Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[AlexGR]

Thanks for the explanation on the fullness of the block

So those few hours with totally full blocks are the sign of the beginning of the end of btc?  

Well I suppose it will be fixed in a way or another.

No, the periods of totally full blocks show that we are hitting the ceiling of the transaction capacity. It's not the beginning of the end of Bitcoin (yet).

Are we?

https://blockchain.info/charts/avg-block-size?timespan=30days&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address=

Avg size is between 0.5mb and 0.7mb the last few days. Which means there is an extra 40% to 100% available capacity, depending the day.

[flagpara]

Thanks for the explanation on the fullness of the block

So those few hours with totally full blocks are the sign of the beginning of the end of btc?  

Well I suppose it will be fixed in a way or another.

No, the periods of totally full blocks show that we are hitting the ceiling of the transaction capacity. It's not the beginning of the end of Bitcoin (yet).

It will be fixed. Either by raising the transaction capacity of the network. Or the service becomes too expensive for a part of the users, and the growth of Bitcoin will come to a halt at a quarter of a million transactions per day. And that (given a current user base of only about 1 million) may be the beginning of the end of Bitcoin if the current users (like me, who are expecting growth) lose confidence and start selling their stashes.

Note, the latter situation can develop quite quickly, since the price of Bitcoin is almost entirely based on speculation about its future. Once the hoodlers lose their faith in Bitcoin's future, the price will collapse.

That's right, it's more or less a question of faith when it comes to bitcoin...

I lost mine years ago but it doesn't mean others will too 

[suda123]

Thanks for the explanation on the fullness of the block

So those few hours with totally full blocks are the sign of the beginning of the end of btc?  

Well I suppose it will be fixed in a way or another.

No, the periods of totally full blocks show that we are hitting the ceiling of the transaction capacity. It's not the beginning of the end of Bitcoin (yet).

It will be fixed. Either by raising the transaction capacity of the network. Or the service becomes too expensive for a part of the users, and the growth of Bitcoin will come to a halt at a quarter of a million transactions per day. And that (given a current user base of only about 1 million) may be the beginning of the end of Bitcoin if the current users (like me, who are expecting growth) lose confidence and start selling their stashes.

Note, the latter situation can develop quite quickly, since the price of Bitcoin is almost entirely based on speculation about its future. Once the hoodlers lose their faith in Bitcoin's future, the price will collapse.

Aw yeaa the fud is fresh and ripe

[sAt0sHiFanClub]

Once you know this , you will have no fear of these private blockchains.

You need to put that into a Matrix meme. Or an Alec Guinness Jedi Mind Trick meme.

Edit:

[ChartBuddy]

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Explanation

[flagpara]

Thanks for the explanation on the fullness of the block

So those few hours with totally full blocks are the sign of the beginning of the end of btc?  

Well I suppose it will be fixed in a way or another.

No, the periods of totally full blocks show that we are hitting the ceiling of the transaction capacity. It's not the beginning of the end of Bitcoin (yet).

It will be fixed. Either by raising the transaction capacity of the network. Or the service becomes too expensive for a part of the users, and the growth of Bitcoin will come to a halt at a quarter of a million transactions per day. And that (given a current user base of only about 1 million) may be the beginning of the end of Bitcoin if the current users (like me, who are expecting growth) lose confidence and start selling their stashes.

Note, the latter situation can develop quite quickly, since the price of Bitcoin is almost entirely based on speculation about its future. Once the hoodlers lose their faith in Bitcoin's future, the price will collapse.

Aw yeaa the fud is fresh and ripe

Is it FUD attempt to have doubt? It would be to yell everywhere "sell sell now it's too dangerous" but just saying that it's a complicated situation where one's faith could be damaged is not FUD...

[Fatman3001]

If First Mover advantage is lost, whether it takes years or months, it will be gone forever.  Yeah, Bitcoin will still be around. Hell, MySpace is still around, but The escape route from Bankster tyranny will have been blocked.

Goldman sachs and govcoin can never replicate some of bitcoins best attributes:soverign, immutable, no KYC. and extremely unlikely to replicate other features that make bitcoin so great : limited , disinflationary.

Once you know this , you will have no fear of these private blockchains.

https://www.onthewire.io/new-york-wants-to-force-vendors-to-decrypt-users-phones/

http://9to5mac.com/2016/01/13/new-york-backdoor-access-bill/

http://www.coindesk.com/fincen-fines-ripple-labs-700000-bank-secrecy-act/

Private companies are swell. You can even fine them.

[ChartBuddy]

Coin



Explanation

[ChartBuddy]

Coin



Explanation

[flagpara]

Coin



Explanation

Yeah seems like blocks are full only from time to time, it's not a global phenomenon. So we won't see a problem in transaction yet!

[rebuilder]

Yeah seems like blocks are full only from time to time, it's not a global phenomenon. So we won't see a problem in transaction yet!

Yep, and even when blocks are full, if it's just 0-fee transactions that don't go through, that's not such a big problem IMO.

The interesting question is: When transactions with fees start getting stuck in the queue, what happens to the sum of fees? If enough users need to use Bitcoin, then the sum will stay the same or rise. It could also be that even with some users paying more for their transactions, the fees would still add up to less than if all, or some, of the lower-paying TX's had been included. These would be users who are willing to pay some fee, but not whatever fee a limited blocksize leads to.

A hard cap on blocksize takes away the miners' ability to choose what kind of transactions are most economical for them to process. IMO it also takes away any chance of finding a fair price for transactions vs. resource usage since the resource usage is capped by dictate.

[Andre#]

Thanks for the explanation on the fullness of the block

So those few hours with totally full blocks are the sign of the beginning of the end of btc?  

Well I suppose it will be fixed in a way or another.

No, the periods of totally full blocks show that we are hitting the ceiling of the transaction capacity. It's not the beginning of the end of Bitcoin (yet).

Are we?

https://blockchain.info/charts/avg-block-size?timespan=30days&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address=

Avg size is between 0.5mb and 0.7mb the last few days. Which means there is an extra 40% to 100% available capacity, depending the day.

Of course, it's not about the average size per day (unless you say it's okay to wait a day for your transaction to be  processed). It's about the occurrence of periods that the network is maxxed out. The more often these periods occur and the longer they last, the more degraded the user experience becomes, as I experienced myself a couple of times already.

And the size of blocks mined doesn't tell everything. There are regularly empty blocks, and sometimes miners don't fill up blocks despite plenty of tx waiting to be included. So not all available tx capacity is actually used by all miners.

In the end it's the user experience that matters, whether this is confirmation time or tx fee. If these goes down hill, usage will shrink, user adoption will stall. Stalling adaption will hurt the confidence of the users and ultimately the price of BTC.

[ChartBuddy]

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Explanation

[AlexGR]

Of course, it's not about the average size per day (unless you say it's okay to wait a day for your transaction to be  processed).

Yes, it is perfectly ok if I don't pay fees.

Not all txs have the same urgency. Consolidating dust in my wallets is not the same as wanting to be included in the first block because I want to transfer money to an exchange *right now*. I can wait 10 blocks or 100 blocks for the dust, but I'll pay extra for the first block inclusion if I need it.

It's about the occurrence of periods that the network is maxxed out. The more often these periods occur and the longer they last, the more degraded the user experience becomes, as I experienced myself a couple of times already.

It's just like the highway. You pay more for your own car, you go faster than the bus. You pay a cab, you go faster than the bus. If you want to go "economy", you keep your money and take the bus.

And the size of blocks mined doesn't tell everything. There are regularly empty blocks, and sometimes miners don't fill up blocks despite plenty of tx waiting to be included. So not all available tx capacity is actually used by all miners.

Yes, because fees are too low for some miners to even bother. When you get 25 btc from block reward and 0.2-0.4 from tx fees, why would I even risk orphaning the block by taking longer to transmit my block finding? It's not worth it.

This is a problem that sooner or later will be understood by "large blockers" when the percentage of the miners not bothering to even mine transactions will increase dramatically. So when half the miners will mine the 2mb blocks, and it's an effective network capacity of 1mb, what then? We'll be asking for 10mb blocks? And what will change then, if miners still refuse to mine txs without the fees going up significantly?

In the end it's the user experience that matters, whether this is confirmation time or tx fee. If these goes down hill, usage will shrink, user adoption will stall. Stalling adaption will hurt the confidence of the users and ultimately the price of BTC.

At 0.5 - 0.7mb avg, we have plenty of space left. Obviously if some miners feel they don't want to mine almost free txs, that's not a capacity problem, but a broken-fee-model, in terms of the "customers" who want to transact for free or almost free, and some miners are like "yeah, ok, please go somewhere else for your free or cheap tx processing".

[rebuilder]

Yes, because fees are too low for some miners to even bother. When you get 25 btc from block reward and 0.2-0.4 from tx fees, why would I even risk orphaning the block by taking longer to transmit my block finding? It's not worth it.

This is a problem that sooner or later will be understood by "large blockers" when the percentage of the miners not bothering to even mine transactions will increase dramatically. So when half the miners will mine the 2mb blocks, and it's an effective network capacity of 1mb, what then? We'll be asking for 10mb blocks? And what will change then, if miners still refuse to mine txs without the fees going up significantly?

If that happens, the fees will go up, because that's what the market has decided. As it should be.

I thought this Bitcoin thing was supposed to be based on free market ideas. Shouldn't we let the service providers decide what kind of service they want to provide, and at what price?

[ImI]

its all about the probability of an orphan block. if we could minimize that probability it would be a big step in the right direction. maybe we should diminish the advantage of 0 tx blocks by making all blocks equally large no matter how much real TXs are in there. so every block would have the same disadvantage of a full block no matter if those are TXs or just some clutter to fill up the 1MB or 2MB

[ChartBuddy]

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Explanation

[Andre#]

Of course, it's not about the average size per day (unless you say it's okay to wait a day for your transaction to be  processed).

Yes, it is perfectly ok if I don't pay fees.

Not all txs have the same urgency. Consolidating dust in my wallets is not the same as wanting to be including in the first block because I want to transfer money to an exchange *right now*. I can wait 10 blocks or 100 blocks for the dust, but I'll pay extra for the first block inclusion if I need it.

I wasn't talking about tx without fees (personally, I never send tx without fee). I mostly use Mycellium for sending tx, and it features four different fee levels, low priority, economy, normal, and priority. I usually go for normal, unless I'm not in a hurry at all, then I take economy. If the latter takes a long time, you won't hear me, but I expect 'normal' to go pretty quickly. Note, 'priority' is much more  expensive (10-20x more than 'normal'), so I'd only use that fee level if it's absolutely essential my tx will be included in the next block.

To cut a long story short, perhaps Mycelium doesn't do a good job with its fee estimations. But I do think it's a very good wallet in general. In the end what counts is the user experience. And mine is getting worse as the blocks fill up.

And the size of blocks mined doesn't tell everything. There are regularly empty blocks, and sometimes miners don't fill up blocks despite plenty of tx waiting to be included. So not all available tx capacity is actually used by all miners.

Yes, because fees are too low for some miners to even bother. When you get 25 btc from block reward and 0.2-0.4 from tx fees, why would I even risk orphaning the block by taking longer to transmit my block finding? It's not worth it.

This is a problem that sooner or later will be understood by "large blockers" when the percentage of the miners not bothering to even mine transactions will increase dramatically. So when half the miners will mine the 2mb blocks, and it's an effective network capacity of 1mb, what then? We'll be asking for 10mb blocks? And what will change then, if miners still refuse to mine txs without the fees going up significantly?

I always thought the idea was that growth in usage would compensate for the dwindling block subsidy. If not, the fees have to go up a lot (at least to a couple of dollars per tx).

In the end it's the user experience that matters, whether this is confirmation time or tx fee. If these goes down hill, usage will shrink, user adoption will stall. Stalling adaption will hurt the confidence of the users and ultimately the price of BTC.

At 0.5 - 0.7mb avg, we have plenty of space left. Obviously if some miners feel they don't want to mine almost free txs, that's not a capacity problem, but a broken-fee-model, in terms of the "customers" who want to transact for free or almost free, and some miners are like "yeah, ok, please go somewhere else for your free or cheap tx processing".

The moments I experience delays concur with blocks being maxxed out. So at those times, it is a capacity problem.

[betterangels]

in 2018 we all are trading minibits

[DeathAngel]

in 2018 we all are trading minibits

Maybe 2018 is too early for that but it's the hope, the dream that this happens at some point in the next 10 years.