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The True Cost of Bitcoin Transactions

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Re: The True Cost of Bitcoin Transactions

#91

Post by lawn »

hnolable wrote: post #4

If Eric was serious about this he would have targeted this post at chinese miners who are stalling on activating segwit (which is a 2x blocksize increase and the foundation for instant & nearly free txs via the Lightning Network).

> for instant & nearly free txs via the Lightning Network

It's amazing we're putting all our hopes on a technology best labeled as vaporware. You make it out like it's readily available but the fundamental problem of decentralized routing hasn't been solved and it may even be unsolvable.

The simple fact is that blockstream is pushing segwit precisely for it being a necessity for lightning network, not because it's a good thing for bitcoin.

The correct solution would have been a blocksize increase long ago but the same people supporting segwit has been actively blocking all attempts at a blocksize increase previously. Why the sudden change? As another comment said, "Follow the money, it's not baffling at all."

Re: The True Cost of Bitcoin Transactions

#92

Post by juskrey »

Laforet wrote: post #77
juskrey wrote: post #47

Pretty funny to see that SEPA money transfer from Kraken to EU bank account costs just €0.09 for any amount. Arrival is guaranteed (though can be late too of course). So the cheapness of bitcoin and high cost of modern fiat transactions are both overstated.

The same way Uber was/is cheaper than Taxi, the cost is subsidised by someone else (Uber's investors, or in this case miners and speculators of Bitcoin)

I don't think physical automatic wire transaction cost is more expensive than SMS. High transfer/transaction fees in most banks are, on contrary, are subsidizing losses from other risky activities.

Re: The True Cost of Bitcoin Transactions

#93

Post by codingmyway »

cloakandswagger wrote: post #23
joshontheweb wrote: post #11

Earlier quoted context omitted.

Can you expound on why? I'm interested in hearing both sides of this.

I've been an outside observer of the block size debate for a while now, so here is my naive take on it: The anti-block size increase camp says that increasing the block size is only a temporary fix, and that no blockchain can accommodate Visa levels of throughput. They also posit that any increase in the block size will make running a full node more difficult, meaning Bitcoin will become more and more centralized and…

That is part of it. I think some miners are against any increase because it will lower fees. Without a blocksize limit fees tend to zero, which is fine while there is the block reward but they still want to milk the congestion fees. To say they are pro segwit or pro unlimited is bluffing. They are pro status quo and congestion and high fees.

The idea that lightning will lead to a hub, in the case of Unlimited believers they think this will be Blockstream and therefore think that the core developers who work for Blockstream are blocking a blocksize increase for nefarious reasons when they are doing it to avoid a hard fork and to maintain the incentives of miners while enabling cheap off chain transactions.

That idea that a natural hub monopoly will form is ill thought out as explained here: https://youtu.be/fst1IK_mrng?list=WL&t=6072

Re: The True Cost of Bitcoin Transactions

#94

Post by nadaviv »

lawn wrote: post #90
nadaviv wrote: post #87

Earlier quoted context omitted.

Comments are not being deleted on r/bitcoin for expressing views, discussing ideas or debating proposals. Comments that promote the use of alternative clients that attempt to alter the bitcoin protocol rules prior to building consensus around the proposal, however, are. An hardfork protocol change that does not have significant support from the community is basically an altcoin that starts from the current UTXO set,…

Sigh. > Comments are not being deleted on r/bitcoin for expressing views, discussing ideas or debating proposals. Yes they are. > Comments that promote the use of alternative clients that attempt to alter the bitcoin protocol rules prior to building consensus around the proposal, however, are. Comments promoting non-core clients are. Segwit is a disruptive change to the protocol and yet is has been allowed since day…

> Comments promoting non-core clients are [being removed].

No, they are not. Promoting alternative client software that is compatible with the Bitcoin protocol is definitely allowed. btcd, NBitcoin, Bitcoin Knots, Toshi, Haskoin, bcoin, Bitcoin-S and pynode are all allowed, because they're all compatible with the protocol are not trying to forcefully deploy an hardfork that has no consensus.

> how are you supposed to building consensus if it's censored? The cognitive dissonance is amazing.

Discussion of ideas and proposals is not censored. You are free to build consensus by discussing your proposal and convincing other stakeholders in the ecosystem to support it. But you cannot go ahead, skip the discussion part, and promote a controversial non-compatible client that is highly likely to hardfork the chain and split bitcoin into two currencies.

All in all, people seem to agree with the moderation policy of r/bitcoin. Everyone are well aware of these policies, yet it is still the most popular bitcoin forum. Apparently people like it when their community moderators makes it possible to conduct productive discussions by removing noise.

> Bitcoin is built around nakomoto consensus, not some flimsy community definition.

"Satoshi Nakmoto" was meant to give the miners one power: deciding which transactions to include in their blocks. It was never meant to be used to decide on the protocol rules and the validity of chains.

Altering the bitcoin protocol requires consent from the entire bitcoin ecosystem, not just the miners.

Re: The True Cost of Bitcoin Transactions

#95

Post by codingmyway »

pmorici wrote: post #56
notyourwork wrote: post #39

Earlier quoted context omitted.

>They also posit that any increase in the block size will make running a full node more difficult, meaning Bitcoin will become more and more centralized and consolidated around the big mining pools that have the hardware to handle bigger block sizes. With a bigger block size what hardware constraints begin to appear? > This is a big problem for miners who have poured lots of money into their rigs, because now the blo…

> With a bigger block size what hardware constraints begin to appear? Mostly it is an issue of disk space and network bandwidth. right now a 1 MB block is produced every 10 minutes. That has to be transferred over the network to every node and each so called "full node" has to store that block. The total size of the Bitcoin block chain for all time is currently ~100GB and grows 1 MB every 10 minutes under current con…

Without a blocksize limit then block space has unlimited supply so the price will be zero. Miners will get LOWER fees so if they think lightning is their enemy and Unlimited is their friend then they don't understand economics.

Those who want the security of on chain transactions will still pay the fees and those who accept the very slight risk of having to watch for channels being dropped for the benefit of lower fees will choose lightning transactions. There's no conflict and is the only way to get the store of value security and low transaction fees with high volume.

The standoff is the miners milking fees for as long as possible. They don't want larger blocks or segwit. This will be broken by having a less efficient lightning without segwit.

Re: The True Cost of Bitcoin Transactions

#96

Post by Laforet »

nadaviv wrote: post #88
pmorici wrote: post #56

Earlier quoted context omitted.

> With a bigger block size what hardware constraints begin to appear? Mostly it is an issue of disk space and network bandwidth. right now a 1 MB block is produced every 10 minutes. That has to be transferred over the network to every node and each so called "full node" has to store that block. The total size of the Bitcoin block chain for all time is currently ~100GB and grows 1 MB every 10 minutes under current con…

> This whole stink started because some guy who happened to have a ton of BTC was upset that people running full nodes didn't get a cut of any of the transaction fees. What? Who? > Today, the main company that is pushing the Segwit / small block agenda hopes to push everyone to their off chain lightening network where they can collect the fees instead of the miners. Lightning is open-source and was invented by Lighti…

>it is expected that everyone with some spare bitcoins would run lightning nodes to collect fees, so there should be plenty competition.

Thanks for getting back to me in another comment and I find this assertion interesting. As I said earlier, currently there is no incetive for small players to run full nodes so the network tends towards centralisation over time. How do we know the fees involved in Lightening are sufficient that average users can be convinced to act as intermediataries?

Re: The True Cost of Bitcoin Transactions

#97

Post by codingmyway »

lawn wrote: post #91
hnolable wrote: post #4

If Eric was serious about this he would have targeted this post at chinese miners who are stalling on activating segwit (which is a 2x blocksize increase and the foundation for instant & nearly free txs via the Lightning Network).

> for instant & nearly free txs via the Lightning Network It's amazing we're putting all our hopes on a technology best labeled as vaporware. You make it out like it's readily available but the fundamental problem of decentralized routing hasn't been solved and it may even be unsolvable. The simple fact is that blockstream is pushing segwit precisely for it being a necessity for lightning network, not because it's a…

This political argument that it's all just a plot by Blockstream is what is causing the division where the technical benefits of segwit are clear to anybody who knows what they are talking about.

As soon as it became about people and BS conspiracies instead of technical rational solutions it was only going to end up in slagging match.

Re: The True Cost of Bitcoin Transactions

#98

Post by jerguismi »

nadaviv wrote: post #61
lawn wrote: post #57

Earlier quoted context omitted.

> Pretty much every developer in the bitcoin community supports SegWit. Only in the censored outskirts. I recommend everyone to read John Blocke's articles: https://medium.com/@johnblocke/the-importance-of-clear-defin... https://medium.com/@johnblocke/its-not-the-censorship-resist...

- 105 businesses and projects from the Bitcoin space support SegWit and are working on implementing it in their products: https://bitcoincore.org/en/segwit_adoption/ - 54 bitcoin developers signed the "capacity increase roadmap" published by Bitcoin Core: https://bitcoin.org/en/bitcoin-core/capacity-increases - 45 companies and individuals signed in support of Bitcoin Core: https://bitcoincore.org/en/supporters/ - 85…

Impressive numbers! Bad luck the only metric that happens to matters, miner vote, is still below 25% and seems to be going slightly down...

http://bitcoin.sipa.be/ver9-10k.png

Re: The True Cost of Bitcoin Transactions

#99

Post by mhluongo »

juskrey wrote: post #47

Pretty funny to see that SEPA money transfer from Kraken to EU bank account costs just €0.09 for any amount. Arrival is guaranteed (though can be late too of course). So the cheapness of bitcoin and high cost of modern fiat transactions are both overstated.

In eg the US, a domestic wire will cost you $30. In the US and EU I believe, credit card fees are much worse (1.5-3%). If paying internationally cross-currency, you'll often lose quite a bit in the exchange.

Though I see that you said "modern fiat transactions", so maybe payments in the US don't count :)

Re: The True Cost of Bitcoin Transactions

#100

Post by mhluongo »

nadaviv wrote: post #51
mhluongo wrote: post #8

Earlier quoted context omitted.

Erm, targeted at? You mean he would have, what, written it in Chinese? Note he said most businesses are looking for Segwit activation + a hard fork blocksize increase (ours included). The "Chinese miners" have expressed that desire as well. Segwit is stalling because it's not what the market is asking for.

SegWit is supported by over 100 businesses and projects, and pretty much by ~everyone in the technical bitcoin community. It definitely is what the market is asking for. https://bitcoincore.org/en/segwit_adoption/

The market also includes miners. Do they appear excited to activate Segwit? As I understand it, they're waiting for a HF blocksize proposal to go with it.

Many of the businesses in that list that preparing for Segwit, but would still prefer that scenario as well (including many of those with the largest user bases).

Lastly, I'm in the technical bitcoin community. I agree most of us are in support of Segwit- just the show of hands at Satoshi Roundtable this year made that clear- but many of us would also like to see a block size increase, and the dev / miner impasse ended.

EDIT: Segwit signalling by miners is currently https://blockchain.info/charts/bip-9-segwit

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