NFTs in the Bitcoin blockchain - Ordinal Theory

[Wind_FURY]

But how the whole system is actually designed shows that it's not just a network for "peer to peer electronic cash" is it?

The system is designed to have electronic peer to peer cash into a visible ledger by using PoW consensus to prevent double spend . What other design do you think bitcoin has ? I'd really like to know what else do you see .

It is that, but it is also much more than that in my opinion. What use would there be for censorship-resistance, the network's value proposition, if it's to merely use for daily coffee transactions?

Plus POW is more than to prevent double spend. It's also a way to issue the units of Bitcoin to put in circulation, which also incentivizes the miners and it keeps them honest.

Have you truly tried to understand how the protocol works and what its implications are? It's not a decentralized PayPal, that I can tell you. It's much much more.

Maybe i haven't , can you point me of what the implications are ? I like socratic dialogues , but i have to warn you that to have such a dialogue we both need to have an open mind and a great understanding of how things work .

One of them is Bitcoin's role in the creation of the ransomware market. It filled a gap where hackers could take advantage and be incentivized of the fact that some software vendors are slow in deploying security updates. As an increasing amount of computers were compromised, the software vendors were forced to deploy patches and software updates more regularly. Bitcoin actually took part in making random computer networks more secure.

Do you remember that ip to ip transactions were implemented in the original design that was later removed ?  Mike Hearn makes a point , that things could be reinstated at some later point https://bitcointalk.org/index.php?topic=9334.msg134801#msg134801 .

No, that was before my Bitcoin journey, but I could already tell that IP to IP transactions are open to attacks like IP-Spoofing and MOTM. It's probably better to leave that decision to the Core Developers.

Wasn't Mike Hearn the developer who spread FUD about Bitcoin's collapse if it didn't hard fork to bigger blocks?

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[ABCbits]

Quoting a Satoshi post doesn't make it ideal. You need arguments, like these: https://bitcoin.stackexchange.com/a/37303/134811

The creators thought of how things should be done isn't ideal , that's nice . As for the arguments of the post you shared , these are complete BS . Initial blocksize was 32 MB and there was a reason at the time that 1MB was imposed .  

Didn't Satoshi suddenly change maximum block size limit to 1MB on Bitcoin-Qt source code without any explanation?

Do you remember that ip to ip transactions were implemented in the original design that was later removed ?  Mike Hearn makes a point , that things could be reinstated at some later point https://bitcointalk.org/index.php?topic=9334.msg134801#msg134801 .

No, that was before my Bitcoin journey, but I could already tell that IP to IP transactions are open to attacks like IP-Spoofing and MOTM. It's probably better to leave that decision to the Core Developers.

Wasn't Mike Hearn the developer who spread FUD about Bitcoin's collapse if it didn't hard fork to bigger blocks?

In addition, IP to IP transaction was never part of Bitcoin protocol/consensus. It was just Bitcoin-Qt feature which connect to certain IP address and ask for regular Bitcoin address, before making regular Bitcoin transaction.

[stompix]

If $2,000 will be the reward per block, then there won't be a point on having Bitcoin in the first place. If ~$2,000 is the average block reward in a decade or two from now, then it'll already be dead. The $2,000 is the side effect. The cause is the fact that nobody uses it.

The discussion started about the reward being gone, you're still relying on the block reward, what happens when that ain't no more, cause you mentioned thinking for longterm and not short-term solutions like the one I proposed/
Block 765431 (765432 was not full  ) , had only $2,156 in fees, those will be the ones guaranteeing the network protection.
It's no other way round you either have enough people to pay for it or you don't!

The only time the current block reward was matching the fees was when we had a media of $20 per tx, do you think that will keep being the norm, and people will till pay for it?
Not to mention you're forgetting another aspect, right now 100k a block for miners guarantees a level of protection that means you have to spend 10 billion in order to attack Bitcoin, valued at 600 billion market cap. What happens when the total value of the network will be 10 trillion, will 10 billion in protection be enough?
See, I'm thinking long-term, far longer than you thought, and sorry to say but your solution right now is wait and see!

Define me the ideal block size, and tell me the reasoning behind it.

Where a full block of fees paying 2-5 satoshi/b guarantees a level of protection that means you need 10% of the market cap to attack it.

We're currently paying about 10x in fees, and I don't see lots of people being uninterested.

400k a day?  
If you say that is a definition of adoption then you agree where on the same level as dogecoin!
Btw, the last block fees were $9,327, 5% of the total reward, you will either have people paying 20 times as much or, quite interesting have 20x times more people paying the same. That would mean 8 million transactions or 1/3 the number of card transactions Visa and MasterCard do in France alone.

Except that I never argued we can reach global adoption with solely lightning.

Then with what? Binance or Coinbase credits? Bank of America IOU bitcoin?

Didn't Satoshi suddenly change maximum block size limit to 1MB on Bitcoin-Qt source code without any explanation?

There was no explanation but a reason, and that was spam.

And there is a more interesting thing, garzik introduced a patch to increase the size limit, Satoshi opposed because of incompatibility but his words were
https://bitcointalk.org/index.php?topic=1347.msg15139#msg15139

+1 theymos.  Don't use this patch, it'll make you incompatible with the network, to your own detriment.
We can phase in a change later if we get closer to needing it.

[BlackHatCoiner]

The discussion started about the reward being gone

The discussion started about you being genuinely curious as to why we can't just tinker with the block size limit.

what happens when that ain't no more, cause you mentioned thinking for longterm and not short-term solutions like the one I proposed

Suppose there is no block size limit for a moment. Miners can put as much data as they want in a block. All unconfirmed transactions get confirmed every 10 minutes. Miners' average reward is equal to the total fees being spent by the entire network every 10 minutes, block subsidy asides. Competition for transaction priority drops to 0. Fees are now 1 sat per tx (or 1 sat/vb).

Will that hold enough sustainability in your opinion? Would it make it globally?

Where a full block of fees paying 2-5 satoshi/b guarantees a level of protection that means you need 10% of the market cap to attack it.

Do you imply that the block size limit should be dynamical, and analogous with the total unconfirmed transactions and the bitcoin price?

Then with what? Binance or Coinbase credits? Bank of America IOU bitcoin?

Second layers.

[stompix]

The discussion started about you being genuinely curious as to why we can't just tinker with the block size limit.
 

This is my first intervention in this topic in the last 30:
https://bitcointalk.org/index.php?topic=5437464.msg62427173#msg62427173

Oh, but they can! The only thing is that you need more than 500 000 a day, if we look at block 788766 which had nearly the same fee/reward ratio you will see the median fee was 20$. So in order to get the same revenue that would guarantee the same level of protection you will need to have 4000 users paying on average $20 since the reward is gone.
OR!!!! You could have 40 000 and pay $2. Or 80 000 pay $1.

So, it's not really why we don't do it, more like what the f**8 we're going to do if we don't do that!

Do you imply that the block size limit should be dynamical, and analogous with the total unconfirmed transactions and the bitcoin price?

Dynamical or why not implement the opposite of halving for the block size, we have a halving in the reward a doubling in the block size. If we look at disk price and internet speed we;'re already 12 years behind compared to 2009, so we would have at least 2 decades to see if it works or no!

Then with what? Binance or Coinbase credits? Bank of America IOU bitcoin?

Second layers.

And do you have a timeline on how long it will take for every single let's say US citizen to open and close let's say twice a second layer LN channel with a 1MB block? Or you can forget the US, let's just say 10% of the world, that's 800 million people, so 3.2 billion in and outs of a second layer.
Is it doable?

[BlackHatCoiner]

So, it's not really why we don't do it, more like what the f**8 we're going to do if we don't do that!

In my opinion, it is unlikely that everyday transactions will predominantly occur on-chain. Most on-chain transactions will likely be conducted by large institutions that will contribute to second layer solutions. In situations where there is a high transaction volume, priority will probably be given to big companies most of the time. Conversely, during periods of low volume, regular individuals can consolidate their inputs and the like.

This is merely speculation. I cannot accurately predict what will happen, I'm just guessing. What I do know for certain is that a future where every single transaction is conducted on-chain is just illusory dream. I agree that 1 MB isn't much, but the same can be said for limits such as 4, 8, 16, or 32 MB in the long run. There are still inherent issues that prevent widespread adoption. Point of sale transactions, for instance, remain vulnerable to double-spending compared to second layer solutions. Transaction fees continue to pose a problem, though somewhat alleviated. Also, security is compromised as miners gain a time advantage during block propagation, and there's also the concern of limited disk space.

Dynamical or why not implement the opposite of halving for the block size, we have a halving in the reward a doubling in the block size.

Here are a few reasons:

• Doubling the block size limit doesn't necessarily lead to double transactions, nor to double earnings.
• At some point it simply breaks away from the ideal. There won't ever be infinite transactions, but the limit heads towards that.
• If you do know the ideal (which you don't, as I've let it be implied), why not setting it in the first place?

And do you have a timeline on how long it will take for every single let's say US citizen to open and close let's say twice a second layer LN channel with a 1MB block?

There isn't a single second-layer solution developed.

[Ico.best]

In my opinion, it is unlikely that everyday transactions will predominantly occur on-chain. Most on-chain transactions will likely be conducted by large institutions that will contribute to second layer solutions. In situations where there is a high transaction volume, priority will probably be given to big companies most of the time. Conversely, during periods of low volume, regular individuals can consolidate their inputs and the like.

This is merely speculation. I cannot accurately predict what will happen, I'm just guessing. What I do know for certain is that a future where every single transaction is conducted on-chain is just illusory dream. I agree that 1 MB isn't much, but the same can be said for limits such as 4, 8, 16, or 32 MB in the long run. There are still inherent issues that prevent widespread adoption. Point of sale transactions, for instance, remain vulnerable to double-spending compared to second layer solutions. Transaction fees continue to pose a problem, though somewhat alleviated. Also, security is compromised as miners gain a time advantage during block propagation, and there's also the concern of limited disk space.

I also think this way about transaction priority. I think the fixed fee value used makes it one of the priorities (both companies and individuals) and I think the issue of unstable fee values ​​will still be a problem, as long as there is no determination of the volume value of the price that is uncertain per day x price.

[larry_vw_1955]

In my opinion, it is unlikely that everyday transactions will predominantly occur on-chain. Most on-chain transactions will likely be conducted by large institutions that will contribute to second layer solutions.

how about this. they invent this card that you can use to conduct purchases and other similar transactions. the company backing up the card has centralized servers.  so it works really fast has high transactions per second. no maximum blocksize or anything like that. your card is backed up by bitcoin you let them hold for you. when you use your debit card to buy something, it's not going to appear on the blockchain, the company will just adjust your "bitcoin balance" with them.

[cryptosize]

In my opinion, it is unlikely that everyday transactions will predominantly occur on-chain. Most on-chain transactions will likely be conducted by large institutions that will contribute to second layer solutions.

how about this. they invent this card that you can use to conduct purchases and other similar transactions. the company backing up the card has centralized servers.  so it works really fast has high transactions per second. no maximum blocksize or anything like that. your card is backed up by bitcoin you let them hold for you. when you use your debit card to buy something, it's not going to appear on the blockchain, the company will just adjust your "bitcoin balance" with them.

Binance card already offers that, it's nothing new.

[larry_vw_1955]

Binance card already offers that, it's nothing new.

And so does Coinbase along with few others custodial service.

so then why can't people use those things that way they don't need to pay transaction fees. or at least hefty ones. using the blockchain directly is never going to be cheap most likely...forget about using layer 1 for buying coffee in other words. that's not what it's for. that's what those debit cards are for. but one should only keep money on them that they can afford to lose since they are not decentralized. 

[larry_vw_1955]

They can. But it's centralized, custodial and has limited to merchant which accept Visa debit without strict limitation. By strict limitation, i mean only accept card from reputable issuer. In addition,
1. There's concern about fee and conversation rate which might feels unfair for the user.
2. Such service only available to user in certain country.

well, i'm not a big fan of using something like coinbase's crypto debit card for the simple reason that i don't feel a coffee purchase at starbucks should be something i should be needing to keep track of and report to the IRS. so i'd just open a throwaway checking acct that I can put a small amount like $50 or $100 and use a debit card on that account. that beats using bitcoin to buy coffee by far. and makes more sense. and no i'm not worried about my bank shutting down and taking my $50 or $100 with them.

with something like the coinbase debit card,

buying coffee at starbucks =  you sold crypto and need to report that on your federal tax return so the irs knows about it..

but to tie it back into the discussion, there's just some things that bitcoin can't do. it can't be everything to everyone  maybe it can't be the solution to buying tiny things like a cup of coffee. not as time goes on.

[cryptosize]

They can. But it's centralized, custodial and has limited to merchant which accept Visa debit without strict limitation. By strict limitation, i mean only accept card from reputable issuer. In addition,
1. There's concern about fee and conversation rate which might feels unfair for the user.
2. Such service only available to user in certain country.

well, i'm not a big fan of using something like coinbase's crypto debit card for the simple reason that i don't feel a coffee purchase at starbucks should be something i should be needing to keep track of and report to the IRS. so i'd just open a throwaway checking acct that I can put a small amount like $50 or $100 and use a debit card on that account. that beats using bitcoin to buy coffee by far. and makes more sense. and no i'm not worried about my bank shutting down and taking my $50 or $100 with them.

with something like the coinbase debit card,

buying coffee at starbucks =  you sold crypto and need to report that on your federal tax return so the irs knows about it..

but to tie it back into the discussion, there's just some things that bitcoin can't do. it can't be everything to everyone  maybe it can't be the solution to buying tiny things like a cup of coffee. not as time goes on.

Not even Lightning?

[BlackHatCoiner]

Maybe it's just me, but I don't see bitcoin being destined for coffees and pizzas. Transactions like that are, in a manner, as plain as a pikestaff. You don't care about censorship-resistance when buying a pizza. You don't care if third parties know which toppings in that pizza you prefer. You're never going to buy a pizza overseas.  You just want the transaction to complete the soonest, and pay the least in commissions.

Bitcoin is the good money from Gresham's law. As long as there's "bad money", it will not circulate much in the economy. Unless fiat currencies collapse completely, and both EU and US become poor, merchants will pretty much go in the fiat-way when stuff like censorship-resistance, privacy and being permissionless are not prioritized. And even in that chaotic scenario, there will be banks afterwards, in just another form. People without technical expertise will be required to forfeit their custody, unless some second layer can reach them with near zero disadvantages (I highly doubt about that).

[nelson4lov]

Maybe it's just me, but I don't see bitcoin being destined for coffees and pizzas. Transactions like that are, in a manner, as plain as a pikestaff. You don't care about censorship-resistance when buying a pizza. You don't care if third parties know which toppings in that pizza you prefer. You're never going to buy a pizza overseas.  You just want the transaction to complete the soonest, and pay the least in commissions.

Bitcoin is the good money from Gresham's law. As long as there's "bad money", it will not circulate much in the economy. Unless fiat currencies collapse completely, and both EU and US become poor, merchants will pretty much go in the fiat-way when stuff like censorship-resistance, privacy and being permissionless are not prioritized. And even in that chaotic scenario, there will be banks afterwards, in just another form.

TIL about Gresham's law (thanks for the reference). Also, I agree with you. if nothing is done to improve the technology of Bitcoin - that is, increasing the tx finality speed and significantly bringing down the costs per transaction, then we won't see Bitcoin gaining traction for that kind of activity. One of the most popular ideologies in computer science is that:

Given two services
- service_A with completion of < secs, and $0.00002
- service_B with a completion of >= 3mins and $4 tx cost.

People would only flock to service_A. That's why we have had an influx of other 'layer one' blockchains in the past - all trying to be better than bitcoin forgetting that the blockchain trilemma is still unsolved.

Unless fiat currencies collapse completely, and both EU and US become poor, merchants will pretty much go in the fiat-way when stuff like censorship-resistance, privacy and being permissionless are not prioritized. And even in that chaotic scenario, there will be banks afterwards, in just another form. People without technical expertise will be required to forfeit their custody, unless some second layer can reach them with near zero disadvantages (I highly doubt about that).

Most people don't care as long as long as all transactions they conduct are completed in near-instant times.

[larry_vw_1955]

Not even Lightning?

well yeah i forgot about lightning but if something like Wallet of Satoshi could work for you then I think that's a good solution to the high fee problem.

https://www.walletofsatoshi.com/

looks like they have it really dumbed down so that an average joe bitcoin user could be using lightning. you can even buy bitcoin from within the wallet (hopefully their rates are not a ripoff) so you don't have to transfer any bitcoin in (and pay a transaction fee). I guess the big question then becomes does the coffee shop take lightning payments?  

that doesn't solve the having to tell the irs i sold crypto when i bought coffee but i guess i could live with that...

[cryptosize]

Not even Lightning?

well yeah i forgot about lightning but if something like Wallet of Satoshi could work for you then I think that's a good solution to the high fee problem.

https://www.walletofsatoshi.com/

looks like they have it really dumbed down so that an average joe bitcoin user could be using lightning. you can even buy bitcoin from within the wallet (hopefully their rates are not a ripoff) so you don't have to transfer any bitcoin in (and pay a transaction fee). I guess the big question then becomes does the coffee shop take lightning payments?  

that doesn't solve the having to tell the irs i sold crypto when i bought coffee but i guess i could live with that...

That's a custodial solution, isn't it?

[larry_vw_1955]

That's a custodial solution, isn't it?

yeah apparently, i didn't really notice at first but it says it here:

Wallet of Satoshi is a mobile app for iOS and Android that lets you send and receive Lightning payments.

It is a zero-configuration custodial wallet with a focus on simplicity and the best possible user experience. It can be downloaded using the links at walletofsatoshi.com

Simply download and install the app and you are on the Lightning Network!

But is there a non-custodial wallet where you can buy bitcoin inside of it and "Simply download and install the app and you are on the Lightning Network" ?

[cryptosize]

That's a custodial solution, isn't it?

yeah apparently, i didn't really notice at first but it says it here:

Wallet of Satoshi is a mobile app for iOS and Android that lets you send and receive Lightning payments.

It is a zero-configuration custodial wallet with a focus on simplicity and the best possible user experience. It can be downloaded using the links at walletofsatoshi.com

Simply download and install the app and you are on the Lightning Network!

But is there a non-custodial wallet where you can buy bitcoin inside of it and "Simply download and install the app and you are on the Lightning Network" ?

Self-custody in LN requires way more effort than a cold wallet, not to mention constant micromanagement (backing up & rebalancing channels etc.)

[JayJuanGee]

That's a custodial solution, isn't it?

yeah apparently, i didn't really notice at first but it says it here:

Wallet of Satoshi is a mobile app for iOS and Android that lets you send and receive Lightning payments.

It is a zero-configuration custodial wallet with a focus on simplicity and the best possible user experience. It can be downloaded using the links at walletofsatoshi.com

Simply download and install the app and you are on the Lightning Network!

But is there a non-custodial wallet where you can buy bitcoin inside of it and "Simply download and install the app and you are on the Lightning Network" ?

Self-custody in LN requires way more effort than a cold wallet, not mention constant micromanagement (backing up & rebalancing channels etc.)

Aren't Phoenix, Breez and Blixt trying to accomplish some kind of a semblance of self-custody?  These three all work on IOS, and surely there are likely some other wallets that try to be somewhat user-friendly and perhaps are trying to be self-custodial too.. and I don't claim to really know all of the trade-offs.. .

Of course, Bluewallet requires running your own node, though they did previously let you connect to one of their nodes (and hold coins there) - which caused Bluewallet really not to be self-custody, and Muun wallet has some weird swaps that end up not being as lightning network dependent/reliant as some folks had been presuming.

Rather than my somewhat lame attempts at categorizing lightning network wallets, maybe it is better to show how darthcoin categorizes the various level of custodial versus non custodial lightning wallets and their various features?

https://darthcoin.substack.com/p/lightning-wallets-comparison

[Wind_FURY]

Maybe it's just me, but I don't see bitcoin being destined for coffees and pizzas. Transactions like that are, in a manner, as plain as a pikestaff. You don't care about censorship-resistance when buying a pizza. You don't care if third parties know which toppings in that pizza you prefer. You're never going to buy a pizza overseas.  You just want the transaction to complete the soonest, and pay the least in commissions.

It's not just you. In fact, I believe there are many people here in BitcoinTalk who also has the same opinion, although they don't express it as much they should. But they should to educate the newbies and make them think hard before spending their precious Bitcoins. A Bitcoin now is better HODLed than spent.

Bitcoin is the good money from Gresham's law. As long as there's "bad money", it will not circulate much in the economy. Unless fiat currencies collapse completely, and both EU and US become poor, merchants will pretty much go in the fiat-way when stuff like censorship-resistance, privacy and being permissionless are not prioritized. And even in that chaotic scenario, there will be banks afterwards, in just another form. People without technical expertise will be required to forfeit their custody, unless some second layer can reach them with near zero disadvantages (I highly doubt about that).

But have a shower thought about a simple concept - Unlimited fiat, only 21,000,000 Bitcoin in existence and demand for sats is increasing.