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Why the practical applications of Bitcoin will be limited

sidazhang.com

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Re: Why the practical applications of Bitcoin will be limited

#61

Post by vanzard »

sharpneli wrote: post #51
mrb wrote: post #34

The author's post is full of misguided opinions, and inaccuracies. "Reason 1: Bitcoin will not replace retail payment systems" Bitcoin is more of an enabler than a replacer. There are many financial transactions that do not take place because current financial platforms do not let them happen. For example with Bitcoin I could in theory pay an artist in Namibia who makes little sculptures and ships them to worldwide.…

> So the author ought to explain to us why he thinks such increases would suddenly stop Because they have already stopped. The price of bitcoin has only dropped for the last year. You should give a reason why the drop should stop and it would start to rise again. > The author completely ignores the economic incentive of transactions within the Bitcoin economy itself. When I give 1 BTC to my father, he can spend 1 BTC…

> Because they have already stopped

No, tx/block certainly NEVER stopped increasing: https://blockchain.info/charts/n-transactions?showDataPoints...

And price is cyclical. After the bubble of June 2011, it took 21 months to surpass its previous high of $30. What makes you think this bubble and price correction is different? In fact, Bitcoin is on the rise since its $150 bottom on January 14th so it would indicate the drop in fact did stop.

> Dell does not accept bitcoin

This is irrelevant to the point the OP was making: transactions that remain within Bitcoin incur no fiat exchange fees. I sell something on craigslist for bitcoins, I use these bitcoins to pay back lunch money to my coworker, he gifts the bitcoins to his brother, his brother sends the bitcoin to his son overseas for remittance, etc. All this with zero fiat exchanges.

> But customers unfortunately are not

Growth is not through-the-roof, but it certainly is there: http://avc.com/2014/10/bitcoin-adoption-metrics/ You cannot quote 2 anecdotes and infer an industry-wide trend. The plural of anecdotes is not data. Anyway it's again irrelevant to the point the OP was making: the blog post's argument is flawed, not everybody who uses Bitcoin is doing it for illegal purposes.

Re: Why the practical applications of Bitcoin will be limited

#62

Post by tormeh »

jgrowl wrote: post #40
GlickWick wrote: post #11

The title is very click-baity, I think we can all agree on that. However, a lot of the points made within are completely legit. The Bitcoin world is rife with scams and one of the primary uses of Bitcoin is to engage in illegal transactions. The benefits of de-regulation are obvious, but the downsides are killing it right now. A lot of people are stuck on the "regulation is evil!" rehtoric due to the current issues w…

I find arguments against Bitcoin by talking about scams and illegal transactions completely baffling. The same thing happens with cash simply because it is a medium for exchanging value. It is an inherent property of currency.

That's also why suitcases full of cash are considered suspicious and you can't bring with you as much as you want across borders[0][1]. The problem is acknowledged (though not solved) when dealing with cash, so that's not a valid argument for ignoring it in Bitcoin.

0: http://ec.europa.eu/taxation_customs/customs/customs_control...

1: https://help.cbp.gov/app/answers/detail/a_id/778/~/declaring...

Re: Why the practical applications of Bitcoin will be limited

#63

Post by DennisP »

jedunnigan wrote: post #55
DennisP wrote: post #28

Earlier quoted context omitted.

The Bitcoin devs are working right now on something that could increase the block size more than that. The main thing that limits the size is latency in propagating large blocks. But most miners already have most of the transactions in each block. All you really need to send is a small data structure that lets the miner reconstruct the full block, from the transactions he already has. An invertible bloom lookup table…

Transactions not having to propagate across the network a second time in blocks is certainly nice, but that doesn't solve all the problems of large blocks. As you said, that proposal is focused on maintaining an incentive for miners to create large blocks without having to worry about orphan races. All full nodes still need to process everyone else's transactions, so bandwidth requirements are still hefty, just not s…

VISA is typically around 2000 tx/sec, so it'd only saturate at peak. And anyone with gigabit fiber won't be bothered even at peak. If we reach that traffic level, gigabit will probably be fairly widespread by then.

I don't see how those nefarious miners could succeed, unless they were powerful enough to carry out a 51% attack anyway. Otherwise their secret chain will soon fall behind the public chain.

Re: Why the practical applications of Bitcoin will be limited

#64

Post by darkmighty »

DennisP wrote: post #63
jedunnigan wrote: post #55

Earlier quoted context omitted.

Transactions not having to propagate across the network a second time in blocks is certainly nice, but that doesn't solve all the problems of large blocks. As you said, that proposal is focused on maintaining an incentive for miners to create large blocks without having to worry about orphan races. All full nodes still need to process everyone else's transactions, so bandwidth requirements are still hefty, just not s…

VISA is typically around 2000 tx/sec, so it'd only saturate at peak. And anyone with gigabit fiber won't be bothered even at peak. If we reach that traffic level, gigabit will probably be fairly widespread by then. I don't see how those nefarious miners could succeed, unless they were powerful enough to carry out a 51% attack anyway. Otherwise their secret chain will soon fall behind the public chain.

Are there plans/other networks which distribute blockchain storage and mining somehow?

Re: Why the practical applications of Bitcoin will be limited

#65

Post by CyberDildonics »

Mahn wrote: post #6

Despite the click-bait title, the article makes valid points which are very often overlooked or downright ignored by hardcore bitcoiners. As someone who's been watching bitcoin for the past few years, this is in my opinion the plain reality.

It isn't really a valid point to say that income for miners must increase, since if miners aren't making money they will drop out and increase the profit for others.

Re: Why the practical applications of Bitcoin will be limited

#66

Post by sharpneli »

vanzard wrote: post #61
sharpneli wrote: post #51

Earlier quoted context omitted.

> So the author ought to explain to us why he thinks such increases would suddenly stop Because they have already stopped. The price of bitcoin has only dropped for the last year. You should give a reason why the drop should stop and it would start to rise again. > The author completely ignores the economic incentive of transactions within the Bitcoin economy itself. When I give 1 BTC to my father, he can spend 1 BTC…

> Because they have already stopped No, tx/block certainly NEVER stopped increasing: https://blockchain.info/charts/n-transactions?showDataPoints... And price is cyclical. After the bubble of June 2011, it took 21 months to surpass its previous high of $30. What makes you think this bubble and price correction is different? In fact, Bitcoin is on the rise since its $150 bottom on January 14th so it would indicate the…

tx/block did not stop increasing. But the transaction volume in USD has been flat recently due to the falling price: https://blockchain.info/charts/estimated-transaction-volume-... The amount of value transferred in bitcoin network has seen no growth at all lately. On the other hand it has not diminished either.

I simply wanted to point out that you cannot cherry pick the time periods. Right now on a 6-12 month timescale bitcoin has been absolutely terrible investment.

You are right that transactions that remain within Bitcoin do not incur transaction fees. However those transactions do not include the big merchants, which you did use as an example. So yeah you can give bitcoins to your friend without a fee but you cannot buy anything from a shop that 'accepts' bitcoin in practice without a fee.

The annual revenue of the merchants in those slides is the total annual revenue. There is no mention whatsoever on how many purchases they have that is being made with bitcoin. So it's useless data in that sense.

Do you happen to have any data about the purchases made specifically with bitcoin?

Re: Why the practical applications of Bitcoin will be limited

#67

Post by Frondo »

post- wrote: post #35
lsadam0 wrote: post #18

Earlier quoted context omitted.

The problem with that article is not that it makes 0 valid points, it's that it makes some terrible correlations as an attempt to prove cryptos won't be huge. What does a scammer selling unlicensed shares in porn production have anything to do with the success or failure of cryptocurrency? Bitcoin was simply the method of payment, nothing more. That example is immediately followed with the eBay + TicketMaster example…

> The problem with that article is not that it makes 0 valid points, it's that it makes some terrible correlations as an attempt to prove cryptos won't be huge. Actually, the article doesn't set out "to prove cryptos won't be huge," and ends on a crypto-positive note: > Bitcoin has shown us the promise of blockchain technologies despite its design shortcomings. > The future of the technology will probably evolve towa…

I like your ideas about the colonial aspects of Bitcoin in the developing world. That is an angle I haven't heard anyone else mention before. It pairs nicely with another critique I don't often see, that Bitcoin is undemocratic; there are economic assumptions baked in that, if it were a government-backed money, people could discuss, vote on, and ultimately change. With bitcoin, there is no way that the people whose lives could be affected by those assumptions can have a say in them--the design and operation of bitcoin doesn't answer to the people in a democratic way.

Re: Why the practical applications of Bitcoin will be limited

#68

Post by sp332 »

DennisP wrote: post #63
jedunnigan wrote: post #55

Earlier quoted context omitted.

Transactions not having to propagate across the network a second time in blocks is certainly nice, but that doesn't solve all the problems of large blocks. As you said, that proposal is focused on maintaining an incentive for miners to create large blocks without having to worry about orphan races. All full nodes still need to process everyone else's transactions, so bandwidth requirements are still hefty, just not s…

VISA is typically around 2000 tx/sec, so it'd only saturate at peak. And anyone with gigabit fiber won't be bothered even at peak. If we reach that traffic level, gigabit will probably be fairly widespread by then. I don't see how those nefarious miners could succeed, unless they were powerful enough to carry out a 51% attack anyway. Otherwise their secret chain will soon fall behind the public chain.

The fewer miners there are, the easier it is to carry out a 51% attack. And the top miners have much more processing power than the average miner. Just a few of the top ones collaborating could carry it off.

Re: Why the practical applications of Bitcoin will be limited

#70

Post by DennisP »

sp332 wrote: post #68
DennisP wrote: post #63

Earlier quoted context omitted.

VISA is typically around 2000 tx/sec, so it'd only saturate at peak. And anyone with gigabit fiber won't be bothered even at peak. If we reach that traffic level, gigabit will probably be fairly widespread by then. I don't see how those nefarious miners could succeed, unless they were powerful enough to carry out a 51% attack anyway. Otherwise their secret chain will soon fall behind the public chain.

The fewer miners there are, the easier it is to carry out a 51% attack. And the top miners have much more processing power than the average miner. Just a few of the top ones collaborating could carry it off.

That's definitely a problem, and it's the reason other projects are working on ASIC-resistant proof-of-work. I just don't see how the method I described would make things any worse.
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