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Author Topic: Should we make more use of services offering off-chain transactions?  (Read 524 times)
Kprawn
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July 09, 2015, 06:30:10 AM
 #1

I see a lot of people complaining about Bitcoin's slow transaction per second rate. The debate about the bigger block size is on every forum and discussion.

This made me think about all these services that offer off-chain instant transaction processing. Examples Xapo / AsMoney etc. etc.

Do we really need to have ALL transaction on the blockchain?

Say we all use these services for the small transactions we do on a daily basis. {The coffee you buy, or the parking you paid for etc. etc.}

I do understand the need for people to have most of their bigger transactions on the blockchain, but for small purchases, these transactions can be handled off-chain.

For this to happen, people should approach these merchants and suggest the use of these services. I think most merchants would welcome instant transaction processing.

Do you think this is a workable solution to reduce the load on the blockchain? Let's have a open constructive discussion about this. Give some Pro's and Con's and challenges. 


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July 09, 2015, 02:05:49 PM
 #2

We'll need both LN and blocksize increase in the future. Once people start using offchain transactions more and it gets more tested, more people will follow. Right now, people don't feel safe. I mean we just had problems with people using nothing but Bitcoin Core. Its too early.

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Kprawn
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July 10, 2015, 05:34:54 AM
 #3

Why is it not safe? Xapo has one of the most safest "offline" storage of Bitcoins and I have not heard of anyone complaining that they lost money from these services.

You are not going to store your whole Bitcoins stash on there... You will only top it up weekly from your main account, to pay for the smaller things on a daily basis.

This will significantly reduce the risk of using these services. I do think this would become more popular as time goes by and people see the advantage of instant payments.

The solution is on the table, people just need to see it.  Wink

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July 10, 2015, 08:30:57 AM
 #4

Why is it not safe? Xapo has one of the most safest "offline" storage of Bitcoins and I have not heard of anyone complaining that they lost money from these services.

You are not going to store your whole Bitcoins stash on there... You will only top it up weekly from your main account, to pay for the smaller things on a daily basis.

This will significantly reduce the risk of using these services. I do think this would become more popular as time goes by and people see the advantage of instant payments.

The solution is on the table, people just need to see it.  Wink

1) only because it has never happened does not mean that it might not happen in the future, bitstamp was tagged as a safe initially, then you see a big chunk was stolen

2) if you store a small amount but the price of bitcoin rise(random big pump, certainly possible), then you might lose much more than you think, still low chances of this to happen, but not zero...

besides this i find the off-chain transaction for small things quite a good idea
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July 10, 2015, 12:54:48 PM
 #5

Why is it not safe? Xapo has one of the most safest "offline" storage of Bitcoins and I have not heard of anyone complaining that they lost money from these services.

You are not going to store your whole Bitcoins stash on there... You will only top it up weekly from your main account, to pay for the smaller things on a daily basis.

This will significantly reduce the risk of using these services. I do think this would become more popular as time goes by and people see the advantage of instant payments.

The solution is on the table, people just need to see it.  Wink

1) only because it has never happened does not mean that it might not happen in the future, bitstamp was tagged as a safe initially, then you see a big chunk was stolen

2) if you store a small amount but the price of bitcoin rise(random big pump, certainly possible), then you might lose much more than you think, still low chances of this to happen, but not zero...

besides this i find the off-chain transaction for small things quite a good idea

Seems like off chain transactions would be necessary to most places to take btc and feel confident about it.  This would solve a major usability issue it they can take all payments off-chain, and then have them pushed to the chain in batches
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July 10, 2015, 02:16:56 PM
 #6

Off chain transactions are nothing more than private accounting systems. First, you have to trust the private system you are using. Second, they are centrally controlled. Third, no actual btc is changing hands. These are all fine and won't cause any problems when used for certain purposes. ChangeTip is a good example of one that works because it's for very small amounts of btc that normally wouldn't be processed because it's too expensive. You need to be careful when deciding which off chain service to trust. As you're probably aware, the "trust me, I won't steal from you" idea hasn't worked real well in the past.

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July 10, 2015, 02:17:42 PM
 #7

I believe Off chain transaction is a good solution to unload the burden of the network! But I doubt any institution wins enough trust from bitcoiners. So at the moment off chain transactions may not be popular! But some merchants are accepting bitcoin payment, not require to wait one congirmation time based on trust, like restaurant, coffee shop etc. It at some extent resolves this issues! I don't think this is best solution at the moment.

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July 10, 2015, 02:46:03 PM
 #8

I believe Off chain transaction is a good solution to unload the burden of the network! But I doubt any institution wins enough trust from bitcoiners. So at the moment off chain transactions may not be popular! But some merchants are accepting bitcoin payment, not require to wait one congirmation time based on trust, like restaurant, coffee shop etc. It at some extent resolves this issues! I don't think this is best solution at the moment.

Bitcoiners represent 0.01% of the population, institutions don't need to win their trust per se to be successful. The average person is much more tolerant with off-chain transactions.

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July 10, 2015, 03:21:34 PM
 #9

Offchain transaction doesn't provide the necessary transparency that Bitcoin can. The trust needed for the service is huge and historically, some of those companies ends up being a scam. Offchain transactions can be faked by the operator easily and they can also be reversed. It is basically just like a bank.














 

 

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QuestionAuthority
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July 10, 2015, 06:12:43 PM
 #10

Offchain transaction doesn't provide the necessary transparency that Bitcoin can. The trust needed for the service is huge and historically, some of those companies ends up being a scam. Offchain transactions can be faked by the operator easily and they can also be reversed. It is basically just like a bank.

That's exactly right. In fact, you could technically use it for fractional reserve banking of btc.

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July 10, 2015, 07:44:20 PM
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Offchain transaction doesn't provide the necessary transparency that Bitcoin can. The trust needed for the service is huge and historically, some of those companies ends up being a scam. Offchain transactions can be faked by the operator easily and they can also be reversed. It is basically just like a bank.

That's exactly right. In fact, you could technically use it for fractional reserve banking of btc.

Oh no, not fractional banking Sad  Banks are all scams and we all pay for it in the end.  But I think that off-chain transactions are inevitable.  I hope that fractional reserve is not.
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