Bictoin: Only 7 Transactions Per Second. Not gonna fly...

[BittBurger]

Its Bitcoin Black Friday and a lot of people are using Bitcoin today to make purchases.
And guess what:  I can't check out on some stores.  
I am assuming this has something to do with Bitcoin's limit of 7 transactions per second, across the *entire* network.
It's possible something is wrong with the store I am using, too.

But Visa and Mastercard which can handle 2,000 transactions per second.
My Bitcoin QT client took well over 20 minutes to generate the first confirmation.
Maybe that's why the BitPay interface on this shopping cart eventually timed out - after 15 minutes.
If so, this is a network speed issue, right?

I feel like this is a huge, huge problem that needs to be addressed yesterday.
I know Gavin and the dev team are well aware of it, but now here we are on Bitcoin Black Friday
And its possible some people can't even use Bitcoin to buy things?

Is this where Litecoin comes in, with its faster speed?
Making it the true currency of commerce, while Bitcoin gets pushed to the back as a "store of value" instead? (sad face)

-Burger-

[DeathAndTaxes]

7 tps can be raised, it is an artificial limit which didn't exist in the original client.  It was added after the fact as a denial of service prevention mechanism.

BitPay times out if the TX IS NOT SEEN IN 15 MINUTES.  This means 0-confirm.  My guess is you used a client which wasn't synced to the blockchain and your tx was never sent until >15 minutes after the invoice was created.  You probably shouldn't use the QT client it really isn't designed for "users".  I would recommend using a lite client like multibit or electrum which handles all the "hard stuff" (like keeping synced with blockchain) for you.

Still keep fudding.  You probably should sell all your Bitcoins now, you know it is going to fail so sell while you still can.

[Barek]

https://blockchain.info/charts/n-transactions

Network is currently at about 1 tps.

[BittBurger]

I was fully sync'd to the block chain.

Definitely made sure of that first.

I sat here and watched.  It was a " ? " on the QT transaction thing for roughly 25 solid minutes.  

So this is a network speed issue, is it not?

[Barek]

Plenty of room in the blocks.

Did you include a transaction fee?

[BittBurger]

https://blockchain.info/charts/n-transactions

Network is currently at about 1 tps.

Thanks Barek - I guess that proves my suspicions wrong.  

QT still took 25 minutes to go from a " ? " to a clock icon ...

I suppose this thread could be a discussion about the 7 transactions per second limit anyways.... lol

Its going to be an issue if Visa has to handle 2,000 per second ...

I thought Black Friday - maybe we'd be hitting 7+ transactions per second.

Did you include a transaction fee?

No, just did what an average consumer will do.  Hit "Pay", then Send, and waited.

[jbizzle]

Should Litecoin be the new crypto for currency, and Bitcoin exist as just a store of value?  

Excellent question.

[DeathAndTaxes]

Plenty of room in the blocks.

Did you include a transaction fee?

Bitpay doesn't even require a confirmation to save the invoice.  The invoice will be considered paid pending confirmations if the tx is seen on the network before it expires.  In other words you only need 0-confirm to avoid an invoice expiring.    Now most merchants* will still require 6 confirmations but as soon as the tx is seen on the network it stops the "expiration clock" and bitpay waits for 6 confirms before notifying the merchant that it has been paid and confirmed.


* Merchants can set the level of confirmation they require (0-confirm, 1-confirm, or 6-confirm) but regardless the invoice will not expire once the tx is seen on the network it just will take longer to eventually be marked as confirmed.

[Barek]

Bitpay doesn't even require a confirmation.  The invoice will be considered paid pending confirmations if the tx is seen on the network before it expires.  In other words you only need 0-confirm to avoid an invoice expiring. 

Oh, learned something. Could a missing fee have prevented the TX from being relayed?

[Barek]

Should Litecoin be the new crypto for currency, and Bitcoin exist as just a store of value?  

Excellent question.

It is the other way around. Litecoin penalizes you if coins are spent too quickly after they were received (takes about 2 weeks for that fee penalty to go away). Litecoin transacion fees are also much higher.

Litecoin advocates, please enlighten me if this is wrong. Currently, it is a pain to move LTC.

[DeathAndTaxes]

Bitpay doesn't even require a confirmation.  The invoice will be considered paid pending confirmations if the tx is seen on the network before it expires.  In other words you only need 0-confirm to avoid an invoice expiring. 

Oh, learned something. Could a missing fee have prevented the TX from being relayed?

Possibly but the default QT client will prevent you from sending tx without a fee if they will be dropped because they don't include a fee.  High priority tx are always relayed even without a fee, low priority tx are never relayed unless they have a fee.  Unless modified the QT client enforces no fee on high priority txs and does enforce the minimum fee on low priority txs.

The more likely scenario is the OP client never broadcast a transaction for 15+ minutes.

[jaked]

What you're experiencing is not a network overflow of some sort, but a normal confirmation process.
Your transaction must be included in a block to become part of the "blockchain".
Blocks are generated every 10 minutes, so the time for the 1st confirmation can be as long as 10 minutes. It can take even longer, depending on fees, transaction size and other factors.
This block should be "covered" by yet few more blocks on top to be considered fully confirmed. Current clients require 6 confirmations for the transaction to be considered as "final / done"; this can take an hour or more.

This might appear a very long process, but considering that credit card companies can cancel transactions months after they happened, the finality Bitcoin offers in an hour is a winner.

Litecoin is not quicker. It generates more confirmations in a shorter amount of time, but those confirmations are less secure and more subject to change than Bitcoin's ones.

The UX should be improved indeed, though I'm not sure how. There's probably an opportunity for payment services on top of Bitcoin to offer this.

[ex-trader]

Should Litecoin be the new crypto for currency, and Bitcoin exist as just a store of value?  

Excellent question.

Bitcoin is only a store of value whilst people think it has a value, which is because it can or 'will' be usable to buy things.

If it's ever proven that it doesn't work for commerce (and I believe it doesn't) then it's value will be fraction of what it is now.

[Abdussamad]

Should Litecoin be the new crypto for currency, and Bitcoin exist as just a store of value? 

Excellent question.

Bitcoin is only a store of value whilst people think it has a value, which is because it can or 'will' be usable to buy things.

If it's ever proven that it doesn't work for commerce (and I believe it doesn't) then it's value will be fraction of what it is now.

Well how long will it take to prove that it doesn't work for commerce?? Surely there has been plenty of time already for something like that to be proved true or false.

Bitcoin has value because it is set to become the world's reserve currency replacing the USD and also for global trade replacing SWIFT. That is where it is headed. The signs are clear from the adoption of Bitcoin in China. They've been looking for a way out of the USD trap they are currently in and this is it.

[ex-trader]

Well how long will it take to prove that it doesn't work for commerce?? Surely there has been plenty of time already for something like that to be proved true or false.

Bitcoin has value because it is set to become the world's reserve currency replacing the USD and also for global trade replacing SWIFT. That is where it is headed. The signs are clear from the adoption of Bitcoin in China. They've been looking for a way out of the USD trap they are currently in and this is it.

Bitcoin has not yet proved it can be used for trade in volume, but the hope remains, over time that will either be proven or interest will dissipate.

As for China they're only buying it for speculation, they have a lot of money and are very active gamblers/investors, they cannot use it to buy anything. As for it being a reserve currency that'll only be the case if it has global usage and a belief system that supports it's value. Right now we're still in early Facebook 'I believe' territory, it remains to be seen whether Bitcoin ends up being Facebook or Friends Re-United.

[DeathAndTaxes]

Should Litecoin be the new crypto for currency, and Bitcoin exist as just a store of value?  

Excellent question.

Bitcoin is only a store of value whilst people think it has a value, which is because it can or 'will' be usable to buy things.

If it's ever proven that it doesn't work for commerce (and I believe it doesn't) then it's value will be fraction of what it is now.

Well how long will it take to prove that it doesn't work for commerce?? Surely there has been plenty of time already for something like that to be proved true or false.

Bitcoin has value because it is set to become the world's reserve currency replacing the USD and also for global trade replacing SWIFT. That is where it is headed. The signs are clear from the adoption of Bitcoin in China. They've been looking for a way out of the USD trap they are currently in and this is it.

It might take decades.  For a currency to be used as a unit of account in commerce both parties have to be willing to use it.  Not just some mechant and some customer but the specific customer looking to use a specific merchant.  For an individual to use a currency as a store of value they just need to believe that SOMEONE, anyone will accept it in the future.  That is somewhat simplified but you can see the network effect requires for direct commerce are much higher than for a store of value.

Imagine a hypothetical store.
Does the store accept Bitcoins? No? Then no Bitcoin commerce is possible.
If the store accepts Bitcoins does the customer have Bitcoins to spend? No? Then no Bitcoin commerce is possible.

However if you believe that Bitcoin will be increasingly used as a store of value then that means in the example above the second requirement is more likely to be fulfilled in the future even if it isn't today.  100K Bitcoin holders means 100K potential customers.  1B Bitcoin holders means 1B potential customers.   If adoption as a store of wealth continues to grow (not just value of the currency by the number of individuals holding it).  More currency holders means it is more likely merchants will accept it as payment to gain access to those currency holders.

Imagine I am a merchant that makes widgets and all my competitors make widgets.   At the current time none of us accept bitcoins as payment.  If someone has wealth stored in bitcoins and wants a widget (lets assume these widgets are expensive) they need to trade it for local currency and buy indirectly.  This means they face additional time, cost, and risk.   It would be much easier for this bitcoin holder if at least one widget maker accepts bitcoins.   If I accept bitcoins then I can gain an advantage over competitors even if my prices are marginally higher (as long as bitcoin holding customers see value in a direct transactions).  If you believe in free markets and economic competition then the end game is that eventually there will be large enough critical mass of potential customers that at least one widget maker will accept bitcoins to tap that market. 

A currency can be used as a store of wealth or a unit in transactions.   The store of wealth use requires less of a network effect so it will grow quicker but baring some failure of the system that will boost the growth as a transaction unit use as well.  It however will take longer and require more potential customers holding the currency.  We have seen this effect somewhat already.  The earliest holders of the currency were miners so products and services offered for bitcoins that met that demographic were more successful than ones which didn't.  Think used computer parts vs cosmetics.

[ex-trader]

It might take decades. ......

I completely agree with all your post.

The issue will be whether people holding as a store of value are patient enough and whether some form of crash or problem causes confidence to fail either in Bitcoin itself (to be replaced by another medium) or in all crypto-currencies. Time will tell.....

[eternaluniverse]

It might take decades. ......

I completely agree with all your post.

The issue will be whether people holding as a store of value are patient enough and whether some form of crash or problem causes confidence to fail either in Bitcoin itself (to be replaced by another medium) or in all crypto-currencies. Time will tell.....

agreed so keeping a few hundred in BTC today may pay back 10 fold or we may lose it outright. Im definitely willing to take that risk and am fully aware of the consequences.

[Minor Miner]

It might take decades. ......

I completely agree with all your post.

The issue will be whether people holding as a store of value are patient enough and whether some form of crash or problem causes confidence to fail either in Bitcoin itself (to be replaced by another medium) or in all crypto-currencies. Time will tell.....

You seem to have a view.   Maybe you can tell me this.
How many BTC are trading per day (real trading, not daytrading).
in 1998, when the day trading fad was kicking in, many internet stocks had 70-80% of their volume in NON board lots.   And day traders did not have bots.

[ex-trader]

You seem to have a view.   Maybe you can tell me this.
How many BTC are trading per day (real trading, not daytrading).
in 1998, when the day trading fad was kicking in, many internet stocks had 70-80% of their volume in NON board lots.   And day traders did not have bots.

Real transactions are tiny in my view. Perhaps 1% or less.

BTC trading volumes spike massively as the BTC/USD rate improves (see blockchain), this suggest this is being driven by speculative activity rather than spending on products (which should reduce in BTC as the rate increases).