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An analysis of Bitcoin's throughput bottlenecks

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Re: An analysis of Bitcoin's throughput bottlenecks

#61

Post by ilaksh »

Bitcoin is the cryptocurrency you pick when you don't want to improve or change anything about cryptocurrency. It's the digital gold cryptocurrency.

Many people have tried over the years to improve it such as reducing bottlenecks etc. At this point, I think they have proven that they are not going to make structural changes. And so I think the rational response is just to appreciate and use Bitcoin for what the devs or evil conspirators or whatever have decided that Bitcoin is going to be.

Thankfully we have other cryptocurrencies.

Re: An analysis of Bitcoin's throughput bottlenecks

#62

Post by CSSer »

MereInterest wrote: post #22
djanogo wrote: post #13

Earlier quoted context omitted.

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?

Correct. This adds a point of centralization, which defeats the entire purpose of cryptocurrency. As far as I can tell, cryptocurrency is based on wanting (1) a shared database that (2) can be updated by anyone within specific rules and (3) doesn't require anybody to trust anybody else. In the same way that low-trust societies have a much bigger overhead as a result of the lack of trust, I do not think cryptocurrenci…

> without massive, massive expenditure as a result.

Could you elaborate on this?

The problem I foresee is that having someone you have to trust is not a bad thing because at least you're able to identify that entity's traits and act accordingly. If that entity is, for example, the world's largest military power, I might feel like I have a lot less to worry about than if they're, as another example, a publicly traded company about half the size of the average major U.S. bank.

Is this what you're alluding to?

Re: An analysis of Bitcoin's throughput bottlenecks

#63

Post by londons_explore »

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-...

It looks like you are explaining some good stuff in that blog post, but the overall arrangement and writing style of the post reduces it's impact.

Your post could be more influential if you refined it through a technical writing type process - perfecting the ordering of presenting information for the audience you hope to persuade.

Re: An analysis of Bitcoin's throughput bottlenecks

#64

Post by rawtxapp »

brighton36 wrote: post #59
rawtxapp wrote: post #41

Earlier quoted context omitted.

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 . :)

Not sure what you mean by crypto indexer, you mean people who buy a basket of crypto? Sure, in the short term, they might outperform BTC, over long term 70% will die, 90+% won't recover to their ATHs. If you indexed back in 2017 into top 10 coins, only like 3 of them crossed their old prices from 2017, rest are as good as dead.

Re: An analysis of Bitcoin's throughput bottlenecks

#65

Post by dalmo3 »

lottin wrote: post #53
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.

99% of the content on news.ycombinator.com is not about startups. An utter failure!

Re: An analysis of Bitcoin's throughput bottlenecks

#66

Post by rawtxapp »

dylkil wrote: post #23

its a pity bitcoin devs are so opposed to changing the protocol. So much research has been done showing the feasibility of increasing bitcoins throughput. Xthinner for instance is capable of compressing bitcoin blocks by up to 99% using bloom filters [1]. Much of this research was conducted on the bitcoin fork, bitcoin cash, by people ostracized from the bitcoin community for wanting to explore these ideas. [1] https…

There are some very important changes happening in bitcoin (taproot, eltoo, lightning). Devs aren't opposed to protocol changes, they are opposed to ill-thought changes that make it less decentralized and weaker.

Re: An analysis of Bitcoin's throughput bottlenecks

#67

Post by mullingitover »

Taek wrote: post #20
RcouF1uZ4gsC wrote: post #2

> I will also show that while Bitcoin currently may not be in a safe state, future software optimizations could allow Bitcoin safely process likely more than 100 transactions/second on today's hardware. 100 transactions/second still doesn’t sound like a lot, especially if you want Bitcoin to be an actual currency used for exchange of goods.

In some senses it's not a lot, in other senses it is a lot. Large systems (like the US banking system) only do a few intra-bank settlements per day, 100 tps is well beyond what you need for nation states to do business with eachother. And then down at the consumer level it's nothing at all. During peak hours of the peak season (Christmas), Visa does something like 50,000 tps. What makes Bitcoin interesting is the tru…

> What makes Bitcoin interesting is the trustlessness of the transfers, and that tends to be more interesting higher up the stack (at the inter-bank and inter-national levels) than at the consumer level

What's interesting about that? Higher up the stack, trustlessness is not compelling at all - if I'm transacting with you on the scale of six-plus figures, I absolutely won't transact with someone I don't trust, and anonymity is a defect - I want to know who you are so I can sue you if our deal goes sideways.

Re: An analysis of Bitcoin's throughput bottlenecks

#69

Post by itsdsmurrell »

rawtxapp wrote: post #66
dylkil wrote: post #23

its a pity bitcoin devs are so opposed to changing the protocol. So much research has been done showing the feasibility of increasing bitcoins throughput. Xthinner for instance is capable of compressing bitcoin blocks by up to 99% using bloom filters [1]. Much of this research was conducted on the bitcoin fork, bitcoin cash, by people ostracized from the bitcoin community for wanting to explore these ideas. [1] https…

There are some very important changes happening in bitcoin (taproot, eltoo, lightning). Devs aren't opposed to protocol changes, they are opposed to ill-thought changes that make it less decentralized and weaker.

Wrong, they are opposed to changes that will stop them from profiteering off higher layer solutions they provide.

Re: An analysis of Bitcoin's throughput bottlenecks

#70

Post by beiller »

CSSer wrote: post #21
unwoundmouse wrote: post #16

Earlier quoted context omitted.

Yeah that's how all centralized crypto exchanges do it

What if there's a run on the exchange?

I don't think there can theoretically be a run on the exchange because in theory all the deposits are there, in the exchange, in theory, unlike a bank which only had a fraction of the deposited money in reserve. A run on a crypto exchange would be great for them considering they usually charge a withdrawal fee.
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