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An analysis of Bitcoin's throughput bottlenecks

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Re: An analysis of Bitcoin's throughput bottlenecks

#151

Post by hanniabu »

billytetrud wrote: post #123
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-...

Your proposal isn't trustless anymore. At that point, why not just have normal centralized bank accounts? You wrote that article in 2018 too, what do you think about the state of the LN now, where its no longer common to get payment failures?

> where its no longer common to get payment failures

Sorry but they're still incredibly common

Re: An analysis of Bitcoin's throughput bottlenecks

#152

Post by hanniabu »

amackera wrote: post #52
ezekg wrote: post #5

Earlier quoted context omitted.

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/

Except that it's fairly centralized

Re: An analysis of Bitcoin's throughput bottlenecks

#153

Post by [deleted] »

hanniabu wrote: post #149
rawtxapp wrote: post #66

Earlier quoted context omitted.

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.

Since when does Lightning Network not make it less decentralized? That's news to me

[deleted]

Re: An analysis of Bitcoin's throughput bottlenecks

#154

Post by MereInterest »

tshaddox wrote: post #145
MereInterest wrote: post #22

Earlier quoted context omitted.

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…

> This adds a point of centralization, which defeats the entire purpose of cryptocurrency. I don't think you get to declare what "the entire purpose of cryptocurrency" is! People tend to get confused about what "trustlessness" actually means. It certainly doesn't mean that every single aspect of every transaction involving cryptocurrency must not require any party to place any trust in another party. If you're using…

We're in agreement that trust is needed at some point in the system. Cryptocurrencies can be completely internally consistent, but have no relationship to the real world. The only way for that relationship to be formed is by trust.

But, there is not a single thing in cryptocurrencies that make sense if you are willing to allow for centralization. If you have a centralized system, then you have a limited number of actors allowed to make changes to the ledger. You can establish trust out-of-band, whether that means by passing around gpg keys, by investigating previous banking practices, or by establishing common rules for auditing. After that, there's no need for Proof of Work/Stake/Space/etc, because you can trust the updates coming from the rest of the network.

The reason I say that the point of cryptocurrency is trustlessness and decentralization is because the only other alternative is that all the implementers of cryptocurrencies are utter fools not to see the simpler solution. I don't think that is the case. I think they have seen the simpler solution of trusted validators, and have dismissed it out of a fundamental difference in priorities from mine, but I don't think they are fools.

Re: An analysis of Bitcoin's throughput bottlenecks

#155

Post by jasonl99 »

hanniabu wrote: post #152
amackera wrote: post #52

Earlier quoted context omitted.

Algorand looks like a promising proof of stake altcoin in my opinion. https://www.algorand.com/

Except that it's fairly centralized

That's going to change this fall: https://algorand.foundation/the-algo/algo-governance

Re: An analysis of Bitcoin's throughput bottlenecks

#156

Post by smabie »

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…

I hear much more talk about ethereum than I do about BTC.

He'll, I don't even have a personal BTC wallet and no one I know does either. Everything is ERC20: if you want BTC exposure, you hold WBTC not BTC.

Re: An analysis of Bitcoin's throughput bottlenecks

#157

Post by smabie »

rawtxapp wrote: post #105
homakov wrote: post #103

Earlier quoted context omitted.

I was a 100% bitcoiner 2014 to 2020, but after exploring defi and L2 projects in pipeline, i decided this time is different and converted to eth. That's just my opinion.

To me, it's like gold=Bitcoin, I can fully trust it and know that it will be here in 100 years from now, functioning just the same and that my wallet from today will be perfectly functional, and oil=Ethereum, it's an awesome platform that allows me to run a variety of different financial operations with different assets (including Bitcoin), but it's much more nimble, things are a lot less set in stone and I frankly h…

But do you hold BTC or WBTC? Among people I know, actually havinf a BTC wallet is pretty rare.

The ethereum ecosystem is just so rich that there's no reason to leave it, well, maybe bsc and solana, but that's it.

Re: An analysis of Bitcoin's throughput bottlenecks

#158

Post by smabie »

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?

They pause withdrawals while they get their coins out of cold storage.

Or if the exchange isn't fully collateralized, it's a scam and goes under.

Re: An analysis of Bitcoin's throughput bottlenecks

#159

Post by smabie »

uncoder0 wrote: post #8
sambroner wrote: post #7

Earlier quoted context omitted.

Basically all (hardly even an exaggeration!) other cryptocurrencies are attempting to improve upon the throughput issue. Solana is a particularly prominent one with 50k/s https://solana.com/

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

I don't know about other chains, but for ethereum you get money for destroying/freeing up block space. This is how the Chi gas tokens work: they write 0s to the chain when gas is cheap and destroy the blocks when gas is expensive.

Re: An analysis of Bitcoin's throughput bottlenecks

#160

Post by smabie »

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…

And yet, people do huge deals involving millions of crypto everyday.
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