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The senatorial governance of Bitcoin: making (de)centralized money

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Re: The senatorial governance of Bitcoin: making (de)centralized money

#91

I still hope that they listen to reason and increase bitcoin’s ability to scale. We are all held hostage by a tiny cabal of developers that think they know what is best and want bitcoin to have a perversely small block size and pitiful 7 transactions per second top speed.

Clarifications (this comment perpetuates some common misconceptions): - A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction. - Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactio…

> Bitcoin does not compete with literal credit card transactions

Why not?

Re: The senatorial governance of Bitcoin: making (de)centralized money

#92
post #46

Earlier quoted context omitted.

How is the amount of a transaction fee determined?

Every block has a limited amount of space for transactions (1 MB previously, 4 and up to 8 technically with segregated witness?) , the person mining the block includes transactions based on fees provided by users initiating the transaction. If there are tons of people looking to make transactions, fees go up or down based on people's willingness to pay to be included in the next block.

In practice Segwit only increases the blocksize to 1.4 MB for normal transactions and theoretically to 4 MB, but then blocks are filled with special kinds of transactions people don't really use.

It also doesn't really increase the blocksize, but move some data outside of the blocksize calculation to make room for more transactions. The important difference is that Segwit is opt-in and depend on usage for it's effect, while a blocksize increase would immediately increase transaction throughput to its full capacity.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#93

I still hope that they listen to reason and increase bitcoin’s ability to scale. We are all held hostage by a tiny cabal of developers that think they know what is best and want bitcoin to have a perversely small block size and pitiful 7 transactions per second top speed.

Lightning network solves this as do many other things (liquid sidechains)

You have to pre-setup a connection to others that you know and hope they know someone that knows someone that has a connection to the person you are trying to buy from.

This is how the design of lightning network incentivises mega hubs that know most people. So if facebook made a big hub with all its users it would work smoothly.

Also: You can not receive payments if the computer/wallet that hosts your lightning node is not online. Not super smooth.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#94
post #70

Exchanges trade both in Bitcoin and BitcoinCash, and I've just learned from the paper that they form a tree with a common origin. Does it mean that if I owned Bitcoin before the Bitcoin-BitcoinCash split, I can now spend it on both chains?

Yep. The split was also a taxable event (income) according to the IRS.

Selling coins from the fork is the taxable event, not the folk itself.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#95

Earlier quoted context omitted.

Clarifications (this comment perpetuates some common misconceptions): - A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction. - Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactio…

> Bitcoin does not compete with literal credit card transactions Why not?

Compared to credit cards:

- Bitcoin doesn't have chargebacks

- Bitcoin's base protocol transaction throughput is low

- There is a fixed cost per transaction (credit cards have low marginal costs for the credit card processor, and variable, percentage-based fees)

Re: The senatorial governance of Bitcoin: making (de)centralized money

#96
post #70

Exchanges trade both in Bitcoin and BitcoinCash, and I've just learned from the paper that they form a tree with a common origin. Does it mean that if I owned Bitcoin before the Bitcoin-BitcoinCash split, I can now spend it on both chains?

Yes, your private key will give access to the same amount of bitcoin, bitcoin cash and bitcoin SV

Re: The senatorial governance of Bitcoin: making (de)centralized money

#97
post #88

Earlier quoted context omitted.

Lightning protocol addresses that. You can make millions of transactions per second [1]. Quite a lot of crypto sites are already supporting it and wallet support is increasing too [2]. [1] - https://lightning.network [2] - https://blog.bitrefill.com/top-11-lightning-network-wallets-...

Why is an additional layer of complexity an improvement? Why not make bitcoin blocks 10x larger and 10x more frequent? The argument that "only large entities will be able to keep up with that" doesn't really hold - thats the status quo already.

Why add TCP to IP or HTTP to TCP?

It's sound engineering. Like in other systems by composing layers you can achieve the advantages of each component while addressing their costs, without creating insurmountable complexity... "have your cake and eat it too".

Particularly, the central Bitcoin system is a global broadcast medium-- necessarily for its security. Global broadcast is inherently somewhat limited in its scalability (though less than some assume). Other layers effectively add "transaction switching" to Bitcoin, radically improving scalablity and performance with their own costs which are good trade-offs for their applications.

As far as the status quo of traditional finance... If you're happy with the status quo! Use it!

(I'm going to assume you don't mean the status quo of Bitcoin--because 28kb/sec isn't something only large entities can keep up with, it adds up over time-- but even cumulatively its managable)

You could recreate the status quo of centralized finance with Bitcoin, but it wouldn't be obviously better: at least systems like visa and paypal are purpose build to do what they do. Bitcoin takes on a lot of costs and tradeoffs to achieve decenteralization.

Bitcoin was created to be money that existed above and outside of the vulgarities of immediate human politics, just like how strong encryption made it effectively impossible for some sysadmin to just read your files based on some excuse.

I think having that option in the world is extraordinarily valuable.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#98

Earlier quoted context omitted.

For comparison, Visa claims it can handle more than 65 thousand transaction messages per second: https://usa.visa.com/dam/VCOM/download/corporate/media/visan... > Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The small scale of bitcoin increases the cost of transactions, making it less…

The creator actually suggested that it could scale fine if they increased the block size and mentioned future miner farms in 2010. However, it would make sense that exchanges and credit-card-like institutions would want to keep bitcoin unscalable for the foreseeable future and stall scalable development.

In one of his last messages in 2010 before going publically inactive, Bitcoin's creator wrote:

> Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.

( https://bitcointalk.org/index.php?topic=1790.msg28917#msg289... )

Hal Finney, one of the main developers of PGP and Bitcoin's first user wrote in 2010:

> I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today.

( https://bitcointalk.org/index.php?topic=2500.msg34211#msg342... )

That sort of view was well known and understood by others in early 2011 when (now former) Bitcoin developer Gavin Andresen had recently started he wrote of the future:

> I bet there will be alternative, secure-and-trusted, very-high-speed network connections between major bitcoin transaction processors. Maybe it will just be bitcoin transactions flying across the existing Visa/MasterCard/etc networks (I have no idea what their transaction clearing/processing networks look like or how they work).

( https://bitcointalk.org/index.php?topic=3118.msg44789#msg447... )

Or, look at other discussions early in Bitcoin's life-- and instead of quoting myself from back then, I'll show that these views were broadly understood:

> 2010-12-09 02:14:28 jgarzik: that seems like a bad idea; I have a niggling feeling in the back of my head that the optimal bitcoin-like system would have even smaller blocks/transactions than current bitcoin....

( https://buildingbitcoin.org/bitcoin-dev/log-2010-12-09.html#... )

> 2011-07-15 03:32:13 actually the more it shakes out the more bitcoin is looking like a settlement clearing system like interbank market e.g.

> 2011-07-15 03:41:46 moa7: RE "settlement clearing system" > 2011-07-15 03:42:22 moa7: it is presumed by many that a future bitcoin (if successful) will involve a secondary layer that can handle higher volumes, microtransactions, etc.

( https://buildingbitcoin.org/bitcoin-dev/log-2011-07-15.html#... )

2012-04-13 17:56:22 IMO I think the current bitcoin's endgame is as a not-high-volume settlement network.

( https://buildingbitcoin.org/bitcoin-dev/log-2012-04-13.html#... )

Or,

> 2012-09-09 20:00:32 gmaxwell: I am against changing block size, FWIW. I think the market will properly intervene, bitcoin will reach a steady state where all blocks are 1MB, and the best bidding gets block placement. SatoshiDICE and other data apps automatically solve themselves, once 1MB is normal.

> 2012-09-09 20:00:48 I think I will be overruled, but that is my position.

> 2012-09-09 20:03:24 bitcoin exists _because_ of certain constrained limits. money creation is one of them. block space is another.

> 2012-09-09 20:03:35 that is a fundamental constraint; messing with it massively changes the economics

( https://buildingbitcoin.org/bitcoin-dev/log-2012-09-09.html#... )

There are plenty of tough trade-offs in Bitcoin and reasonable people can have no end of a disagreement about them. But these discussions, mostly from before any credit card company ever heard of Bitcoin-- show that a nuanced understanding existed all along.

Disagree if you like, but the conspiracy theories are an insult to everyone's intelligence borne out of a malicious and dishonest rewriting of Bitcoin's history pushed on by court decreed fraudsters like Craig Wright. You have plenty of alternatives-- if they're better then they should stand on their own without the abuse and deceptive FUD.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#99
tezos is attempting to solve this by incorporating on-chain governance - its dPoS and has a code deployment mechanism with a long voting process (multimonth). They have done 2? upgrades now and quorum seems to be ok so hopefully they can keep up voting %

i still think the nano (formerly raiblocks) approach is cool - it scales by running parallel blockchains - each wallet is its own chain. tx's between chains are voted on weighted by % stake - dpos without lockups or slashing. this way its not a competition for space in a single ledger, its competition for voting bandwidth on the worst marginal node. a better tradeoff imho. downsides: the ledger also grows larger quicker than btc (because theres no 7tps limit so you can spam it)

no voting rewards or inflation - theres no on chain incentives for voting at all, but exchanges/pos need to run full nodes to validate ledger anyway and voting is trivial bandwidth. its elegant and the security model works but its hard to tell people about without coming across as a fanatic.

Re: The senatorial governance of Bitcoin: making (de)centralized money

#100

Earlier quoted context omitted.

Clarifications (this comment perpetuates some common misconceptions): - A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction. - Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactio…

> Bitcoin does not compete with literal credit card transactions Why not?

From a slightly more nerdy perspective:

Because these credit card companies have thousands of _their_ machines, in _their_ locations, running _their_ software, to meet _their_ standards.

Meanwhile, Bitcoin is run god knows where, for god knows who (as rightfully intended of course), on god knows what software.

Sadly speed is just naturally part of the tradeoff in this scenario.

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