Topic: Bitcoin usage and misaligned expectations - page 4. (Read 1159 times)
the bitcoin usage projection is widening which was originally intended for electronic transactions now goes beyond the expectations of its creators to become an investment tool. I am sure the creators did not think so far if the transaction fee burden became large when the market capitalization was high. as the end user a large fee always a complaint at this time, this is not a bitcoin failure design if fees are expensive when the market demands are large. because the miners' do a transactions are also quite high, and we cannot continue to reduce costs to zero they also need a life ecosystem.
If you can make huge profit, store up assets, transact money online and been your own boss. What other success do you want to get with bitcoin? No more expectations from bitcoin because it has been providing and giving me all I ever needed.
If the commission is so insignificant that the buyer can not even think about the purchases made, then of course the use of Bitcoin will increase significantly. But did you ask yourself whether miners will be satisfied with such commissions for mining blocks? I think not. Mining will become unprofitable and then the existence of bitcoins will be under threat. Of course, if they come up with a solution that can reduce the cost of transactions and miners do not suffer, then this will resolve the issue and everyone will be satisfied
Maybe I'm missing something, but I still can't understand why do people pay so much attention to transaction fees in regards to miners' reward, forgetting about the block reward?
The block reward is 12.5 BTC currently and right now it is the equivalent of 98,500 USD. Now, since recently, the Average Number Of Transactions Per Block is around 2,400, and you can pay $1.34 for a fast transaction, but not everyone pays that amount, and I think we can safely assume that it's $1 per transaction, on average, and that means that miners are getting around $2,400 per block in transaction fees. Now, compare $98,500 and $2,400, and tell me isn't the latter amount kind of insignificant? $2,400 is still a big amount, no doubt about that, but, theoretically, miners would accept even txs with zero fee in order to just get the block reward, right?
If the commission is so insignificant that the buyer can not even think about the purchases made, then of course the use of Bitcoin will increase significantly. But did you ask yourself whether miners will be satisfied with such commissions for mining blocks? I think not. Mining will become unprofitable and then the existence of bitcoins will be under threat. Of course, if they come up with a solution that can reduce the cost of transactions and miners do not suffer, then this will resolve the issue and everyone will be satisfied
With Bitcoin, there are misaligned expectation and misaligned usage as well which led to the scam, therefore, to understand BTC usage in an appropriate manner is important.
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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.
No clue yet[/b_2, and I already did say that network security should be prioritized. If we had any idea what the appropriate size should be, then people would already be talking about it. I might be misreading you, but if you think a hard fork for bigger blocks isn't in the pipeline already, you're incorrect. Even the Lightning Network white paper calls it necessary:
No one has a clue, that's the point. Hard forks are dangerous because they are not inclusive. Plus Bitcoin Cash developers thought they had a clue, then why are their blocks almost empty? Why did some people in that community thought a split to Bitcoin Cash SV was a good idea? It set a bad precedent.
In my opinion bitcoin for many is still very new, and many people who still don't believe in bitcoin don't even know what bitcoin is, programs need to be made to make everyone aware of the true value. The economics of bitcoin. Then bitcoin is really valuable and easy to use.
Absolutely no. There is no perfect in this world we all know that and also in the crypto world for sure. Bitcoin and other cryptocurrencies will always have flaws but we still manage to provide a solution into it.
Those people who still don't believe in bitcoin, they will regret not buying any crypto.
Those people who still don't believe in bitcoin, they will regret not buying any crypto.
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.
Hopefully we'll find some middle ground between here and there.
Do you remember that post from Hal Finney, where he predicted the emergence of Bitcoin banks because Bitcoin couldn't scale to all the world's transactions? I think he was onto something there. I think we're going to see a multitude of off-chain solutions -- some of which are custodial and trust-based, as antithetical as that is to "being your own bank." Some of these options will make interfacing with Bitcoin affordable for those who can't afford on-chain transactions.
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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.
No clue yet, and I already did say that network security should be prioritized. If we had any idea what the appropriate size should be, then people would already be talking about it. I might be misreading you, but if you think a hard fork for bigger blocks isn't in the pipeline already, you're incorrect. Even the Lightning Network white paper calls it necessary:
While it may appear as though this system will mitigate the block size increases in the short term, if it achieves global scale, it will necessitate a block size increase in the long term. Creating a credible tool to help prevent blockchain spam designed to encourage transactions to timeout becomes imperative.
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If all transactions using Bitcoin were conducted inside a network of micropayment channels, to enable 7 billion people to make two channels per year with unlimited transactions inside the channel, it would require 133 MB blocks (presuming 500 bytes per transaction and 52560 blocks per year). Current generation desktop computers will be able to run a full node with old blocks pruned out on 2TB of storage.
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If all transactions using Bitcoin were conducted inside a network of micropayment channels, to enable 7 billion people to make two channels per year with unlimited transactions inside the channel, it would require 133 MB blocks (presuming 500 bytes per transaction and 52560 blocks per year). Current generation desktop computers will be able to run a full node with old blocks pruned out on 2TB of storage.
I believe in side chain solutions, but I also believe those side chain solutions should be within reach of the general public. As pooya87 said earlier in the thread, if it costs $50 to open a LN channel, then it probably won't work as intended. It's all well and dandy that miners are getting their share, but I am of the opinion that we need to find a sweet spot where everyone's happy enough with what they're paying/getting.
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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.
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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?
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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.
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.
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.
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.
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.
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.
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.
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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.
I think bitcoin has more uses than just for small transactions, bitcoin has other uses as assets, so I never thought bitcoin failed.
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.
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