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The fees for Bitcoin are way too high to make sense for citizens in poor authoritarian counties. The average transaction fee during slow periods is about $5 an

The fees for Bitcoin are way too high to make sense for citizens in poor authoritarian counties. The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. And the lightning network is a poor solution to this because the LN requires a lot of capital to fund channels, something poor people explicitly don't have. Finally, the fact that Bitcoin proponents have to point to poor authoritarian countries to find legitimate usecases is telling in and of itself. It's basically a blunt admission that the technology is mostly useless in the US.

louloulou 5y ago
Inflation protection for long-term savings is a huge use case.
- ogogmad 5y ago
  When people stop buying the latest and greatest machines for Bitcoin mining, Bitcoin's price will crash to zero. It will trigger double-spending attacks, which will undermine trust in the network. Gold doesn't have this problem; so gold is better. Gold has been used to store value for thousands of years, while Bitcoin is a new and experimental technology. It's absurd to say that you would use an experimental technology to store long-term wealth. Maybe once it's tried and proven, fine. But right now it's inefficient, volatile, has high fees, and has got the problem with mining I talked about above. For clarity: My comments above are directly relevant to the comment above about inflation. Guarding against inflation is about holding onto your wealth for the long term. I was comparing Bitcoin to gold for that purpose -- which is entirely valid.
  - Gosper 5y ago
    > When people stop buying the latest and greatest machines for Bitcoin mining, Bitcoin's price will crash to zero. It will trigger double-spending attacks, which will undermine trust in the network. Gold doesn't have this problem; so gold is better. Nope, you're laboring under a misapprehension. Even if all new compute power stopped being manufactured miners will run their existing equipment. The mining difficulty will plateau and overtime gently decrease as equipment breaks. Older and less efficient (at computing double SHA-256) equipment can be profitably brought online where the price of electricity to do so is available and other more valuable uses of that energy in that locale are not possible. You can ride this all the way back down the years and generations of ASICs then GPUs to CPUs. Once humanity is out of CPUs, well, we'll have more pressing issues. We'll talk again then, or not. Yes, mining and securing the network nevermind transmitting transactions would be difficult with ink, paper, and abacus technology alone. I'd expect gold to hold some value here despite difficulty in securing and assaying it restricting its useble value to technical specialists and institutions. Nonperishable food, water filters, consumable entertaining substances, etc. would be a better bet if you're prepping against a Mad Max level of collapse.
newswasboring 5y ago
> The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. When people say this, do they mean $5/$20 per bitcoin or per any transaction whatever size?
- lalaland1125 5y ago
  That is the average fee across all transactions. Transaction fees are per kb of data so more complex transactions pay more. The amount transfered is irrelevant.
  - newswasboring 5y ago
    I'm sorry if I appear a bit dense, but this is the part of bitcoin I least understand. On an individual level, when transferring person to person, are the transactions ever more complex than just remove funds from here and add it to another wallet?
    - CheezeIt 5y ago
      You might have multiple inputs or outputs for an ordinary payment. There are several other types, see https://developer.bitcoin.org/devguide/transactions.html#standard-transactions https://developer.bitcoin.org/devguide/transactions.html#sta...
- liamwire 5y ago
  Per any transaction, regardless of size.
  - dmoy 5y ago
    What the shit? It costs $5 to spend any amount of Bitcoin? Is that for real? (I genuinely don't know, that just sounds so high)
    - kevinak 5y ago
reedjosh 5y ago
Monero does solve these issues though.
earnesti 5y ago
Custodial wallets are also one solution to that. I'm not saying that BTC fee problem isnt real, but there also are ways around it.
- lalaland1125 5y ago
  If you are using custodial wallets, you might as well use USD as your unit of account.
idontwantthis 5y ago
$5-$20 for any amount is comparable or much less than almost any international transaction fee. If you're other option is transferring money out of the authoritarian country into your destination then this could be very attractive.
- lalaland1125 5y ago
  Keep in mind that this purely the onchain transaction fee. You are also going to paying exchange fees each way and those fees are likely to be quite large in authoritarian countries (as any illegal activity is generally more expensive).
  - sildur 5y ago
    Also, in countries with fake exchange values (like Argentina or Venezuela) you get 1/3 of the currency for your dollars, while with bitcoin you get the full value.
- Closi 5y ago
  I mean my bank (Monzo) charges $0.40 for a small international transfer, and $3.20 for one that is $1000, so depending on the transaction size in most scenarios for me personally bitcoins fees would be WAY higher and will presumably only grow more if Bitcoin gains further adoption. The problem is that the Bitcoin fee is also payable on all domestic transfers too, which of course are free in traditional banking.
  - ipaddr 5y ago
    If your account is frozen for whatever political reason your bank can't help you. Bitcoin fees can be 15 cents. I think it is a dollar now. Plus the 10,000 or 100,000 limit you would have could prevent you.
    - Closi 5y ago
      Yeah but the question was about transaction fees so why are we now talking about freezing accounts?
brigandish 5y ago
This may be a bit off-topic and I don't know much about crypto currencies, but I do know that one of the reasons Stellar was set up the way it is, is to enable tiny transaction fees so that anyone could participate, including the poor or those without the kind of access to a stable currency or financial services that most of us on this forum would normally expect. Thus, the transaction fees are minimal. I guess it should be possible to trade bitcoin via the stellar network (according to their intro page[1], any currency can be), but I could well be wrong. I got some given to me in the Keybase drop so I read up on them, but that's the limit of my knowledge in this area. I'd love to find a way to use them but articles like this talking about ponzi schemes etc tend to put me off bothering. [1] https://www.stellar.org/learn/intro-to-stellar https://www.stellar.org/learn/intro-to-stellar
glenvdb 5y ago
>Finally, the fact that Bitcoin proponents have to point to poor authoritarian countries to find legitimate usecases is telling in and of itself. It's basically a blunt admission that the technology is mostly useless in the US. You say that as though it makes it all but useless, despite the value it provides to people in those countries... that's very telling in itself. But as I said there are many use cases, I just pointed out a few that I thought were most important on a global scale... because, you know, it's not all about people in wealthy developed nations. But outside of those types of countries, and in countries like the US, the self-serving use case is a hedge against inflation. If inflation doesn't worry you, that's ok, but the recent money printing in trillions of dollars worries lots of other people. In 20 years I've seen the purchasing power of my money halved. I'm much happier to store my money in an asset that, so far, is seeing its purchasing power increase year on year. From a technical standpoint the other use case, over the lightning network (and other layers and sidechains), is that it allows for instant micro-payments not possible with the legacy financial system. People are building products like podcast platforms which stream satoshis to content creators for every minute someone listens to their podcast. Others are building systems where every API call can be instantly billed. Or content distribution systems (think Bittorrent) where seeders can be compensated for service. There are plenty of technical uses cases for a digital native money on the internet. If you don't understand why it has utility I don't think there's anything more I can say to convince you. Sorry.

louloulou 5y ago

Inflation protection for long-term savings is a huge use case.

ogogmad 5y ago
When people stop buying the latest and greatest machines for Bitcoin mining, Bitcoin's price will crash to zero. It will trigger double-spending attacks, which will undermine trust in the network. Gold doesn't have this problem; so gold is better. Gold has been used to store value for thousands of years, while Bitcoin is a new and experimental technology. It's absurd to say that you would use an experimental technology to store long-term wealth. Maybe once it's tried and proven, fine. But right now it's inefficient, volatile, has high fees, and has got the problem with mining I talked about above. For clarity: My comments above are directly relevant to the comment above about inflation. Guarding against inflation is about holding onto your wealth for the long term. I was comparing Bitcoin to gold for that purpose -- which is entirely valid.
- Gosper 5y ago
  > When people stop buying the latest and greatest machines for Bitcoin mining, Bitcoin's price will crash to zero. It will trigger double-spending attacks, which will undermine trust in the network. Gold doesn't have this problem; so gold is better. Nope, you're laboring under a misapprehension. Even if all new compute power stopped being manufactured miners will run their existing equipment. The mining difficulty will plateau and overtime gently decrease as equipment breaks. Older and less efficient (at computing double SHA-256) equipment can be profitably brought online where the price of electricity to do so is available and other more valuable uses of that energy in that locale are not possible. You can ride this all the way back down the years and generations of ASICs then GPUs to CPUs. Once humanity is out of CPUs, well, we'll have more pressing issues. We'll talk again then, or not. Yes, mining and securing the network nevermind transmitting transactions would be difficult with ink, paper, and abacus technology alone. I'd expect gold to hold some value here despite difficulty in securing and assaying it restricting its useble value to technical specialists and institutions. Nonperishable food, water filters, consumable entertaining substances, etc. would be a better bet if you're prepping against a Mad Max level of collapse.

newswasboring 5y ago

> The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. When people say this, do they mean $5/$20 per bitcoin or per any transaction whatever size?

lalaland1125 5y ago
That is the average fee across all transactions. Transaction fees are per kb of data so more complex transactions pay more. The amount transfered is irrelevant.
- newswasboring 5y ago
  I'm sorry if I appear a bit dense, but this is the part of bitcoin I least understand. On an individual level, when transferring person to person, are the transactions ever more complex than just remove funds from here and add it to another wallet?
  - CheezeIt 5y ago
    You might have multiple inputs or outputs for an ordinary payment. There are several other types, see https://developer.bitcoin.org/devguide/transactions.html#standard-transactions https://developer.bitcoin.org/devguide/transactions.html#sta...
liamwire 5y ago
Per any transaction, regardless of size.
- dmoy 5y ago
  What the shit? It costs $5 to spend any amount of Bitcoin? Is that for real? (I genuinely don't know, that just sounds so high)
  - kevinak 5y ago

reedjosh 5y ago

Monero does solve these issues though.

earnesti 5y ago

Custodial wallets are also one solution to that. I'm not saying that BTC fee problem isnt real, but there also are ways around it.

lalaland1125 5y ago
If you are using custodial wallets, you might as well use USD as your unit of account.

idontwantthis 5y ago

$5-$20 for any amount is comparable or much less than almost any international transaction fee. If you're other option is transferring money out of the authoritarian country into your destination then this could be very attractive.

lalaland1125 5y ago
Keep in mind that this purely the onchain transaction fee. You are also going to paying exchange fees each way and those fees are likely to be quite large in authoritarian countries (as any illegal activity is generally more expensive).
- sildur 5y ago
  Also, in countries with fake exchange values (like Argentina or Venezuela) you get 1/3 of the currency for your dollars, while with bitcoin you get the full value.
Closi 5y ago
I mean my bank (Monzo) charges $0.40 for a small international transfer, and $3.20 for one that is $1000, so depending on the transaction size in most scenarios for me personally bitcoins fees would be WAY higher and will presumably only grow more if Bitcoin gains further adoption. The problem is that the Bitcoin fee is also payable on all domestic transfers too, which of course are free in traditional banking.
- ipaddr 5y ago
  If your account is frozen for whatever political reason your bank can't help you. Bitcoin fees can be 15 cents. I think it is a dollar now. Plus the 10,000 or 100,000 limit you would have could prevent you.
  - Closi 5y ago
    Yeah but the question was about transaction fees so why are we now talking about freezing accounts?

brigandish 5y ago

This may be a bit off-topic and I don't know much about crypto currencies, but I do know that one of the reasons Stellar was set up the way it is, is to enable tiny transaction fees so that anyone could participate, including the poor or those without the kind of access to a stable currency or financial services that most of us on this forum would normally expect. Thus, the transaction fees are minimal. I guess it should be possible to trade bitcoin via the stellar network (according to their intro page[1], any currency can be), but I could well be wrong. I got some given to me in the Keybase drop so I read up on them, but that's the limit of my knowledge in this area. I'd love to find a way to use them but articles like this talking about ponzi schemes etc tend to put me off bothering. [1] https://www.stellar.org/learn/intro-to-stellar https://www.stellar.org/learn/intro-to-stellar

glenvdb 5y ago

>Finally, the fact that Bitcoin proponents have to point to poor authoritarian countries to find legitimate usecases is telling in and of itself. It's basically a blunt admission that the technology is mostly useless in the US. You say that as though it makes it all but useless, despite the value it provides to people in those countries... that's very telling in itself. But as I said there are many use cases, I just pointed out a few that I thought were most important on a global scale... because, you know, it's not all about people in wealthy developed nations. But outside of those types of countries, and in countries like the US, the self-serving use case is a hedge against inflation. If inflation doesn't worry you, that's ok, but the recent money printing in trillions of dollars worries lots of other people. In 20 years I've seen the purchasing power of my money halved. I'm much happier to store my money in an asset that, so far, is seeing its purchasing power increase year on year. From a technical standpoint the other use case, over the lightning network (and other layers and sidechains), is that it allows for instant micro-payments not possible with the legacy financial system. People are building products like podcast platforms which stream satoshis to content creators for every minute someone listens to their podcast. Others are building systems where every API call can be instantly billed. Or content distribution systems (think Bittorrent) where seeders can be compensated for service. There are plenty of technical uses cases for a digital native money on the internet. If you don't understand why it has utility I don't think there's anything more I can say to convince you. Sorry.