I have an economy degree
You certainly do. Nobody should believe such claims online without proof. True, you only need proof of work, anything else is just words on a piece of paper  |
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If everyone plan like OP described then 5K will happen for sure My plan is to buy bitcoin continuously from exchanges and put them in cold wallet so that they never re-enter the circulation. If everyone is doing this then the amount of bitcoin on market will be less and less thus the slightest purchase will send its value over 10K And then next step is to persuade banks to provide loan based on those bitcoin holdings. When the credit door is open for bitcoin, I just take a loan and buy bitcoin and use those bitcoin to get more loans and buy more bitcoins until there is only 1 bitcoin left on market or the banks have run out of fiat money. At mean time the price of bitcoin will rise to infinite  |
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>all the financial products can be regarded as Beanie Babies for majority of the investors No. Most ponzi schemes, most in-game currencies, but not most financial products. Start learning about financial products here. >many home miners have large advantage against industry miners, since they might have free electricity No, there's no such thing as "free electricity," someone (your parents, your landlord, your school) is paying for it. Treating it as "free" is not much different than taking "free money" mom & dad leave unattended around the house. I really don't see any difference in most of the financial products, it is all pump and dump unless participants can make the products by themselves. And the master of all pump and dump scheme is fiat money, it has been tried for over 300 years since John Law's first version of fiat money, so the degree of masking is enough high to blind majority of the people Many apartment rents include electricity cost, of course you can not run large scale operation, but that's how decentralized mining should work. In future when chip technology has reached its end due to processing nodes limitation, home miner can survive long term wise since they have their electricity cost included in the rent, or they use the miner as a heater thus use the heating cost to do bitcoin mining. Of course this will reduce the bitcoin production cost and cause more miners to sell their coins, but that's another topic >I really don't see any difference in most of the financial products That's because a nod is as good as a wink to a blind horse. If you're unwilling to learn, you'll have to take that on trust. Same goes for fiat money. It may not be something you understand, though not everything that you don't understand is a scam. >electricity cost included in the rent This doesn't mean that it's free electricity & you're free to run a cable to the aluminum smelter next door and make a killing. If not obvious, you should also buy your own toilet paper, instead of taking rolls from restaurant bathrooms "because it's free." Same for sugar, salt, pepper, and napkins. I have an economy degree but I think all those things on books are just to mask the truth. If you try to understand the financial system from those books, you will be more confusing than average Joe. Try to become a miner and see through the money creator's view |
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There is this idea that we must choose between settlement network or payment network, this is a false dichotomy, a false choice. Bitcoin can be both of these things and more, they actually reinforce each other in a synergistic fashion. By attempting to put one above the other you are actually breaking both.
Bitcoin is and can be many different things to different people, there are many coders and engineers who think that we can scale Bitcoin, therefore I think that we should, even if Core thinks that we should not, their reasons for not doing so remains ideological and I have a distinctly different vision for Bitcoin which also happens to align closer to the original vision of its founder as well. I am sure that there are many people that did originally sign up for this original vision and do not appreciate this bait and switch.
I appreciate most of the work done by Core but I do not want a technocratic group of engineers and coders to dictate to us what Bitcoin should become and what its economic policy should be, this should be determined by the market itself instead. I rather have the engineers remind us ideologues of what is possible so that we can then pursue our dreams to create a better world. It is not impossible to increase the blocksize limit, so I reject the notion that we must choose between settlement layer or payment network now.
In reality if you want to travel fast then you have to pay more, an airline ticket is always more expensive than a boat ticket. But still many people travel by air because they can afford that ticket. And if you have a capacity problem in traffic, you encourage people to use public transport, e.g. trusted 3rd party service provider that can provide volume traffic at a competitive price |
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>all the financial products can be regarded as Beanie Babies for majority of the investors No. Most ponzi schemes, most in-game currencies, but not most financial products. Start learning about financial products here. >many home miners have large advantage against industry miners, since they might have free electricity No, there's no such thing as "free electricity," someone (your parents, your landlord, your school) is paying for it. Treating it as "free" is not much different than taking "free money" mom & dad leave unattended around the house. I really don't see any difference in most of the financial products, it is all pump and dump unless participants can make the products by themselves. And the master of all pump and dump scheme is fiat money, it has been tried for over 300 years since John Law's first version of fiat money, so the degree of masking is enough high to blind majority of the people Many apartment rents include electricity cost, of course you can not run large scale operation, but that's how decentralized mining should work. In future when chip technology has reached its end due to processing nodes limitation, home miner can survive long term wise since they have their electricity cost included in the rent, or they use the miner as a heater thus use the heating cost to do bitcoin mining. Of course this will reduce the bitcoin production cost and cause more miners to sell their coins, but that's another topic |
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Perhaps true, however the reason why many people invest is because they see a longer term vision of a highly usable currency. If you're only investing because you think others will see it as a store of value, then it becomes ponzi-like.
Even in future bitcoin is a highly usable currency, people would still not spend it often, simply because it is always rising in value against fiat money, so the usage pattern will quickly switch to save it and spend inflative fiat money instead Suppose that I have a currency that increases in value almost 20% per year, should I spend it? No way, I would accumulate more of it. And when I want to spend, I will get fiat loan to spend, since the interest cost of a fiat loan can be simply paid by the value appreciation of bitcoin, and I still be able to get a few percent extra |
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>you have an exchange for Beanie Babies
When people see Beanie "value rise 400% per year," they'll build exchanges. Same as Bitcoin.
>Being able to produce bitcoin by yourself is a very important aspect
Oh? You mean one can spend $100 to mine $20, that sort of a thing? Because that's roughly what non-factory miners can expect.
If you want, I could create Giant's Place, a Beanie Cloudmining website, where you can pretend that you're mining Beanies while I return $20 out of each $100 you give me.
How would that be different from Bitcoin?
At higher level of abstraction, these are good questions. From this point of view, all the financial products can be regarded as Beanie Babies for majority of the investors, you just need to find some way to promote its value and set up an exchange then you can pump and dump them That's exactly why bitcoin is different, since you can choose to mine bitcoin instead of purchasing it. Your figures of home mines' profitability is off. In fact many home miners have large advantage against industry miners, since they might have free electricity, or even use miners as a heating device, so that the running cost is almost zero, and they can use already ROIed hardware so that the initial cost is also zero My 400% price figure is just a metaphor, in reality the figures will be more likely in 20-50% range per year, this is still extremely high investment return so the most attracted users will be investors |
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So the question is: To make bitcoin a forever prosperous gold rush or a mobile payment system like other similar solutions?
It's not an "this-or-that" thing. It's both. If bitcoin was no usable payment system, it would have never had any worth. It's name is not bitgold, but bitcoin. But if bitcoin would not have this aspects you describe, it would be just some kind of decentralized paypal (which is, btw, great). With those aspect it's some kind of decentralized paypal with gold (which is greater). In this current situation, where it's unclear where Bitcoin is heading, too many people imho want to define what bitcoin is made for. There is no valid answer on this except: Bitcoin is made for what people do and what the network is capable to support. That's it. Many people in eastern europe e. G. use Bitcoin to order from shops in western europe that don't accept credit cards from some countries in eastern europe. The same with people from africa. Other people like to gamble in the internet, what is not allowed in their jurisdictation. Next people use Bitcoin to order drugs online. And other just use it to watch pornography without revealing their name. And now there come some people and say: this usecases are not what bitcoin is made for? Of course it will be good that bitcoin can satisfy all these use cases at the same time. But when you have a real world resource limitation and have to take some prioritizing, it is better to maintain the core properties of bitcoin and try to move those less important part to 3rd party service providers For example, most of the payment related requests can be done through a couple of payment service provider, similar to people doing pooled mining. These service providers only provide transaction service at a low fee, but it has clearing channel towards many of the other institutions/merchants. And such service provider will also release average user from the pain of the steep learning curve of bitcoin security. Anyway nowadays less and less people select to run a full node client, using SPV client is basically no difference than using a web wallet I think the most exciting aspect of bitcoin is that everyone without permission can be a central bank and start to create money, and let others to use their money. However that's not an easy task since this is a highly competitive market. But still if you lose the possibility to get bitcoin through mining, then bitcoin will lose its most fundamental advantage against fiat money |
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Is "400% per year" price growth likely for a currency costing $100 per transaction?
"Bitcoin 2.0: A Peer-to-Peer Electronic [Useless As] Cash System"?
Why do you want to use the blockchain directly when all you want is zero fee transaction? Why would I want to buy BTC period? To "store value"? Why not use Beanie Babies for that? How many BTC are there gonna be total, 21 mil? You know how many First Edition Princess Di Beanies there are? That's right, *fewer*. Moar scarcity. And while the 21 million could be changed on a whim, with a simple fork, there'll never be another First Edition Princess Di Beanie. By definition. Princess Di Beanie scarcity is guaranteed by logic, its value could not be diluted according to fundamental and unalterable metaphysical laws. "But how do you transact in Beanies? That's, like, the dumbest thing I ever heard!!" you protest. "Why do you want to use the Beaniestalk directly when all you want is zero fee transaction?" I reply. Beanies are not for transacting, use sidesprouts for that. Beanies are for storing massive amounts of wealth.  Sorry I never heard about Beanie Babies until last year, just like almost no one heard about bitcoin during 2009. But now there are so many exchanges out there to provide the bitcoin conversion to fiat currency world wide, if you have an exchange for Beanie Babies, it would also have its market value decided by the users Scarcity is one of the reason for bitcoin's value, but there are more to it. Being able to produce bitcoin by yourself is a very important aspect, this does not apply to Beanie Babies |
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[...]
If bitcoin's value rise 400% per year and it is very expensive to transact in bitcoin (like 100 USD per transaction), I think everyone would still rush into bitcoin like there is no tomorrow. [...] Is "400% per year" price growth likely for a currency costing $100 per transaction? "Bitcoin 2.0: A Peer-to-Peer Electronic [Useless As] Cash System"? Why do you want to use the blockchain directly when all you want is zero fee transaction? There are so many mobile payment solutions which charges zero fee and instant confirmation, why bother using bitcoin? If all you want is zero fee transactions, then you can use some web wallet service. I think the high fee on blockchain will push them to establish their major clearing channel, then they will provide zero fee transactions, or even negative fee transactions if that makes you happy |
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The network effect only has value when the utility of Bitcoin is better than the alternative. Artificially making Bitcoin less useful (high fees), makes alternatives more useful. It may take years to fully sacrifice the utility of the FMA, but if you do, don't be surprised if your first mover advantage turns out to be just as beneficial as it was to myspace, ashes between your fingers.
Of course there are limits, limits to be decided by miners that expend energy to create blocks. Creating megablocks that choke the network (and make your block stale in the process) is not the greatest concern here. Satoshi understood free market incentives, he designed the system around them, it's a shame to see an arbitrary malicious miner protection measure corrupt them in such a brutal fashion.
I refuse to take fear mongering in the form of government intervention seriously while a few phone calls and door knocks from the PRC would be nearly lights out. WRT major govts, we had/have two options... security through obscurity, or security through ubiquity.
Of course it will be good that the blockchain can also be used to purchase coffee, but there is little meaning in it, since the lower the transaction value, the less trust you need Similar to existing centralized payment services like paypal or VISA, in future you can use large bitcoin service providers to do zero transaction fee and instant confirmation transactions, if that's the utility you want. I don't see why people would use the blockchain to do it, which is more expensive and slower. The only reason that you'd rather use blockchain to do the transaction is because you are moving large amount of money or have specific privacy concern, in that case you will be willing to pay a high fee |
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The argument for a large block is to reduce the fee for average users, but what if a small block is better for bitcoin's adoption?
I cant understand how coin with high fees can have better adoption (number of people using it), when there will be cheaper altcoin alternative (fees)... Can such coin just be used for international remitance players instead ? Well why not look for a cheaper alternative instead again ? Ok, and what about store of value, at least. Why would you store your value on a coin when the coin can hardly to be used for anything ? As I see it, if you cap how much coin can be used (number of transactions), people just use other coins for the same purpose, and just stop caring about Bitcoin or even consider storing value there, just like you do today with random altcoin or coin you have no use for. If bitcoin's value rise 400% per year and it is very expensive to transact in bitcoin (like 100 USD per transaction), I think everyone would still rush into bitcoin like there is no tomorrow. They will do like pooled miners, combine their transactions as a single one to save the transaction fee You should understand why most of the people come to bitcoin: Because this is a gold rush in cyberspace. They don't desperately want cheap transactions, so the payment function is the least to worry about. The California gold rush created the boom of the west coast, similar to bitcoin mining frenzy created most of these bitcoin companies today The most attractive part of bitcoin is that by mining bitcoin, you can become your own central bank, participating in the money creation. This is totally impossible in today's fiat money system, and this property already attracted lots of enthuthiasts around the world when bitcoin were still worth almost nothing There is a false claim from banks that money's value are generated from its transaction demand (to cover the fact that fiat money does not have any cost), but for honest money with a production cost (like gold or bitcoin), their value are not generated through its transaction demand. The fact that gold has quit transaction for decades but still rise in value clearly denied that theory. In fact, even for fiat money like USD, its value is not decided by how many people use it, but by people's trust. That's the reason when you have much lower transaction demand during a recession, the value of USD even rises because people desperately want USD when they are poor Once you cleared this misconception, you will understand that raised level of bitcoin transaction capacity will not raise its value, its value would still be mainly decided by the mining cost and long term storage demand So the question is: To make bitcoin a forever prosperous gold rush or a mobile payment system like other similar solutions? |
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As far as the numbers, there's 8 bits in one byte. Therefore, a difference of 8 megabits in speed is one megabyte per second.
If block size is 8 MB, that's 8 seconds. Yet it takes 10 minutes to solve a block so 8/600.
Each node connects to 8 nodes, and each of these 8 nodes connect to another 8 nodes, and so on. But some of these connections are duplicated, so it will take several hop before a block is relayed to majority of the nodes, 4-5 hops maybe. When you have 8 seconds for a block transfer and the block verify time of 8 seconds, the nodes on the far end of the network would receive it in 80 seconds, which is a significant delay Let's first imagine the ideal bitcoin blockchain done by aliens: It takes 1 second to receive and verify each block, takes 1MB hard drive space, and can carry unlimited amount of transactions in 10 minutes Then you add those real world limitations on it and see which part you can compromise Ok fine, but the additional hops don't have anything to do with the miner himself and how long it takes him to propagate his winning block in the first place. Therefore my point is still valid: The small-blocker argument of 'geographic centralization will happen with bigger blocks due to internet speed descrepencies' doesn't really hold water. Actually, I have a question that you might be able to answer for me. If two miners get their blocks out at roughly the same time, and one has a slightly longer chain (not an additional block but just a lower hash/more work/more transactions/higher difficulty -- you know what i'm trying to say) , do nodes throw out the first one and use the second one? I know what you are talking about thus I will not comment on miner's gambling mind set.  The argument for a large block is to reduce the fee for average users, but what if a small block is better for bitcoin's adoption? See my post above |
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I am a 1MB block supporter who feels 1MB is enough for many years to come. We have a network run on Raspberry Pi's and old laptops from the 90s, We need a stronger network and a stronger world wide web and a stronger Tor network; we need better mempool protocols to allow for rebroadcasting transactions with higher transaction fees and many other features like client side minimum fee requirement prediction but what we do not need is a larger block size. Bitcoin was never meant to be a free system, higher transaction fees are the only way to secure the network from government manipulation and control.
Hardforking now is impossible, consensus is everything and it will not be won by force, A hard fork now would mean fracturing the network into two distinct camps the 1MB faction and the others, it would be war. A war the 1MB camp will win.
There can only be one Bitcoin and one Bitcoin network and the new fork would be seen as nothing more then an alt coin bootstrapping itself with the Bitcoin Blockchain. When in doubt people will side with the 1MB faction and people know it, this is the only thing preventing a hardfork now.
Higher transaction fees mean more incentive for mining pools to process transactions and reinvest profits in the cutting edge hardware needed to stay ahead of the mining difficulty wave. The total cost of all transaction fees is more or less = to the amount of money spent on mining hardware, as that price falls so dose the price needed to manipulate the network. If miners are not constantly reinvesting profits to buy new hardware then governments will gain control simply by waiting for our mining hardware to become antiquated. We should only raise the block size after transaction fees grow to a point where they become prohibitive to the growth of the network that inflection point will be around 1 to 5 USD per transaction. Again Bitcoin was never meant to be free. Freedom is not free and nether is Bitcoin.
When transactions hit the 1MB limit nothing will happen other then through natural selection, the higher transaction fees will start culling out the useless tiny transactions (spam) of the network.
I'm very interesting to see how would a fee market become if the blocks become full at 1MB. It seems many people are afraid of seeing that happen, but what if it makes bitcoin more valuable? Imagine that the mining fee per block becomes higher than 50 BTC, e.g. 0.0125btc per transaction for 4000 transactions per block at 1MB, and average transaction will be larger than 1 BTC to not feel the pain of fee. That is about 6 dollar per transaction at today's exchange rate, almost at the same level as today's international bank transfer fee, but still lower. So it won't impact two largest user group of bitcoin: Long term value store and international remittance However, the result of 50 BTC fee per block is: In a 4 years' period, half of the coins will be collected by miners. Currently many people do not trust bitcoin because they doubt that it is a pump and dump scheme: Early adopters sitting on millions of coins, making lots of campaigns to merchants and users in an effort to dump them to late adopters and profit. However, if late adopters can become a miner and process transactions for early adopters and collect equal amount of coins like early adopters, then this monetary system is much better balanced and will not result in inequality long term wise. Because mining is almost free entry for anyone, this will attract more users, more than a low fee will do In fact, this is already a concern when the next reward halving is coming, means over 75% of the coins have been mined. What would people do when a gold mine is depleted? Satoshi said that in future the block reward will be replaced by fees, but he did not mention how it can be done. If the block is always half-empty, then the fee per block will always be a small fraction of the block subsidy, which shrinks every 4 years |
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As far as the numbers, there's 8 bits in one byte. Therefore, a difference of 8 megabits in speed is one megabyte per second.
If block size is 8 MB, that's 8 seconds. Yet it takes 10 minutes to solve a block so 8/600.
Each node connects to 8 nodes, and each of these 8 nodes connect to another 8 nodes, and so on. But some of these connections are duplicated, so it will take several hop before a block is relayed to majority of the nodes, 4-5 hops maybe. When you have 8 seconds for a block transfer and the block verify time of 8 seconds, the nodes on the far end of the network would receive it in 80 seconds, which is a significant delay Let's first imagine the ideal bitcoin blockchain done by aliens: It takes 1 second to receive and verify each block, takes 1MB hard drive space, and can carry unlimited amount of transactions in 10 minutes Then you add those real world limitations on it and see which part you can compromise |
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I personally am a bit taken back by the current situation. Bitcoin has such promise. If a few reasonable changes were made, it COULD become a global currency, probably THE global currency. Honestly, it has everything going for it - a huge infrastructure buildout, pretty solid user base, good name recognition, almost 10 years of solid debugging and real world lab experience, and yet..... why the heck am I getting this impending sense of doom lately?
I am totally serious. I am totally shocked that this little Blockstream Player / Core-Dev group is so blind to what they are squandering, and at how strongly rebellion is brewing. Right now it would not take much for everyone to start running for the exits, or towards another solution. And we KNOW that other solutions are being worked on.
I have a feeling that bitcoin will eventually overcome all these difficulties and prove that a decentralized system has its own decision making intelligence In a centralized system like presidential election, nearly half of the people do not vote since they don't like any of those candidates or they don't care who rules. However the participants in a decentralized system all cares about the system development and running related issues, since these directly affect their own business This means every participants here are highly motivated to make the system better. Of course the definition of better varies drastically from person to person, but unless they can reach a major consensus, they are not going anywhere. They can just fork as they will, and their fork will become an alt-coin and value crash to almost nothing. So after several such try, they will eventually agree that consensus is the king, they will try to make compromise and try to listen to other's idea until they finally find a major consensus that everyone can live with It takes time to reach consensus. It is very easy to reach consensus on 1+1=2 since it does not take more than a few minutes to explain to the most illiterate person. But to reach consensus on if Segwit or 8MB block is a good idea, these are very time consuming task due to the complexity they involved, and it will take much longer time to reach agreement among all the major stake holders, maybe never. I guess only small changes have a chance to reach consensus |
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In most of this cases, the money comes from a hacked/stolen account
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Another example that people will trust non-blockchain solution is that they are not IT expert. I have friends who don't even know how to run a bitcoin client, but they trust me to handle it for them, it is enough
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i like to think outside of the box. and it seems that many people argue, if your not a XT supporter you must be a blockstream supporter.
which brings people to start a 'race war' about which community people belong to.
but think outside of the box and ask yourself,
in 2011 when mining was done on GPU, why wasnt there "security risks" and people crying when the average block went from 100kb to 200kb, when the average persons hard drive was 250gb
why in 2013 when mining was done by 60ghash miners and the blocks were 500kb average and peoples hard drives were 500gb average, that there was no big arguments?
why in 2016 where a 2TB hard drive is cheap enough for regular people to buy, suddenly there is a problem for even an increase of the blocklimit to 2mb.
It is already a pain to verify the blockchain at current block size, it can take hours to catch up if my qt client is 2 weeks behind. You can imagine that in future no one would be able to download and install bitcoin through a normal way since it takes forever to verify those historical blocks Most of the bitcoin data is generated in the latest 2-3 years, while in the beginning bitcoin core client was a super light application. If you don't put a limit on its growth, keep current trajectory, the grow will simply crash majority of the nodes in a couple of months. I think even a 2MB limit will be reached rather quick when we have another wave of rally at next reward halving, and still use blockchain to handle all types of transactions without prioritizing |
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Because a 100 btc transaction consumes exactly the same resource as a 0.01 btc transaction, it is a bad idea to put any transaction on the blockchain regardless of their value. It is socialism, not market based approach I think eventually there will be a fee market, low value transactions will go off chain. But that is a good thing, because you don't always need the 100% trust-less model that is provided by the bitcoin blockchain At what level do you need 100% trustless |
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