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Did Bitcoin just prove it can't scale?

news.ycombinator.com

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Re: Did Bitcoin just prove it can't scale?

#481

Post by t3soro »

wildmusings wrote: post #428
PKop wrote: post #421

Earlier quoted context omitted.

No it doesn't. The purpose of Bitcoin is sound money.. A finite currency immune to governments' and central banks' desire to devalue currency for debt financing. Bitcoin is more scarce and therefore better store of value than any fiat currency could ever be. Do you not understand second layer solutions do not put your Bitcoin at risk? You commit to a payment channel which defaults to closing the channel according to…

You can certainly have fractional reserve banking in a Bitcoin financial system, just as we did under the gold standard. Banks would give you an incentive to deposit BTC with them (could be interest rates or lower transactions fees) and then lend out some percent of those deposits. Voila , FRB and money supply growth.

The bank would have no capital to lend at fractional reserve. It could not lend out 90% deposit value without getting run on, because there is no deposit insurance. There is no M1 money supply growth coming from the central bank. You would be buying a bond but also necessarily acknowledging the possibility of default, unlike today in the funny money world of perpetual debt money.

Re: Did Bitcoin just prove it can't scale?

#483

Post by wildmusings »

t3soro wrote: post #481
wildmusings wrote: post #428

Earlier quoted context omitted.

You can certainly have fractional reserve banking in a Bitcoin financial system, just as we did under the gold standard. Banks would give you an incentive to deposit BTC with them (could be interest rates or lower transactions fees) and then lend out some percent of those deposits. Voila , FRB and money supply growth.

The bank would have no capital to lend at fractional reserve. It could not lend out 90% deposit value without getting run on, because there is no deposit insurance. There is no M1 money supply growth coming from the central bank. You would be buying a bond but also necessarily acknowledging the possibility of default, unlike today in the funny money world of perpetual debt money.

Fractional reserve banking predates deposit insurance by hundreds of years. All of what you say was also true about gold, which was of relatively static supply.

Re: Did Bitcoin just prove it can't scale?

#484

Post by taysic »

gruez wrote: post #316
taysic wrote: post #264

The rally is partly because it can’t scale and people are unable to get their bitcoin to an exchange to sell it. Instead it is stuck in the mempool... and there is an increasing amount of bitcoin that can’t be moved because fees surpass its value. For a bitcoin that has scaled see Bitcoin Cash.

>The rally is partly because it can’t scale and people are unable to get their bitcoin to an exchange to sell it. that's demonstrably false. there's plenty room of you're willing to pay enough in transaction fees. if you don't want to pay $5 in transaction fees to cash out $5000, that's your problem. either that or you don't want to pay $5 to cash out $10, but in that case that has no appreciable impact on trading vo…

The median fee is currently $15 and there have been around 200k unconfirmed transactions for days. Is it false in addition to this that around half of all bitcoin addresses hold less bitcoin than the current fee? That’s a massive constriction of supply. Very few people are transacting at amounts of $5000 where the fee might make sense.

Re: Did Bitcoin just prove it can't scale?

#485

Post by ben_w »

nske wrote: post #473
ben_w wrote: post #362

Earlier quoted context omitted.

When the correct answer is “bitcoin“, what is the question? I genuinely, genuinely, don’t see any task for which it is the best solution — not even for anonymous online payments or secret ways to store wealth.

"what is the most well tested and carefully developed payment system today that allows me to have complete control of my funds without having to trust any third party?"

I see your suggestion and raise you “precious metals”

Re: Did Bitcoin just prove it can't scale?

#487

Post by pseudozach »

spookthesunset wrote: post #266
wildmusings wrote: post #259

Earlier quoted context omitted.

I’m not sold on Bitcoin but I don’t agree with your definition of what it needs to be successful. There is no reason that actual bitcoin end-users need to deal directly in bitcoin. If Bitcoin were to ever become a major currency, a big if, there would be financial institutions (banks) issuing instruments (physical or digital notes) backed by real bitcoins held by those institutions. Real bitcoin transactions would be…

Bitcoin and The Blockchain are only useful when you absolutely can't trust anybody but yourself. Why would financial institutions need Bitcoin and its immense overhead when they all can use the law as a tool to ensure adequate trust? If they can trust each other at that level, all they need is a simple database. In other words, "financial institutions" have no need for the blockchain. Want proof? You think the NASDAQ…

What if russia and china decide to start their own global trade system based on something. http://www.zerohedge.com/news/2017-12-02/russia-china-and-br... And they don't trust eachother because well why would they. Would they have a use for a global, distributed, trustless system to keep inventory?

Re: Did Bitcoin just prove it can't scale?

#488

Post by grubles »

pmorici wrote: post #457
grubles wrote: post #448

Earlier quoted context omitted.

The hard cap is the same until it isn't -- when Bcash has to hard fork to infinite inflation in order to incentivize mining because fees won't supplant the mining reward.

Not gonna happen.

Explain to me what will incentivize mining on Bcash when the fees are too low compared to Bitcoin? The mining subsidy, by design, is eventually supplanted by transaction fees.

Re: Did Bitcoin just prove it can't scale?

#489

Post by ComputerGuru »

HereBeBeasties wrote: post #268
ComputerGuru wrote: post #227

Earlier quoted context omitted.

Bitcoin is absolutely not a good store of value. A good store of value is a reliable store of value: one where you can place your assets and go back and get them at any later time. As a deflationary currency, bitcoin would be a hypothetically good store of value if a bitcoin actually had any intrinsic or even just de facto value. But it clearly doesn’t: it’s only the conversion to and from USD (and others) that has g…

Most asset classes look like that, though. Gold has some intrinsic value as a good conductor/reflector of heat. But it's not really so very much superior to aluminium or copper or whatever to make it worth what it is worth. It is expensive because it is scarce. That's it. Bitcoin is the same. (They are obviously very different in other ways, but you get the point.) Things don't need to have intrinsic value to be valu…

I agree with you - I actually implicitly meant everything you said.

The crux of the matter lies with your last sentence: "They simply need to be desired by the market"

Ergo, the quality of an asset as a "store of value" (the point of contention I was addressing in my comment) is directly mapped to the desire. BTC's desire is insanely volatile, automatically making it a poor store of value.

My point is precisely that all assets used as currency are oftentimes intrinsically worthless. It's the demand - and the liquidity it provides converting to and fro said currency from other goods or currencies - that makes it a value storage vehicle. BTC, as a "value storage vehicle," is a very poor choice. Gold isn't.

Re: Did Bitcoin just prove it can't scale?

#490

Post by Rmilb »

jaredklewis wrote: post #439
SaltyFetus wrote: post #340

Earlier quoted context omitted.

If you believe lightning undermines the whole purpose and is the product of sabotage (or whatever core is being accused of these days), there are multiple forks to choose from that don't use it. No need to attack Bitcoin, just go all in on Bitcoin Cash , put your money where your mouth is, and move on.

Yea! And I wish all these American liberals would stop complaining about Trump policies. Put your money where your mouth is and move to Mexico already! /s

Terrible analogy. To be more accurate, you would copy america and change the policies you want. Then the market decides on what they believe in and want.
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