Topic: is bitcoin scalability problem solve now? - page 3. (Read 618 times)

ad.1 I know and its very interresting ... why exhanges charge ~25$ fee for btc withdrawal while network fee is around 80 cents currently (24.2$ is pure exchange profit). And only .00001BTC - 0.47$ for BEB-20 BTC withdrawal (hotbit) or 0.0000055 - 0.25$ (binance) while network fee is ~10-20 cents (5-25 cents exchange profit, why not 20$?)

ad.2 Does it matter if all I use WBTC for is tranfer of value form one place where my money are exposed to exit scam 24/7 (exchange x) to second place where my money are exposed to exit scam 24/7 (exchange y). Safety of fraction of my trading portoflio during 30 sec transfer is not worth 25$ making it perfect solution for this purpose especially that rest of my portfolio is stored on bitcoin chain in cold wallet.

1. High BTC withdrawal fee is caused by exchange greed to earn more profit. In fact only small fraction of the fee is used to pay Bitcoin transaction fee.
2. WBTC require you to trust BitGo, read https://bitcoin.stackexchange.com/a/100844 for more info.

There are wrapped BTC tokens not only on ETH but also on BSC, KCC, SOL or even TRC20. And how does it help bitcoin scalability? It takes out all the load made by people who wants to transfer bitcoins from exchange x to exchange y without paying ~25$ fee (standard BTC withdrawal fee is 0.0005 BTC). You dont need security/decentralization for this purpose (transfer of value from risky place - exchange - to other risky place - other exchange). Who does that? Mostly arbitrage trader balancing their portfolio but also BTC/altcoin traders who does not touch stable coins.

https://bscscan.com/token/0x7130d2a12b9bcbfae4f2634d864a1ee1ce3ead9c
 I was looking at this adress a while and there is like ~20TX per minute - ~5% of BTC chain max traffic (7 TX/s) took off.

Can you then definitely say that Bitcoin Cash, and Bitcoin Cash SV has solved the “scalability problem” just by forking to larger blocks?

OP, onchain scalability will only be “solved” if the network’s transaction throughput can be increased WITHOUT sacrificing decentralization.

A centralized exchange (ie. Binance) is not a good source of knowledge. Stick to reliable sources such as the bitcoin wiki or forums such as this place or SE.

The explanation given by Binance Academy is very misleading. SegWit does NOT reduce transaction size, in fact in some cases the size is bigger. It also does NOT remove or separate signatures from transactions or blocks. You can not do that, otherwise anyone would create transactions without a signature and spend anyone else's coins.

What SegWit does is that it introduces a new concept called "weight" that is 4 MB and a new field is added in each transaction that can contain the "witness". This new field is NOT separate from transactions, it is still part of each transaction and is included in each block. The new nodes will use it to verify each transaction in a block.

The part that creates confusion that leads to wrong statements by those like Binance that you quoted is that "weight" of SegWit transactions can be lower than legacy tranasctions (not their size).
Also in order to let old nodes (that are no longer considered "full nodes") to continue to sync, the full nodes strip this new field before sending transactions or blocks to them.
This way block size was increased without needing everyone to upgrade, and that means more transactions can be included in blocks so bitcoin scalability was improved.

security?? um.. ASIC miners dont have hard drives, dont touch blockdata. it doesnt matter if a block is 1mb or 100mb. an asic just handles header data and a hash. (always the same size)

decentralisation?? um, we are not in the 1990's of dialup and floppy disk drives where by 1mb every 10minutes is unsustainable.

its 2021. we have 4tb hard drives and 900mb/s fibre internet.
seriously, why are you trying to push old outdated FUD propaganda to try making bitcoin appear to be useless to users.. are you really that much of a altnet fan and bitcoin hater?

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that said. there are altnets, like sidechains and LN that have their niches. but they should not be considered as the only option people should be offramped, as a solution where people should avoid using the bitcoin network for months on end..
 as THE ALTNETS have their flaws and security risks and centralisation issues.
other networks, even if branded or sloganed as being bitcoin. are not bitcoin.

having to 'federate' the coin locks in either a side chain management firm or a conglomerate of corporate LN hubs in a hub/spoke model is more risky offchain, than actually having individuals with their single signer privkey independence on the bitcoin network.

i cannot believe in 2021 people are acting like kodak in 1999 saying that digital memory wont replace 35mm picture film "cos digital storage cannot scale"

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to answer the topic creators question

bitcoin even 4 years after SW and 12 years in total has not ever had a single day that has seen 604800 transaction (7tx/s)
7tx/s represents 4200tx every 10min. or 25200tx an hour. there has never been a single hour that has offered 25k tx.

however they have had blocks that are over 2mb but only containing silly amounts of transactions like 230tx
https://www.blockchain.com/btc/block/540107
(sarcastic thankyou(real facepalm) to segwit for that bad efficiency example)


this is not because its technically/physically impossible to increase the transaction count. but is due to politics of developers saying they dont want to allow it, because they can make more profit/income from selling alternate network solutions by hampering bitcoins ability
('we dont want people buying coffee or pizza using bitcoin' (facepalm))

WBTC is certainly not something we consider a scaling solution. WBTC is used to add liquidity to DeFi platforms on the Ethereum network. When you hold wrapped bitcoin, you are not holding bitcoin; you are holding an ERC-20 token.

Let's also not forget transacting on the Ethereum network right now is insanely expensive. While I can't say this will be the case in the future, it certainly doesn't look like a scaling solution now.

How does WBTC solve Bitcoin scalability again? If anything Ethereum is far more expensive to transact with; not to mention that WBTC doesn't inherit the security and decentralization of the Bitcoin network. You're simply not going to get scalability on the base chain without sacrificing security/decentralization.

Thank you for this kind explanation.
Yes, is a big omission. WBTC deserve a place here for the role in solving bitcoin scalability problem. Especially in Defi and smart contracts. But my problem is some kind of centralization before you recieve WBTC

After we give up on the idea that bitcoin is going to replace fiats (compete with visa) - 2017 bubble paradigm - and focus on "digital gold" "safe haven" "plan b" paradigm that is currently driving bitcoin price ... 7 tps is enough ... problem solved by changing bitcoin narrative/usecase. Current BTC transaction cost is below 1$, no one need less if your competitor is no longer Visa (24 000TPS and free for end user) but ... gold with 0 TPS, or rather 1 transaction per 2-10 working days via DHL/DPD/UPS/FEDEX for a fee of 2-50$ with shipping insurance XD.

You also forgot to add one big thing. Alternative chain solution (wrapped bitcoin) that is being used by arbitrage traders, traders, workers, and many more to move bitcoins from exchange x to exchange y faster with 0.0000055 withdrawal fee instead of 0.0005 BTC. Also average trader is no longer trading BTC/ALTcoins  (2014-2017 70-90% of altcoin trading volume was made by BTC/ALTcoins trading pairs) but rather USDT/Altcoins so he moves tether all around the exchanges rather than bitcoins.
I think it lower bitcoin onchain traffic a lot.

No, the scaling issue has not been solved yet. While Taproot and Segwit were both steps in the right direction, we still have a long way to go.

The lightning network itself still have scalability issues to solve when it comes to larger payments. Don't forget that while the lightning network is brilliant and will scale bitcoin tremendously, it is not the end-all-be-all for bitcoin's scalability issues.

Signatures are the important part of the transactions, which means they cannot be thrown away because if it were otherwise we would end up with the whole bunch of transactions that could be spent by literally anyone in the network. Segwit doesn't separate signature data from transaction data, it simply moves actual signature data and other data that is used to verify a transaction (aka "witness data") to a special part of a transaction called "witness." Non-SegWit nodes don't know that this special field of SegWit transaction even exists, but they still consider these transactions valid if miners that had upgraded to SegWit included them in a block. So, in SegWit the actual signature data remains a part of the transaction, but it is not visible for older nodes. The fact that these non-upgraded nodes don't see witness data along with other data in transactions gives people an illusion that this data is somehow "separated" while in reality, it is not.

Ok. Which means the scalability problem will not be solve for ever.
Also I mean the one that happens on chain. The ones that happens off chain are not suppose to be counted in my opinion so.

Please explain this well for me.

Wrong. Signatures are still very much part of each transaction and are included in each block.

The reason for SegWit soft-fork was many things (malleability fix, opening room for easy future deployment of new soft forks, ...), one of which was scaling.

That is Schnorr signatures, Taproot is a lot more than that. There is already a lot of topics about it so I won't start explaining here.

Same with SegWit (witness version 0) this is doing a lot more than just scaling.

Scalability is not something you just solve once and be done with it. It is something you have to keep improving based on new development in technology and hardware.

The scalability problem isn't solved. It'd only be solved if there were no fees and the chain could weight us all for free. It's just blunted.

Depends on which transactions you're talking about. Those that happen off-chain or on-chain? The former are obviously much more than just 7. Theoretically, as of November 2021, it can handle up to 40 million TPS. As for the latter, it depends on the median transaction size. Note that 7 TPS was the maximum. I suspect it hasn't changed much with Taproot.

In 2017 there was the last civil war in bitcoin. This civil war gave rise to the hard fork to whom that gave birth to bitcoin cash. The reason for the war is because of bitcoin scalability. One part of the network wanted the fork that will make bitcoin have upto 200 and above TPS. But the order part of the network believe that if the change is apply it will lead to centralization of bitcoin. The result is bitcoin cash from bitcoin.

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Some week after the civil war. Pieter Wuille came out with segregated witness. But this one is soft fork. What seg wit did is to technically increase 1mb size of bitcoin block to 4mb. He did this by separating the bitcoin signature data from transaction data. So that there we be more space in the block to accept more transaction. The reason for this soft fork is to solve the scalability too.

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Lightening network has be there before the 2017 war. But is adopting slowly. The Lightening network use second layer bitcoin protocol to process transaction fast and small transaction fees. This one is design to happen not on the blockchain but will be add to the blockchain after transaction. The reason for this too is to solve the scalability.

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On november this year. Important update was made in bitcoin protocol call taproot upgrade. This is design to aggregate the different signatures in one single batch and validate. This help to increase the number of transaction to be made on bitcoin network. This is brought to solve bitcoin scalability problem too.

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My question

• From Ln to sig wit to taproot.  Can we say that bitcoin scalability problem is solve
• is bitcoin TPS officially more than 7 now.