Bitcoin is a revolutionary currency but a fairly inefficient payment network

[Kakmakr]

Visa is used as a example of a efficient payment network, but they have been around for 55 years. PayPal have been doing this for 18 years. Now, we want to compare Bitcoin that has been around for +/- 7 years with those kinds of payment options? Bitcoin are not funded like a corporate entity, it's network has been growing through decentralized contributions by the public and Open Source development through public participation governed by public consensus.

Let's leave Franky to discuss the merit of the scaling solutions being developed and how bigger blocks will solve the problems. ^smile^

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[franky1]

But isn't it true to a point that the blockchain would be too large and that it will make it harder for people to run a node? The storage problem could be stored. But what about the bandwidth problem?

this is where doomsday theories rather than rational thought comes in.
some want 4mb (core) some want more. some want onchain some want 100% use offchain. thats where compromises come in and finding the acceptable level.
this "terrabyte block" doomsday has been shot out the park last year. the current compromise is 2mb bas 4mb weight.
the everthing has to be offchain has been shot out the park. the current compromise is expand onchain and allow offchain for freedom of choice.
i dont know why anyone is talking about terrabytes, apart from the doomsdayers who want to twist the future to distract the present
i dont know why anyone is talking about only offchain will work, apart from the doomsdayers who want to twist the future to distract the present

there is a balance. a compromise. and although some are presenting 8,6,32 proposals now..
i personally feel 2mb base 4mb weight is a good compromise everyone could agree with, and everyone gets what they want.. IF they put their political party ambitions aside.

forcing false doomsdays to coerce people offchain,(even done subtly) causes less people to want to become nodes(for security). less reason to want to become miners(for security). and turns bitcoin into a less secure system.
thus moving people to sidechains permanently the agenda. (much like "realbitcoins" rhetoric last year involving the altcoin NXT being bitcoin 2.0)

bitcoin needs to continue having an open and fair choice to continue doing onchain transactions for the immutable security. or offchain for the faster convenience.
there should not be an all or nothing debate.(though blockstreamers want all or nothing)

bitcoin is an open network that should have no barriers of entry and no dictatorship in central authority. this should not change.
by barrier of entry i mean. today sticking with 1mb blocks is a barrier to entry. jumping to obscene block sizes of "terrabytes" is a barrier of entry
thus a safe and workable compromise and agreement by the community is the best option to continue bitcoins ethos.

I also want to know your opinion what a Bitcoin hard fork would look like. I am afraid that it might happen just like what happened to Ethereum. The blockchain splits and now we have 2 chains competing against each other. Will it not slow down Bitcoin's adoption if this happens? I believe Roger Ver said something like if it happens then it happens, and he acted as if it was not a big deal.

If Bitcoin Unlimited "wins", what will happen to the core developers?

there is misunderstandings and our misrepresenting of what a hard fork is.
ethereum was not a consensus hard fork it was a controversial fork.
ethereum bypassed consensus orphaning mechanism and literally banned communicating with nodes of different rules to avoid orphaning the minority. "--oppose-dao-fork"
it is actually Gmaxwell of blockstream that proposed that BU should split, rather than use the consensus mechanism which BU(ver) wants.

a consensus mechanism is what the community want to happen. rather than a dictatorial split.
consensus, everyone wins and everyone continues.
controversial, dictator wins and everyone else f**ks off

[franky1]

Visa is used as a example of a efficient payment network, but they have been around for 55 years. PayPal have been doing this for 18 years. Now, we want to compare Bitcoin that has been around for +/- 7 years with those kinds of payment options? Bitcoin are not funded like a corporate entity, it's network has been growing through decentralized contributions by the public and Open Source development through public participation governed by public consensus.

Let's leave Franky to discuss the merit of the scaling solutions being developed and how bigger blocks will solve the problems. ^smile^

better to compare bitcoin now to visa 'XX' years ago and paypal 'X' years ago. (when thinking about user adoption)
then in a few years compare bitcoin then to visa 'TX' years ago and paypal 'T' years ago. (when thinking about user adoption)

trying to assume bitcoin has 1billion users right now is a flaw. and a rhetoric to push an agenda
much like trying to say cars should fly now, because in 50 years, x,y,z

bitcoin wont have 1billion users any time soon. so judgements today should be thinking about short term future. and revisit the judgement later when the reality of the future can be seen rationally. rather than 10-100 year hypotheticals, and doomsdays, which delay rational short term goals.

judgement should be made on reality and scope of logical and rational proposals that are not due purely to economics and politics. but rather bitcoins utility and security

[Pursuer]

Bitcoin is a revolution currency but bitcoin is a fairly inefficient payment network. The latter is a perfectly fine consequence of the former. If people turn this on its head and try to market bitcoin as a payment rail where the currency is an unfortunate requirement, it would be immediately out competed in the market by better payment systems which are fundamentally more scalable than the decentralized Bitcoin system or which don't require costly and unpredictable currency conversion.

I only see the benefits of using bitcoin as a payment network rather than seeing the negative only. and yes I am aware of the problems. but when it comes to choosing between using another payment processor like paypal, other online processor, a credit card, bank transfer and ... I will always choose bitcoin because it is decentralized, I wouldn't have to pay large fees and many more.

and yes bitcoin can not handle the large number of transactions because of the small block size issue but right now there is not much transactions to be left out (unconfirmed and waiting)

[tenk]

For now, it's inefficient because there is only a few establishement, website, etc. that accepts bitcoin as payment. I think Bitcoin has not yet been recognized by the majority of the world's population, and I feel that this is why most payments have not yet accepted bitcoin as a method of payment. But, if Bitcoin does ever get a major player to make use of it as a payment method, this would boost its popularity and usage.

For example, if bitcoin were implemented as a payment method of Amazon. For sure, Bitcoin will be recognized by the world and most probably will improve its usage and thus will now result in it becoming a standard payment method like Visa, MasterCard or PayPal. If that happens, Bitcoin will surely be a more efficient payment method.

[Snorek]

For now, it's inefficient because there is only a few establishement, website, etc. that accepts bitcoin as payment. I think Bitcoin has not yet been recognized by the majority of the world's population, and I feel that this is why most payments have not yet accepted bitcoin as a method of payment. But, if Bitcoin does ever get a major player to make use of it as a payment method, this would boost its popularity and usage.

For example, if bitcoin were implemented as a payment method of Amazon. For sure, Bitcoin will be recognized by the world and most probably will improve its usage and thus will now result in it becoming a standard payment method like Visa, MasterCard or PayPal. If that happens, Bitcoin will surely be a more efficient payment method.

Bitcoin is not yet recognized by most people - and I think we should be grateful for that. Why? Because bitcoin is not ready for mainstream adoption.
Just look at community - constantly fighting over everything: LighningNetwork is not pure bitcoin, then it is not good, 2MB is the only true BTC, 4 MB is the future etc.
Everyone has their own opinion and will fight for it and we can't achieve progress, meanwhile Vitalik has no problems with forcing Hard Forks every month...

[ObscureBean]

For as long as Bitcoin remains headstrong about centralization, it will remain an inefficient payment network. Centralization and decentralization both have advantages and disadvantages, without concessions maximum efficiency can never be reached. In a uniform world where everyone is equal, there would be no need to integrate any form or centralization into the design. But people are not equal, hardware is not the same, bandwidth is not the same, storage is not the same, income is not the same. The ironic thing is that while the war against centralization rages on, Bitcoin is already getting centralized on some levels (and not in a good way), seemingly without anyone noticing.

[gembira]

For as long as Bitcoin remains headstrong about centralization, it will remain an inefficient payment network. Centralization and decentralization both have advantages and disadvantages, without concessions maximum efficiency can never be reached. In a uniform world where everyone is equal, there would be no need to integrate any form or centralization into the design. But people are not equal, hardware is not the same, bandwidth is not the same, storage is not the same, income is not the same. The ironic thing is that while the war against centralization rages on, Bitcoin is already getting centralized on some levels (and not in a good way), seemingly without anyone noticing.

I'm so amazed with your opinion in this regard,the extent of the bitcoin when applied in a good Government? is it going to reduce crimes like corruption

[Golftech]

For as long as Bitcoin remains headstrong about centralization, it will remain an inefficient payment network. Centralization and decentralization both have advantages and disadvantages, without concessions maximum efficiency can never be reached. In a uniform world where everyone is equal, there would be no need to integrate any form or centralization into the design. But people are not equal, hardware is not the same, bandwidth is not the same, storage is not the same, income is not the same. The ironic thing is that while the war against centralization rages on, Bitcoin is already getting centralized on some levels (and not in a good way), seemingly without anyone noticing.

I'm so amazed with your opinion in this regard,the extent of the bitcoin when applied in a good Government? is it going to reduce crimes like corruption

oh well if handled correctly maybe yes but its still have many downfall since its anonymous it an use in the other way around.

[TastyChillySauce00]

For as long as Bitcoin remains headstrong about centralization, it will remain an inefficient payment network. Centralization and decentralization both have advantages and disadvantages, without concessions maximum efficiency can never be reached. In a uniform world where everyone is equal, there would be no need to integrate any form or centralization into the design. But people are not equal, hardware is not the same, bandwidth is not the same, storage is not the same, income is not the same. The ironic thing is that while the war against centralization rages on, Bitcoin is already getting centralized on some levels (and not in a good way), seemingly without anyone noticing.

I'm so amazed with your opinion in this regard,the extent of the bitcoin when applied in a good Government? is it going to reduce crimes like corruption

oh well if handled correctly maybe yes but its still have many downfall since its anonymous it an use in the other way around.

bitcoin is defintely pseudo-anonymous,or maybe some people here even said the most transparent currency ever,it's always publishing every transaction / saving and can be easily accessed through blockchain explorer so it's definitely not anonymous at all

[ObscureBean]

For as long as Bitcoin remains headstrong about centralization, it will remain an inefficient payment network. Centralization and decentralization both have advantages and disadvantages, without concessions maximum efficiency can never be reached. In a uniform world where everyone is equal, there would be no need to integrate any form or centralization into the design. But people are not equal, hardware is not the same, bandwidth is not the same, storage is not the same, income is not the same. The ironic thing is that while the war against centralization rages on, Bitcoin is already getting centralized on some levels (and not in a good way), seemingly without anyone noticing.

I'm so amazed with your opinion in this regard,the extent of the bitcoin when applied in a good Government? is it going to reduce crimes like corruption

True decentralization can only exist in a system where there is no concept of more/less/better/bad etc, a system where everyone/everything is truly equal. The entire human world is based on centralization, whether it be the government, banks, social class, groups of friends or just human selfishness. So striving for true decentralization is a delusional fool's errand, it's mathematically impossible.
A mergence between the blockchain technology and the current system is the best move going forward, however for it to truly benefit everyone it needs to be acknowledged as such by all parties.
The blockchain is the only invention to date that has the power to significantly change the human world on a global scale.
Nothing of what I've said here assumes a 'good' government, such a thing can never exist.

[Carlton Banks]

True decentralization can only exist in a system where there is no concept of more/less/better/bad etc, a system where everyone/everything is truly equal.

Everyone and everything is equal? You're confusing decentralisation with communism somehow, that would involve a redistributing the coins so that everyone/everything is truly equal, right?

The entire human world is based on centralization, whether it be the government, banks, social class, groups of friends or just human selfishness. So striving for true decentralization is a delusional fool's errand, it's mathematically impossible.

I think you mean "observationally impossible". Just because you can't perceive decentralised systems functioning in the real world, doesn't mean it isn't happening. Imagination failures are not everyone else's responsibility, they're yours. And where's this so-called math you're referring to?

A mergence between the blockchain technology and the current system is the best move going forward, however for it to truly benefit everyone it needs to be acknowledged as such by all parties.

Someone call a taxi for this guy

The blockchain is the only invention to date that has the power to significantly change the human world on a global scale.

That's because of the decentralised nature of the network, not in spite of it.

Nothing of what I've said here assumes a 'good' government, such a thing can never exist.

So you don't have faith in centralised systems.... except you do have faith in centralised systems?! What?

[ObscureBean]

True decentralization can only exist in a system where there is no concept of more/less/better/bad etc, a system where everyone/everything is truly equal.

Everyone and everything is equal? You're confusing decentralisation with communism somehow, that would involve a redistributing the coins so that everyone/everything is truly equal, right?

My bad, perhaps I should've gone a bit deeper into this one (although deeper might be too deep).
First off, I'm not talking about communism and no I'm not insinuating coin redistribution either. By truly equal I mean people exactly they way they are now, except that there is no appointed entity to oversee/define equality on a global or personal level. Such a system would have no awareness of the equality that prevails within itself.

The blockchain is the only invention to date that has the power to significantly change the human world on a global scale.

That's because of the decentralised nature of the network, not in spite of it.

No, transparency and unalterable ledger first, then decentralized nature since the decentralization is not pure. It if was pure then transparency and unalterable ledger would be redundant.

[~Bitcoin~]

The problem related to price volatility will be solved as soon as bitcoin marketcap will be around 50% of total online payment processor so i think bitcoin can be efficient payment network in future. However even price volatility doesn't matter if you are merchant and have fear regarding getting less than expected as there are services like bitpay which directly converts your bitcoin to fiat if you like to receive payment in fiat.

Gold price would also be so volatile if it doesn't had this high marketcap, and bitcoin is also GOLD of new era which need few more years to get more investors and holders and we may see quite stable price.

[Doamader]

Well sure bitcoin has a problem that is those payment delay, but i do believe the system is amazing, you can send and use your money anytime without limits, taking those into consideration, the time that takes to confirm a transaction means nothing atleast for me, sure bitcoin might and will improve those, it has potencial besides that, bitcoin is a strong currency with huge and unlimited power, meaning no one knows what may happen with the value in the future, i do believe bitcoin will be and its already the DIGITAL GOLD.

[randy8777]

The problem related to price volatility will be solved as soon as bitcoin marketcap will be around 50% of total online payment processor so i think bitcoin can be efficient payment network in future. However even price volatility doesn't matter if you are merchant and have fear regarding getting less than expected as there are services like bitpay which directly converts your bitcoin to fiat if you like to receive payment in fiat.

Gold price would also be so volatile if it doesn't had this high marketcap, and bitcoin is also GOLD of new era which need few more years to get more investors and holders and we may see quite stable price.

the point with gold and its stability comes from the fact that countries own the far majority of all the gold in the world. and i am not only talking about the publicly known gold stash. these countries need gold to remain stable in order to maintain the value of their assets at a certain level. bitcoin doesn't, and will never have this kind of support. volatility will always be a part of bitcoin, no matter what the market cap is.

[franky1]

The problem related to price volatility will be solved as soon as bitcoin marketcap will be around 50% of total online payment processor so i think bitcoin can be efficient payment network in future. However even price volatility doesn't matter if you are merchant and have fear regarding getting less than expected as there are services like bitpay which directly converts your bitcoin to fiat if you like to receive payment in fiat.

Gold price would also be so volatile if it doesn't had this high marketcap, and bitcoin is also GOLD of new era which need few more years to get more investors and holders and we may see quite stable price.

the point with gold and its stability comes from the fact that countries own the far majority of all the gold in the world. and i am not only talking about the publicly known gold stash. these countries need gold to remain stable in order to maintain the value of their assets at a certain level. bitcoin doesn't, and will never have this kind of support. volatility will always be a part of bitcoin, no matter what the market cap is.

not sure why this has turned into a market valuation of gold debate. but.
the stability of gold is actually based on 2 things
1. the reserves of a country are known. unlike a bitcoin exchange that does not show the reserves and there are definitely not all ~16mill coins are on exchanges, thus supply metric cant be fixed/known very well in bitcoin
2. the countries are mainly day trading each other where fractions of a percent are profitable trades. so everyone is happy using bots to trade in fractions of a percent.
3. when you see larger blips(over 1%) in the price this is where large selloffs/buyups from country to country occur where one country has alot less in their reserve. and another has more which is something again that cannot be seen clearly on bitcoin exchanges.

some say the gold market is more stable.. i say its more predictable.

but with all that said the price of gold has nothing to do with bitcoins utility, security. so we should not compare bitcoin and gold especially when talking about bitcoins utility

[Dabs]

According to Blockchain.info the estimated transaction volume over the last 24 hours was about 343,500 BTC, and the total mining revenue was 2000 BTC.  The cost of the Bitcoin payment system is about 0.6% of transaction volume.

Visa's yearly transaction volume is about $3300 billion, while its revenue is about $14 billion. The cost of the Visa network is about 0.4% of transaction volume.

Visa is currently more efficient than Bitcoin, but I expect that to change in the future.

Can you look at the estimated transaction volume over the last 365 days instead of just 24 hours? You are comparing 1 day to 1 year, maybe you should compare a longer time frame such as 30 days, for both Visa and Bitcoin.

[odolvlobo]

According to Blockchain.info the estimated transaction volume over the last 24 hours was about 343,500 BTC, and the total mining revenue was 2000 BTC.  The cost of the Bitcoin payment system is about 0.6% of transaction volume.

Visa's yearly transaction volume is about $3300 billion, while its revenue is about $14 billion. The cost of the Visa network is about 0.4% of transaction volume.

Visa is currently more efficient than Bitcoin, but I expect that to change in the future.

Can you look at the estimated transaction volume over the last 365 days instead of just 24 hours? You are comparing 1 day to 1 year, maybe you should compare a longer time frame such as 30 days, for both Visa and Bitcoin.

Eyeballing the graphs for the last 60 days, the average daily mining revenue is still about 2000 BTC/day, but the average estimated transaction volume is about 220,000 BTC/day, so the rate over the last 60 days is about 0.9%

It is always interesting to note that most of the transaction costs are paid by the holders (and hodlers) of bitcoin in the form of inflation, and not the users.

[countryfree]

To my eyes, efficiency questions relate to energy. So we would need to calculate how much energy is needed to confirm a transaction to verify the claim. Then to make a comparison, we would need to find out how much energy Visa or Paypal needs to validate a transaction.

I'm afraid I can't answer the question...