Why I am now not enthused about increasing the block size

[CIYAM]

There has been quite a bit of bad news lately in regards to Bitcoin as a payment system and frankly I'm not at all surprised (I've always thought that Satoshi really hadn't quite thought this aspect through very well).

Although the blockchain invention is perhaps the most significant thing since HTTPS for the internet, Bitcoin as a payment system really doesn't work very well (and I was trying to use it myself for this purpose over the last few years but have basically given up now).

Apart from the slow confirmation times and the low TPS issues - for any average consumer what is the benefit of making an irreversible payment?

Adding to that the complexity of merchants having to deal with txs that may never confirm due to minimum fees with full blocks you simply don't see anything even vaguely threatening to the likes of VISA or Mastercard.

I've already stated that Bitcoin should be focused on the remittance market and as a potential replacement for SWIFT (as it is a very good fit for both of those) but still some people just seem to think that Bitcoin won't have "made it" until they can buy a coffee with it (and most of the people who are saying this are people who probably don't even have enough BTC to buy much more than one coffee).

Now I've thought about it more I think that those pushing for very large block sizes really are rather confused as to what they think this will achieve. If you can't reverse your payment (due to say not getting something delivered) then why would any online purchaser prefer to use Bitcoin (and talking about escrows is just silly as people don't use escrows when normally purchasing things with credit cards as they don't need to - you can generally just complain to your credit card provider and the merchant will lose out which is what most consumers prefer).

What Bitcoin can do *now* is act as a store of value (and is about the most superior such thing apart from the volatility which in recent months seems to be a lot less which is appealing to those wishing to use it for this purpose) so I think that it is far more important for the project to focus on this strength (and its potential to disrupt the remittance market) than on replacing existing payment systems (other than as a person to person payment system which is another great strength that it has).

[Mickeyb]

I've read throughly your post and I have noticed that you have stated at least 5 strong use cases for Bitcoin. You have also stated the one pessimistic use case and that is the mass payments for buying a cup of coffee for example.

I am happy about the other 5 use cases that have a lot of potential according to you. If we would be able to win some market cap in some of those 5 use cases, there is no doubt in my mind that Bitcoin would be huge.

Now about mass payment. More I read about the block size increase problem, more I came to a conclusion that the right, perfect solution is very hard to find. Might be that in the end, because we can't find a perfect solution, we will have to opt out for the best possible solution. I see it here that we might drop the mass payment system as you have advised. Especially if we will have to choose between performance (more TPS) and security. Of course if we don't find some miracle solution that will make both worlds happy.

I repeat, even if we drop the mass payment feature, I think that Bitcoin still could have amazing future.

[brg444]

I've read throughly your post and I have noticed that you have stated at least 5 strong use cases for Bitcoin. You have also stated the one pessimistic use case and that is the mass payments for buying a cup of coffee for example.

I am happy about the other 5 use cases that have a lot of potential according to you. If we would be able to win some market cap in some of those 5 use cases, there is no doubt in my mind that Bitcoin would be huge.

Now about mass payment. More I read about the block size increase problem, more I came to a conclusion that the right, perfect solution is very hard to find. Might be that in the end, because we can't find a perfect solution, we will have to opt out for the best possible solution. I see it here that we might drop the mass payment system as you have advised. Especially if we will have to choose between performance (more TPS) and security. Of course if we don't find some miracle solution that will make both worlds happy.

I repeat, even if we drop the mass payment feature, I think that Bitcoin still could have amazing future.

This is a false dichotomy. The mass payment feature will not be "dropped", it will be served by second-level open-source payment layers.

[Mickeyb]

I've read throughly your post and I have noticed that you have stated at least 5 strong use cases for Bitcoin. You have also stated the one pessimistic use case and that is the mass payments for buying a cup of coffee for example.

I am happy about the other 5 use cases that have a lot of potential according to you. If we would be able to win some market cap in some of those 5 use cases, there is no doubt in my mind that Bitcoin would be huge.

Now about mass payment. More I read about the block size increase problem, more I came to a conclusion that the right, perfect solution is very hard to find. Might be that in the end, because we can't find a perfect solution, we will have to opt out for the best possible solution. I see it here that we might drop the mass payment system as you have advised. Especially if we will have to choose between performance (more TPS) and security. Of course if we don't find some miracle solution that will make both worlds happy.

I repeat, even if we drop the mass payment feature, I think that Bitcoin still could have amazing future.

This is a false dichotomy. The mass payment feature will not be "dropped", it will be served by second-level open-source payment layers.

You mean Bitcoin lightning network and sidechains, right?

Like I said, I hope some miracle solutions will be derived so we can have the best of both worlds!

[brg444]

I've read throughly your post and I have noticed that you have stated at least 5 strong use cases for Bitcoin. You have also stated the one pessimistic use case and that is the mass payments for buying a cup of coffee for example.

I am happy about the other 5 use cases that have a lot of potential according to you. If we would be able to win some market cap in some of those 5 use cases, there is no doubt in my mind that Bitcoin would be huge.

Now about mass payment. More I read about the block size increase problem, more I came to a conclusion that the right, perfect solution is very hard to find. Might be that in the end, because we can't find a perfect solution, we will have to opt out for the best possible solution. I see it here that we might drop the mass payment system as you have advised. Especially if we will have to choose between performance (more TPS) and security. Of course if we don't find some miracle solution that will make both worlds happy.

I repeat, even if we drop the mass payment feature, I think that Bitcoin still could have amazing future.

This is a false dichotomy. The mass payment feature will not be "dropped", it will be served by second-level open-source payment layers.

You mean Bitcoin lightning network and sidechains, right?

Like I said, I hope some miracle solutions will be derived so we can have the best of both worlds!

Lightning network, voting pools, open source payment systems (Strawpay). It doesn't need to be a miracle. These tools are there already, technologists doing what they do, they will find solution to these problems.

[NorrisK]

Regarding the masses not wanting a payment option that is irreversible: What about cash? That is just as irriversible as bitcoin and we use it every day.

I don't think it will be a big problem, and feedback will play an even bigger role for webshops.

[brg444]

Regarding the masses not wanting a payment option that is irreversible: What about cash? That is just as irriversible as bitcoin and we use it every day.

I don't think it will be a big problem, and feedback will play an even bigger role for webshops.

I don't know anyone that uses cash for internet transactions.

The "mainstream" crowd everyone apparently targets has exactly zero incentive to use irreversible payments over the internet.

[ronald98]

There are times I want to buy a cheap piece of equipment from China from the very cheapest supplier, which is often a site like bestofferbuy or banggood. I wouldn't trust those sites with my credit card details, but I would be prepared to risk buying from them using Bitcoin because they are often the cheapest choices. The equipment they sell is often cheaper than a cup of coffee. If they started accepting payment in Bitcoin it could boost their sales and possibly increase Bitcoin's transaction volume above the point where it needs bigger blocks.

[iluvbitcoins]

for any average consumer what is the benefit of making an irreversible payment?

It benefits the seller, not the buyer

Though, I'm not selling anything

And I got 160$ limited on PayPal for 180 days, so yeah, I like that bitcoin is irreversible

Main benefit of bitcoin is that it's all yours, no one can take it away from you, once you have it, you have it

There's no PayPal who can limit you for no reason ( *see here* ), there's no scammer who can perform a chargeback, there's no scammer who can fake unauthorized access, there's no goverment who can seize it (well, if you encrypt it and store it properly   )
You can rest in peace once you get it, god forbid you sell digital goods with PayPal, would be safe to assume if you got 200$ on your balance you would get 40 after 6 months  

[brg444]

There are times I want to buy a cheap piece of equipment from China from the very cheapest supplier, which is often a site like bestofferbuy or banggood. I wouldn't trust those sites with my credit card details, but I would be prepared to risk buying from them using Bitcoin because they are often the cheapest choices. The equipment they sell is often cheaper than a cup of coffee. If they started accepting payment in Bitcoin it could boost their sales and possibly increase Bitcoin's transaction volume above the point where it needs bigger blocks.

Don't get me wrong this will happen, I'm not saying either that Biticoin doesn't hold great promises as a transactional currency but we are not there yet.

[brg444]

for any average consumer what is the benefit of making an irreversible payment?

It benefits the seller, not the buyer

Though, I'm not selling anything

And I got 160$ limited on PayPal for 180 days, so yeah, I like that bitcoin is irreversible

unfortunately, "the customer is always right" 

[iluvbitcoins]

for any average consumer what is the benefit of making an irreversible payment?

It benefits the seller, not the buyer

Though, I'm not selling anything

And I got 160$ limited on PayPal for 180 days, so yeah, I like that bitcoin is irreversible

unfortunately, "the customer is always right"  

The problem here is I'm the fucking customer

( *see here for further info* )

[ashour]

The problem with bitcoin as a payment method is it's transaction time, you have to wait around 10 minutes before you receive 1 confirmations. But with credit cards the seller instantly receives his money.

[Nancarrow]

I've never understood why those against increasing the blocksize *insist* that their opponents are always about "paying for cups of coffee".

Not all consumer transactions are in the $1-$3 range. Strange to relate, but many things that people want to buy cost MORE than three dollars. Sometimes a lot more.
Why should an advocate of bitcoin-as-payment-network, concerned about their future ability to buy

a) a computer game,
b) the week's groceries,
c) a laptop PC,
d) their monthly mortgage/rent/utilities,
e) a used car,
f) a new car,
g) a mansion on a tropical island,

with bitcoins, always have to defend their stance as if they were talking about cups of coffee?

I look forward to a day when I can pay at least items in the categories (b) and (d) using Bitcoin. But no, ignore *everything* I just said, I JUST WANT TO BUY CUPS OF COFFEE.

Why do this?

If you advocate for small blocks you are not only forcing three-dollars transactions off the chain. You're going to restrict thousand-dollar transactions too, they'll just drop off the chain a little later. If you're fine with that, have the basic intellectual integrity to declare that you are. Don't distort the debate with frankly stupid memes about cups of coffee. CIYAM, can't say I know you that well but you seem like a decent sort and I'm surprised you'd frame things that way.

I agree with you that the benefits of BTC to purchasers have been oversold. One benefit though, is that if Bitcoin reduces payment processing costs for merchants, consumers should see these passed on as discounts on their purchases. But of course that relies on merchants passing on at least some of their savings, which too few are prepared to do.
Of course I understand shoestring operations may not be able to - if they're just baaaaarely above water with credit card processing fees, they're not going to get to hookers-and-blow territory when they accept BTC. But mortgage lenders, utility companies, supermarkets - they seem to me to be good examples of sectors which (a) can afford to pass savings on to consumers, and (b) will pretty much have to, to stay competitive, at least once the first snowball starts rolling.

[gentlemand]

The problem with bitcoin as a payment method is it's transaction time, you have to wait around 10 minutes before you receive 1 confirmations. But with credit cards the seller instantly receives his money.

Merchants have to wait a long ass time to receive the actual cash from the card company. It gives the illusion of being instant but it's the merchant who has to swallow the wait.

[christycalhoun]

The problem with bitcoin as a payment method is it's transaction time, you have to wait around 10 minutes before you receive 1 confirmations. But with credit cards the seller instantly receives his money.

Merchants have to wait a long ass time to receive the actual cash from the card company. It gives the illusion of being instant but it's the merchant who has to swallow the wait.

This is true. Also keep in mind that the merchants also face the risk of chargebacks and frozen funds. It can bee a nightmare.

[CIYAM]

I've never understood why those against increasing the blocksize *insist* that their opponents are always about "paying for cups of coffee".

Honestly it has been exactly "cups of coffee" that many of the large block size proponents have been using as their own mantra (this particular use case certainly didn't start with me).

In any case I am referring to small payments that currently you would be far more likely to be using a credit card and for which reversibility is something that one would want without much hassle (you don't want to have to involve a lawyer to get back 10 dollars from a bad merchant).

Again for person to person transactions Bitcoin works extremely well (I have purchased Bitcoins for RMB in the past for people that had visited China a few years back).

[franky1]

I've never understood why those against increasing the blocksize *insist* that their opponents are always about "paying for cups of coffee".

Honestly it has been exactly "cups of coffee" that many of the large block size proponents have been using as their own mantra (this particular use case certainly didn't start with me).

In any case I am referring to small payments that currently you would be far more likely to be using a credit card and for which reversibility is something that one would want without much hassle (you don't want to have to involve a lawyer to get back 10 dollars from a bad merchant).

Again for person to person transactions Bitcoin works extremely well (I have purchased Bitcoins for RMB in the past for people that had visited China a few years back).

most things like cups of coffee in starbucks wont need confirms or reversibility.. because the coffee buyer can slap the barrista in the face with a wet fish if the customer doesnt get their coffee after payment.

but if your talking about a $4 keyboard and mouse from some chinese supplier.. then thats slightly different.
that being said the news has reported that silk road alone has done millions of small transactions even with nefarious merchants and there hasnt really been a problem with the buyer-seller relationship.

so buying a snickers in a walmart or a coffee in starbucks is no issue at all. they have their own codes of conducts which protect customers no matter the currency. the only issue is the 'stranger danger' transactions with people thousands of mile away.

[CIYAM]

most things like cups of coffee in starbucks wont need confirms or reversibility.. because the coffee buyer can slap the barrista in the face with a wet fish if the customer doesnt get their coffee after payment.

Actually in the specific case of something like a cup of coffee it is the vendor who will be taking a big risk if blocks are near to full (be they 1MB or 10MB) as there are multiple threads about txs that never confirm.

How hard would it be to write a simple little wallet that purposely crafts txs that won't confirm (before they are dropped from the mempool)?

As soon as that kind of thing is reported (assuming it does occur) then you will see merchants spooked and stop offering Bitcoin as a payment option (which is also why I don't see any urgency to push for Bitcoin to be used as a general purpose payment system).

[franky1]

most things like cups of coffee in starbucks wont need confirms or reversibility.. because the coffee buyer can slap the barrista in the face with a wet fish if the customer doesnt get their coffee after payment.

Actually in the specific case of something like a cup of coffee it is the vendor who will be taking a big risk if blocks are near to full (be they 1MB or 10MB) as there are multiple threads about txs that never confirm.

How hard would it be to write a simple little wallet that purposely crafts txs that won't confirm (before they are dropped from the mempool)?

As soon as that kind of thing is reported (assuming it does occur) then you will see merchants spooked and stop offering Bitcoin as a payment option (which is also why I don't see any urgency to push for Bitcoin to be used as a general purpose payment system).

Ciyam.. as you are a person who was involved in the blockchain.info project, im certain that even you know that offchain tx's is a very easy thing to impliment, to send tx's instantly between users without touching the actual blocks..

after all people dont do bank transfers for a cup of coffee using swift. they use third party services such as visa. so offchain is a solution.
why do you think apple now want you to pay with applepay for itunes.. because its alot easier then asking for 70c from visa everytime..

secondly its easy to check a receiving TX, see what address it came from and check if the originating funds already have confirms to not delay things in regards to the new tx the shop just received.. plus if your going to do it. you would also push the TX to all the miners, just incase the customer has only pushed it to a explorer service nodes in attempt to try look like its been received but still not quite entered the mempool of miners.

im kind of surprised your coming up with these objections, especially with your experience