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Author Topic: Bitcoin works as intended, price confirms  (Read 1450 times)
lurker10
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May 09, 2017, 08:21:47 AM
 #1

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

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May 09, 2017, 08:28:54 AM
 #2

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.

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May 09, 2017, 08:36:36 AM
 #3

It works great for everyday transactions. It was never intended for microtransactions.

Segwit is a huge change of the protocol, it will undermine investors confidence and send the price plummeting. Unlimited blocks is also not safe. Investors are cautious. Upgrade Bitcoin to Segwit or to BU and it will lose relevance very quickly.

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May 09, 2017, 08:39:49 AM
 #4

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.

it DOES work as intended, and the increasing volume in transactions, increased number of merchants, increase in the amount of money that payment processors for merchants such as BitPay are processing each month (which is millions of dollars) is supporting this.

the fact that there is a spam attack and during that period of attack people still pay low fees such as 20 satoshi per bytes and then get a late confirmation doesn't mean "bitcoin as a currency is impractical"

at the same time price rising, and all these things that are said doesn't mean we don't need some solution for scaling.

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May 09, 2017, 08:47:07 AM
 #5

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.
Segwit is yet to be tested on real life bitcoin transactions and we may see what segwit can do when ltc will have segwit after tomorrow. If it works as intended than that may help bitcoin to get more support for segwit activation. Yes doing micro transactions on bitcoin is quite costlier right now but price is in steady rise which is good thing for anyone to hold bitcoin for both short term and long term. Look at other alts all are red right now.


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May 09, 2017, 08:50:08 AM
 #6

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

I cannot go against your statement. Both bitcoin unlimited and segwit wanted to be on the top of the blockchain as the primary code to be used in mining. The two groups would imply that if the blocksize of bitcoin will not increase it will become unstable. But looking at the situation at the moment bitcoin doesnt need higher blocks and even without increasing the blocksize bitcoin continues to move on.

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May 09, 2017, 09:28:47 AM
 #7

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.

it DOES work as intended, and the increasing volume in transactions, increased number of merchants, increase in the amount of money that payment processors for merchants such as BitPay are processing each month (which is millions of dollars) is supporting this.

the fact that there is a spam attack and during that period of attack people still pay low fees such as 20 satoshi per bytes and then get a late confirmation doesn't mean "bitcoin as a currency is impractical"

at the same time price rising, and all these things that are said doesn't mean we don't need some solution for scaling.
No, it doesn't work as intended.  The average transactions per block have been steadily increasing since the beginning.  The miners' revenues have also been rising and there's absolutely no reason why people should be paying anything other than tiny transaction fees with the mining revenues as they are.  And by "tiny transaction fees" I mean <20 satoshi per byte.  Transaction fees are meaningless and they only make up 10% or so of mining revenues anyway - they should only matter for priority transactions until the block reward is so small relative to the price that transaction fees are 100% necessary to secure the network.

Bitcoin objectively needs scaling.  It's not just a case of paying higher fees because that means that these pointless fees will be a competition to get into a block and many people never get their transactions confirmed at all.

The solution is SegWit + LN.  That's the only way which results in infinite scaling instead of just handling an increase in transaction volume until it gets too big and ordinary people can't use nodes.

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May 09, 2017, 09:43:29 AM
 #8

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.

it DOES work as intended, and the increasing volume in transactions, increased number of merchants, increase in the amount of money that payment processors for merchants such as BitPay are processing each month (which is millions of dollars) is supporting this.

the fact that there is a spam attack and during that period of attack people still pay low fees such as 20 satoshi per bytes and then get a late confirmation doesn't mean "bitcoin as a currency is impractical"

at the same time price rising, and all these things that are said doesn't mean we don't need some solution for scaling.
No, it doesn't work as intended.  The average transactions per block have been steadily increasing since the beginning.  The miners' revenues have also been rising and there's absolutely no reason why people should be paying anything other than tiny transaction fees with the mining revenues as they are.  And by "tiny transaction fees" I mean <20 satoshi per byte.  Transaction fees are meaningless and they only make up 10% or so of mining revenues anyway - they should only matter for priority transactions until the block reward is so small relative to the price that transaction fees are 100% necessary to secure the network.

Bitcoin objectively needs scaling.  It's not just a case of paying higher fees because that means that these pointless fees will be a competition to get into a block and many people never get their transactions confirmed at all.

i am disagreeing with you on things you just mentioned here. i agree that at this point with $21000+ block reward we shouldn't be paying high fees.

i am disagreeing with you on saying "bitcoin is not working as intended". bitcoin was intended to be used as a decentralized digital cash and it is still doing that. the intention was never about the amount of fees we are supposed to pay.

fees being higher, blocks being full, mempool being spammed to death, miners not making up their mind about scaling, and all the topics about scaling and some users calling it as store of value, only to transfer money oversees, only to transfer millions of dollars, .... does not change the fact that bitcoin is a p2p digital cash and it still is working as such.

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May 09, 2017, 09:50:36 AM
 #9

Quote
The solution is SegWit + LN.  That's the only way which results in infinite scaling instead of just handling an increase in transaction volume until it gets too big and ordinary people can't use nodes.

Even with LN, we can't talk of "infinite scaling". We need to open a LN channel for every user with an on-chain transaction, and there must also be space on the blockchain to close it. Doing a little bit of kindergarden math: If we'd 2 MB blocks (~the effective estimated Segwit block size) and a value of 180 byte per transaction, then ~11000 users could open a payment channel per block, or 1,5 million per day. That's a lot, but it's not enough for the whole world's population, and it doesn't take into account channel closing transactions and other on-chain transactions.

Sidechains and extension blocks are a way to get closer to "infinity". I prefer a three-layer system: 1) Main chain 2) Sidechains or "extension" blockchains 3) LN.

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May 09, 2017, 11:03:33 AM
 #10

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

Do you have something against the core developers?
I assume that you are one of the Segwit haters,but i don`t see any reason why you hate Segwit.
By the way,most of the core devs are playing with altcoins.



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May 09, 2017, 11:13:45 AM
 #11

Well it doesn't work as intended, because it was intended to be a currency and is now impractical for everyday transactions until SegWit/LN are implemented.  SegWit doesn't affect the stability of the Bitcoin network, it's just a way of making Bitcoin transactions easier to send which is even good for bigger investors.

it DOES work as intended, and the increasing volume in transactions, increased number of merchants, increase in the amount of money that payment processors for merchants such as BitPay are processing each month (which is millions of dollars) is supporting this.

the fact that there is a spam attack and during that period of attack people still pay low fees such as 20 satoshi per bytes and then get a late confirmation doesn't mean "bitcoin as a currency is impractical"

at the same time price rising, and all these things that are said doesn't mean we don't need some solution for scaling.
No, it doesn't work as intended.  The average transactions per block have been steadily increasing since the beginning.  The miners' revenues have also been rising and there's absolutely no reason why people should be paying anything other than tiny transaction fees with the mining revenues as they are.  And by "tiny transaction fees" I mean <20 satoshi per byte.  Transaction fees are meaningless and they only make up 10% or so of mining revenues anyway - they should only matter for priority transactions until the block reward is so small relative to the price that transaction fees are 100% necessary to secure the network.

Bitcoin objectively needs scaling.  It's not just a case of paying higher fees because that means that these pointless fees will be a competition to get into a block and many people never get their transactions confirmed at all.

i am disagreeing with you on things you just mentioned here. i agree that at this point with $21000+ block reward we shouldn't be paying high fees.

i am disagreeing with you on saying "bitcoin is not working as intended". bitcoin was intended to be used as a decentralized digital cash and it is still doing that. the intention was never about the amount of fees we are supposed to pay.
I see your point here.  Maybe I was hyperbolic, but here's something that the whitepaper says:

Quote from: satoshi
The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions

He's right, but mediation only results in higher transaction costs if the alternative can handle the transactions at all.  A decentralised peer-to-peer cash (which I admit is working in the most basic sense, as you pointed out) is seldom appealing if it seems like principle over practicality.  Whether people like it or not, any altcoin could provide these scaled solutions from the start (admittedly none have done it very well yet bar litecoin), so Bitcoin's immutability should only apply when it's something worth keeping.

Quote
fees being higher, blocks being full, mempool being spammed to death
Note:  Mempool spam are still transactions.  Sometimes they will be inevitable which is why it's important to have a system that works (d5000 knows what he's talking about when referring to a combination of extension chains and LN), instead of just having transaction capacity in the most basic sense.

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May 09, 2017, 11:45:29 AM
 #12

Do you have something against the core developers?
I assume that you are one of the Segwit haters,but i don`t see any reason why you hate Segwit.
By the way,most of the core devs are playing with altcoins.

Read one more time.
As a sane and cautious investor I am against any change of the Bitcoin protocol. Bitcoin is too big to change.

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May 09, 2017, 11:50:08 AM
 #13

Even with LN, we can't talk of "infinite scaling". We need to open a LN channel for every user with an on-chain transaction, and there must also be space on the blockchain to close it. Doing a little bit of kindergarden math: If we'd 2 MB blocks (~the effective estimated Segwit block size) and a value of 180 byte per transaction, then ~11000 users could open a payment channel per block, or 1,5 million per day. That's a lot, but it's not enough for the whole world's population, and it doesn't take into account channel closing transactions and other on-chain transactions.

That's not taking something very important about the transaction capacity of Lightning Network into account; once the channel is open, you can use the BTC in the channel infinitely (well, unless you run out of BTC of course). There is no need to close the channel, unless you need it for an on-chain transaction, or if someone you exchange BTC on Lightning with tries to start replaying old transactions.

So your "kindergarten math" is not very insightful, because it paints the absolute worst case scenario for Lightning's capacity.

Sidechains and extension blocks are a way to get closer to "infinity". I prefer a three-layer system: 1) Main chain 2) Sidechains or "extension" blockchains 3) LN.


Extension blocks simply produce the same outcome as Bitcoin Unlimited with a different method. The miners control which extension block they put a regular user's transaction into, and so they can create new chains at will, and force users to download the extension chains they create against the user's will.

And so extension blocks simply give miners all the power to turn the mining network into servers that control the client software that the users use, Bitcoin would cease to be decentralised or peer to peer. Miners could create extension chains so huge that it would be no longer practical for regular users to download all the extension chains that their transactions are placed in, or to donwload the chains that contain BTC they receive from others. It's basically an even worse idea than Bitcoin Unlimited, as the miners don't even need Bitcoin nodes voting for the blocksize, they can change the blocksize to anything they like at whim.

Vires in numeris
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May 11, 2017, 08:43:35 AM
 #14

Bitcoin is fine, nothing should be changed in its protocol. Investors have confidence it will not be changed and buy, confirmed by price action. Dare to make changes and they will flee.

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May 11, 2017, 08:50:11 AM
 #15

That's not taking something very important about the transaction capacity of Lightning Network into account; once the channel is open, you can use the BTC in the channel infinitely (well, unless you run out of BTC of course).

This is the big problem, and why the LN has a HUGE centralization pressure.  Only hubs that can link to *a lot of customers* and hence lock in a lot of coins, and have *big amounts* locked in with other big hubs, can hope to average out a lot of payments so as to avoid channels to get exhausted.  If you only have, say, 4 BTC, and you lock them up in 8 channels, each of them 0.5 BTC, it will be hard for you, as a small node, not to "run out of BTC" in one of the channels after even just a few transactions.  If you have 10 000 BTC, and lock up 500 BTC in 20 channels to some other dolphins of the same kind, you will have a network that can handle a lot more transactions before having to settle, which puts you at a big advantage over smaller fish.  These lots of transactions will smooth out much more and keep your channel actually quadratically long alive with its content.  (if you put 10 times more coins in a channel, it will live 100 times longer, because the fluctuations go as square root of the amount).


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May 11, 2017, 11:56:48 AM
 #16

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

What these very vocal people on the internet don't realize is that the sooner the system reaches 'stability', the sooner fund managers will move in.
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May 11, 2017, 12:06:49 PM
 #17

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

I totally agree with it and that bitcoins blocksize is of no issue but just an issue being hyped by the miners so that they can have control over bitcoin and they can increase the miner fee. Bitcoin is good as it is and it doesnt need upgrading at the moment. Bitcoin is growing up and will continue to increase when Australia starts to adopts bitcoin on July.

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May 11, 2017, 12:10:30 PM
 #18

As I wrote some time ago:
The only thing that makes Bitcoin preferred over other cryptocurrencies is stability and safety, it is the longest running network and for fans of POW, Bitcoin is the most difficult blockchain to attack. Activating Segwit is such a huge change that it will remove this stability and safety - the competitive advantage of Bitcoin. If Segwit is activated and Bitcoin loses this stability safe haven status, why not go for coins that are technologically much more superior, the so-called generation 2 and 3 coins? Bitcoin with Segwit will offer the same level of safety as these other coins but Bitcoin will be much more backward technologically, so it makes no sense to stay invested in Bitcoin with Segwit activated.

Bitcoin should be left alone as a crypto reserve and crypto settlement network, as is, only bugfixes should be done on it.

Price action confirms that investors are fine with leaving Bitcoin as is. It does NOT need big blocks, it does NOT need Segwit. Developers, with your itchy fingers, go play with altcoins. Bitcoin is now investors safe haven, untouchable.

What these very vocal people on the internet don't realize is that the sooner the system reaches 'stability', the sooner fund managers will move in.
Stability wont happen even though its being slowly accepted by some countries as of now.System of bitcoin would remain as it is and investors and traders would really remain on the field since price wont really be go stable no matter what and that's the beauty of bitcoin on my part not only to myself but on most people for sure.



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May 11, 2017, 12:12:01 PM
 #19

That's not taking something very important about the transaction capacity of Lightning Network into account; once the channel is open, you can use the BTC in the channel infinitely (well, unless you run out of BTC of course).

This is the big problem, and why the LN has a HUGE centralization pressure.  Only hubs that can link to *a lot of customers* and hence lock in a lot of coins, and have *big amounts* locked in with other big hubs, can hope to average out a lot of payments so as to avoid channels to get exhausted.  

No, you're wrong

If you run out of BTC in a Lightning channel, the channel remains. All you have to do is get something paid into it, it's called commerce.

Vires in numeris
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May 11, 2017, 04:04:29 PM
 #20

If you run out of BTC in a Lightning channel, the channel remains. All you have to do is get something paid into it, it's called commerce.

Care to explain ?  Suppose Alice and Bob set up a channel.  Alice puts in 1 BTC, and Bob puts in 1 BTC too.
The channel derives its security from the fact that the balance of the channel will always be between (2 BTC for Alice / 0 BTC for Bob) and (0 BTC for Alice, 2 BTC for Bob), right ?  It is a stack of non-published transactions from Alice or from Bob towards the "actual state", with "guard transactions" that allow the duped party to get everything (here, 2 BTC) if ever the counter party publishes a previous transaction that is not the last balance.  At least, that's my understanding of it.

Now, suppose that the network is such, that 5 times in a row, LN channels go through the Alice/Bob link in the same direction, from Alice to Bob, with 0.2 BTC to transact.  Now, Alice is at 0 BTC in the channel, and Bob is at 2 BTC in the channel.  There is no channelling possible any more from Alice to Bob.  Note that this probably means, that Alice had another channel open, say, to Joe.   If that channel was 1 BTC/1BTC initially, it is now also 0 BTC / 2 BTC, in the favour of Alice.

Alice still has her 2 BTC from the start (of which she locked in 1 BTC to Bob, and 1 BTC to Joe).  But it is now totally in her Joe channel, and nothing any more in her Bob channel.

You are saying that Alice doesn't have to settle.  She can wait for a payment in the other direction.  Sure.  But if her node is principally on a flux "from Joe to Bob" (say, Joe is closer to a big spender, and Bob is closer to a bitcoin accepting shop), her node is essentially "dead", and our 3 people have bitcoins locked up in channels that will wait for a long time before acting again.

The only thing to do, is essentially, to settle the channels, free up the 2 BTC that Alice had locked up in the channels, and start over again (after a day or so, when the time lock expires).

Did I get something wrong ?
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