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An analysis of Bitcoin's throughput bottlenecks

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Re: An analysis of Bitcoin's throughput bottlenecks

#51

Post by ezekg »

WanderPanda wrote: post #10
uncoder0 wrote: post #8

Earlier quoted context omitted.

I'm interested in how all these other chains deal with people writing tons of junk transactions per second to bloat up the chain.

From what I’ve seen they don’t

NANO actually just went through a pretty big spam attack and it crippled the network for awhile, but they supposedly came up with a pretty novel solution in the latest version. I haven't dug into it yet though. But NANO is fee-less, so it is (was?) more prone to these types of attacks. Having a fee increases the cost of a spam attack.

Re: An analysis of Bitcoin's throughput bottlenecks

#52

Post by amackera »

ezekg wrote: post #5
MereInterest wrote: post #3

Earlier quoted context omitted.

If Bitcoin were used by everybody on the planet, the current max of 10 transactions/second means that each person could be part of a transaction once every 13 years (4 billion pairs of people / 10 Hz). Boosting the rate up to 100 transactions per second reduces that down to 15 months. Just think, receive you paycheck this week, and over a year later you can use it to buy groceries. Bitcoin's throughout is absolutely…

Are there any cryptocurrencies that are attempting to solve this issue?

Algorand looks like a promising proof of stake altcoin in my opinion.

https://www.algorand.com/

Re: An analysis of Bitcoin's throughput bottlenecks

#53

Post by lottin »

djschnei wrote: post #14

Bitcoin doesn't need to increase its throughput. This is what layer 2 (3,4,...,n) solutions are for. This is like saying "Well, the dollar is useless because Fedwire TPS doesn't accommodate all transactions." If you compare apples to apples, Bitcoin is more than adequate to replace something like Fedwire with a zero trust decentralized system. Layer 2 solutions for Bitcoin can look something like The Lightning Networ…

Sorry but bitcoin is peer-to-peer cash system. If it can't handle peer-to-peer transactions then it's an utter failure.

Re: An analysis of Bitcoin's throughput bottlenecks

#54

Post by aeternum »

chromaton wrote: post #38
aeternum wrote: post #33

Earlier quoted context omitted.

Those are on-chain transactions. Coinbase and many other wallets now support offline, or 'Instant Sends' which is more akin to the simple database update that PayPal/Visa performs. Sure those aren't purely decentralized but a decentralized settlement layer is probably where most of the value is anyway.

>a decentralized settlement layer is probably where most of the value is anyway. Why?

Graph theory. A purely centralized topology has significant problems with fault tolerance, trust, and control. However you do not need a hyperconnected graph to achieve strong fault tolerance and protect against a single node with full control.

The internet itself is a good example. It strikes a balance between decentralization and efficiency through the use of ISPs as supernodes.

Re: An analysis of Bitcoin's throughput bottlenecks

#55

Post by buckie »

Taek wrote: post #37
ChainOfFools wrote: post #30

Earlier quoted context omitted.

has anyone ever done the modeling on the dynamic limits of decentralized network consensus? my intuition has always been that getting, say, 100,000 globally distributed voting nodes to agree on even a simple truth value will quickly run into exponential (or worse) latency bottlenecks by way of metcalfe's law. the speed of light, as a hard limit, starts to become insurmountable when your consensus pathway has to be tr…

Bitcoin's Proof of Work algorithm has linear scaling. Basically 100,000 nodes all trying to build consensus using Nakamoto PoW can do it in O(100,000) messages. The scaling factor on the number of miners is not what is a bottleneck here. The main bottleneck for cryptocurrencies is that every single node has to validate every single transaction. So your global throughput is effectively limited to what a single node ca…

There is an example of directly scaling PoW that's been in prod for 1.5 years now: https://explorer.chainweb.com/mainnet

Instead of having X PH of PoW difficulty for a single blockchain, you have N parallel blockchains with ~X/N PH difficulty. Same energy needs, N*single chain performance. The coolest bit being that N can increase in an upgrade w/o needing to increase energy consumption, should the network gain traction and need more throughput. It upgraded from 10 to 20 chains last summer.

Other cool bit is that each chain runs a formally verifiable LISP (Pact)... I jokingly refer to Kadena as "a multithreaded LISP machine in the sky".

Disclaimer: I designed the Chainweb consensus algorithm

Re: An analysis of Bitcoin's throughput bottlenecks

#57

Post by lottin »

djanogo wrote: post #13
MereInterest wrote: post #3

Earlier quoted context omitted.

If Bitcoin were used by everybody on the planet, the current max of 10 transactions/second means that each person could be part of a transaction once every 13 years (4 billion pairs of people / 10 Hz). Boosting the rate up to 100 transactions per second reduces that down to 15 months. Just think, receive you paycheck this week, and over a year later you can use it to buy groceries. Bitcoin's throughout is absolutely…

I don't know how Bitcoin transactions work, but can a company (like Paypal) buy bunch of bitcoins (10000), and then proceed to do all transaction internally with their own ledger mechanism without depending on other networks?, wouldn't this allow anybody within paypal network to send/receive super fast?

The whole selling point of bitcoin is that it's a decentralised ledger that isn't owned by anybody. If the transactions are managed by a central entity, then that's no longer true. For example, what's to stop such an entity from creating bitcoins out of nothing and thus debasing the bitcoin currency?

Re: An analysis of Bitcoin's throughput bottlenecks

#58

Post by ulzeraj »

chromaton wrote: post #11

Here is the real world, Bitcoin is currently running a blazing 3.3 transactions per second. Etherium dwarfs that at a mighty 14 transactions per second. Meanwhile, PayPal crawls along with a pathetic 488 tps. https://www.statista.com/statistics/730838/number-of-daily-c... https://www.businessofapps.com/data/paypal-statistics/

How many settlement layers exist between a PayPal transaction and the underlying money transfer protocol (SEPA, SWIFT etc)?

Re: An analysis of Bitcoin's throughput bottlenecks

#59

Post by brighton36 »

rawtxapp wrote: post #41
homakov wrote: post #31

Bitcoin dominance is fading this year only because it has bet on LN with fundamental inbound capacity problem. LN rejected my proposal to solve it and extend channels with credit lines: XLN https://medium.com/fairlayer/xln-extended-lightning-network-...

Bitcoin dominance always goes down in altcoin season and then comes right back up.

Meanwhile, crypto indexers beat Bitcoin maximalists. But, the evidence for indexing performance will never see the light of day . :)

Re: An analysis of Bitcoin's throughput bottlenecks

#60

Post by hgfxgkgc »

djanogo wrote: post #13
MereInterest wrote: post #3

Earlier quoted context omitted.

If Bitcoin were used by everybody on the planet, the current max of 10 transactions/second means that each person could be part of a transaction once every 13 years (4 billion pairs of people / 10 Hz). Boosting the rate up to 100 transactions per second reduces that down to 15 months. Just think, receive you paycheck this week, and over a year later you can use it to buy groceries. Bitcoin's throughout is absolutely…

I don't know how Bitcoin transactions work, but can a company (like Paypal) buy bunch of bitcoins (10000), and then proceed to do all transaction internally with their own ledger mechanism without depending on other networks?, wouldn't this allow anybody within paypal network to send/receive super fast?

Paypal already does this with bitcoin.
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