New video: Why the blocksize limit keeps Bitcoin free and decentralized

[tvbcof]

Just because the payment processor is using some of his own capital to make transactions efficient does not mean that there needs to be a credit relationship between he and his customers.

I'm having trouble understanding your explanations now. They seem to be more convoluted and vague than they need to be.

A credit relationship exists as soon as a customer deposits BTC with the bank, and is given demand deposits in exchange. The demand deposits are credit, that others accept as BTC, because they trust the bank to be good for them.

Not exactly.

When a person deposits money in any modern bank account, the money both legally and in practice belongs to the bank.  They have a debt to repay to you.  This is not a big deal...it fails catastrophically only once every few generations and is not a major beef I have with banks.  But anyway...

It is perfectly possible to give something to a payment processor which he cannot buy coke with.

Say you wish to make a payment to Bob.  You can tell the processor, "you know that blob I gave you the other day?  I want you to turn some of it into value and give it to Bob."  The payment processor looks around and say, "I found Bob.  Sign this note which will allow me to give some of it to Bob."  I say OK.  Moments later, Bob has some value in his account.

This is a substantively different relationship than I have with my bank, and made possible with advances in technology which the banking system has not caught up with.  And are probably in no hurry to as it would ruin a fair fraction of their revenue stream.  The big difference is that the payment processor has no real incentive to steal my blob because it won't do him any good unless I sign it over to him.

I believe this is the structure alluded to in the video with the "Imagine a plexi-glass bank.  We can use the same methods used to secure the Bitocoin blockchain, blah, blah, blah" but I am only dimply aware of the precise implementation methods.

---

Allow me to bring something back from an earlier post of yours because it is awfully confusing:

In a scenario where BTC is a major global currency, I see almost zero possibility that a large BTC clearing house used by thousands of BTC-banks would not be a traditional financial institution. We're not talking a few thousand transactions a day. We're talking hundreds of millions of transactions, worth hundreds of billions of dollars.

This is not a completely implausible scenario.

Seems to me that there are two choices.

 - You transact everything on the Bitcoin blockchain which is in now way suitable for that kind of load and creates a single point of catastrophic failure.

 - You utilize a expandable pool of solutions which attempt to meet whatever challenges which pop up and use the Bitcoin blockchain as a static and robust source of truth.

I cannot imagine anyone in their right mind not choosing the latter as the logical way to proceed.

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[mp420]

I do not understand why a miner-voted blocksize limit would be a bad thing. We can even make it very conservative by requiring a high supermajority in order to adjust the limit. Also, this could be implemented as a semi-hardfork (as far as miners are considered; it is unfortunately always a hardfork regarding non-mining full nodes). Just consider not voting a "no change" vote.

Miners have an incentive to try to maximise their real revenue. Too high limit would mean lower fees, too low limit would mean less transactions and lower purchasing power of BTC. The voting process would find the equilibrum where the purchasing power of the miner revenue is as high as possible.

Of course miners wouldn't be voting manually, for the most part. They'd use algorithms that would decide for them, trying to find the ideal strategy for the individual miner.

[amincd]

Just because the payment processor is using some of his own capital to make transactions efficient does not mean that there needs to be a credit relationship between he and his customers.

I'm having trouble understanding your explanations now. They seem to be more convoluted and vague than they need to be.

A credit relationship exists as soon as a customer deposits BTC with the bank, and is given demand deposits in exchange. The demand deposits are credit, that others accept as BTC, because they trust the bank to be good for them.

Not exactly.

When a person deposits money in any modern bank account, the money both legally and in practice belongs to the bank.  They have a debt to repay to you.  This is not a big deal...it fails catastrophically only once every few generations and is not a major beef I have with banks.  But anyway...

Let me first clarify, as my terminology might be unclear/confusing. I'm referring to "bank credit" not as credit extended by the BTC-bank to the consumer, but in the context of credit as a 'claim on an asset', instead of the actual asset. In other words, these promises to pay BTC on demand is what I'm referring to as 'bank credit', and this trust the customer puts in the BTC-bank to pay them back in BTC when they demand it is the 'credit relationship' I'm referring to.

I see a Bitcoin economy reliant on these promissory notes, because a 1 MB block size limit pushed transaction fees to $20, as a perversion of the original promise of Bitcoin. I think relying on BTC-banks and clearing houses to transfer claims on BTC, rather than BTC itself, would take a sledgehammer to Bitcoin entrepreneurship.

My website btctip.com is a good example of an amateur startup that couldn't operate in this high-powered expensive BTC world. On a very active week, I have maybe $20 worth of transactions into/out-of my site. Without low-cost network transactions, these tiny deposits and withdrawals would not be possible.

Instead I would have to accept BTC-credit (promissory notes). In order for my users to deposit BTC-credit into my site, I would have to become a client of a BTC-bank, and my customers would have to have accounts with the same BTC-bank, or a BTC-bank with a credit relationship with my bank, allowing for migration of BTC-credit between accounts on the two banks. This would be difficult, and would probably only give me access to a small percentage of BTC users, rather than all of them, as I have now.

My ability to allow my users to withdraw would likewise be limited to the banks I can manage to connect with.

I would not develop a site in an economy like this, because there would be too many obstacles, my market would be too small, and my disadvantage relative to big players too big.

Say you wish to make a payment to Bob.  You can tell the processor, "you know that blob I gave you the other day?  I want you to turn some of it into value and give it to Bob."  The payment processor looks around and say, "I found Bob.  Sign this note which will allow me to give some of it to Bob."  I say OK.  Moments later, Bob has some value in his account.

This is a substantively different relationship than I have with my bank, and made possible with advances in technology which the banking system has not caught up with.  

You're talking about advances in banking, not in Bitcoin. These same technologies could be used in fiat banking, since they're just transfers of claims, that could be for any asset.

To claim that you're going to develop the technology of modern banking so that a Bitcoin-economy reliant on banks is as easy and seamless as one reliant on nodes is pie in the sky idealism that should not be a factor in deciding what to do with the block size limit.

[Stampbit]

i concur

[tvbcof]

...
My website btctip.com is a good example of an amateur startup that couldn't operate in this high-powered expensive BTC world. On a very active week, I have maybe $20 worth of transactions into/out-of my site. Without low-cost network transactions, these tiny deposits and withdrawals would not be possible.
...

Good heavens!  You are already an off-chain processor.  This is great!  It's pretty much sinking in to most people by this time that micro-payments are unrealistic, and a lot of us (including myself) are disappointed...even if we saw it coming years ago.  That is indeed one of the driving forces behind wishing to have a robust 'off-chain' set of solutions.

Your case is a perfect example of a much needed niche to be filled.

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

I do anticipate that the same methods which protect your customers from you will be accessible to protect you from any counter-parties you might do business with in an attempt to streamline your operations and reduce costs.

Bitcoin seems like some magic bullet which makes everything free and easy at this point, but that is mainly an artifact of it's being a tiny tiny spec in the global economy at this time.  It will become more expensive and complex as it grows.  We have entities chomping at the bit to subsidize the cost of this growth because they would like to capitalize on some of the value streams it offers.  The larger the entity, and the more they can monopolize the infrastructure, the more value they can realize from the solution.  I, and others, really don't want to see that become the future of Bitcoin.

[aaaxn]

Good heavens!  You are already an off-chain processor.  This is great!  It's pretty much sinking in to most people by this time that micro-payments are unrealistic, and a lot of us (including myself) are disappointed...even if we saw it coming years ago.  That is indeed one of the driving forces behind wishing to have a robust 'off-chain' set of solutions.

Your case is a perfect example of a much needed niche to be filled.

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

I do anticipate that the same methods which protect your customers from you will be accessible to protect you from any counter-parties you might do business with in an attempt to streamline your operations and reduce costs.

Bitcoin seems like some magic bullet which makes everything free and easy at this point, but that is mainly an artifact of it's being a tiny tiny spec in the global economy at this time.  It will become more expensive and complex as it grows.  We have entities chomping at the bit to subsidize the cost of this growth because they would like to capitalize on some of the value streams it offers.  The larger the entity, and the more they can monopolize the infrastructure, the more value they can realize from the solution.  I, and others, really don't want to see that become the future of Bitcoin.

So how exactly you are going to fund your bittip account? Will you be forced fund it $1000 at once just to get reasonable fee? Great user experience

[tvbcof]

Good heavens!  You are already an off-chain processor.  This is great!  It's pretty much sinking in to most people by this time that micro-payments are unrealistic, and a lot of us (including myself) are disappointed...even if we saw it coming years ago.  That is indeed one of the driving forces behind wishing to have a robust 'off-chain' set of solutions.

Your case is a perfect example of a much needed niche to be filled.

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

I do anticipate that the same methods which protect your customers from you will be accessible to protect you from any counter-parties you might do business with in an attempt to streamline your operations and reduce costs.

Bitcoin seems like some magic bullet which makes everything free and easy at this point, but that is mainly an artifact of it's being a tiny tiny spec in the global economy at this time.  It will become more expensive and complex as it grows.  We have entities chomping at the bit to subsidize the cost of this growth because they would like to capitalize on some of the value streams it offers.  The larger the entity, and the more they can monopolize the infrastructure, the more value they can realize from the solution.  I, and others, really don't want to see that become the future of Bitcoin.

So how exactly you are going to fund your bittip account? Will you be forced fund it $1000 at once just to get reasonable fee? Great user experience

In practice, there would probably be three options from the perspective of the micro-blogger.  (Using $ terms for simplicity.)

 - If the tips are, in the range of $0->$10 per month, just provide reference(s) to other processor(s) which are used.

 - If the tips are in the $10->$1000 range, count 'bittip' as one of the off-chain processors you use.

 - If the tips exceed $1000/mo, request native Bitcoin blockchain operations.

In no case would an up-front deposit be necessary for the micro-blogger.

As a person who wished to be the tip-er, I would anticipate choosing one of the off-chain providers I choose to patronize as the sender.  If I was really into giving tips I may go ahead and set up an account with 'bittip' for that reason alone, but I don't expect that that would be terribly common.

[aaaxn]

In practice, there would probably be three options from the perspective of the micro-blogger.  (Using $ terms for simplicity.)

 - If the tips are, in the range of $0->$10 per month, just provide reference(s) to other processor(s) which are used.

 - If the tips are in the $10->$1000 range, count 'bittip' as one of the off-chain processors you use.

 - If the tips exceed $1000/mo, request native Bitcoin blockchain operations.

In no case would an up-front deposit be necessary for the micro-blogger.

As a person who wished to be the tip-er, I would anticipate choosing one of the off-chain providers I choose to patronize as the sender.  If I was really into giving tips I may go ahead and set up an account with 'bittip' for that reason alone, but I don't expect that that would be terribly common.

What one would really do facing such options? Use Paypal, dwolla or whatever ;]
You forgot one tiny thing: no one is forced to use bitcoins. If it sucks so much as you describe just don't use it until it is fixed.

[tvbcof]

What one would really do facing such options? Use Paypal, dwolla or whatever ;]
You forgot one tiny thing: no one is forced to use bitcoins. If it sucks so much as you describe just don't use it until it is fixed.

Currently Bitcoin is fantastic (although not perfect.)  This is understandable because it has not yet been forced to deal with the engineering, market, and political challenges which will appear with significantly increased utilization.

The goal for me here is the try to help ensure that Bitcoin does not fall into the same category as Visa/PayPal, etc.

I've always said that I actually like and prefer Visa/PayPal for certain things at this time.  Most of the things I do in fact.  Bitcoin, however, offers so unique advantages which Visa and PayPal cannot match.  I use Bitcoin for these things (like storing wealth securely, making donations, etc)  and I very much do not wish to see these things vanish from the suite that Bitcoin offers.

[Seth Otterstad]

The blockchain is not currently increasing in size linearly in a straight line, as you can see here:
http://blockchain.info/charts/blocks-size?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

It is increasing exponentially because we are in the adoption stage where more users are added.  Once bitcoin reaches its potential market size, or once it hits a blocksize limit, the blockchain size will increase linearly.  We will never see sustained exponential growth in the number of monetary transactions that humans need to conduct.

Bitcoin merchant adoption and transaction fees have grown 1000% over last year, which is an extremely high rate that temporarily outpaces hard drive capacity growth, but this cannot be sustained very long.  Hard drive space and internet speed show no signs of slowing their exponential growth rates, so they will always outpace the bitcoin blockchain in the long run.  Exponential growth will always win out over linear growth.  People will be able to store the blockchain on their personal computers forever.  Removing the blocksize limit doesn't change that.

There was a recent article in Bitcoin Magazine that analysed the blockchain size, but most of their articles are not available online.  The article looked at some worst case scenarios, and even using really conservative estimates, 20 years from now people will easily be able to store the whole blockchain on their phone and download the whole thing in a few hours.

Hard drive capacity over time:

[Peter Todd]

There was a recent article in Bitcoin Magazine that analysed the blockchain size, but most of their articles are not available online.  The article looked at some worst case scenarios, and even using really conservative estimates, 20 years from now people will easily be able to store the whole blockchain on their phone and download the whole thing in a few hours.

Bitcoin Magazine is assuming technological growth continues to grow exponentially. Unfortunately that's an extremely optimistic assumption at best. For instance, the width between the smallest features on transistors will be on the order of 10-20 atoms in just a few more years, and frankly no-one in the industry has any clue how we're going to do much better than that, or even if we can. (I work as an electronics designer) Additionally the cost of chip fabs is already to the point where the whole world economy can only support about 10 top-of-the-line fabs, and that number has historically gotten smaller for every technological iteration.

You remind me of the people who were predicting flying cars back in the 60's on the basis that airplane technology had been improving exponentially prior to the 60's. Everything looked great... until they hit the physical limits of the technology.

In any case, focusing on raw technology is missing the point: what matters is censorship-proof network bandwidth. Unfortunately that doesn't scale with technology improvements.

[Seth Otterstad]

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Flying cars seems like an ironic example to choose.  We already have flying cars.  They will get popular once some infrastructure is built and the price comes down a bit.
http://www.youtube.com/watch?v=nnF2yua4KIw
http://www.youtube.com/watch?v=CajAq6ndJYE
http://www.youtube.com/watch?v=FY85eExk7Zo

Also, by 2030 we will be able to fly London>Sydney in 1 or 2 hours with hypersonic aircraft.

Why do you think censorship-proof network bandwidth doesn't scale with technology improvements?  You think TOR would be just as fast if we were all running 14.4k modems?  You think TOR will be the same speed when we all have 1gb internet connections?

[grue]

We should only expand block size when there's a legitimate bottleneck. Satoshidice and other "on the chain" services does not count. Neither do small value transactions that can be settled by off the chain transaction providers. If you take away all of those, we have plenty of room to grow.

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs here.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Only problem: moore's law doesn't apply to bandwidth capacity. Case in point: I'm still stuck with my ADSL 1 internet. My other option is VDSL or DOCIS 3.0 but they are only offered by incumbents and they have a cap of 80 GB/month.

[edmundedgar]

We should only expand block size when there's a legitimate bottleneck. Satoshidice and other "on the chain" services does not count. Neither do small value transactions that can be settled by off the chain transaction providers. If you take away all of those, we have plenty of room to grow.

Out of interest, what's the specific cost per transaction, in USD, that you think will price out Satoshi Dice while keeping things that are "legitimately" on the block-chain viable?

[Seth Otterstad]

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs here.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Only problem: moore's law doesn't apply to bandwidth capacity. Case in point: I'm still stuck with my ADSL 1 internet. My other option is VDSL or DOCIS 3.0 but they are only offered by incumbents and they have a cap of 80 GB/month.

Don't be ridiculous.  Moore's law applies to bandwidth just fine.  In fact it seems to be speeding up.  The law does not fail just because when fiber is rolled out, it is not installed in your particular house.
http://www.cabletechtalk.com/broadband-internet/broadband/broadband-speed-and-moores-law-a-response-to-robb-topolski/

1980:  300 baud
1990: 14.4k
2000: 384k dsl
2013: 1000mb fiber

[edmundedgar]

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs here.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Only problem: moore's law doesn't apply to bandwidth capacity. Case in point: I'm still stuck with my ADSL 1 internet. My other option is VDSL or DOCIS 3.0 but they are only offered by incumbents and they have a cap of 80 GB/month.

Don't be ridiculous.  Moore's law applies to bandwidth just fine.  In fact it seems to be speeding up.  The law does not fail just because when fiber is rolled out, it is not installed in your particular house.
http://www.cabletechtalk.com/broadband-internet/broadband/broadband-speed-and-moores-law-a-response-to-robb-topolski/

1980:  300 baud
1990: 14.4k
2000: 384k dsl
2013: 1000mb fiber

Nielsen reckons network growth is a bit slower, but still exponential. He has network speed increasing at 50% per year, while Moore's Law works out at about 60% per year.
http://www.nngroup.com/articles/law-of-bandwidth/

[grue]

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs here.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Only problem: moore's law doesn't apply to bandwidth capacity. Case in point: I'm still stuck with my ADSL 1 internet. My other option is VDSL or DOCIS 3.0 but they are only offered by incumbents and they have a cap of 80 GB/month.

Don't be ridiculous.  Moore's law applies to bandwidth just fine.  In fact it seems to be speeding up.  The law does not fail just because when fiber is rolled out, it is not installed in your particular house.
http://www.cabletechtalk.com/broadband-internet/broadband/broadband-speed-and-moores-law-a-response-to-robb-topolski/

1980:  300 baud
1990: 14.4k
2000: 384k dsl
2013: 1000mb fiber

Now we have exponentially growing bandwidth capacity that WE CAN'T USE. nice! Tell me, how many locales in the americas can you get 1 Gb/s fiber?

[amincd]

You're not addressing my points here:

...
My website btctip.com is a good example of an amateur startup that couldn't operate in this high-powered expensive BTC world. On a very active week, I have maybe $20 worth of transactions into/out-of my site. Without low-cost network transactions, these tiny deposits and withdrawals would not be possible.
...

Good heavens!  You are already an off-chain processor.  This is great!  It's pretty much sinking in to most people by this time that micro-payments are unrealistic, and a lot of us (including myself) are disappointed...

But I still need low cost transactions to allow users to deposit and withdraw, otherwise even the <$20 worth of deposit/withdrawal activity that happens per week wouldn't happen.

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

That's tangential and not an explanation for how I would run my site as it is now.

My site doesn't have professional security measures/best-practices in places. It's an experimental site I run on the side so users do not trust it with more than $20 worth of BTC deposits per week cumalatively. With a 1 MB block size limit and $20 transaction fees, my site would not be possible.

Bitcoin seems like some magic bullet which makes everything free and easy at this point, but that is mainly an artifact of it's being a tiny tiny spec in the global economy at this time.  It will become more expensive and complex as it grows.

Transactions don't need to become more expensive as it grows. We can simply not have a 1 MB block size limit.

We have entities chomping at the bit to subsidize the cost of this growth because they would like to capitalize on some of the value streams it offers.

There's no evidence this is happening.

In practice, there would probably be three options from the perspective of the micro-blogger.  (Using $ terms for simplicity.)

 - If the tips are, in the range of $0->$10 per month, just provide reference(s) to other processor(s) which are used.

First of all, as I've mentioned before, it's not "other processor(s)" we're talking about, it's "other banks". If btctip were to provide a reference to a BTC-bank, it would cease to be dealing in BTC. Instead, it would be dealing with BTC-credit.

To explain further, let's say one of my users has BTC deposited with MtGox. He wants to deposit some BTC in my site, but doesn't want to pay a $20 transaction fee, so provides a "reference" to some of the BTC he has stored at MtGox.

I therefore receive some of the BTC-credit (promissory-notes), as opposed to actual BTC, that is backed by the full faith and credit of MtGox.

Overtime, the BTC-credit deposited at btctip would become an assortment of promissory notes from various BTC-banks, each with a different value depending on how much the backing bank is trusted.

If one of my users 'tips' another user, my site would have to try to determine which type of BTC-credit to transfer. Remember: I don't have any actual BTC deposited at my site, just promissory notes, issued by different BTC-banks. There would be no obvious way to do this. My site would not be possible.

In this economy, only the largest BTC-banks would have universally trusted BTC promissory notes, with most users opting to their credit. This would create a tendency to more centralization of the BTC-economy around a few large financial institutions, with small players like my website being completely dependent on them.

The power of the largest BTC-banks would be like the power large financial institutions have today. They would have the power to exclude anyone they wanted from using their services, and those excluded would be at a severe disadvantage relative to those approved by the large BTC financial institutions.

This is why I see a permanent 1 MB block size, that forces transaction fees to $20, as going against everything that makes BTC useful.

[Seth Otterstad]

People have been calling for an end to moore's law for decades and been wrong.  Besides, the only important parts of moore's law here is hard drive capacity and internet bandwidth, not CPUs here.  These are not going to slow down their exponential growth any time in the next decades.  Hard drive capacity in particular seems likely to have radical breakthroughs that smash the pace of moore's law.

Only problem: moore's law doesn't apply to bandwidth capacity. Case in point: I'm still stuck with my ADSL 1 internet. My other option is VDSL or DOCIS 3.0 but they are only offered by incumbents and they have a cap of 80 GB/month.

Don't be ridiculous.  Moore's law applies to bandwidth just fine.  In fact it seems to be speeding up.  The law does not fail just because when fiber is rolled out, it is not installed in your particular house.
http://www.cabletechtalk.com/broadband-internet/broadband/broadband-speed-and-moores-law-a-response-to-robb-topolski/

1980:  300 baud
1990: 14.4k
2000: 384k dsl
2013: 1000mb fiber

Now we have exponentially growing bandwidth capacity that WE CAN'T USE. nice! Tell me, how many locales in the americas can you get 1 Gb/s fiber?

Are you ******* serious dude?  You obviously don't have a clue what moore's law is.  Hardly anyone had 384k DSL at the turn of the century either.  Change it to 2013: 20mb.  It still follows moore's law.  Did you even see the freaking graph I posted?  World internet bandwidth has gone from less than 1,000 Gb/s in 2001 to 80,000 Gb/s in 2011.  It's too bad they missed your house, but stfu about it.

[tvbcof]

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

That's tangential and not an explanation for how I would run my site as it is now.

My site doesn't have professional security measures/best-practices in places. It's an experimental site I run on the side so users do not trust it with more than $20 worth of BTC deposits per week cumalatively. With a 1 MB block size limit and $20 transaction fees, my site would not be possible.

I anticipate that what will develop will be a selection of turn-key engines which will gaurentee to people like me that people like you are running a service which is highly likely to be legitimate and will achieve the result I want.  As a bonus, it will be free to you.  You can then focus on value-adds which are important to your customers.

Everyone wants a free ride on the blockchain.  If it's offered I'll hop right on (as outlined in my sig.)

At this point I still hold hope that Bitcoin proper can evolve to form the backbone of a solution that we, as citizens of Planet Earth, badly need.  If Bitcoin can move to that role without being 'PayPal-ified' by well capitalized corporate interests it will be better for everyone.  Or everyone I care about, at least, and that certainly includes efforts such as 'bittip'.

---

I'm sorry to snip the remaining, but I'm exasperated with this conversation and I don't believe that it is achieving much for anyone at this point.  Once some other material which explains the basic problems, principles, definitions, and possibilities makes it's way around, we can re-visit some of this stuff.  These were only touched on in the vid due to lack of time and lack of development.