cut them off, governments that don't like it if you don't do what they say, etc.
entropyneur 7y ago
I think they are being sarcastic. What they probably mean is "for political/business reasons Coinbase CEO has to tiptoe around Bitcoin's actual purpose".
- arthurcolle 7y ago
  I mean Armstrong is calling it "economic freedom" so he's not that far off base, in any case.
pixelperfect 7y ago
Bitcoin is continuing to scale, but it's doing so with the Lightning Network instead of by increasing block size. I'm not super familiar with Bitcoin's tech, but that seems sensible to me. The blockchain is already 250 GB at 7 transactions per second. If you multiplied that by 100, you still have orders of magnitude less transactions per second than credit card processors, but the hardware requirements are now high enough that few individuals could afford to run full nodes.
- dane-pgp 7y ago
  For context, I don't think anyone is suggesting that BTC's blocks would still be full if they were 100 times bigger, so it is premature to talk about competing with credit card processors. However, 250 GB is approximately 25 GB per year (since Bitcoin started in 2009), which, if you multiply it by 100, is 2.5 TB per year. That means it will take about 6.4 years to fill a 16 TB hard drive, which should cost less than $600: https://www.techradar.com/uk/news/worlds-largest-hard-disk-drive-goes-on-sale-today-for-less-than-youd-think https://www.techradar.com/uk/news/worlds-largest-hard-disk-d... It's not hard to imagine someone paying under $100 per year to run a full node, whereas on the day that TechRadar article was published, the average price of a bitcoin transaction was $4.58 as seen here: https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#1y https://bitinfocharts.com/comparison/bitcoin-transactionfees...
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- mundo 7y ago
  Correct me if I'm misunderstanding things, but Lightning Network means off-chain transactions, right? Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? And in practice, that means traditional financial services companies and their KYC-compliant customers, which is the exact 180 degree opposite of the originally envisioned use case. From where I sit, it seems like BTC was designed to be a currency that would free us from financial regulation, it has failed on both counts, and crypto enthusiasts are trying to turn it into an over-elaborate debit card because the alternative is for it to become a historical curiosity.
SkyMarshal 7y ago
It doesn't matter what Satoshi said five years ago, it matters what he would say now, given what we've learned about Bitcoin since. His old opinions are less and less informed each year. Increasing block size utilization has series tradeoffs for decentralization, privacy and reliability. Each year we learn and understand those tradeoffs better. Pro block-size increase people never seem to directly address them though, just talk around them and imply they don't matter. They do matter, a great deal.
- thomasrognon 7y ago
  I don't think Satoshi's opinion would be any different now. Decentralization as a primary goal and maximizing it at all costs is a narrative that grew after he left. It was originally a means to an end and things just needed to be decentralized enough to be resilient. Relevant Satoshi quote: The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate. https://bitcointalk.org/index.php?topic=532.msg6306#msg6306 https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
  - SkyMarshal 7y ago
    The problem with that quote is that if "the rest" of the client nodes also can't validate, then Bitcoin is centralized and completely pointless. Mining is already effectively centralized, the only check and balance against collusion of miners is a robust and engaged community of users running full nodes. The client nodes have to validate in addition to only doing transactions. Satoshi doesn't say that in his comment. But the faster the block size growth, the faster it gets to "every Usenet user runs their own NNTP server", and the fewer and fewer run full validating nodes. His comment is self-contradictory.
- jotto 7y ago
  Do you have any recommended links/reading on this? (better understanding on the tradeoffs)
hnews_account_1 7y ago
Every single crypto that has tried to pass that limitation has remained centralised in one way or another. You can either: 1) have centralisation 2) assume storage space will expand exponentially since the entire point of bitcoin is many many copies of its ledger 3) come up with a new method more secure than PoW but still decentralised Good luck with (3). (1) and (2) are not good choices. So they moved it off the chain into lightning network.
- dane-pgp 7y ago
  I'm not sure what you mean by "assume storage space will expand exponentially", since there is only a limited number of potential active crypto-currency users, making a small number of daily transactions (ignoring things like High Frequency Trading), recorded in a blockchain that grows linearly over time. Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements? It's possible for Bitcoin (for example) to be decentralised and useful to the world and only require linearly increasing storage space. Fortunately it seems that storage technology will continue to scale linearly over the coming years too: https://images.anandtech.com/doci/15064/seagate-roadmap.png https://images.anandtech.com/doci/15064/seagate-roadmap.png
  - hnews_account_1 7y ago
    I should've phrased that better. What I meant was to assume consumer affordable storage space will increase in size exponentially i.e. if we pay $0.01 / GB today, we should be paying fractions of that fraction in a year (because obviously "exponential" is loose term here). > (ignoring things like High Frequency Trading) HFT is not a blockchain transaction. They are off blockchain transactions entirely because they trade money between bitcoin / other cryptos and dollars. > there is only a limited number of potential active crypto-currency users My entire point is that this limits them from growing. If the blockchain is kept from exploding, it helps to onboard more users. > Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements? Indeed not. But their user base is now standardised. So they have a predictable number of transactions every second. However, their storage requirements are still obviously industrial grade server farms. The point of bitcoin is that everyone should have a copy of every transaction (excluding lightning network transactions). You see the connection? Not all of us can have our own server farms. If we all wants to store every transaction in the way the parent of my previous comment alluded to (increase block size), each of us will need our own mini server farm i.e. exponential storage growth. > It's possible for Bitcoin (for example) to be decentralised and useful to the world and only require linearly increasing storage space. Yes. It'll level off at some point. But we are far, faaar away from that point. So it'll take quite a while before it levels off.
RustyRussell 7y ago
To be fair, Brian is a businessman who saw an opportunity in spending time and money to navigate the regulatory morasd required for fiat access in the US. This entire model does not sit comfortably with a permissionless, even anarchic construction like Bitcoin. Partially because it puts you in constant conflict with regulators whose relationship is your business. Secondly because if Bitcoin becomes a major currency in its own right, your role as an onramp is no longer necessary, or at least far more competitive. And as every other exchange discovered, the real money is in offering a blistering array of coins and taking a percentage on trade between them. Thus, it might be disappointing to cypherpunks that Coinbase is only a reluctant proponent of Bitcoin, but it's also quite predictable.

esotericn 7y ago

He's the chair of a very public company with investors and whatnot. Inevitably that hamstrings permissible opinions. Not only that, the purpose of his company is to profit from cryptocurrency in a specific way, whether or not that's the 'right thing' for the space or not. Their business model basically falls apart, for example, if people stop using fiat currencies and atomic swaps allow trades to happen without a clearing house. All over this thread you can see waffle about money laundering or whatever else; which Coinbase cannot sidestep because they're forced to interface with banks that will cut them off, governments that don't like it if you don't do what they say, etc.

entropyneur 7y ago

I think they are being sarcastic. What they probably mean is "for political/business reasons Coinbase CEO has to tiptoe around Bitcoin's actual purpose".

arthurcolle 7y ago
I mean Armstrong is calling it "economic freedom" so he's not that far off base, in any case.

pixelperfect 7y ago

Bitcoin is continuing to scale, but it's doing so with the Lightning Network instead of by increasing block size. I'm not super familiar with Bitcoin's tech, but that seems sensible to me. The blockchain is already 250 GB at 7 transactions per second. If you multiplied that by 100, you still have orders of magnitude less transactions per second than credit card processors, but the hardware requirements are now high enough that few individuals could afford to run full nodes.

dane-pgp 7y ago
For context, I don't think anyone is suggesting that BTC's blocks would still be full if they were 100 times bigger, so it is premature to talk about competing with credit card processors. However, 250 GB is approximately 25 GB per year (since Bitcoin started in 2009), which, if you multiply it by 100, is 2.5 TB per year. That means it will take about 6.4 years to fill a 16 TB hard drive, which should cost less than $600: https://www.techradar.com/uk/news/worlds-largest-hard-disk-drive-goes-on-sale-today-for-less-than-youd-think https://www.techradar.com/uk/news/worlds-largest-hard-disk-d... It's not hard to imagine someone paying under $100 per year to run a full node, whereas on the day that TechRadar article was published, the average price of a bitcoin transaction was $4.58 as seen here: https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#1y https://bitinfocharts.com/comparison/bitcoin-transactionfees...
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deleted 7y ago
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mundo 7y ago
Correct me if I'm misunderstanding things, but Lightning Network means off-chain transactions, right? Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? And in practice, that means traditional financial services companies and their KYC-compliant customers, which is the exact 180 degree opposite of the originally envisioned use case. From where I sit, it seems like BTC was designed to be a currency that would free us from financial regulation, it has failed on both counts, and crypto enthusiasts are trying to turn it into an over-elaborate debit card because the alternative is for it to become a historical curiosity.

SkyMarshal 7y ago

It doesn't matter what Satoshi said five years ago, it matters what he would say now, given what we've learned about Bitcoin since. His old opinions are less and less informed each year. Increasing block size utilization has series tradeoffs for decentralization, privacy and reliability. Each year we learn and understand those tradeoffs better. Pro block-size increase people never seem to directly address them though, just talk around them and imply they don't matter. They do matter, a great deal.

thomasrognon 7y ago
I don't think Satoshi's opinion would be any different now. Decentralization as a primary goal and maximizing it at all costs is a narrative that grew after he left. It was originally a means to an end and things just needed to be decentralized enough to be resilient. Relevant Satoshi quote: The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate. https://bitcointalk.org/index.php?topic=532.msg6306#msg6306 https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
- SkyMarshal 7y ago
  The problem with that quote is that if "the rest" of the client nodes also can't validate, then Bitcoin is centralized and completely pointless. Mining is already effectively centralized, the only check and balance against collusion of miners is a robust and engaged community of users running full nodes. The client nodes have to validate in addition to only doing transactions. Satoshi doesn't say that in his comment. But the faster the block size growth, the faster it gets to "every Usenet user runs their own NNTP server", and the fewer and fewer run full validating nodes. His comment is self-contradictory.
jotto 7y ago
Do you have any recommended links/reading on this? (better understanding on the tradeoffs)

hnews_account_1 7y ago

Every single crypto that has tried to pass that limitation has remained centralised in one way or another. You can either: 1) have centralisation 2) assume storage space will expand exponentially since the entire point of bitcoin is many many copies of its ledger 3) come up with a new method more secure than PoW but still decentralised Good luck with (3). (1) and (2) are not good choices. So they moved it off the chain into lightning network.

dane-pgp 7y ago
I'm not sure what you mean by "assume storage space will expand exponentially", since there is only a limited number of potential active crypto-currency users, making a small number of daily transactions (ignoring things like High Frequency Trading), recorded in a blockchain that grows linearly over time. Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements? It's possible for Bitcoin (for example) to be decentralised and useful to the world and only require linearly increasing storage space. Fortunately it seems that storage technology will continue to scale linearly over the coming years too: https://images.anandtech.com/doci/15064/seagate-roadmap.png https://images.anandtech.com/doci/15064/seagate-roadmap.png
- hnews_account_1 7y ago
  I should've phrased that better. What I meant was to assume consumer affordable storage space will increase in size exponentially i.e. if we pay $0.01 / GB today, we should be paying fractions of that fraction in a year (because obviously "exponential" is loose term here). > (ignoring things like High Frequency Trading) HFT is not a blockchain transaction. They are off blockchain transactions entirely because they trade money between bitcoin / other cryptos and dollars. > there is only a limited number of potential active crypto-currency users My entire point is that this limits them from growing. If the blockchain is kept from exploding, it helps to onboard more users. > Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements? Indeed not. But their user base is now standardised. So they have a predictable number of transactions every second. However, their storage requirements are still obviously industrial grade server farms. The point of bitcoin is that everyone should have a copy of every transaction (excluding lightning network transactions). You see the connection? Not all of us can have our own server farms. If we all wants to store every transaction in the way the parent of my previous comment alluded to (increase block size), each of us will need our own mini server farm i.e. exponential storage growth. > It's possible for Bitcoin (for example) to be decentralised and useful to the world and only require linearly increasing storage space. Yes. It'll level off at some point. But we are far, faaar away from that point. So it'll take quite a while before it levels off.

RustyRussell 7y ago

To be fair, Brian is a businessman who saw an opportunity in spending time and money to navigate the regulatory morasd required for fiat access in the US. This entire model does not sit comfortably with a permissionless, even anarchic construction like Bitcoin. Partially because it puts you in constant conflict with regulators whose relationship is your business. Secondly because if Bitcoin becomes a major currency in its own right, your role as an onramp is no longer necessary, or at least far more competitive. And as every other exchange discovered, the real money is in offering a blistering array of coins and taking a percentage on trade between them. Thus, it might be disappointing to cypherpunks that Coinbase is only a reluctant proponent of Bitcoin, but it's also quite predictable.