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Author Topic: Bitcoin losing its P2P efficiency!!  (Read 493 times)
Mia Chloe (OP)
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December 22, 2023, 05:25:26 PM
Merited by The Sceptical Chymist (5), El duderino_ (3), PrivacyG (2), ABCbits (1)
 #1

One or the Most significant reasons for the creation of Bitcoin was,to create a currency easy and suitable to be used for peer-to-peer transactions.
During the first eight to nine years of its launch, Bitcoin actually achieved this goal, With fees considerably low as just a few cents. However things began to change at about early 2016 when fees began to increase noticably, and during late 2017 when the mempool started having congestions, which influenced transaction fees directly.

Of course, One can say the reason for the very low fees during its earliest stages was a result of low adoption and a less congested mempool. We can also confirm that due to the problems of competition for block spaces which led to high fees, Bitcoin's block size was increased on August 24, 2017 by the application of the SEGWIT protocol upgrade known as "Segregated witness" in full. This definitely helped in malleability of transactions by separating the signature data (withness data) from the transaction data to free up block space.

Other solutions like the layer 2 that became popular during 2018,also helped reduce congestions and fees by conducting majority of transactions off the Blockchain making transactions more scalable and faster.

However, upon these upgrades and solutions, as Bitcoin grew the congestion problem has  become more and more prominent especially due to the effects of ordinals in recent times.These congestion and fee problems are gradually exempting the need to make simple day to day transactions with Bitcoin thereby bring the need for people to make small transactions with other stable altcoins like Tron and Doge.

Take for example this post made by Hhampuz who is one of the most reputable campaign managers on Bitcoin talk.
In that post Hhampuz made mention of spending roughly $200 /week on fees for each campaign. Now assuming Hhampuz managess 5 campaigns for 15 weeks, taking the math he would have spent an enormous amount of about $15,000 (~0.34BTC) on fees only. Considering these enormous fees P2P transactions would become  uneconomical.

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December 22, 2023, 05:53:23 PM
Merited by Mia Chloe (1)
 #2

This has been an issue except for those who uses LN or will take time to wait using accelerators but in the end this is still not suitable for us as bitcoiners, this is changing people perception of Bitcoin soon I guess if there are no alternative then everyone will just be HODLing bitcoin just for making money and the main reason of its invention which is giving individuals financial freedom from paying high charges, third parties and slow transactions.
Some individuals never consider Bitcoin scalability as any serious issue but as times pass by its becoming worse because of congestion. Now imagine if the entire world has adopted bitcoin then will such fee be constant?

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December 22, 2023, 05:59:42 PM
 #3

Bitcoin turnout to be more on valuable investments rather than use as currency for P2P and other daily transactions. Transaction is expected to be higher in proportion to the Bitcoin price growth. The success on price growth gives a repercussion of having a high fee.

There’s a lot of existing altcoin out there that can be use for P2P transactions. I think being valuable investment is the only feature that make Bitcoin still unique among bunch of shitcoins out there since convenient P2P transactions is already common on other blockchain.

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December 22, 2023, 06:10:08 PM
Merited by Mia Chloe (1)
 #4

Bitcoin losing its P2P efficiency!!

Bitcoin is not losing any P2P efficiency; just as it is, anyone can still use it for their transaction as long as they are ready to pay the transaction fee. P2P transactions are carried out based on an agreement. Frankly speaking, what we are dealing with here is the transaction fee, which has skyrocketed and become unfavorable for most Bitcoiners like myself.

Quote
These congestion and fee problems are gradually exempting the need to make simple day to day transactions with Bitcoin

I have stopped accepting Bitcoin payments in my business for now. When the fee was low, I usually liked to cover the transaction fee for the customer. As the fee got higher, I initiated another strategy, which was to split the fee between me and the customer, but now the fee has gotten so high that it's affected me. I can't afford to pay such a high fee for customers, and majority are not ready to pay the high fee either. Only a few are will to pay. It's affecting.

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December 22, 2023, 06:21:02 PM
 #5

I also agree with the earlier posts that Bitcoin is not losing its P2P efficiency.  The system is still unchanged and everyone will be able to make a transaction between persons directly.  It is that the fee is surging and anyone willing to pay for the transaction fee no matter how much it cost can still fully enjoy the P2P feature of Bitcoin.  If BTC is losing something, it is losing the benefits of making transactions at lower costs.

I have stopped accepting Bitcoin payments in my business for now. When the fee was low, I usually liked to cover the transaction fee for the customer. As the fee got higher, I initiated another strategy, which was to split the fee between me and the customer, but now the fee has gotten so high that it's affected me. I can't afford to pay such a high fee for customers, and majority are not ready to pay the high fee either. Only a few are will to pay. It's affecting.

This is expected, merchants will be most likely to be affected by the surge of Bitcoin transaction fees.  If this tx fee surge continues, Bitcoin will be abandoned by merchants, and that will have a huge impact on Bitcoin adoption.  Miners may enjoy the high fees today but most probably they will be dried out when people stop using Bitcoin due to high fees.

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December 22, 2023, 06:23:20 PM
Last edit: December 22, 2023, 06:37:14 PM by franky1
Merited by Mia Chloe (1)
 #6

segwit and LN have not solved things..
fee's have remained higher than pre 2016 prices.. infact segwit had code to make 2009-2016 formatted transactions become 4x that of segwit. and then segwit also increased in fee rates too , thus the legacy multiple grew even faster in fee cost

looking at the liquidity capacity of LN compared to the transaction volume of bitcoin network. more bitcoin transfers had more value in one block  than the whole LN network ever locked up in 6 years

LN has not even touched 0.0001% of the value transfer, bitcoin has been able to achieve in one 10minute block session

yes bitcoin has lost efficiency and since 2016 all we have seen is development stall, in exchange for developers getting sponsored by corporations to concentrate on other additions that only aid projects which aim to get people stuck into using middle men.. all while being told for 6 years "be patient, just wait, it will take care of itself"

many excuses are made. all trying to avoid the conversation of blaming the developers. yet bitcoin is not some self writing AI. developers wrote it and now they want to blame everyone else for the actions caused by developers and the inaction caused by developers.

the latest distraction is trying to blame asic machines for the fee cost. even though asics do not select which transactions get into a block

developers could have retained a fee formulae that would have only fee punished spammers.
developers could have keeps "nonstandard" tx formats disabled from node relay preconfirm
developers could have not included code that miscounts bytes
developers could have scaled the blockspace efficiently where the 4mb space was actually usable to be 4x of 1mb space
developers could have had many ways to keep fee's from becoming a premium

but instead developers stopped optimising bitcoin or scaling bitcoin and sold their souls to corporations that want users to abandon bitcoin in exchange for some other payment system off the blockchain

for developers that no longer want bitcoiners using the blockchain efficiently. those developers should give up-retire and realise they should not be politicising their views by pretending to be bitcoin blockchain developers if its now against their sponsored ideals to develop bitcoins blockchain

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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December 22, 2023, 06:49:40 PM
 #7

segwit and LN have not solved things..
If you open a channel, even fee paid to miners would be charged.

But there are some wallets that can be used that run their own channels which can be used in time like this for small amount of bitcoin. Example is Muun wallet.

developers could have had many ways to keep fee's from becoming a premium
This is true. It would have been better if bitcoin developers can do something that can make the mempool not congested at all.

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December 22, 2023, 08:05:07 PM
Merited by Agbe (1), Richbased (1)
 #8

You know the truth: Bitcoin has just become an investment scheme. Everyone just wants to make money from Bitcoin investments; hence, no one cares about the real goal of Bitcoin. True, Bitcoin still uses a peer-to-peer payment method, but it is insignificant in comparison. Due to the high fees, it has become hard to make payments in any marketplace through Bitcoin. Because congested network transaction times wouldn't meet with the payment gateway. In this manner, it's true that Bitcoin is losing efficiency. Developers should find a solution to reduce transaction fees and avoid congested networks.

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December 22, 2023, 08:10:39 PM
 #9

You know the truth: Bitcoin has just become an investment scheme. Everyone just wants to make money from Bitcoin investments; hence, no one cares about the real goal of Bitcoin. True, Bitcoin still uses a peer-to-peer payment method, but it is insignificant in comparison. Due to the high fees, it has become hard to make payments in any marketplace through Bitcoin. Because congested network transaction times wouldn't meet with the payment gateway. In this manner, it's true that Bitcoin is losing efficiency. Developers should find a solution to reduce transaction fees and avoid congested networks.
Yeah its sad but you cant blame out the majority on having that kind of impression towards it because we arent that blind on not to see on how it is really having that huge potential when it comes on making profits
and this is why it would really be just that normal that they would really be focusing on accumulating it rather than on spending it out or simply in talks about p2p and just we do all know that even making simple
transactions like on buying up something on a store that accepts Bitcoin payment but since we are skeptical about the price might be shoot up then you would really be just having that normal feeling
that it is really just that a waste on spending up your coins into something on which you could be able to pay up with fiat.

Not only talking about its potential profit that it do gives but also on the network fees that we are current experiencing now. Who would really be on their right minds on paying up 20 bucks worth
of Bitcoin and having a fee of the same amount?No one on their right minds would really be definitely doing that. This is why its not really that shocking into seeing things such as this
that there's a lessen p2p efficiency and there's nothing we can do about it but to deal up on the things on what are really that happening.
So its better to go with the flow.

R


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December 22, 2023, 08:13:47 PM
 #10

I think some people above my reply do not get the idea.  Bitcoin is definitely losing potential and efficiency.

Yes you can still spend and receive.  Yes you can still create any Seed and use any Address however you like.  But it is as useful as downloading some Stock simulating game on a Smart phone and pretending you own Bitcoin.  If you can not spend it due to exorbitant fees then it becomes useless.

Think about this for a minute.  Say Bitcoin continues to have this Mempool trouble for the next six months.  How many of us will be optimistic and happy about owning Bitcoin?

Now think about this.  Bitcoin continues to have this Mempool trouble for the next two YEARS.  How will that look for Bitcoin?  How many of us will afford paying so much for every single Transaction we broadcast?

It is painful.  What happens now is the Wealthy are in immense advantage over us.  They can spend and receive however they like with negligible Fees.  Negligible as in a 25 Dollar Fee for a 50 Dollar Transaction is 50 percent while a 25 Dollar Fee for a 500,000 Dollar Transaction is nothing percentage wise.

I hope a solution is found but I do not know anymore.  Lightning seems to be a temporary fix but it is still not the right one in my opinion.  Guess we all have to wait.  Truth is, the Peer to Peer efficiency is truly diminishing as we speak.

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December 22, 2023, 08:51:53 PM
 #11

One or the Most significant reasons for the creation of Bitcoin was,to create a currency easy and suitable to be used for peer-to-peer transactions.
During the first eight to nine years of its launch, Bitcoin actually achieved this goal, With fees considerably low as just a few cents. However things began to change at about early 2016 when fees began to increase noticably, and during late 2017 when the mempool started having congestions, which influenced transaction fees directly.

Of course, One can say the reason for the very low fees during its earliest stages was a result of low adoption and a less congested mempool. We can also confirm that due to the problems of competition for block spaces which led to high fees, Bitcoin's block size was increased on August 24, 2017 by the application of the SEGWIT protocol upgrade known as "Segregated witness" in full. This definitely helped in malleability of transactions by separating the signature data (withness data) from the transaction data to free up block space.

Other solutions like the layer 2 that became popular during 2018,also helped reduce congestions and fees by conducting majority of transactions off the Blockchain making transactions more scalable and faster.

However, upon these upgrades and solutions, as Bitcoin grew the congestion problem has  become more and more prominent especially due to the effects of ordinals in recent times.These congestion and fee problems are gradually exempting the need to make simple day to day transactions with Bitcoin thereby bring the need for people to make small transactions with other stable altcoins like Tron and Doge.

Take for example this post made by Hhampuz who is one of the most reputable campaign managers on Bitcoin talk.
In that post Hhampuz made mention of spending roughly $200 /week on fees for each campaign. Now assuming Hhampuz managess 5 campaigns for 15 weeks, taking the math he would have spent an enormous amount of about $15,000 (~0.34BTC) on fees only. Considering these enormous fees P2P transactions would become  uneconomical.

Yes, you're right, it's happening unfortunately because of ordinals and similar token spam. Some signature campaign managers are migrating to LTC or USDT because the network has now stalled completely. 100+sat/byte transactions are sitting in mempool for days. I simply can't believe it. Bitcoin has become unusable.
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December 22, 2023, 09:51:26 PM
 #12


Yes, you're right, it's happening unfortunately because of ordinals and similar token spam. Some signature campaign managers are migrating to LTC or USDT because the network has now stalled completely. 100+sat/byte transactions are sitting in mempool for days. I simply can't believe it. Bitcoin has become unusable.

As it stands now we can all blame ordinals because it is them that consist mainly of this transaction and most started paying higher transaction fees to try beat every other transaction to the next block. The question is should devs be looking at finding a specific solution to only this Ordinals to avoid filling the blockchain? Wouldn’t that be a censorship which is against bitcoin decentralization protocol?

Also shouldn’t we be looking beyond ordinals and assume they are like the much expected adoption we have been clamoring for? Should it come wouldn’t the mempool be congested as this?

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December 22, 2023, 10:21:35 PM
 #13

The issue isn't Bitcoin. Other blockchains suffer from the same problem(s). Demand for confirmations and fees go up in tandem. We can argue that Bitvoin Devs can make an upgrade to make things better but they already did with SegWit upgrade at the time. Scalability is part of a larger problem called the Blockchain Trillema. Except anyone have bright ideas to speed up transactions without compromising security, that would be awesome.

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December 22, 2023, 10:43:59 PM
 #14

One or the Most significant reasons for the creation of Bitcoin was,to create a currency easy and suitable to be used for peer-to-peer transactions.
During the first eight to nine years of its launch, Bitcoin actually achieved this goal, With fees considerably low as just a few cents. However things began to change at about early 2016 when fees began to increase noticably, and during late 2017 when the mempool started having congestions, which influenced transaction fees directly.

Of course, One can say the reason for the very low fees during its earliest stages was a result of low adoption and a less congested mempool. We can also confirm that due to the problems of competition for block spaces which led to high fees, Bitcoin's block size was increased on August 24, 2017 by the application of the SEGWIT protocol upgrade known as "Segregated witness" in full. This definitely helped in malleability of transactions by separating the signature data (withness data) from the transaction data to free up block space.

Other solutions like the layer 2 that became popular during 2018,also helped reduce congestions and fees by conducting majority of transactions off the Blockchain making transactions more scalable and faster.

However, upon these upgrades and solutions, as Bitcoin grew the congestion problem has  become more and more prominent especially due to the effects of ordinals in recent times.These congestion and fee problems are gradually exempting the need to make simple day to day transactions with Bitcoin thereby bring the need for people to make small transactions with other stable altcoins like Tron and Doge.

Take for example this post made by Hhampuz who is one of the most reputable campaign managers on Bitcoin talk.
In that post Hhampuz made mention of spending roughly $200 /week on fees for each campaign. Now assuming Hhampuz managess 5 campaigns for 15 weeks, taking the math he would have spent an enormous amount of about $15,000 (~0.34BTC) on fees only. Considering these enormous fees P2P transactions would become  uneconomical.
Quite true. I think it's time we talk about how we want bitcoin to be regarded of once again, even if it brings about another blocksize war. The fact of the matter is that, even if bitcoin were to be successful in being a store of value and being an investment tool you can use to make yourself wealthy, people will still talk about the good old days and how it was once a great way for you to transfer money to another person without paying too much as a few cents. Furthermore, it also hampers with the tradability of bitcoin as you're either forced to wait until bitcoin's network's not congested (which happens like never nowadays) or you have to shoulder the 10-50 dollar transaction fee just so you can transfer money to and fro different networks. It's quite distressing and in some cases it even makes fiat money remittance more appealing cause at the very least when you send money to Western Union you don't get charged 100 bucks in a single transaction.

Scalability is going to be a problem if we don't do anything right now. Layer 2 is great but is there really anyone in here who'd willingly go out of their own way to use the Lightning Network which mind you isn't as efficient as they make it out to be?

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December 22, 2023, 10:52:07 PM
 #15

It is sad, but the reality is that for now BTC is unusable as a currency, because it would be almost impossible for one to spend BTC on things they can buy with other currencies, considering this kind of high fee. But i don't think BTC is losing its 'p2p efficiency', BTC is p2p cash simply because there is no central authority that stands in as a third party, and that hasn't changed. High fees or not, if you use BTC the way it is supposed to be used, without any third party, then that is p2p.

We are all talking about a solution, but what solutions do some of you propose. I see solutions suggesting that miners should reject ordinals tx's, but that would mean supporting censorship in a censorship resistant network, what other solutions can work without going against the principles of the network?

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December 22, 2023, 10:56:06 PM
 #16

Bitcoin turnout to be more on valuable investments rather than use as currency for P2P and other daily transactions. Transaction is expected to be higher in proportion to the Bitcoin price growth. The success on price growth gives a repercussion of having a high fee.

There’s a lot of existing altcoin out there that can be use for P2P transactions. I think being valuable investment is the only feature that make Bitcoin still unique among bunch of shitcoins out there since convenient P2P transactions is already common on other blockchain.
That's not bitcoin's fault, it just so happens that people are hodling on to it more than usual and the price of bitcoin is just too high to be traded all the time, they don't want to miss out on the price of bitcoin suddenly going up due to volatility, the lessons of the past still haunts many of us which is the 10k bitcoin pizza. It can still be used as a currency for P2P transaction and although the efficiency can still be debated especially right now, the same feeling as when it's still back in 2010-2013 is still there.
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December 22, 2023, 11:13:46 PM
 #17

It's important that bitcoin remains as decentralized as possible, the added value of having low value transactions directly on the L1 is not enough of a reason to compromise on bitcoin's decentralization.

But with a Layer 2 & 3 we can have our cake and eat it too, we can have max decentralization on Layer 1, and fast and cheap transactions on Layer2, its being built right now, lighting is maybe not the full solution we once thought it would be, its has its place and there are other Layer 2 underway, and they're about to get a whole lot of attention now that fees are a problem again.

this is the path bitcoin has chosen, and its probably the right path.

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December 22, 2023, 11:36:02 PM
 #18

Bitcoin transaction fee is expensive now but you can wait and if you can wait, you will have cheaper fee to use it.

Ordinals won't last forever because you will not continue to spend money for Ordinals forever when they no longer have chance or see chance to get quick and easy money from useless inscriptions.

Bitcoin blockchain is always a biggest and safest blockchain to use.

Altcoin blockhains can be hacked, Layer 2 infrastructures can be hacked, bridges can be hacked but did anyone hack Bitcoin blockchain?

How many confirmations of altcoins are enough compares to 6 confirmations of Bitcoin blockchain?
How many Bitcoin confirmations is enough?
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December 23, 2023, 02:07:02 AM
 #19

It's important that bitcoin remains as decentralised as possible, the added value of having low value transactions directly on the L1 is not enough of a reason to compromise on bitcoin's decentralisation.

lower fee do not cause more centralisation.. its actually the opposite way round

when fee's are high users lock their value to middlemen, causing more centralisation of fund control

when mining pools get too much profit. they buy more asic farms to centralise the hashing. but the distributed hobby miners due to not having great deals on electric and hardware cannot buy as many asics in one go to compete.

when pools take a 2% cut of reward + X% of fee's they can expand their single location asic farm faster than hobby miners distributed around the world getting only 0.000x% share of reward+fees

it doesnt matter how high the fee's go the individual independent asic owners cannot compete compared to the pool owners

its the economics of any industry manager-worker relationship
if general income is X but manager gets 2% and worker gets 0.0002% the more income the business earns the manager profits the most

think about it.. (asic costs $4k)
if a manager gets 2% of $270k ($5375) he can add 4 new asics every 3rd block
if a worker gets 0.0002% ($0.54) he can get one new asic once every 7400 blocks

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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December 23, 2023, 02:26:48 AM
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 #20

Transactions fees temporarily spike every once in a while. And every time that happens so many people feel the need to make these doom and gloom threads about Bitcoin not working anymore.

Bitcoin works the same as it always has. Saying it is losing P2P efficiency just says you don't understand how blockchain works. Fees were never going to stay low. They were low in the early years due to Bitcoin not being that popular. That was always going to be a temporary state.

Bitcoin scales on L2. And no reason to freak out just because fees spike for a little while. Every time a spike happens people act like it is the new norm. Like in May when fees spiked to like $20-$30 for a few days so many people were freaking out thinking that was the new norm, and fees quickly went back down to like $1-$3.

Yeah it sucks useless ordinals are clogging up the blockchain, and ideally those wouldn't exist. But the future of Bitcoin use is obviously L2 and it always has been because the Bitcoin blockchain is the base security layer for the Bitcoin payment ecosystem. In the future most people will never or hardly ever interact with it because as in any payment protocol, the average person only touches the higher more efficient layers.

No need to freak out every time fees temporarily spike. Fees are already falling from wherever they peaked at recently. Bitcoin works same as always, and we've still got a number of years before fees will actually drive us all to have to use L2.
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