Topic: Transaction speed when mining activity starts to level off and other downsides (Read 485 times)

So I think it is clear that for Bitcoin to become established past this initial hype phase, it needs to be capable of replacing ordinary fiat-based transaction functionality. 

My understanding is that mining is also the means by which transactions are recorded in the blockchain, so mining and transactions are inextricably linked.

So, already it takes quite a long time to confirm a transaction, not to mention the problems that arise with the natural scarcity of BTC (Coinbase) which seems to be an argument against it becoming a practical means of replacing fiat anytime soon. But isn't this the narrative that is driving up the adoption and acquisition of BTC right now (and for the forseeable future), particularly by non-techies?  They hear "It's not a bubble, it's a foundation for replacing money-as-we-know-it!" and this comforts them that they are not buying into a gold crash 2.0 or tulip mania 2.0 or the housing bubble or magical beanstalk futures etc.  But it seems to me that once there is no practical way to mine BTC any more, the considerable cost of running a mining operation will clearly be a bad investment for anyone who is not doing it as a hobby (and it's already well priced out of hobby range at this point), so real, grown-up business decision factors will be at play.   And if mining cannot keep up with the scaling of transaction processing nor satisfy the need for Visa-like instant transactions, causing them to slow down even further relative to the increased adoption of the currency, who will use BTC?   It only takes a few bad stories to tilt the media toward "Today, yet another early Bitcoin adopter, $RETAILER, has just announced they are no longer accepting Bitcoin!!!1!!1one"   

Hunch:   The biggest long term investors in BTC, for better or worse, will be the major credit card companies, who will use their massive existing data center infrastructure to take over the transaction processing burden from the hobby miners in order to ramp up and collect transaction processing fees.   

Also... What happens on Black Friday when Joe Sixpack BTC investor, who was only persuaded after a lot of cajoling by his kid/coworker/news story to give Bitcoin a try and dumped $5000 from his 401k or savings account into it, attempts to pay with (or just simply convert into fiat) some of his newly inflated BTC to do Christmas shopping... and finds out that actually using it is a *lot* harder than it was made out to be by his Bitcoin-evangelist friend?  I have a feeling that Nov 27,28,29 will be a very interesting test of the average person's confidence in Bitcoin for this reason.  Yes I know the USA isn't the only bitcoin participant, but a *lot* of countries celebrate Christmas now, or are affected in some way by the sales cycle it creates.  The news media loves this kind of "poor average joe" themed hit piece, because there's a huge audience of frustrated haters brewing, those who missed out on the last 6 months and are tired of hearing about how that one guy down the street made $20,000 on his $500 investment.