The cost of bitcoin system is too high.it is not a cheap payment at all.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: amaclin on January 13, 2015, 11:14:25 AM

Quote

I checked it again,I just can't find their method.Did I miss something?

Yes. You have missed that these digits are bitcoin promotion.
We can compare expenses of bitcoin network and bank system.
But.
We should compare the cost per transaction, not total expenses.

We were just talking about where those numbers come from.

amaclin

legendary

Activity: 1260

Merit: 1019

Quote

the cost of bitcoin system is the clearing network.

~ USD $20 per one transaction for bitcoin network today. May be even more.

oyasumi

newbie

Activity: 28

Merit: 0

In fact,the cost of any digital currency's prodction is zero,whatever the digital currency come from(banks,bitcoin system、 a game etc.)
The only thing can be compare with the cost of bitcoin system is the clearing network.
Because Bitcoin network is just a clearing network.
The cost of bitcoin system is the cost of bitcoin clearing network and its security of the bicoin clearing network.

Grumpster

full member

Activity: 210

Merit: 101

OP seems to actually know nothing about the bitcoin protocol, or, for that matter, anything about why bitcoin got so successful in the first place...

amaclin

legendary

Activity: 1260

Merit: 1019

Quote

I checked it again,I just can't find their method.Did I miss something?

Yes. You have missed that these digits are bitcoin promotion.
We can compare expenses of bitcoin network and bank system.
But.
We should compare the cost per transaction, not total expenses.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: Elwar on January 13, 2015, 10:43:37 AM

Quote from: oyasumi on January 13, 2015, 10:29:54 AM

Quote from: Elwar on January 12, 2015, 02:44:40 AM

http://media.coindesk.com/2014/07/Picture-5-630x210.png

http://media.coindesk.com/2014/07/Picture-23-630x227.png

http://media.coindesk.com/2014/07/Picture-7-630x316.png

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

First,I don't know where these coindesk's number come from，and,which part is counted.
Second,I think some number should not put together.
For example, glod mining and Bitcoin mining,It is different.
It's not fair to both glod and Bitcoin.

I included the link to the article that goes into detail on where they got the numbers. And those numbers are conservative.

I checked it again,I just can't find their method.Did I miss something?
It seems these details is the conclusion based on these number,but not the evidence of these number.

Elwar

legendary

Activity: 3598

Merit: 2386

Viva Ut Vivas

Quote from: oyasumi on January 13, 2015, 10:29:54 AM

Quote from: Elwar on January 12, 2015, 02:44:40 AM

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

First,I don't know where these coindesk's number come from，and,which part is counted.
Second,I think some number should not put together.
For example, glod mining and Bitcoin mining,It is different.
It's not fair to both glod and Bitcoin.

I included the link to the article that goes into detail on where they got the numbers. And those numbers are conservative.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: Elwar on January 12, 2015, 02:44:40 AM

http://media.coindesk.com/2014/07/Picture-5-630x210.png

http://media.coindesk.com/2014/07/Picture-23-630x227.png

http://media.coindesk.com/2014/07/Picture-7-630x316.png

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

First,I don't know where these coindesk's number come from，and,which part is counted.
Second,I think some number should not put together.
For example, glod mining and Bitcoin mining,It is different.
It's not fair to both glod and Bitcoin.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: freebit13 on January 12, 2015, 04:23:27 AM

Quote from: oyasumi on January 11, 2015, 07:50:26 PM

Developers can set transaction fees to any number,and the system will be no change,because the cost of Bitcoin system is not paid by transaction fees,but by block reward now.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

Yes, but by then there should be more transactions in every block... at the moment they are pretty empty. The system was designed this way to reward miners so they would build up the necessary network security. It is the plan that the block reward will be offset by transaction fees as the network grows and more people use it. It is organic and has worked pretty well so far.

Organic?So why is system's cost so high when transactions is just 200 times?
A plan?Bitcoiner say Bitcoin is a cheap payment for transaction fee is just 0.0001,why?
25 bitcoins,0.0001*200 bitcoins,there is a big difference.
And,a truth is, Bitcoin(PoW) need hash race,and,many computer work,but just one computer's working is effective at one time.
So,I don't think there is a way to fill it.
And I also have another question.If the transactions number is millions per ten minutes,will Bitcoin system work well?It seems no evidence.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: doggieTattoo on January 12, 2015, 12:19:52 AM

Quote from: oyasumi on January 11, 2015, 07:25:58 PM

Quote from: countryfree on January 11, 2015, 12:02:04 PM

Quote from: oyasumi on January 11, 2015, 06:10:15 AM

Compare to mainframe used in banks,the cost of Bitcoin is much more higher.Now transaction fee is low because the cost of system is undertake by people who buy bitcoins,not people who use bitcoins.

The cost of using Visa and MC is huge. Shops must buy a dedicated terminal which costs at least $300, and there's a higher fee to pay for each transaction. Then there's Visa which I'm sure has back office with servers in every country the service is offered. We're talking of a network with several thousands dedicated servers in it. This wasn't made in a day, and it took billions to build...

1.
In Bitcoin system,the number of transactions per ten minutes is about 200 times.In Visa clearing system,the number is millions.

When you calculate the cost per transaction, it is generally accepted that the cost to process a bitcoin transaction is lower when you calculate the estimated electric cost. If you use the value of found blocks (including block subsidies) then visa is cheaper

Quote

2.
Bitcoin system is clearing system,but visa is not just clearing system(BASE II).
For example,if you lost your visa card,you can contact to visa,let them handle the problem.
you can also save money when you go shopping.
It need money,but it is not the cost of visa clearing system.

You would actually contact the issuing bank to replace your lost/stolen credit card. The same goes with any payment disputes. The payment network would generally be unaffected

Quote

3.
Servers in visa clearing system just process transactions,but in Bitcoin system,Servers also do hash race,and just one servers' working is effective at one time.
If there is no block reward,the transactions fee would be about 30 dollars in Bitcoin system.

If there was no block subsidy (not reward) then yes the cost per transaction would be higher, although it would not quite be $30 per transaction. The theory is that over time the number of transactions will increase enough so that TX fees will rise enough to cover the reduced block subsidies.

1 and 2,I don't get your point.
3
Just as I said,Bitcoin(PoW) need hash race,and,many computer work,but just one computer's working is effective at one time.
So,what you said will not happen.

Kazimir

legendary

Activity: 1176

Merit: 1011

Quote from: oyasumi on January 13, 2015, 09:40:26 AM

Less miners,less security.

Completely irrelevant.

Mining bitcoins is by definition never expensive, or even 'too' expensive. If it's worth it to mine bitcoins, more people will do so, and difficulty will increase. Until it becomes not worth it anymore, then some people will stop mining, and difficulty will decrease. This dynamic equilibrium will automatically maintain itself due to the very nature of Bitcoin.

Saying that the cost of the Bitcoin system is "too high" is just plain retarded, and completely ignorant of fundamental Bitcoin basics.

oyasumi

newbie

Activity: 28

Merit: 0

Quote from: cryptworld on January 11, 2015, 08:11:30 PM

it is actually not expensive because you could maintain the network with less miners.

the point it that more and more miners are insanely increasing the network power

Less miners,less security.
If all bitcoin worth 1 million and attacker is going to using 10 thousands to attack the Bitcoin system,
then,when all bitcoin worth 10 millions,the attacker is going to using 100 thousands to attack the Bitcoin system.

countryfree

legendary

Activity: 3066

Merit: 1047

Your country may be your worst enemy

Quote from: ?? on ??

Quote from: amaclin on January 12, 2015, 06:49:33 AM

Quote

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

Don't forget fraud costs, a sizeable chunk of the transaction fees goes towards paying the costs of fraudulent transactions from stolen card data etc. About 6 billion dollars a year last I heard, not really fair burdening the consumer with the inefficiencies of an outdated network Wink

Both arguments are correct, but they don't relate to the cost of the currency used. Visa operates with about every currency in the world. If a given currency goes down, they'll just raise their operating costs in that given currency.

johnyj

legendary

Activity: 1988

Merit: 1012

Beyond Imagination

Quote from: amaclin on January 12, 2015, 06:49:33 AM

Quote

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

Maybe the word "care" is not accurate, can I say that VISA is not responsible for any currency's value? Do they care that USD just rose against Rubble for more than 50% thus the transaction cost in Russia is 50% higher if counted in Rubble?

amaclin

legendary

Activity: 1260

Merit: 1019

Quote

VISA does not care how much USD worth

omg! really?
visa does care how much one transaction costs. because visa also pays for hardware, electricity, salary and taxes.

johnyj

legendary

Activity: 1988

Merit: 1012

Beyond Imagination

Bitcoin is first a monetary system and then a payment network, it is not appropriate to compare a monetary system to a payment network like VISA. There is big difference here. VISA does not care how much USD worth, but bitcoin network must decide how much bitcoin worth through mining

The banking system's biggest cost is to force their zero-cost fiat money to circulate by passing a law. The cost to make that law is almost the wealth of the whole nation. If Russia trys to force everyone in US to use Rubble, you will see how huge that cost will be Grin

For a voluntarily monetary system like bitcoin, its value is not forced upon its users by law, but through market behavior, e.g. the lowest cost to get bitcoin will decide its value. So mining cost works as a reference baseline for bitcoin's value. If there is a shortcut that you can get cheap coins like in PoS coins, then everyone will take that route to get coins and no one will pay for it (there is no law forcing you to accept PoS coin), the coin's value will plummet to the cost of that cheapest method

bitdraw

hero member

Activity: 504

Merit: 500

includ government bailouts, inflation loss etc. in your comparison and suddenly the bitcoin network seems cheaper to maintain than the banking sector

freebit13

hero member

Activity: 616

Merit: 500

I got Satoshi's avatar!

Quote from: oyasumi on January 11, 2015, 07:50:26 PM

Developers can set transaction fees to any number,and the system will be no change,because the cost of Bitcoin system is not paid by transaction fees,but by block reward now.
If the block reward is zero,to keep the same security level,the transaction fees will be about 30 dollars.

Yes, but by then there should be more transactions in every block... at the moment they are pretty empty. The system was designed this way to reward miners so they would build up the necessary network security. It is the plan that the block reward will be offset by transaction fees as the network grows and more people use it. It is organic and has worked pretty well so far.

amaclin

legendary

Activity: 1260

Merit: 1019

Quote

The theory is that over time the number of transactions will increase enough so that TX fees will rise enough to cover the reduced block subsidies.

I think that the number of transactions will decrease enough so that TX fees cover the reduced block subsidies.
Zero transactions. Zero tx fees. Zero blocks. Zero subsidies. Zero value. Grin

Elwar

legendary

Activity: 3598

Merit: 2386

Viva Ut Vivas

http://www.coindesk.com/microscope-conclusions-costs-bitcoin/

Topic: The cost of bitcoin system is too high.it is not a cheap payment at all. (Read 3426 times)