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Bitcoin – Potential Network Disruption on July 31st

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Re: Bitcoin – Potential Network Disruption on July 31st

#211

Post by moduspol »

matt_wulfeck wrote: post #58

> This means that any bitcoins you receive after that time may later disappear from your wallet or be a type of bitcoin that other people will not accept as payment. Can you imagine the uproar if Visa said the same thing? It would be totally unthinkable. Bitcoin can get away with this type of "disruption" because it's not really being used for anything other than a speculative vehicle.

Visa is only a payment network. Bitcoin is both a currency and a payment network.

If you as a business accept(ed) Visa payments in Zimbabwe's currency in 2008, or Venezuelan bolivars over the last few years, you absolutely can have its value disappear from you.

Re: Bitcoin – Potential Network Disruption on July 31st

#212

Post by simias »

Taek wrote: post #197
simias wrote: post #163

Earlier quoted context omitted.

Seems like a good deal for the coffee shop (you don't have to pay for the Visa fee and you get some free customer retention on top of it all) but as a customer what do I gain from that, practically speaking? The only thing I can think of is low fees if I'm traveling abroad. But if the fees are really very low then your incentive becomes void, I won't bother putting $50 in the coffee shop if it only saves me $0.001 in…

You missed a really important feature of lightning. If you have a channel open with Starbucks, and Starbucks has a channel open to Wal-Mart, and Wal-Mart has a channel to $local_bank, which has a channel to $local_store, then you can use your Starbucks channel to pay $local_store. It's much better than a Starbucks app.

Good point, but then again how this complex routing will be implemented in practice remains a bit foggy and highly experimental: http://bitfury.com/content/5-white-papers-research/whitepape...

And while this is an important feature of lighting, it's not actually a "feature" when compared to Visa or MasterCard and the centralized banking system from the point of view of the user. Ideally this should all be hidden away from the average customer.

People won't want to worry about graph theory when paying for a sandwich at a gas station. Existing payment solutions still wins hands down 99% of the time when it comes to convenience even if we imagine a "perfect" lightning network. I really have a hard time imagining what would drive a mainstream adoption of bitcoin over the current status-quo.

Re: Bitcoin – Potential Network Disruption on July 31st

#213

Post by wyldfire »

zero_iq wrote: post #165
jpatokal wrote: post #20

Well, that's a remarkably uninformative announcement. Here's an attempt at a neutral tl;dr from a Bitcoin amateur. Bitcoin is currently suffering from significant scaling problems, which lead to high transaction fees. Numerous proposals to fix the scaling issue have been proposed, the two main camps being "increase the block size" and "muddle through by discarding less useful data" (aka Segregated Witness/SegWit). Ho…

I am rather stunned that the entire global bitcoin network, with its colossal combined computing power, and staggering electricity consumption, is only capable of sustaining 7 tps. The level of inefficiency here is mind-boggling. Surely this must be one of the least efficient, least environmentally-friendly computing ventures ever?

> colossal combined computing power

It's colossal because of the sliding difficulty. The block period is a big portion of why the transaction rate is what it is.

Re: Bitcoin – Potential Network Disruption on July 31st

#214

Post by xorcist »

jpatokal wrote: post #20

Well, that's a remarkably uninformative announcement. Here's an attempt at a neutral tl;dr from a Bitcoin amateur. Bitcoin is currently suffering from significant scaling problems, which lead to high transaction fees. Numerous proposals to fix the scaling issue have been proposed, the two main camps being "increase the block size" and "muddle through by discarding less useful data" (aka Segregated Witness/SegWit). Ho…

Bitcoin may not scale well, but it is the capacity problems that lead to high fees. These are two different things and it is important to not conflate the two.

Scalability has improved somewhat during the past two years and most developers believe it is time to increase capacity as well. The question you refer to is how to increase capacity, within the scaling constraints.

I understand the ambition to be neutral in a contentious issue but one must be careful as not to spread misinformation. "Discarding less useful data" is not how segwit works at all. Segwit does away with the fixed blocksize and uses instead a flexible block size of up to four times the previous fixed limit.

The discarding you refer to is the backwards compatible aspect of segwit where it can communicate with older nodes that do not implement this feature by not sending them the data. It is not discarded and a supermajority of the network must use the full larger blocks in order for this to be secure. It is merely a transition method to allow for upgraded and non-upgraded nodes to briefly share the same network.

So what you refer to are two methods for larger blocks. One must be upgraded with a flag day where everyone upgrades or you lose money, and one allows for a transition with a certain amount of backwards compatibility.

It is also misleading to describe this as two "sides". The sides are mostly within social media. The technical debate has been had and there was overwhelming consensus among the developers that the backwards compatible way should be deployed first.

If the technology takes off and solutions such as Lightning prove viable, most developers agree that the non-witness part of the blocks probably needs to be upgraded as well.

Re: Bitcoin – Potential Network Disruption on July 31st

#215

Post by whiskers08xmt »

runeks wrote: post #204
whiskers08xmt wrote: post #94

Earlier quoted context omitted.

I think what the miners are afraid of, is that the power of the bitcoin network, leaves their hands and fall into the hands of second layer operators. At the same time, a higher blockchain size would make it less profitable for small miners, to mine bitcoin. Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB. This would further cen…

> Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB. I don't understand this. Due to what would 95% of current miners find mining unprofitable at 8MB blocks?

8mb blocks would mean that the bitcoin blockchain, would grow by 35 gigabyte a month. Compare this to the total blockchain size of about 120gb right now. This increases the cost of mining, by requiring miners to keep up on harddisk space. This cost can be amortized, as you can scale your processing independently of your harddisk space, making it even more profitable to mine for big investors, than smaller fish.

Re: Bitcoin – Potential Network Disruption on July 31st

#216

Post by wyldfire »

imaginenore wrote: post #180
sktrdie wrote: post #158

All this "unconsensus" is weird to me given that PoW was created to fix just that. I don't understand how can any other group of people decide what should happen other than the miners. After all, anybody can be a miner. Anything other than that just doesn't make it decentralized anymore. If you trust the developers, exchanges or even users to make decisions, then why not just make a BitcoinSQL where the servers are c…

> I don't understand how can any other group of people decide what should happen other than the miners. How about Bitcoin owners instead? Your vote is proportional to how much you have.

That's a proof-of-stake! There are coins that use it. The only that comes to mind is peercoin (first to use PoS IIRC).

Re: Bitcoin – Potential Network Disruption on July 31st

#217

Post by _red »

zby wrote: post #53
jpatokal wrote: post #20

Well, that's a remarkably uninformative announcement. Here's an attempt at a neutral tl;dr from a Bitcoin amateur. Bitcoin is currently suffering from significant scaling problems, which lead to high transaction fees. Numerous proposals to fix the scaling issue have been proposed, the two main camps being "increase the block size" and "muddle through by discarding less useful data" (aka Segregated Witness/SegWit). Ho…

It is probably not possible to solve the scaling problems on-chain - a secure decentralized consensus on a global scale cannot be fast. Currently the bitcoin protocol processes about 7 transactions per second. Doubling the speed by doubling blocks will not make it much closer to the 50K transactions per second of a system like VISA. But it is probably possible to scale the transaction system off-chain - with https://…

The 7 TPS claim is an apples-to-oranges comparison.

You must remember that Bitcoin transactions are "settled" in that 7 TPS timescale, whereas VISA transactions are merely "recorded" in their 50K TPS rate.

In reality, it generally takes a minimum of 15 days for your VISA transaction to "settle" with your bank account. Thereby the true TPS rate is orders of magnitude lower for VISA.

Re: Bitcoin – Potential Network Disruption on July 31st

#218

Post by jrimbault »

Hydraulix989 wrote: post #40
acjohnson55 wrote: post #26

Earlier quoted context omitted.

That's a much more informative post than the link, and yet, I still don't really understand all the jargon. But it also reinforces for me just how not ready for primetime BTC is, and it makes me think the appreciation over the past year is truly insane.

The demand for something like BTC is clearly there though.

How many individuals/7B is there?

Re: Bitcoin – Potential Network Disruption on July 31st

#219

Post by DavidSJ »

_red wrote: post #217
zby wrote: post #53

Earlier quoted context omitted.

It is probably not possible to solve the scaling problems on-chain - a secure decentralized consensus on a global scale cannot be fast. Currently the bitcoin protocol processes about 7 transactions per second. Doubling the speed by doubling blocks will not make it much closer to the 50K transactions per second of a system like VISA. But it is probably possible to scale the transaction system off-chain - with https://…

The 7 TPS claim is an apples-to-oranges comparison. You must remember that Bitcoin transactions are "settled" in that 7 TPS timescale, whereas VISA transactions are merely "recorded" in their 50K TPS rate. In reality, it generally takes a minimum of 15 days for your VISA transaction to "settle" with your bank account. Thereby the true TPS rate is orders of magnitude lower for VISA.

Bandwidth is not the same thing as latency.

Re: Bitcoin – Potential Network Disruption on July 31st

#220

Post by gopz »

As someone with a basic Comp Sci understanding of crypto currencies could someone explain to me why there is a scalability problem? I thought one of the primary benefits of Bitcoin was that higher transaction fees will attract more miners and ergo the transactions can be processed at a higher rate. Why won't this problem be resolved naturally? Tinkering with the block size makes sense to me as a way to crank through more transactions per mined block, but again, why is it even a problem? The mining power is just not there?
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