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Can you comment on some of the things I've heard about Bitcoin which might prevent its mass adoption? - The network imposes a limit of 7 transactions per secon

Can you comment on some of the things I've heard about Bitcoin which might prevent its mass adoption? - The network imposes a limit of 7 transactions per second (https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability); and the information I've seen suggests that it typically averages much less than that (http://blockchain.info/en/charts/n-transactions http://blockchain.info/en/charts/n-transactions). - There is a finite number of Bitcoins, and they can effectively be lost forever if private keys are lost. This has led to people doing things like leaving tips in BTC which expire (https://www.bctip.org/ https://www.bctip.org/). This is disregarding the volatility of the price and the fact that it seems to behave like a speculative commodity rather than a real currency -- what is your vision of "mass adoption" of Bitcoin?

bdcs 13y ago
1) From your link "Today the Bitcoin network is restricted to a sustained rate of 7 tps by some artificial limits. These were put in place to stop people from ballooning the size of the block chain before the network and community was ready for it. Once those limits are lifted, the maximum transaction rate will go up significantly." 2) Bitcoin money supply is currently INFLATING at fast clip of over 10%/year. Refer to nobel economist Milton Friedman and others to read about a constant-supply currency.[1] The volatility is because the sum(bids+asks) on the exchanges is small relative to speculator's pockets. This is getting better with time. [1]http://www.econlib.org/library/Columns/y2006/Friedmantranscript.html http://www.econlib.org/library/Columns/y2006/Friedmantranscr...
shazow 13y ago
I don't work for Coinbase, but I'll try to answer (someone correct me if I'm wrong): > - The network imposes a limit of 7 transactions per second (https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability); and the information I've seen suggests that it typically averages much less than that (http://blockchain.info/en/charts/n-transactions http://blockchain.info/en/charts/n-transactions). The transaction volume is currently limited by two things. (1) The number of transactions that can be included within each block by miners. (2) The bandwidth required to keep up with the blockchain. The block transaction cap is just a hardcoded value in the client. Like many things that change on a monthly basis in the reference client, it can and will be changed when the time is right. There are lots of variables which are being adjusted as Bitcoin grows, such as the recommended minimum fee for small transactions. As for the bandwidth, there are a few options: First part is to only require clients to maintain a tiny summary of each block, rather than the full ledger. This will reduce the sync bandwidth required by at least two orders of magnitude. This solution only applies to clients, not miners. The second less popular plan is to encourage networks of "green addresses" (kind of like trusted banks that don't need to verify transactions between each other) as well as super-nodes which delegate trust by layers. And finally, there is always methods for pruning the Merkle tree to remove unnecessary history, or introduce periodic genesis blocks which put down the current state in stone without requiring the history before it. These are just off the top of my head, there are likely more initiatives in the works, maybe of which have been planned for from the first day that the Bitcoin whitepaper was published. > - There is a finite number of Bitcoins, and they can effectively be lost forever if private keys are lost. This has led to people doing things like leaving tips in BTC which expire (https://www.bctip.org/ https://www.bctip.org/). Both of these things are true. Keep in mind, a bitcoin can be divided into units of 0.00000001 (what we call a satoshi). That is to say, the finite number of satoshis is 2,100,000,000,000,000 which should be more than enough for a long long time. (More on that here: https://en.bitcoin.it/wiki/Bitcoin https://en.bitcoin.it/wiki/Bitcoin) As for the question of Bitcoin being lost forever, all this means is that everyone else's Bitcoins rise in value slightly (since you're reducing supply).
- betterunix 13y ago
  "The block transaction cap is just a hardcoded value in the client" Why is these even a value? Why does the protocol limit how many transactions can be performed in a given period of time? This seems like an extreme deficiency to me...
  - shazow 13y ago
    Many reasons are outlined in the link of the grandparent's post. https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability (Check out the rest of the wiki, it's quite informative.) To summarize: It helps reduce some DoS attack vectors and helps encourage the use of transaction fees early on.
    - betterunix 13y ago
      The fact that there is a risk of a DoS attack without hard-coded limits on global transaction volume sounds like a much deeper flaw in the design of Bitcoin. It is particularly troublesome given the existence of protocols that do not have this problem, like Chaum's offline digital cash systems (which have been extensively researched by cryptographers). What is Bitcoin's excuse for this problem? Surely it cannot be that a goal of Bitcoin is to remove central authorities, if some central team of developers has the power to change this system parameter at will. I suppose the only real excuse is that Satoshi was not even aware of that body of work, which would not be all that shocking given the fact that it is not even cited in the Bitcoin paper.
      - bcoates 13y ago
        I don't think Bitcoin is even trying to solve the same problem Chaum's ecash was. Bitcoin is about creating a distributed, consistent transaction ledger; ecash is more like a conditionally anonymized electronic certified check.
        betterunix 13y ago
        OK, so what is the formal definition of a "distributed consistent transaction ledger?" How is security defined here?

bdcs 13y ago

1) From your link "Today the Bitcoin network is restricted to a sustained rate of 7 tps by some artificial limits. These were put in place to stop people from ballooning the size of the block chain before the network and community was ready for it. Once those limits are lifted, the maximum transaction rate will go up significantly." 2) Bitcoin money supply is currently INFLATING at fast clip of over 10%/year. Refer to nobel economist Milton Friedman and others to read about a constant-supply currency.[1] The volatility is because the sum(bids+asks) on the exchanges is small relative to speculator's pockets. This is getting better with time. [1]http://www.econlib.org/library/Columns/y2006/Friedmantranscript.html http://www.econlib.org/library/Columns/y2006/Friedmantranscr...

shazow 13y ago

I don't work for Coinbase, but I'll try to answer (someone correct me if I'm wrong): > - The network imposes a limit of 7 transactions per second (https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability); and the information I've seen suggests that it typically averages much less than that (http://blockchain.info/en/charts/n-transactions http://blockchain.info/en/charts/n-transactions). The transaction volume is currently limited by two things. (1) The number of transactions that can be included within each block by miners. (2) The bandwidth required to keep up with the blockchain. The block transaction cap is just a hardcoded value in the client. Like many things that change on a monthly basis in the reference client, it can and will be changed when the time is right. There are lots of variables which are being adjusted as Bitcoin grows, such as the recommended minimum fee for small transactions. As for the bandwidth, there are a few options: First part is to only require clients to maintain a tiny summary of each block, rather than the full ledger. This will reduce the sync bandwidth required by at least two orders of magnitude. This solution only applies to clients, not miners. The second less popular plan is to encourage networks of "green addresses" (kind of like trusted banks that don't need to verify transactions between each other) as well as super-nodes which delegate trust by layers. And finally, there is always methods for pruning the Merkle tree to remove unnecessary history, or introduce periodic genesis blocks which put down the current state in stone without requiring the history before it. These are just off the top of my head, there are likely more initiatives in the works, maybe of which have been planned for from the first day that the Bitcoin whitepaper was published. > - There is a finite number of Bitcoins, and they can effectively be lost forever if private keys are lost. This has led to people doing things like leaving tips in BTC which expire (https://www.bctip.org/ https://www.bctip.org/). Both of these things are true. Keep in mind, a bitcoin can be divided into units of 0.00000001 (what we call a satoshi). That is to say, the finite number of satoshis is 2,100,000,000,000,000 which should be more than enough for a long long time. (More on that here: https://en.bitcoin.it/wiki/Bitcoin https://en.bitcoin.it/wiki/Bitcoin) As for the question of Bitcoin being lost forever, all this means is that everyone else's Bitcoins rise in value slightly (since you're reducing supply).

betterunix 13y ago
"The block transaction cap is just a hardcoded value in the client" Why is these even a value? Why does the protocol limit how many transactions can be performed in a given period of time? This seems like an extreme deficiency to me...
- shazow 13y ago
  Many reasons are outlined in the link of the grandparent's post. https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability (Check out the rest of the wiki, it's quite informative.) To summarize: It helps reduce some DoS attack vectors and helps encourage the use of transaction fees early on.
  - betterunix 13y ago
    The fact that there is a risk of a DoS attack without hard-coded limits on global transaction volume sounds like a much deeper flaw in the design of Bitcoin. It is particularly troublesome given the existence of protocols that do not have this problem, like Chaum's offline digital cash systems (which have been extensively researched by cryptographers). What is Bitcoin's excuse for this problem? Surely it cannot be that a goal of Bitcoin is to remove central authorities, if some central team of developers has the power to change this system parameter at will. I suppose the only real excuse is that Satoshi was not even aware of that body of work, which would not be all that shocking given the fact that it is not even cited in the Bitcoin paper.
    - bcoates 13y ago
      I don't think Bitcoin is even trying to solve the same problem Chaum's ecash was. Bitcoin is about creating a distributed, consistent transaction ledger; ecash is more like a conditionally anonymized electronic certified check.
      - betterunix 13y ago
        OK, so what is the formal definition of a "distributed consistent transaction ledger?" How is security defined here?