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Did Bitcoin just prove it can't scale?

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61–70 of 501 posts

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

#61
Two popular refrains on scaling:

a. Block size - This was increased in bitcoin cash. What many people are not aware of is the paper 'Information propagation in the bitcoin network' by Decker and Wattenhofer in 2013. The average time for a block to be seen by a node is ~13 secs. As per the paper:

"For blocks, whose size is larger than 20kB, each kilobyte costs an additional 80ms delay until a majority knows about the block." -'Information propagation in the bitcoin network.

So, increasing the block without increasing the block time actually increases chances of double spending. But, increasing block time is well simply delaying the payments.

b. Lightning network - Off-chain transactions. Fascinating idea. The problem is it goes to a form of centralization. And if things hold the companies running these channels will invariably meddle in some transactions. But the stated goal of bitcoin was -

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party

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

#62
post #4

IMHO (because to claim to "know" anything about how this is all going to turn out is to be a fraud), Bitcoin is the proof of concept for this whole crypto thing. It was the first. It was the genesis idea. But good lord, do we think it's the actual solution? What would be the odds? I imagine that Bitcoin will play its part as the public face of the blockchain revolution, but something else - or many other somethings -…

> something else - or many other somethings - will be the successors that we actually use in the future.

Right now, the top 3 crypto-tokens are Ethereum-based, as are 89 of the Top 100:

https://coinmarketcap.com/tokens/

Word-find "token" here to see what the word means in this context:

https://en.wikipedia.org/wiki/Ethereum

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

#64
post #19

I use electrum wallet and never had a problem with the default settings - transactions appears after 20 mins.

That's about 19 minutes and 59 seconds longer than what would be acceptable for a digital cash system.

You just need to wait for a few seconds for the transaction to be "pending" though, which is enough for small-medium payments. Unless you're worried the guy buying a 5$ burrito from you will mine a block with his double-spent transaction.

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

#65
You are both right and wrong.

There have been multiple attempts at scaling Bitcoin on-chain by raising the blocksize. They have all been unsuccessful because they have been blocked by the Core developers and their supporters using censorship, troll campaigns, ddos and abuse. It's not due to technical reasons but because they want to redirect scaling off-chain, using technology they coveniently develop. The very same developers actually supported bigger blocks a couple of years ago but changed their tone to support the scaling approach their company favors. After the last attempt (Segwit2x) it's clear Bitcoin won't scale on-chain.

However the technical limits of the technology ha never been reached, tested or even been fully researched. Bitcoin Cash is for example a fork which aims to scale on-chain by increasing the block size. If all transactions from Bitcoin would be done on Bitcoin Cash the network would work fine today.

Where the actual limit is we don't know. It's probably not possible to support every financial transaction for everyone. For that we do need off-chain scaling in addition to many other improvements.

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

#66
post #3

I don't know what you mean by "prove". People have known about the block size limit for years. It's been increased, but most haven't updated their software to make use of it yet. Lightning now works on mainnet, but no one is using that either. Maybe it's more proof that no one cares?

Segwit isn't a a block size increase. It allows for a tiny amount more transactions but it's very clear it's not enough. An actual block size increase (say to 8MB) would solve the current problems.

LN is years from being actually usable by the masses. This is from their developers themselves.

> Maybe it's more proof that no one cares?

That's a pretty idiotic thing to say. The technology isn't ready yet despite the developers being aware of the problem for, as you say, years.

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

#67

My understanding is... There is a scaling problem. It could be help by increasing the block size (like segwit2x) But the miners don't want to fix it because they like the high transaction fees.

A global currency controlled by a few warehouses in china sure does sound optimal.

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

#68
post #47
post #36

> How is this expected to work with 7 billion people using it for every tiny financial transaction? https://lightning.network/ tl;dr: a network of off-chain, transitive payment channels. two on-chain transactions (to fund and settle channel) allow for ~unlimited, ~free, ~instant transactions across a p2p network of nodes off-chain

Payment channels (which Lightning Network uses) allows for unlimited transactions, but not an unlimited number of users, because — as you say — two on-chain transactions (deposit+withdrawal) are required to initiate and finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M transaction per month, this means only 20M people can deposit to/withdraw from the Lightning Network (LN) per month. To this…

~20M transaction per month are an arbitrary limit. The economic majority recently decided against increasing that limit, but this doesn't mean it's not going to get increased at some later point.

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

#69
post #47
post #36

> How is this expected to work with 7 billion people using it for every tiny financial transaction? https://lightning.network/ tl;dr: a network of off-chain, transitive payment channels. two on-chain transactions (to fund and settle channel) allow for ~unlimited, ~free, ~instant transactions across a p2p network of nodes off-chain

Payment channels (which Lightning Network uses) allows for unlimited transactions, but not an unlimited number of users, because — as you say — two on-chain transactions (deposit+withdrawal) are required to initiate and finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M transaction per month, this means only 20M people can deposit to/withdraw from the Lightning Network (LN) per month. To this…

There will be large rewards for companies that do tackle these types of problems though. It's still early in the game.

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

#70
post #57
post #4

IMHO (because to claim to "know" anything about how this is all going to turn out is to be a fraud), Bitcoin is the proof of concept for this whole crypto thing. It was the first. It was the genesis idea. But good lord, do we think it's the actual solution? What would be the odds? I imagine that Bitcoin will play its part as the public face of the blockchain revolution, but something else - or many other somethings -…

> It was the first. It was the genesis idea. But good lord, do we think it's the actual solution? What would be the odds? If superior technology comes along, what will prevent Bitcoin from adopting this, and using its network effect to outmaneuver a competing blockchain? A couple of months ago, the Bitcoin network adopted the SegWit protocol change, which could be considered a minor fix (no major improvements to scal…

Adoption of Segwit (a minor change) was neither quick, easy or without controversy. It does not lend much faith in the Bitcoin community ability to deploy big changes in a timely manner.
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