Bitcoin usage and misaligned expectations

[Mahanton]

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

If its a failure then we wont see on how big the community is as of this moment.It might miss some expectations in terms of payment options but it do have some revolutionary benefits that
other things cant provide.

[1714648562]

1714648562

[1714648562]

1714648562

[1714648562]

1714648562

[traderethereum]

Then they need to learn more about bitcoin because bitcoin needs that fee to make the network running and with the fee, it will also give support for the network to stay for a long time.
Besides that, the fee is something that is included in the transaction whether we like or not, and the fees are the part of the transaction itself.
Besides that, it doesn't make sense that you can get more bitcoin in many ways, but you don't want to pay the fee.
And I think that is a failure if they think like that.

[franky1]

Then is Bitcoin truly a failure? Without meandering, and the social drama, tell us directly. Because your reply hints that it's a "failure", but the reality is going against the people, like you, that say it.

Going to the other side, without the social drama, would you say that the Bitcoin forks with bigger blocks, and almost-zero fees are truly "successful"?

to address the second point.. your derailing into th social drama of altcoins.. (you keep trying to do this) stay on point please
but to quickly brush over it. if a coin has utility where people want to use it and are happy then its not a failure.
most forks are not popular because they dont have the merchant acceptance and so although theres more buffer(more technical potential) the potential does not reveal success or failure.


the bitcoin technology works fine.
a hashed block has enough strength to give people trust that it makes it hard/near impossible for another party to re-org a fresh chain quickly/easily. thus people will trust if something is confirmed, they can relax and treat it as such,

what people dont realise is there is nothing that commands, enforces that a certain transaction should get included under guarantee.
no fee, no format, no rule ensures a transaction is guaranteed to be confirmed.
mining pools make the decision of what they want to put into a block. they could leave a block empty, or fill it with zero fee's and ignore transactions with fee's.

for instance BTCC had an exchange and for the BTCC exchange withdrawals the BTCC pool would add those transactions in at zero fee and prioritise them. thus ignoring random transactions in the network even if fee's were high. that was their choice.

pools do not ned to fill blocks. they can simply have half filled blocks and set min fee at say 666sats a byte.. or fill a block with an average of 333sats a block to get the same end total value

trying to presume that blocks need to stay at 1mb legacy just to push fee's up is bad economics of HUMANS and nothing to do with bitcoin tech.
bitcoin tech can sort out fee issues without the need to stifle blocksizes.
bitcoin tech can sort out fee issues when pools decide they need income from fee's

right now at an average of 25c a tx 3000 tx=$75
pools wont waste time filling blocks with transactions of 25c if the delay of doing so risks gtting their $100,000 reward
pools would rather empty block if they could to gaina few second advantage to win the $100k rather than fill blocks.

pools only fill blocks for personal moral reasons of putting something into blocks will keep users happy to continue using bitcoin so they have users to buy their $100k reward.
they dont care about fee's as an income. and wont care for decades.
what they do care about is if users are forced into paying too much just to make a transaction that they no longer want to use bitcoin and thus no one wants to buy bitcoin from pools

[TimeTeller]

Then they need to learn more about bitcoin because bitcoin needs that fee to make the network running and with the fee, it will also give support for the network to stay for a long time.
Besides that, the fee is something that is included in the transaction whether we like or not, and the fees are the part of the transaction itself.
Besides that, it doesn't make sense that you can get more bitcoin in many ways, but you don't want to pay the fee.
And I think that is a failure if they think like that.

Those who truly understand the nature of Bitcoin will not question about such fee.
We are already paying all sorts of fees in every single item that we purchased, and we are not complaining about it.
Bitcoin transaction is very transparent, the reason why we can immediately see the fees unlike our everyday expenses, fees are integrated with them already that we couldn't see the real value of the item.

[Shenzou]

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

I am not gonna say that Bitcoin has failed to be a micro transactions currency, but i say there is a large for improvements, maybe now it is not as noticeable since the market is still stable and there is not as much transactions in the blockchain, but back in 2017 when the the price skyrocketed people went crazy and so were the fees, and you had to pay like 10$ for 1$ transaction and if you don't your transaction would take for hours and hours to be confirmed, it did die out after the price started going down again in 2018 but who says that it won't happen again, if we really want bitcoin to thrive and be considered as a payment method like in the real world at local shops and restaurants, we need to find a solution to that.

[Wind_FURY]

Then is Bitcoin truly a failure? Without meandering, and the social drama, tell us directly. Because your reply hints that it's a "failure", but the reality is going against the people, like you, that say it.

Going to the other side, without the social drama, would you say that the Bitcoin forks with bigger blocks, and almost-zero fees are truly "successful"?

to address the second point.. your derailing into th social drama of altcoins.. (you keep trying to do this) stay on point please
but to quickly brush over it. if a coin has utility where people want to use it and are happy then its not a failure.
most forks are not popular because they dont have the merchant acceptance and so although theres more buffer(more technical potential) the potential does not reveal success or failure.

Why can't you answer, and always accuse me of "meandering", or "derailing", or doing "social drama"? I want to know your opinion.

the bitcoin technology works fine.
a hashed block has enough strength to give people trust that it makes it hard/near impossible for another party to re-org a fresh chain quickly/easily. thus people will trust if something is confirmed, they can relax and treat it as such,

what people dont realise is there is nothing that commands, enforces that a certain transaction should get included under guarantee.
no fee, no format, no rule ensures a transaction is guaranteed to be confirmed.

Of course there is, game-theoretically the fees do. If a miner or a pool ignores this fact, other miners and pools will take advantage of it, and kill the other miner or pool that ignores.

mining pools make the decision of what they want to put into a block. they could leave a block empty, or fill it with zero fee's and ignore transactions with fee's.

I believe Antpool used to do it, but why?

[Aaltu1212]

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

wright!

[Betwrong]

Apart from being positive that Bitcoin will be used for "almost-zero fee" coffee transactions at some point in the future, I want to focus on what BTC is good for right now. Think of the biggest trucks in the world, such as Caterpillar 797B, Hitachi EH5000, Liebherr T 282 B and others.



If you will try to deliver pizza on them, your business will fail obviously. But are those trucks a  failure? No.

My point is that today's Bitcoin can be compared to those powerful trucks in a sense that it is a very good tool for massive, over $1,000, transactions, especially when they are transnational ones.

[sehoon]

You can't judge bitcoin's success because of this zero fee thing because that is not how cryptocurrencies work. They probably find failure because they can't make something out of bitcoin because they are probably buying at a high price and complains when it is low. And I don't understand this fee thing. I mean, is the fee too high? I don't think it is too high and we are already dealing with fees even without cryptocurrency.

[IPVPIRL]

Apart from being positive that Bitcoin will be used for "almost-zero fee" coffee transactions at some point in the future, I want to focus on what BTC is good for right now. Think of the biggest trucks in the world, such as Caterpillar 797B, Hitachi EH5000, Liebherr T 282 B and others.



If you will try to deliver pizza on them, your business will fail obviously. But are those trucks a  failure? No.

My point is that today's Bitcoin can be compared to those powerful trucks in a sense that it is a very good tool for massive, over $1,000, transactions, especially when they are transnational ones.

You make a great point there. Right now Bitcoin is used by institutions storing or transfering huge amounts of value. Also it is used even more for speculation. Most people and institutions that own Bitcoin prefer not to spent it, but instead hold it in their hardware wallet and have it probably buried in their backyard.

We talk about pizza day and every single time we have to count the Bitcoin's spent in today's dollar value. Everyone is actually claiming that you should not use Bitcoin but store it instead. From my point of view Bitcoin is not store of value. It is not a piece of art that will be sold at an auction.

The purpose of any currency is transfer of value for exchange of goods. In the case of Bitcoin it is digital money. Bitcoin is obviously deflationary, meaning prices of goods become cheaper in time as they cost less and less Bitcoins. So people think they should store it instead of spenting it. This is not adoption though. This is just speculation. Without people using Bitcoin we cannot see a major shift in public view in favour of us. For real adoption to happen we need to be able to buy a cup of coffee with bitcoin, without paying double its price and waiting in que for the transaction to confirm.

I have high hopes that we have a few of the best developers working for this. Otherwise I would have just kept speculating about price and not even caring.

[javainn]

only problems that cannot be used for payments cause people to think that bitcoin has failed. I see this is not fair, right now bitcoin will still continue to be a good one and for that maybe in the future bitcoin will be more effective to use.

[candra raditya]

I think bitcoin has more uses than just for small transactions, bitcoin has other uses as assets, so I never thought bitcoin failed.

[jseverson]

-snip-

What constitutes "cheap"?

Once we establish that, I guess we can talk about the economic implications and how it affects the design. I strongly believe that the sustainability of the system has to be the top priority, much more important than cheap fees.

It's really hard to point to a number, but I'm thinking the highest we could go is just enough so that the average person can open a channel or two weekly without really affecting their savings. It could be thought of as a small utility bill or something that doesn't impact monthly budgeting in a significant way.

I suspect that Bitcoin's value stems from elsewhere than cheap fees though, and that there will be strong demand for Bitcoin's block space even at orders of magnitude higher fees than seen today.

It currently seems to be heavily fueled by speculation -- people pay the fees because they'll be able to make that and more. I'm not sure if I believe that would be sustainable. It doesn't feel like many value Bitcoin's other intrinsic qualities at the moment.

[maxreish]

It is not failure. It is the circumstances that we need to accept. There is no free in this world and we have to take the consequences. There are some people who hardly accept that their is a particular fee in every transactions. If we just consider it as a tax, then we can just go on. Buy a coffee with fee. Anyway, we can purchase other than coffee like things that is very useful for us. People have different views about bitcoin as a payment but my point of view is that bitcoin is developing and is now successful in many ways.

[figmentofmyass]

one interesting thing to consider is what bitcoin might be replacing. right now, people save money in fiat like USD which is quickly devalued through inflation, which per keynesian theory keeps the monetary system healthy and liquid. in fact, inflation is how bitcoin is currently secured. in the future though, we'll be paying the cost of bitcoin's deflation/fixed supply in the form of fees. besides inflation and fees, there are other possible incentive systems for decentralized security too like demurrage.

but no matter what system you choose, the cost will be significant. the USD inflation rate has been as high as 10-20% annual before. bitcoin's current inflation rate is ~3-4% annual. freicoin's demurrage fees amount to 5% annual. 

It currently seems to be heavily fueled by speculation -- people pay the fees because they'll be able to make that and more. I'm not sure if I believe that would be sustainable. It doesn't feel like many value Bitcoin's other intrinsic qualities at the moment.

that's true to an extent, but we can't ignore that overall usage is growing. during the 2018 bear market, the number of crypto users nearly doubled. that's impressive during a time when speculators are being flushed out of the market.

[Wind_FURY]

<writes alot about how he feels the stifling of bitcoin and the fee war is some altruistic plan to help pools. without realising pools dont need help>

pools DO NOT need to have blocksizes stiffled/cut short to play around with supply and demand. they can simply raise or lower the price of admission to a block. a block does not need to be full or empty to pass any test.

Then can the mining pools in Bitcoin Cash raise the fees to support themselves/miners after two halvings? If the answer is yes, and the no. of transaction volume on-chain doesn't improve, then why did they need to split away from the main chain, and increase the block size to 32mb?

No social drama. I am simply curious of their mindset.

[Leyss]

It seems that Bitcoin is developing more slowly than many would like. It is much more conservative than other coins, and this seems to be its peculiarity. He is still waiting for new solutions, including its scalability, and it is very difficult to judge in which direction its further development will go. For the time being, we don’t need to hurry and make premature conclusions.

[jseverson]

-snip-

that's true to an extent, but we can't ignore that overall usage is growing. during the 2018 bear market, the number of crypto users nearly doubled. that's impressive during a time when speculators are being flushed out of the market.

That's true, but I was alluding to the assumption that not many people other than speculators are indifferent to high fees. If fees must truly be expensive (to the degree that the average person would feel burdened by opening a channel), then I imagine that kills a lot of Bitcoin's use cases and flushes out a lot of legitimate users with it.

I agree that cheap fees will have to take a back seat to network security, but shouldn't be neglected at the same time. The network could be the most secure on the planet, but if only a handful can comfortably use it, I'd say it has failed.

[leea-1334]

-snip-

I see. I was always under the impression that block rewards were supposed to be the compensation, and transaction fees were cherry on top. I also read somewhere some time ago that the sheer number of transactions at mass adoption would continue to make mining viable even at low fees and no block rewards, but I guess prices trending down does complicate that. It's looking like a lot of the early ideas have been short-sighted.

I guess everything does make sense though, considering the fact that we're looking into off-chain solutions for scaling. I just thought that the game plan was always to keep on-chain transactions relatively cheap (i.e. still very viable for people who prefer on-chain transactions), though that does defeat the purpose of trying to move bulk of the transactions off-chain.

That is also how I used to see the blockchain rewards, as a reward for finding the next block and solving the puzzle and helping to verify transactions,,, and the fee was what people would pay to say to the miners, here here's my tip.

I do wonder about mass adoption transactions, because that needs lightning network since blocks will be too full anyway or do you mean fee price wars?

[Wind_FURY]

-snip-

that's true to an extent, but we can't ignore that overall usage is growing. during the 2018 bear market, the number of crypto users nearly doubled. that's impressive during a time when speculators are being flushed out of the market.

That's true, but I was alluding to the assumption that not many people other than speculators are indifferent to high fees. If fees must truly be expensive (to the degree that the average person would feel burdened by opening a channel), then I imagine that kills a lot of Bitcoin's use cases and flushes out a lot of legitimate users with it.

I agree that cheap fees will have to take a back seat to network security, but shouldn't be neglected at the same time. The network could be the most secure on the planet, but if only a handful can comfortably use it, I'd say it has failed.

Then would you truly believe that the best path forward would be to risk the whole network to do the hard fork to bigger blocks to lower fees? How big?

Fees will be the main source of income for the miners. Bitcoin Cash will soon see that Bitcoin's model is the correct path forward. Wait for the next halvings next year.