I would point out that a 2 input, 2 output transaction will cost about $0.56 to get confirmed in the next block with near certainty. If you assume that a merchant pays (and passes along the costs of) 3% for accepting a credit card payment, then the cost of using a credit card will be the same as using Bitcoin for a ~$18.70 transaction -- this means it is currently cheaper to use a credit card than Bitcoin for transactions under this economic size. I would certainly not call $20 (or $18.70) a "micro-transaction".
I will assume that your facts here are generally correct that currently bitcoin is not economically competitive for transactions of $20 or less as compared with credit cards or other similar payment competitor processes.
My assumptions were that a transaction would have two inputs and two outputs, and would pay a fee that actively outbid other transactions waiting for confirmation. It assumes that the merchant is not using a payment processor (like BitPay/Coinbase/ect., which would likely cause the tx fee to double (the transactions would likely require a second transaction), and the payment processor would generally want to take a 1% cut (what I can tell is the market rate for BTC payment processors).
Yes. i already assumed your underlying facts to be true, even though you are adding additional layers of complexity that don't really matter too much. People will decide which one of those to use and whether to use any of those various processors based on the level of complexity and cost. And, then I also asserted that it could be correct that there a variety of more competitive payment processors for amounts under $100... and yes bitcoin may not be the best of those at the moment.. because bitcoin has other values... so I assumed all of that to be true, and my point is that bitcoin has other values besides the processor of payments that you are trying to make it out to be.
So fucking what? Bitcoin has a lot of value, even if it is not competitive for smaller payment levels (even if bitcoin is currently not competitive for transactions under $100, bitcoin still brings a whole hell of a lot of value to the table).
This is going to hinder adoption.
O.k. again you are asserting that a narrow set of uses hinders bitcoin's adoption. ... but bitcoin has other uses too, and a lot of this will develop over time. Why rush bitcoin into being something that other platforms can do better? There is plenty for bitcoin to do without narrowing it into something for which it is not currently ready... and it is not a question of blocksize that is going to solve the development and adoption matters, it is a time issue and functionality issue and seg wit is one thing that will allow further development and the building of the kinds of tools that will facilitate more and more development and likely economies of scale through increasing and increasing adoption.
When someone who has no experience using any kind of cryptocurrency, they are not going to want to start with a million dollar transaction, they are going to want to start with an amount they can afford to lose, that makes sense to use economically
Who is talking about a million dollars? We can talk about someone getting into bitcoin first by just merely accumulating it, and maybe later down the road attempting to use it. I know a lot of people who just hold their bitcoins and they dont really spend them.. so why do we need to spend them, exactly? at this time? we can wait for later or we can just cash them out if they appreciate in value over time. We can do whatever we want based on how much we want to hold of bitcoin and whether we want to hold them on an exchange or in a private wallet. There are nearly 6 million wallets on coinbase and there are nearly 10 million wallets on blockchain.info. People may or may not move their coins around very much, especially if they are just beginning to accumulate coins.
(I would also point out that if it does not make economic sense to make spend $20 worth of bitcoin on Lunch, it is likely that not many restaurants will accept bitcoin as payment, so those considering to "test" bitcoin with small real world transactions would be unable to do so, even uneconomically).
use something else then. bitcoin does not necessarily need to serve such a purpose, especially if it is not economically feasible at the moment and if systems have not sufficiently been developed.
I would also point out that high transaction fees create incentives to have additional mining centralization and for users to use various services (exchanges, pools, ect.) as banks.
Yeah.. let's assume that people do not want to move less than $100 at any one time. I am fine with that. Then they are going to mostly hold and mostly just transfer the larger amounts when they feel that it is necessary, whether they hold the coins on an exchange or a bank or put them in a private wallet of their own.. but once they move them then they will be inclined to move them less often (due to fees). I agree. I usually don't move amounts smaller than a few hundred bucks at a time, except maybe smaller amounts when I am just consolidating addresses.
Many users will combine their mining hashpower together at a mining pool; with pools it is not a huge deal if an individual pool were to get a large percentage of the network hashpower because if it were to start acting maliciously, miners would leave that pool in order to protect their future income. Generally speaking (at least based on what I have seen), mining pools will pay out mining earnings to individual miners once per day (I believe that some mining pools have the option to set minimum thresholds of payments, and otherwise hold payments back). It will cost a miner ~100x more money to spend $1 of their mining revenue who receives 0.01BTC per day, verses a miner whose equipment earn 1BTC per day -- this is important because miners generally will need to use a portion of their mining revenue to pay expenses. Mining is a very low margin industry that can be describes as a 'game of inches' and I believe that over time this will lead to further mining centralization based on ultimate control over the mining equipment.
You could have some decent points here, but I don't think that it is as big of a deal as you make it out to be... maybe get paid once a week rather than once a day or get paid once a month rather than once a week... you can budget for those kinds of things.
Also, I think that the evidence of the past several years seems to show more decentralization in mining rather than centralization.. pools are not as dominant now as they were in early 2014. They are smaller and there are more of them.
I also believe that persistent high fees will cause users to gravitate towards services like exchanges (and other online services that have possession of users' coins) and use them as banks. This will cause the obvious problem that when these services eventually get hacked, customers' funds will be lost, and users will lose faith in bitcoin (and the net cost of using bitcoin will be high when taking into consideration the cost of having some of their coins stolen/lost). This will also cause further centralization in terms of bitcoin related businesses, as it will raise the barrier to entry.
Who knows? We have always had various centralized systems, but bitcoin has allowed the development of a large number of decentralized systems that have not really developed yet. So yeah, the big experiment is the extent to which decentralized systems can develop and cause users to gravitate in that direction... a lot of them are still being developed. Also, individuals can make choices regarding which services they chose to use.
These matters are evolving, and individuals should find and balance their own uses to the extent feasible in order to find whatever system is the most competitive for whatever use that they are going to undertake. Even assuming that bitcoin is not competitive for transactions under $100 for some folks does not mean that bitcoin should give up on its various advantages and developments and progress in order to try to become something that it is not... and yeah, maybe some day bitcoin will evolve into a "competitive" micropayments processor, but at this point, bitcoin has a whole hell-of-a lot of value outside of that particular narrow use case.
This is exactly what Bitcoin was designed to be, a "peer-to-peer electronic cash system"
Of course it is designed to be peer to peer, but rome was not built in a day.. such peer to peer is still being built and such peer to peer systems are still being developed... don't rush it with something dumb and ill thought out, such as big blocks and changes to bitcoin governance, otherwise you will screw it up.
I have not seen enough active support for SegWit that would suggest that there is consensus that SegWit is desired by users.
Generally the large majority of various technical experts in bitcoin believe that seg wit is a great, useful and empowering innovation.
And, who gives a ratt's ass about what users think, because the vast majority of users do not sufficiently understand what seg wit provides, and possibly they don't even care, as long as bitcoin functions for them in whatever way that they chose to attempt to get it to function. So, in the end, it does not really matter too much what a bunch of misinformed and whiney users on various big block forums think, if they don't really understand the issues and they are just believing that big is better for the sake of it.
Ummm, the last time I checked, what the devs want does not matter when it comes to consensus. The devs are merely advisors, and users can choose to take the advice or not. No one has given the devs any kind of authority to make any kind of decisions on behalf of anyone.
I don't get your point. Devs made some software, and it is up to miners to signal that they are ready to adopt it. If they do not signal in sufficient quantity then the software does not get adopted. Otherwise if it seems that the software change could be forced or some lower threshold then maybe that action would occur. If it seems to controversial, then the status quo is maintained and nothing happens.. just keep running the old software.
Decentralized means that a lot of folks could chime in and attempt to affect the behavior of others, too... but in the end, if miners start signalling seg wit then the software can be implemented... I am not sure what role the users play except maybe saying what they want and maybe attempting to influence the behavior of miners or the behavior of devs.
I have seen a large number of services that are ready for SegWit if implemented, however I have not seen them give active support, and I would say that there are a decent number of users with decent economic weight that are against SegWit. If anything, I would consider SegWit to be a contentious fork (only that I find it unlikely that it will activate, as the miners tend to be amongst those who are against SegWIt).
Maybe we largely agree on these points? In the beginning it seemed as if all the technical folks were behind seg wit and it should be easy to implement, but currently, it seems that the signaling level is stagnating, so it might not get adopted.
I have however seen what I would consider to be a general consensus that scaling solutions for Bitcoin are desired and that lower fees for Bitcoin are desired.
That assertion is pretty vague. Ultimately people can chose what they want to use within bitcoin or not on an individual level in terms of fees, in terms of speed, or value or whatever, etc etc... So who cares? Just let them chose what they would like based on what they perceive is being offered and then they can attempt to experience bitcoin or whatever for themselves and decide if they want to continue to use it or to diversify their investment or their useage into something else.
The overall gist of this statement is that Bitcoin users seems to want scaling solutions, and they do not want SegWit; all this really leaves is an increase in the maximum block size.
I think we have a different reading on this. I think that there are some whiners out there who push this theme about big blocks and attempt to mislead and exaggerate.
As stated above, most major Bitcoin related businesses are maintaining a neutral position on the subject, and users [in effect] want the max block size to be increased (via wanting lower fees, scaling, and not wanting segwit).
These are retarded statements to say what users want... yeah we got some vocalizing idiots on some forms suggesting that there is a problem that does not exist... otherwise known as exaggerating. You are likely right that some businesses are on the fence.
I think it is counterintuitive to say that users can do what they want to get around a problem that is being imposed by an artificial, arbitrary limit, that can be best described by unnecessary regulation by a central authority.
I think that I already made my point, here. Do what they want means use bitcoin or don't. If they are going to use bitcoin, then figure out what they want to use it for and how much and to invest accordingly. If they think that there is some other better solution, then they can join in on those projects, such as ethereum or dash or monero or litecoin.
I think that bitcoin has plenty of uses and plenty of development and plenty of ongoing dynamics that it is continuing to grow and to provide value, even if there are higher fees and slower transaction times. I personally think that there is a long way to go before fees and transaction times are unreasonable given what bitcoin already provides and that is secure immutable decentralized value storage and transfer. Name anything in the world that provides what bitcoin does at any comparable level. I am waiting.
