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Please correct me if I'm wrong here (I've been out of the crypto game for a couple years), but I don't think crypto holds up here. The nature of transaction fee

by jjcm 3y ago

Please correct me if I'm wrong here (I've been out of the crypto game for a couple years), but I don't think crypto holds up here. The nature of transaction fees with crypto is they scale exponentially with demand. Monero fees are low because volume is low. Bitcoin fees are high ($9.97 was the average transaction fee yesterday!) because volume is high. Any fully decentralized crypto at the scale of use that the Web Monetization API would need would have enormous tx prices. There are ways to scale this, ie the lightning network, but those are essentially centralized solutions to scale.

ptsd_dalmatian 3y ago
this is the point of lightning network for btc, way lower costsand nearly instantaneous transactions. I haven’t tried it so far.
- epolanski 3y ago
  Because it's still theory 7 years after announcement it has been proven again and again to not be a real alternative.
  - madacol 3y ago
    Lightning has had lots of problems, but most of those are fixable through software or gets better and better with adoption (at least in theory). The reason adoption has been so low is that with current hardware you cannot run a full node in a phone, so you either get a server to run a full node or you trade-off some control/security of your coins There are still other theoretical problems, mostly things like denial-of-services, but adoption has been what has stagnated it. The hardware/control tradeoff is a real PITA, we need a phone with like 50x more battery or efficient to be able to run lightning in a completely self-custodial manner And there are still some people advocating for blocksize increase, which will make the problems of lightning even worse
gamepsys 3y ago
The current bitcoin blocksize is limited to 1mb. This means, on average, only 1mb worth of transactions can be written to the ledger. With that 1mb we save thousands of transactions. When you pay a transaction fee you are essentially bidding on your data being written to the ledger every 10 minutes. You are correct that the more people bidding, the higher we can expect the price to be. There is however no technical reason we should limit the blocksize to 1mb. We could have 10mb or even 100mb blocksizes easily. Realistically a 100mb block would be large enough to handle all transaction data our species currently generates. The transaction fee is a considerable portion of miner's revenue. Miners ultimately are responsibility for making changes to the bitcoin protocol. I think it's unlikely bitcoin miners will vote for a higher blocksize because it will cause short term decreases in revenue. However, they are missing a potential boon from the Jevons paradox -- the cheaper a resource becomes to use the more of the resource we use. So in summary, it's not really a technical limit to have a high transaction volume but we aren't likely to see it from the current big coins.
- tommica 3y ago
  Does not seem to be a sustainable solution: if the amount of microtranfers increase, the blocksize is going to be an issue again
  - gamepsys 3y ago
    The number of real time electronic transactions is virtually guaranteed to increase. This is not only a big problem now, it's becoming a bigger problem over time. I consider the unwillingness of the bitcoin network to increase blocksize to be a critical flaw. Edit: The problem is not 100mb is too small for the future. The problem is that just like we cannot go from 1mb to 100mb today, we would have no ability to go from 100mb to 1000mb when needed.
    - epolanski 3y ago
      Yet bitcointalk and /r/bitcoin were able to sway what later become to be known as Bitcoin Cash into the wrong fork.
j0hnyl 3y ago
It depends on the chain. Some chains can support high throughput at low fees.
- rglullis 3y ago
  Theoretically.
- tromp 3y ago
  Sure; they can. By sacrificing the very properties Bitcoin was designed for: decentralization and censorship resistance.
  - j0hnyl 3y ago
    Which would mostly be fine for this usecase. Also, these properties wouldn't need to be abandoned entirely. Bitcoin in its current form isn't really a great model for this anyway.
rglullis 3y ago
The worst part of lightning is not even the centralization but the capital inefficiency. By definition, any money locked in a payment channel can not be used for anything else.
PhilippGille 3y ago
> There are ways to scale this, ie the lightning network, but those are essentially centralized solutions to scale. Some nodes are more popular than others for open a channel to, but there are still several thousands, so calling it centralized is misleading.
jamilton 3y ago
As mentioned, Nano is inherently feeless. In theory it's supposed to remain fast and reliable at high network usage, and as of right now it's very fast, but it's only doing about 26k tx/day (about the same as Monero) so it's hard to say.

by jjcm 3y ago

ptsd_dalmatian 3y ago

this is the point of lightning network for btc, way lower costsand nearly instantaneous transactions. I haven’t tried it so far.

epolanski 3y ago
Because it's still theory 7 years after announcement it has been proven again and again to not be a real alternative.
- madacol 3y ago
  Lightning has had lots of problems, but most of those are fixable through software or gets better and better with adoption (at least in theory). The reason adoption has been so low is that with current hardware you cannot run a full node in a phone, so you either get a server to run a full node or you trade-off some control/security of your coins There are still other theoretical problems, mostly things like denial-of-services, but adoption has been what has stagnated it. The hardware/control tradeoff is a real PITA, we need a phone with like 50x more battery or efficient to be able to run lightning in a completely self-custodial manner And there are still some people advocating for blocksize increase, which will make the problems of lightning even worse

gamepsys 3y ago

The current bitcoin blocksize is limited to 1mb. This means, on average, only 1mb worth of transactions can be written to the ledger. With that 1mb we save thousands of transactions. When you pay a transaction fee you are essentially bidding on your data being written to the ledger every 10 minutes. You are correct that the more people bidding, the higher we can expect the price to be. There is however no technical reason we should limit the blocksize to 1mb. We could have 10mb or even 100mb blocksizes easily. Realistically a 100mb block would be large enough to handle all transaction data our species currently generates. The transaction fee is a considerable portion of miner's revenue. Miners ultimately are responsibility for making changes to the bitcoin protocol. I think it's unlikely bitcoin miners will vote for a higher blocksize because it will cause short term decreases in revenue. However, they are missing a potential boon from the Jevons paradox -- the cheaper a resource becomes to use the more of the resource we use. So in summary, it's not really a technical limit to have a high transaction volume but we aren't likely to see it from the current big coins.

tommica 3y ago
Does not seem to be a sustainable solution: if the amount of microtranfers increase, the blocksize is going to be an issue again
- gamepsys 3y ago
  The number of real time electronic transactions is virtually guaranteed to increase. This is not only a big problem now, it's becoming a bigger problem over time. I consider the unwillingness of the bitcoin network to increase blocksize to be a critical flaw. Edit: The problem is not 100mb is too small for the future. The problem is that just like we cannot go from 1mb to 100mb today, we would have no ability to go from 100mb to 1000mb when needed.
  - epolanski 3y ago
    Yet bitcointalk and /r/bitcoin were able to sway what later become to be known as Bitcoin Cash into the wrong fork.

j0hnyl 3y ago

It depends on the chain. Some chains can support high throughput at low fees.

rglullis 3y ago
Theoretically.
tromp 3y ago
Sure; they can. By sacrificing the very properties Bitcoin was designed for: decentralization and censorship resistance.
- j0hnyl 3y ago
  Which would mostly be fine for this usecase. Also, these properties wouldn't need to be abandoned entirely. Bitcoin in its current form isn't really a great model for this anyway.

rglullis 3y ago

The worst part of lightning is not even the centralization but the capital inefficiency. By definition, any money locked in a payment channel can not be used for anything else.

PhilippGille 3y ago

> There are ways to scale this, ie the lightning network, but those are essentially centralized solutions to scale. Some nodes are more popular than others for open a channel to, but there are still several thousands, so calling it centralized is misleading.

jamilton 3y ago

As mentioned, Nano is inherently feeless. In theory it's supposed to remain fast and reliable at high network usage, and as of right now it's very fast, but it's only doing about 26k tx/day (about the same as Monero) so it's hard to say.