2013-11-12 WaPo: Bitcoin needs to scale by a factor of 1000 to compete with Visa

[Arvicco]

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/12/bitcoin-needs-to-scale-by-a-factor-of-1000-to-compete-with-visa-heres-how-to-do-it/

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[LiteCoinGuy]

nice piece. thanks.

[totaleclipseofthebank]

Lol, I think this is way beyond the comprehension level of most wapo readers

[kriwest]

I learned something new about the inner workings of Bitcoin, and the future plans ahead. Nice article.. increased my faith in BTC even more.

[prophetx]

this is gonna be a big deal...

[solex]

Great article - but seemed truncated.

[HeliKopterBen]

Nice article outlining a legitimate problem without spreading FUD.

[Rygon]

Good article, although it doesn't mention the network bandwidth issue that would occur with more frequent transactions. As transactions increase, it takes longer to push out the new block to all the nodes, and delay the time before a node works on a new block. If the average block size was 1000 times larger, that would be about 1 gig of information that needs to make it around the network to all the mining pools and full nodes. The mining pools want this information in seconds, so they will need to be connected through data centers and high-end commercial lines. Merchants running full nodes can probably get away with a minute or two, but that still requires a high bandwidth line of around 100 Mbit/seconds.

My numbers are probably a little off, but it seems clear that the network will have to become much more centralized in order to deal with large transaction traffic. The good news is that everyone running the nodes will have sufficient motivation to be honest. The bad news is that bitcoin might not be feasible in some countries due to a lack of network infrastructure and governments that can easily identify and shut down full nodes.

[Gabi]

So, 3 or 4 years? Ok.

[cr1776]

A relatively good article from the Post. When it scales the price by a factor of 1000 too...

And after the ECB comments today, it is certainly possible!

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/12/bitcoin-needs-to-scale-by-a-factor-of-1000-to-compete-with-visa-heres-how-to-do-it/

[prophetx]

A relatively good article from the Post. When it scales the price by a factor of 1000 too...

And after the ECB comments today, it is certainly possible!

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/12/bitcoin-needs-to-scale-by-a-factor-of-1000-to-compete-with-visa-heres-how-to-do-it/

you mean this?

"The European Central Bank could adopt negative interest rates or purchase assets from banks if needed to lift inflation closer to its target, a top ECB official said, rebutting concerns that the central bank is running out of tools or is unwilling to use them."

http://online.wsj.com/news/articles/SB10001424052702304243904579195631017906684

[cr1776]

Yes, that was it. Sounds like they have little idea about what is going on.  ;-)

A relatively good article from the Post. When it scales the price by a factor of 1000 too...

And after the ECB comments today, it is certainly possible!

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/12/bitcoin-needs-to-scale-by-a-factor-of-1000-to-compete-with-visa-heres-how-to-do-it/

you mean this?

"The European Central Bank could adopt negative interest rates or purchase assets from banks if needed to lift inflation closer to its target, a top ECB official said, rebutting concerns that the central bank is running out of tools or is unwilling to use them."

http://online.wsj.com/news/articles/SB10001424052702304243904579195631017906684

[Mike Hearn]

Good article, although it doesn't mention the network bandwidth issue that would occur with more frequent transactions.

It isn't mentioned because it's easy to change the protocol so that transactions are not repeated in blocks, yielding much smaller block messages and correspondingly lower propagation delays.

Remember that by the time a block has arrived, a "warmed up" node has already done the hard work of verifying all the signatures and cached their validity. So all that is required is to commit the block state to disk and relay. The process can be highly optimised.

[solex]

Good article, although it doesn't mention the network bandwidth issue that would occur with more frequent transactions.

It isn't mentioned because it's easy to change the protocol so that transactions are not repeated in blocks, yielding much smaller block messages and correspondingly lower propagation delays.

Remember that by the time a block has arrived, a "warmed up" node has already done the hard work of verifying all the signatures and cached their validity. So all that is required is to commit the block state to disk and relay. The process can be highly optimised.

Well done getting so much quoted info out!

Another point which the mainstream is oblivious about is that Bitcoin transactions are so much more efficient. VISA payments are always one-to-one but, of course, Bitcoin allows for one-to-many and many-to-one. The potential of this is unexplored territory for commerce.

[Rygon]

Good article, although it doesn't mention the network bandwidth issue that would occur with more frequent transactions.

It isn't mentioned because it's easy to change the protocol so that transactions are not repeated in blocks, yielding much smaller block messages and correspondingly lower propagation delays.

Remember that by the time a block has arrived, a "warmed up" node has already done the hard work of verifying all the signatures and cached their validity. So all that is required is to commit the block state to disk and relay. The process can be highly optimised.

Wow, I had no idea. Thanks for the clarification. You rock.

[callem]

Great article. The fact bitcoin is even being compared to visa in terms of potential transaction volume shows how fast things are moving.

A few orders of magnitude are nothing in 'bitcoin time'  

[Spaceman_Spiff]

Very informative article.