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An analysis of Bitcoin's throughput bottlenecks

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Re: An analysis of Bitcoin's throughput bottlenecks

#111

Post by jayd16 »

aeternum wrote: post #33
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/

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.

Why is that more novel than, say, intra-bank transactions?

Re: An analysis of Bitcoin's throughput bottlenecks

#112

Post by billytetrud »

A little late, but I wanted to mention that I came to work on this because of the debate about block size and scaling ideas around the segwit update. Lots of opinions are generally thrown around without a whole lot of data to back it up, so I wanted to put in the work to make a systematic framework for estimating and comparing alternatives. I wanted to make it easier for other people to evalute what bitcoin's actual bottlenecks are and the way their preferred solution would affect those bottlenecks.

Re: An analysis of Bitcoin's throughput bottlenecks

#113

Post by billytetrud »

Havoc wrote: post #82

I’m still not quite following why people are looking at bitcoin for this. Surely one of the newer generation like eth is better suited? Or better yet a layer 2 on eth

What's better about Ethereum in this regard? People are still looking to Bitcoin because its substantially larger than Ethereum in pretty much every way (development, market cap, awareness, etc), its got a way better track record than Ethereum, its far more decentralized (Vitalik is still the god of Ethereum). There's lots of reasons people still look to Bitcoin.

> Surely one of the newer generation like eth is better suited?

Why surely?

Re: An analysis of Bitcoin's throughput bottlenecks

#114

Post by billytetrud »

Havoc wrote: post #109
gruez wrote: post #84

Earlier quoted context omitted.

>Surely one of the newer generation like eth is better suited? What scaling technologies do they have? The ones I'm aware of are: "commit the global state every n blocks and trust that", and "have n parallel blockchains so it's not one big chain" >Or better yet a layer 2 on eth or layer 2 on BTC, aka lightning network?

>What scaling technologies do they have? The ones I'm aware of are Not Eth, but you're missing one option - tree graph based. They've pushed 3000+ TPS through it already in testnets...and that's on layer 1. High level description: https://confluxnetwork.medium.com/tree-graph-structure-of-co... >or layer 2 on BTC, aka lightning network? Indeed - that could work. I do think Eth has the edge though. Throughput only matt…

> They've pushed 3000+ TPS through it already in testnets

Whenever someone says something like "they've tested it with X throughput", it usually means that they're not considering security properties. Sure, you can push throughput through on test machines in a test setting and it will happen. But in an adversarial environment, systems pushed to those limits can often be attacked. Its not sufficient to test throughput in normal conditions. You have to go through every attack vector and test the throughput during attacks and ensure the throughput you're pushing through isn't making those attacks easier to pull off.

Centralized systems can push plenty of throughput. The question is not: "How fast can we make this system run?", the question is "how fast can we make this system run WHILE keeping its properties of decentralization and resilience against attacks?".

Re: An analysis of Bitcoin's throughput bottlenecks

#115

Post by billytetrud »

vmception wrote: post #106
gruez wrote: post #84

Earlier quoted context omitted.

>Surely one of the newer generation like eth is better suited? What scaling technologies do they have? The ones I'm aware of are: "commit the global state every n blocks and trust that", and "have n parallel blockchains so it's not one big chain" >Or better yet a layer 2 on eth or layer 2 on BTC, aka lightning network?

Ethereum has 8 distinct active layer 2 technologies including things analogous to lightning network, as they are permissionless to build and deploy there. Turns out nobody likes watchtowers which lightning style solutions require, the market is not choosing that Bitcoin does not represent choice, it represents throwing all eggs in one basket and defending that with no competition (lightning). More like a state capita…

> Bitcoin does not represent choice

Why not? Anyone can use bitcoin for anything they want. And any other cryptocurrency can compete with bitcoin if they want (and clearly many try). Seems we have plenty of choice in the market at the cryptocurrency moment.

The difference is that in Bitcoin land, people cooperate to build standards. In Ethereum, far fewer standards are created, and instead people just build whatever Ethereum based project they want and try to sell that. So yes, there are more choice, but the quality of those choices is a lot lower. For example, in Bitcoin there's one lightning network standard, and many wallets that implement that stanrdard. By contrast there's a ton of layer 2 networks on Ethereum and none of them interoperate and each one has a single implementation (generally).

> nobody likes watchtowers

The number of bitcoin lightning nodes has been constantly growing since its inception, and pretty much every metric is at an all time high: https://bitcoinvisuals.com/lightning . So .. I think you're not correct there.

Re: An analysis of Bitcoin's throughput bottlenecks

#116

Post by Ekaros »

rebelos wrote: post #110
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…

It hasn't gotten attention because they just re-centralized using exchanges and off-chain transactions. Just the latest episode of the fugazicoin clown show.

If the transactions are off the chain and to centralized and networked banks I wonder if the 21M coins will hold true for very long... And what happens when bank-run is attempted... As I don't see people staying away from all the fun things they can do with fiat currencies... As at that point the currency on exchanges and between them is fiat.

Re: An analysis of Bitcoin's throughput bottlenecks

#117

Post by billytetrud »

DennisP wrote: post #89
gruez wrote: post #84

Earlier quoted context omitted.

>Surely one of the newer generation like eth is better suited? What scaling technologies do they have? The ones I'm aware of are: "commit the global state every n blocks and trust that", and "have n parallel blockchains so it's not one big chain" >Or better yet a layer 2 on eth or layer 2 on BTC, aka lightning network?

Ethereum shards share security, so you can't just do a 51% attack on one shard. Zkrollups on Ethereum have the same security properties as on-chain transactions, with no need for monitoring and no withdrawal delays. That can't be said for the LN.

Sharding is fraught with issues. One fundamental issue is that by the very nature of sharding, you have fewer nodes on each shard, which makes it easier to perform sybil attacks on a particular shard. Shards aren't a pancia. Also, if you have, say, 10 shards - that isn't giving you 10x throughput. Its gonna give you maybe 2x throughput because what shards are doing is allowing lower-power machines help run the network, and those lower-power machines are not as effective as the rest, so they aren't contributing as much. I mean, its not cut and dry because there may be a lot of extra machines depending on the state of the network and resource requirements, but its generally not a linear relationship there.

Re: An analysis of Bitcoin's throughput bottlenecks

#118

Post by axiosgunnar »

billytetrud wrote: post #113
Havoc wrote: post #82

I’m still not quite following why people are looking at bitcoin for this. Surely one of the newer generation like eth is better suited? Or better yet a layer 2 on eth

What's better about Ethereum in this regard? People are still looking to Bitcoin because its substantially larger than Ethereum in pretty much every way (development, market cap, awareness, etc), its got a way better track record than Ethereum, its far more decentralized (Vitalik is still the god of Ethereum). There's lots of reasons people still look to Bitcoin. > Surely one of the newer generation like eth is bette…

Isn‘t ETH in the vicinity of an order of magnitude to Bitcoin's market cap etc?

Which is „pretty much the same“ in crypto terms.

Re: An analysis of Bitcoin's throughput bottlenecks

#119

Post by billytetrud »

loveitmore wrote: post #98
wyager wrote: post #90

Earlier quoted context omitted.

> It has been in development for 7 years. Good. They need to get it right. > Why use this complicated hack solution It’s complicated but not a hack at all. It makes perfect sense. > when anyone can just use a different cryptocurrency and not have these problems in the first place? There are 0 (zero) cryptocurrencies that scale better than Bitcoin that don’t also compromise on security or decentralization. Lightning i…

0 that scale better? XRP performs better at scale and I don’t believe for a second Bitcoin is anymore decentralized. That being said, I don’t know enough about the security aspect - so your claim may end up being correct!

XRP isn't decentralized at all... Bitcoin is absolutely far far far more decentralized than a currency that is wholely controlled by a single company.

Re: An analysis of Bitcoin's throughput bottlenecks

#120

Post by Ekaros »

mullingitover wrote: post #67
Taek wrote: post #20

Earlier quoted context omitted.

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 an…

I'm sure the banks will love when they their lowly paid employee/contractor accidentally moves the money to wrong address or some bit flip happens... Or targeted attack...

With current system money is still somewhere and you can drag them to court as final step. With crypto, no luck it is just lost.

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