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

[toknormal]

I couldn't really care less about the backlog.

It isn't affecting the ability to move mid to larger amounts of Bitcoin around.

fyp

Moving around 10$ worth of BTC and paying 3$ makes not much sense.

Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource. Like any other limited resource where there is contention for access it gets expensive.

There are payment systems in abundance for moving $3 around.

[BlindMayorBitcorn]

He means alt coins.

[toknormal]

He means alt coins.

No, I mean regular payment networks that are supported in almost every corner shop and supermarket in the developed world.

[spiderbrain]

Wow, I just noticed Kraken's little ATH a few hours ago. What's that about?

[Torque]

Supposed $400M backlog.

And all of the bitcoiners are whining and complaining that this backlog consists of everyone rushing to simultaneously make $400M worth of purchases of goods and coffees.

Shut. The. Fuck. Up. Whiners.

You know that's not why. Not even remotely.   What a farce.

[Ibian]

Wow, I just noticed Kraken's little ATH a few hours ago. What's that about?

THE EUROPEANS ARE COMING!!!

[spiderbrain]

Wow, I just noticed Kraken's little ATH a few hours ago. What's that about?

THE EUROPEANS ARE COMING!!!

They are most welcome if they're happy to pay that much for bitcoins =)

[marcus_of_augustus]

It's gotten too late now for a simple blocksize bump, with all the pathetic politicking and ego-tripping on display, resulting in the current blocking of genuine progress.

The only hardfork that will achieve consensus now will solve the blocksize limit and fee pressure regulation from it's activation time all the way through until we transition to the non-reward regime ~2036.

Short-term HF blocksize bumps will just give the DDOS attackers newer bigger and more deadly targets to aim for, whilst continually agitating for the next HF blocksize "short-term" bump in the interims and then creating mayhem and disruption during the HFs.

I am not sure what you are proposing. I have reread it and I don't even know if you are in favor or against Segwit+2MB.

tl;dr SegWit+FlexCap (or something like it) will now be the only HF solution to get consensus ... 'emergent consensus' is essentially an O(1) attempt at flexcap

[ImI]

I couldn't really care less about the backlog.

It isn't affecting the ability to move mid to larger amounts of Bitcoin around.

fyp

Moving around 10$ worth of BTC and paying 3$ makes not much sense.

Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource. Like any other limited resource where there is contention for access it gets expensive.

There are payment systems in abundance for moving $3 around.

Yes, and as those limits aren't naturally given but set in code they are obv a topic of discussion. To paint a situation where everything is god given and set in stone is simply bs.

Also you are contradicting yourself: "Ability to move around Bitcoin isn't affected" contradicts "Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource."

[toknormal]

Also you are contradicting yourself: "Ability to move around Bitcoin isn't affected" contradicts "Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource."

The problem is that bitcoin (or any blockchain) cannot be a commercial payments system AND an efficient store of value both at once since the two objectives have priorities which are in conflict.

For a start, the purpose of a payment system is to clear trades, not to settle them and as such the commercial realm is adequately catered for by worldwide payment networks such as Visa and Mastercard. There is anything a blockchain can improve on there - even in terms of fees, because the merchant isn't paying those fees to clear the trade, they're paying for access to a massive customer base.

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable. Paying a $3 fee to transact on it isn't comparable to paying  2% fee with Visa because the merchant is purchasing different things in each case:

 • with Visa they aren't paying for realtime settlement, with bitcoin they are
 • with Bitcoin they aren't paying for access to a majority client base, with Visa they are
 • with Bitcoin they aren't paying for merchant services, with bitcoin they are

So with bitcoin it's all about settlement, not trade which is why its technical properties should be prioritised around monetary security, stability and confidence rather than commercial versatility.

Against that background, $3 is nothing for moving an asset that is fundamentally a deflationary store of value and that has liquidity worldwide.

[Ibian]

The problem is that bitcoin (or any blockchain) cannot be a commercial payments system AND an efficient store of value both at once since the two objectives have priorities which are in conflict.

Of course it can. Increase the block size. That's it, that's all it takes.

[notme]

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable.

You keep saying this, but consider that if you double the available space without halving the minimum fee then you double the cost of DOSing legitimate transactions.  If blocks are full, there will be fee pressure that ensures this floor (besides the fact that transactions without sufficient fees aren't even relayed anymore).  If blocks aren't full, then miners are perfectly capable of determining what transactions are worth the long term cost to include.  They are the ones who have to bear that cost after all.

[ImI]

Also you are contradicting yourself: "Ability to move around Bitcoin isn't affected" contradicts "Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource."

The problem is that bitcoin (or any blockchain) cannot be a commercial payments system AND an efficient store of value both at once since the two objectives have priorities which are in conflict.

For a start, the purpose of a payment system is to clear trades, not to settle them and as such the commercial realm is adequately catered for by worldwide payment networks such as Visa and Mastercard. There is anything a blockchain can improve on there - even in terms of fees, because the merchant isn't paying those fees to clear the trade, they're paying for access to a massive customer base.

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable. Paying a $3 fee to transact on it isn't comparable to paying  2% fee with Visa because the merchant is purchasing different things in each case:

 • with Visa they aren't paying for realtime settlement, with bitcoin they are
 • with Bitcoin they aren't paying for access to a majority client base, with Visa they are
 • with Bitcoin they aren't paying for merchant services, with bitcoin they are

So with bitcoin it's all about settlement, not trade which is why its technical properties should be prioritised around monetary security, stability and confidence rather than commercial versatility.

Against that background, $3 is nothing for moving an asset that is fundamentally a deflationary store of value and that has liquidity worldwide.

The biggest threat for Bitcoin's function as store of value are multiple forks. If Bitcoin splits up into several competing instances of the same original store of value, the value of each single chain and also all chains combined diminishes. So it should be a top priority to keep everyone on board, even if that means doing compromises which are eventually seen as suboptimal.

[Ibian]

Really, increasing the block size seems to have no drawbacks to me. The only ones personally affected by it will be miners, and all that will mean is that the top miners stay the top miners and shit tier miners stay shit tier miners. Nothing changes.

Where is the major problem here?

[toknormal]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

[Ibian]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

[Lauda]

Really, increasing the block size seems to have no drawbacks to me.

Then you do not understand anything. Let's start with the crucial one:
1) DoS attack vector due to quadratic validation time O(n^2) at 2 MB. You are able to construct a transaction/block that takes longer than 10 minutes to validate, essentially preventing others from catching-up to you.
2) Increased orphan rates.
3) Increased node centralization/decreased node count.
4) Increased mining centralization (direct effect of the 2 above).
5) Risk of chain-split.
There's probably more, but these are the first ones that come into mind.

Just keep the blocksize the same.

Explain.

You can scale Bitcoin to a fair extent without modifying the block size. Segwit -> Schnorr + Signature aggregation -> LN/sidechains/TumbleBit/Mimblewimble.
I just noticed this wall at Bitstamp:

[Ibian]

Really, increasing the block size seems to have no drawbacks to me.

Then you do not understand anything. Let's start with the crucial one:
1) DoS attack vector due to quadratic validation time O(n^2) at 2 MB. You are able to construct a transaction/block that takes longer than 10 minutes to validate, essentially preventing others from catching-up to you.
2) Increased orphan rates.
3) Increased node centralization/decreased node count.
4) Increased mining centralization (direct effect of the 2 above).
5) Risk of chain-split.
There's probably more, but these are the first ones that come into mind.

How does any of that conflict with the top miners staying on top, and shit tier miners staying shit tier?

The thing that ultimately matters is, how many people can use bitcoin at a time. Orphaned blocks and whatever might turn out to be a cost of increased size, but it is better than never rising much beyond where we are now.

Mimblewimble

What the fuck does it tell you that we are using terms like that?

[toknormal]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

So, for example when you checkout of an order on Amazon the last thing you do is enter your credit card details and submit the page. We refer to that process as "paying".

But at an engineering level it isn't paying. It's simply getting the trade out of the way so the retailer can deal with the next trade and the customer can get on with their life. In that respect, the job of a 'payment system' is to clear trades like this. The process of settling them is necessarily decoupled because it has different priorities.

On the other hand if you wanted to move $100,000 from one bank to another you might pay a $500 fee. It's a completely different and distinct commercial/monetary process.

If you re-couple these processes in a retail situation (for example by introducing blockchain payments as POS), you just create a huge headache for retailers that would simply bring everything to a grinding halt due to the lack of performance and flexibility of a blockchain solution.

My point is that the fees people are complaining about are incorrectly compared with trading fees for payment of goods and services. When you look at the cost of moving $100,000 on the bitcoin network and take into account that it clears within an hour with good confirmations, the fees are positively cheap.

The advantage of keeping the blocksize at 1 Mb is that it consolidates Bitcoin's value proposition against alt coins. The only reason it has value is because it is unique, original and is seen as a 'safe haven'. In other words, unlike the altcoin world, the less that's done to it the better (obviously within reason as long as doing nothing doesn't actually do it damage).

[Ibian]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

That's because they are one and the same. Whatever happens behind the scenes is none of the average person's business. And you did not explain why it "*should*" be expensive to move bitcoin around.

On the other hand if you wanted to move $100,000 from one bank to another you might pay a $500 fee. It's a completely different and distinct commercial/monetary process.

What the fuck kind of bank are you using.

My point is that the fees people are complaining about are incorrectly compared with trading fees for payment of goods and services. When you look at the cost of moving $100,000 on the bitcoin network and take into account that it clears within an hour with good confirmations, the fees are positively cheap.

And still ten times as high as they used to be - and that's just in terms of btc, not even in terms of fiat.

The advantage of keeping the blocksize at 1 Mb is that it consolidates Bitcoin's value proposition against alt coins. The only reason it has value is because it is unique, original and is seen as a 'safe haven'. In other words, unlike the altcoin world, the less that's done to it the better (obviously within reason as long as doing nothing doesn't actually do it damage).

That makes no sense.

In any case, the DISadvantage is that it limits the number of people who can use bitcoin. Higher blocksize, more people, more transfers, more fees, more profit to miners and a higher price. It is an extremely simple choice that needs to be made. Growth or stagnation.