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…
Bitcoin – Potential Network Disruption on July 31st
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Re: Bitcoin – Potential Network Disruption on July 31st
#222As 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…
The limitation is in the protocol, or rather, its current implementation with the 1MB blocksize limit. It was originally implemented to make growth a little more predictable in the beginning, nothing else. Satoshi himself said that it's only to prevent spam, which was at a time before growth, when it wasn't obvious yet how well the self regulation with TX fees works.
After Satoshi disappeared, other people took over the development, and disagreements over how to continue began. What was mostly a technical argument at one point, became a political argument after Blockstream formed, which had taken investments from banks and had most of the core developers under them.
These then not only pushed for other means of scaling than just removing the blocksize cap, but also actively pushed against that, which split the community in half.
Now we have people who (very simplified) just want the blocksize cap increased, and others who support the scaling methods of Blockstream, namely segwit and, down the road, lightning.
This endless debate with both parts of the community calling the other's solution unsafe is what is currently crippling Bitcoins potential.
Re: Bitcoin – Potential Network Disruption on July 31st
#223Earlier quoted context omitted.
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…
Lightning will work the same way. Nobody needs to worry about graph theory, they can just generally assume that the graph is fully connected, and that their software will be able to find a path from A to B.
Re: Bitcoin – Potential Network Disruption on July 31st
#224Earlier quoted context omitted.
> Where is the centralization? If there was no centralization, people would still be profitable doing solo mining. Most of the pools these days are pools because they own huge mining datacenters already (not because they have a lot of miner-users).
That's not how we should see decentralization, "lacking a central point of control" is a better definition. What you're arguing for is the mining to be distributed. https://medium.com/@johnblocke/decentralization-fetishism-is...
Re: Bitcoin – Potential Network Disruption on July 31st
#225Earlier quoted context omitted.
Pretty easy. Pull all of your coins into a wallet you control (like bitcoin-core, running on your own computer), and then just ride through the storm. For some amount of time, there may be 2 or 3 versions of Bitcoin that are active, but if you use this strategy you'll own all of your coins on all the versions. So, as long as the combined value of every version is approximately around the value of the original version…
I have a few coins in a copay wallet, which is a BIP32 wallet. Does that mean that wallet is under my control and my coins are safe?
I believe copay is okay from a brief glance, but I honestly can't tell if they give the keys to Bitpay for backup or not.
The safest wallet is bitcoin-core, though there are plenty of reasonably safe options.
Re: Bitcoin – Potential Network Disruption on July 31st
#226As 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…
1) currently, only about 6 blocks can be verified by the network per hour. That is fixed, any faster and the difficulty rises. Any slower and the difficulty declines. With the current code in use, it will always be about 6 blocks per hour.
2) currently, blocks are limited to 1MB in size. This means that only a certain number of transactions can be processed per block (apx 1200 to 2500).
Thus, only 24 * 6 * #txns_per_block => 170k to 350k transactions can be processed per day. It doesn't matter how many computers are verifying new blocks in the blockchain. This is an... issue.
Note, a "transaction" is moving BTC from one wallet to another wallet.
Re: Bitcoin – Potential Network Disruption on July 31st
#227Earlier quoted context omitted.
No, that's not correct. In the case of the UASF, something very frightening is possible. If the UASF has majority economic support (unlikely) and also the miners do not support it, initially the UASF side will be behind, and there will be multiple chains. There will be the UASF chain and the normal chain. But since the UASF has more support, it'll have more block reward, and eventually it'll have more hashrate behind…
>The other chain completely implodes, and stops existing. Are you sure? If I'm not wrong, this isn't that much different from Ethereum/Ethereum Classic situation. Ethereum Classic's price is no where near Ethereum's but it is still maintaining a good position - 5th by Market Cap and 3rd by 24hr volume. You are saying the ALL of the mining power will eventually move over, but what if it doesn't the miners (85% of whom…
If we end up with Bitcoin and BitcoinSW, and BSW is the minority (like Etherum Classic), we'd have a situation like today. Except, if BSW were to ever catch up to Bitcoin in total work, when it passed Bitcoin (51% hashrate is enough to cause this), it would obliterate the original chain, and become the only chain.
This property is why we gave it a new name (UASF).
Re: Bitcoin – Potential Network Disruption on July 31st
#228Well, 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…
Re: Bitcoin – Potential Network Disruption on July 31st
#229Earlier 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.
Bitcoin doesn't need to be prime time at all. Almost no banking services, outside of checking accounts and index funds, are "ready for prime time" and yet banking services is a huge market.
Don't get me wrong, I think the concept is brilliant. I just don't see how nearly 10x value was created in about a year.
Re: Bitcoin – Potential Network Disruption on July 31st
#230Earlier quoted context omitted.
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…
Users don't need to worry about routing when they connect to the internet, though in fact the computer is making 10+ hops for any given connection. Lightning will work the same way. Nobody needs to worry about graph theory, they can just generally assume that the graph is fully connected, and that their software will be able to find a path from A to B.
What will be bitcoin's "ISPs"? Who makes sure the graph remains connected and usable? Who invests in the "infrastructure", making sure channels remain well balanced? Some say that Lightning will be self-balancing through a clever set of incentives, but that's again extremely experimental and untested.
Also note the big "net neutrality" thing going on in the US right now. What will prevent big players from teaming up and interconnecting with each other to facilitate transactions while leaving out the rest?
I don't have the answers to any of these questions, maybe it's just FUD. I'm just surprised that bitcoin is a couple of weeks from making such a huge jump into the unknown. It's extremely interesting to be sure, but I feel like some people are going to get severely hurt if this whole thing comes crashing down.