The amount of resources to process a whopping, what is it, 2 transactions a second? (And don't say "but lightning network!". Come back to me when something ACTUALLY happens.
Are you referring to the high hashrate? that isn't a requirement for the "2 transactions per second". It is basically unrelated.
It would work if everyone turned off their computers and the hashrate dropped to one
except then I would turn on my computers and earn all the bitcoin instead, which nobody else wants to happen when they can be earning more bitcoin than I
I think it is pretty clever and the network works very well. Your criticism is about its future scalability?
Transferring bitcoin right now, has worked just as well as it worked back in 2012. You send it from one address, to another address, and it gets there in the same time period.
You could ignore all the drama for the last four years and your transaction would still work. Just as much as you ignore all the board meetings that VISA has, that SWIFT has, that the engineers at FEDwire have.
The scaling issue is a fun thought experiment, but it really doesn't matter for you actually using bitcoin. Which promise are you criticising? How bitcoin is supposed to compete against the US dollar?
I've got the cast and crew of the Panama Papers over in cryptocurrency now, and it works really well, while people are still questioning what bitcoin even does. 2012 is over, shit still works.
Typical handwaving. You make it sound like everything has fine, but there have been many many occurrences of full blocks and delayed transactions over the last year.
My last fees were .00013 and .00005 respectively. If I was just reading headlines and not actually using bitcoin, I would think there was a problem too.
If you are worried about the network scaling, there are criticisms to be had. The network works very well for me, I don't consider that handwaving. I consider Blockstream to be delusional people, it has nothing to do with the network, it works really well if you've tried to use it, even during one of those "stress tests".
As long as it's just a few hackers playing with their toy, yes, it works fine. It fails horribly at any sort of non-toy use case. It couldn't even support the transaction volume of a small city, much less an entire country, or the whole world.
We are at 2 TX/sec because, well, people simply don't transact more than that.
Bitcoin CAN support a much higher transaction rate with ZERO increase in mining resources. All we need is (1) more transactions and (2) a block size increase. Let it be clear: the only "dumb" thing is not the system itself, but Bitcoin developers who have not yet agreed on increasing the block size.
Secondly, seeing the mining resources as spent only validating transactions is failing to see the whole picture. Miners sustain a system that is already a net benefit to the economy. Venture capitalists invested more than $1 billion into at least 729 Bitcoin companies which created thousands of jobs. Is all this worth the 150+ megawatt of (practically all) clean energy used by miners? Hell yes! This argument (and others) is explained in detail in:
I agree that the throughput capabilities of Bitcoin are absurd, and that Lightning network is not a substitute for onchain transactions.
However, did you know that the hashrate and transaction throughput are almost entirely unrelated? Hashrate is correlated to the value of the coin that can be kept secure, not to the number of transactions per second that can be processed.
He didn't say that the market cap of btc was tied to the hashrate (which is of course bullshit).
He said that the hashrate relates to how much BTC you can keep safe, which is provably true.
Let's say you control 10% of all hash power. Satoshi's paper helpfully maps out that the likelihood of you being able to pull off a double spend if I wait for 5 confirmations is 0.1%. If you were to mine honestly over 5 blocks, your expected reward is 12.5 BTC from block rewards (plus some more from fees). If you attempt to attack me, the total reward is my transaction value plus 5 blocks' worth of block rewards, so 125 BTC. At 0.1% chance of success, you need to win 12500 BTC from your double spend attack, so if you sent me less than 12375 BTC, I know that after five blocks you have no economic incentive to try to double spend.
For a fixed block count before accepting the transaction (5 blocks in this example), the higher the hash power you control, the higher the probability of success for your attack, and the less money you need to double spend for the attack to be economically rational. Inversely, and precisely the GP's point, the higher the hash power, the more money you can safely transact.
