Every time there is something mentioning Bitcoin Cash or the scaling issues with Bitcoin Core, the same people show up in these threads attacking everyone and spamming the comments with the same arguments over and over. (I’m not going to name names but look through these comments and see some of the posters calling Bitcoin Cash “bcash” and posting 30+ comments.)
Can we please not turn this forum ito the childish name calling of r/Bitcoin? There are good arguments for and against the two main Bitcoin forks and I’d like HN to be a place where these can be discussed without name calling and personal attacks.
I agree. They should be immediately closed. The problem with them is that crypto is a collision between tech and money. It, unfortunately, brings out the worst part of people wanting to get rich. I like yc because it isn't like that, but it just gets brigaded these days.
I would completely respect a complete ban of all crypto discussion on yc. I like the fact that it isn't that.
The op is talking about accounts like yours Frogolocalypse. You only comment on crypto related articles on HN and it's always the same talking points over and over.
Edit: I see further down the page someone even called you out for spamming this thread and others with identical comments over and over.
> Bullshit. Whingeing shitheads that never contribute where it counts. Coinbase has done fuck all to contribute to bitcoin development except be cheerleaders for every asshole fail train driver who has tried to destroy it. If they gave a shit they would have contributed to lightning development.
This was foreseeable when Bitcoin Core rejected Segwit2x. BitPay's business model simply fails unless the blockchain can scale much more than Segwit alone achieves, very soon.
While I agree that Segwit2x would have been good for BTC, it ultimately only kicks the can down the road a little bit. If BTC (or BCH) is going to be used at Visa/Mastercard scale then the transactions need to happen off-chain. The Lightning Network is the answer here, a lot of work still needs to be done though, particularly on the software side.
This is the major (technical - plenty of political issues) problem I have with Bcash. It’s cheap and fast because transaction volumes, and price, are 10% of BTC, yet blocks are 1.5x the size (roughly, looking at a block explorer). As soon as they fill up, they’ll have the exact same problems down the line. Increasing the block size doesn’t scale long term and is a bandaid solution at best.
These kinds of transactions aren't feasible on the Bitcoin chain since the fees are prohibitive, so all those small unspent outputs remain in the UTXO set forever and are essentially unspendable.
I'd also argue that increasing the block size scales fine as long as network speeds and storage continue to scale as they have been over the past years.
The inability to clear dust on Bitcoin is a serious problem. It's fragmentation, for your money, that makes it impossible to spend (given the current fee structure, which has been defined as "normal" now that Bitcoin is "digital gold" rather than a transmission network).
It's like every time you buy something, the change just disappears, and once a week you have to spend another $20 to sweep it up. This is not how currency is supposed to work, and it's been retconned as somehow being a good thing.
Don't hate on me for stating the obvious here. Whatever happened to the "no fees" that advocates like Marc Andreesen were promoting circa-2014?
Everything is relative. The significant part is that increasing the block size steadily can scale to huge transaction volumes. Visa level transaction levels of around 2,000 TPS can be achieved with block size increases and higher end computer hardware. If we are talking visa level transaction volumes then the user base has to be at least 500 million users. If the userbase is that large then think of how many people would be willing to run full nodes. Not everyone but probably 10,000+. The current crypto ecosystem is probably a few million people across all coins.
Also it is important to note that BTC could be like BCH at higher transaction levels if they increased the block size but that won't because of this lightning network idea. Which is what I don't get. You can increase the block size right NOW and work on the lightning network as well. Yet, they don't do that because the lightning network is everything and any other solution is not even considered.
I used to also think that bigger blocks were always bad but that is simply not true. The original block size limit was purely implemented to stop spam when bitcoin's userbase was very low. Satoshi actually wanted to implement bigger blocks as the userbase grew. Bigger blocks is the not the long-term solution but it is a solution that we have right now that works.
Unfortunately, pointing out the fact that this sort of faux scaling will lead to centralization is never going to be popular among the tech illiterates at this site who believe Roger Ver over listening to people who actually work on the bitcoin code.
It's kind of weird really. They think they can make reality go away because they make sockpuppets and try and force an outcome that will make them rich. By being really loud, and not really understanding how any of the technology works. All they do is copy paste things from people they think are smarter than them. Sadly, they are being played by much more experienced shysters and charlatans. Reckon it's mostly kids though.
> they’ll have the exact same problems down the line
But it could be years later; years in which other scaling solutions can be researched. If you only accept scaling solutions that can scale to infinity today, you will never accept a single one.
2 MB blocks (Bitcoin Classic) don't affect decentralization, if you support SegWit. SegWit blocks can be 4 MB, and that is 4 MB of data that has to be transmitted over the wire and stored unless you weaken your security model.
In fact, SegWit negatively affects decentralization because it is much harder to build and maintain your wallet because of all of the complexity of SegWit, pushing people to crowd around existing solutions.
The worst-case performance of validating a block full of SegWit transactions, which is the only way you'll hit 4MB with SegWit, is actually a lot better than the worst-case performance when validating a block full of non-SegWit transactions. The original design of Bitcoin had an unfortunate flaw where the cost of transaction validation could increase quadratically with transaction size. SigWit fixes this to be linear. (As it happens, Bitcoin Cash copied this fix, which makes it just as incompatible with existing wallets as SegWit transactions; arguably more so in fact, since by the time that deployed a lot of wallet software had implementations already.)
That's why it was such a compromise. In order to get the massive decentralization and privacy boost of the malleability fix that segwit provided, the blocksize increase was included to give the increase that the classic hard-fork suggested. And it was done as a soft-fork too, which means none of the 160,000+ bitcoin nodes needed to upgrade their software.
And what happened? After they got exactly what they wanted with the doubling of capacity, they said "we want more" which demonstrated the entire exercise had nothing to do with blocksize, but about stealing the blockchain away from its users, and centralizing it in their data-centers. Which is why, months after the segwit implementation, the biggest and loudest people clamouring for a capacity increase for years, which includes bitpay, the subject of this thread, and coinbase, which has been an actively undermining the bitcoin developers for years, have not even implemented the blocksize increase. So much for blocksize being important.
Why do some people call Bitcoin Cash "Bcash?" It seems to accompany critical statements. I'll assume you're not doing it to save 6 letters, because later you refer to Bitcoin as BTC. You could have saved more letters by referring to Bitcion Cash at BCH. Is this a campaign to rebrand Bitcoin Cash as something other than a Bitcoin fork?
It's more a reaction to Bitcoin Cash officially insisting that it's the "real" bitcoin, and trying to actively misleading users by referring to BTC as "Bitcoin Core", creating a false parity to make it seem like they're both equal "forks" that bitcoin split into.
I've tried to refer to them using the less loaded "BTC" and "BCH" symbols instead; but it's kindof getting tiring, hearing people insist "Bitcoin Cash is Satoshi's True Vision". It's like somebody starting a "Apple Phone LLC" and saying it's Steve Jobs' true vision, ignore that other "Apple" company.
The difference is that you have to look at the attributes of each coin and see which one most likely reflects the white paper that satoshi himself wrote. He is talking about a P2P cash system, not a P2P gold system.
Just because the first generation of bitcoin was the beginning doesn't mean it still reflects the original vision.
"The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate." - Satoshi Nakamoto
The comparison to Apple is funny. Are you suggesting Bitcoin is a centralised company with a trademark?
If suddenly someone spins up a million bitcoin cash nodes will you call it bitcoin? If total PoW exceeds core will you? If core finally hard forks to increase the blocksize will you stop calling it bitcoin?
But that you'd compare it to Apple, that's just weird.
Yes, it was a campaign propagated by a self titled group of Crypto Currency trolls called "The Dragon's Den" They coordinate propaganda campaigns and cyber attacks on crypto currencies they don't like. There is a lot of overlap between the Dragon's Den and Bitcoin Core as well as Litecoin and they hold moderation positions in /r/bitcoin. The idea is that by calling Bitcoin Cash "bcash" they take the word "Bitcoin" out of the name and there by confuse people unfamiliar with the history of the community about what Bitcoin Cash is and it's reasons for existing.
> The idea of authorisation or ownership of the one true core is hilarious.
That's great, but it's not what I wrote. What "one true core"?
Taking someone's software, modifying it, and touting your change as the next version of their software is wrong. Regardless if the code is meant for a block chain, or anything else.
What? Satoshi disappeared! The rest of the developers continued on. How is that comparable to bitcoin cash trying to do a hostile take over of bitcoin, simply because they want to take the brand name for themselves?
No, because those same developers worked on the earlier versions as well. They didn't just come in, take someone else's code, change it, and say, "Look guys, here is the next version of their software! Enjoy ;)"
Either you don't want to see my point, or you can't see it, because you haven't said anything to address it. If you have an argument, why don't you say it? This juvenile name calling makes me feel sad for you.
I've given my argument - your entire position is ridiculous, given the nature of what you're talking about. It's beyond irony, and whats more it makes you look a petty fool.
Again with the insults. Then what is your damn argument? I've stated mine, several times. Please, state yours.
All I can do is guess that you are talking about users not only being inundated with forks, but not even being able to tell one fork from another, or even one coin from another because they all use the same names. And this is all fine for you because of anarchy or something.
It's an abbreviation. Bitcoin Cash = Bcash/BCH. This acronym is not confusable with Bitcoin or the BTC acronym at all.
Why is this considered remotely offensive? People are incredibly reactive to this and I don't understand why. It's a pretty straightforward mechanism of acronyms that has been going on for hundreds of years.
Why is this actually considered a serious point of discussion, at all?
I don't at all. Is using an abbreviation supposed to be insulting somehow?
(and the thing is, it's not even the bcash people who are bothered by the term - it's the BTC people! it's like you got insulted when someone recognized me enough to call me PMD... which is what I suspect it comes down to.)
We could start using 'Side chains' today you might as well just create a bitcoin bank where everyone has an account hmmm hmm i mean a channel and all transactions can happen on your bank network and not on the blockchain. See i solved the problem. But first i need to convince everyone to use my side network, sooo if the main blockchain is like a stream what i need is for this stream to be blocked so that i can channel everyone to my side stream. Maybe i will call my bank blockstream.
Payment channels and the lightning network aren't centralized; the users remain in control of their coins without counterparty risk. It's not like a "bitcoin bank" where they have to trust someone else to hold their coins for them. This is shitty FUD.
This half-assed analogy falls apart under cursory examination; Lightning isn’t anything like a banking system because you have to trust banks and you don’t have to trust Lightning counterparties.
It only kicks the can until you scale the remaining components to where it can scale:
- the whitepaper itself solved the storage problem with old transaction pruning.
- The block propagation and validation bandwidth requirements can be brought down 90%+ by canonically ordering transactions, memoizing transaction validation, and propagating only the block header and metadata.
- the inefficiencies in the actual code are being worked out by Bitcoin unlimited's gigablock project among others.
> If BTC (or BCH) is going to be used at Visa/Mastercard scale then the transactions need to happen off-chain. The Lightning Network is the answer here
There is a lot of technical complexity to this, and no real working proof at scale (AFAIK there is no production implementation even at a small scale).
Lightning Network at scale will involve routing problems between coinholders analogous to a mesh network (or more realistically, FidoNet/UUnet) which risks centralization since those problems are not solved at scale in any fashion except hub-and-spoke/backbone. BGP is not an acceptable solution for LN since it involves a substantial degree of trust, and manual routing devolves into centralization.
Not only that. The problem is that you can't just say "see I found a route A-D through B and C: ABCD"
You actually have to be able to say: "See, I found a route A-D through B and C: ABCD and all nodes are sufficiently funded to execute the payment."
And that's the big unsolved issue. Can you make an algorithm that will reliably do the latter while keeping the network decentralized?
I think this is very hard, as the channel states between individual nodes will change for each payment, and that's entropy that somehow needs to be synchronized.
Of course, simple centralized solutions like making B and C big enough ("banks") to deal succesfully with almost any payment are possible.
But solving this problem is pretty damn hard, and I have yet to see a satisfying solution to this. Note that satisfying absolutely must include being decentralized.
Because else, we can as well do the simple and sane thing and scale just on-chain, which also ensures that the miners get their fair share of the pie and makes it less likely that the bottom falls out because there's lots of layers, each taking a cut, to the system.
Now, don't get me wrong: I am fine with LN and I think it might have good use in the micro/nano-payment space. Regular, simple payment channels (like BCH and BTC have since the beginning) might fully cover that use case as well. Who knows. In any case, LN as the (and the only) solution to scaling is not going to work out.
That's not the whole story. Litecoin has about the same theoretical capacity as Bitcoin Cash and one huge advantage for BitPay's business model: generating blocks at 4x the speed means it's more likely that transactions will confirm within the window they're willing to lock in a price for. (It's also on more exchanges, as I recall.) There's obviously some other reason besides transaction capacity for Bitcoin Cash to being chosen here.
Also, Bitcoin Cash had the annoying antifeature of using the same address format as Bitcoin, probably because it pretends to be Bitcoin, which means it's easy to accidentally send Bitcoins to a Cash address and vice-versa. Even experienced users seem to screw this up occasionally. (This certainly wasn't for reasons of wallet software compatibility; changing the address version number is trivial compared to the other changes required to port even a lightweight wallet.)
BitPay's workaround for this is apparently to use their own address format for Bitcoin Cash which is incompatible with most existing wallet software ("the BitPay and Copay wallets' BCH address format"). Non-BitPay wallet software seems to have backed a different, incompatible new address format as the solution to this problem. Of course, all of the wallet software is still going to happily let you accidentally send Bitcoin Cash to the Bitcoin payment address... it's only sending it to the correct address that may not be supported.
Segwit2x was an initiative to increase the block size. It only required replacing Bitcoin Core because Bitcoin Core refused to merge a block size increase. If they had agreed to merge a block size increase, then btc1 would not have been necessary.
That narrative is a bit tiresome, since it's so obviously false.
The Bitcoin developers (not "Bitcoin Core") had just implemented a block size increase after years of discussion.
The segwit2x intiative didn't take part in this. They didn't bother even writing a specification, let alone a proposal or take it through public discussion.
Neither the community nor the core devs wanted 2x in the first place. That's why the original pre-segwit 2x fork didn't work; then BCH was created as a protest; and then (for some reason) the same group of people tried to push Segwit2x to get 2x into BTC yet again.
The last one (Segwit2X) had it's reference nodes so poorly coded that the mining nodes didn't even manage to mine their first block; due to 3 separate off by one errors that even basic testing would have revealed. Shoddy coding like that is yet another reason why the core devs (and the community) wanted nothing to do with the 2x team. And given how it took them months to fix BCH's difficulty algorithm, I'm not really convinced that they've improved.
The bitcoin open source development team doesn't control the node i run. If you want centralized chinese government controlled crypto, there's bcash. If you were actually interested in just cheap fees, you'd use litecoin. It has been around for years. It even has segwit, unlike bcash.
> If you want centralized chinese government controlled crypto, there's bcash.
That's the pot calling the kettle black. Bitcoin core is China-coin.
The economics of mining mean that there will always be centralization. Mining will centralize where there is free or cheap electricity (ahem, China). Mining will centralize on the hardware of the single manufacturer with the most cost-effective asics (ahem, China). It inevitably centralizes as other miners will fall behind revenue-wise, and not be able to invest enough to provide meaningful hashpower over time.
The small-blocks-prevent-centralization line of thinking is just closing the barn door after the horse is out.
Since the work was undertaken in China, can you flesh out how the fact that nodes verify consensus resolves the China-coin problem? A 51% attack dictated by the chinese government would verify just fine.
You fundamentally do not understand how bitcoin works. So let's talk about nodes and consensus as defined in the whitepaper and implemented in nodes. Let's start with the bitcoin white paper (https://bitcoin.org/bitcoin.pdf) :
> Satoshi from the Bitcoin white-paper chapter 12 'Conclusion' : The network is robust in its unstructured simplicity. _Nodes_ work all at once with little coordination. They do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis. _Nodes_ can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this _consensus mechanism_.
First, you have to understand what 'consensus' actually means :
> A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. Examples of applications of consensus include whether to commit a transaction to a database (or, for example, committing blocks to a blockchain), agreeing on the identity of a leader, state machine replication, and atomic broadcasts. The real world applications include clock synchronization, PageRank, opinion formation, smart power grids, state estimation, control of UAVs, load balancing and others.
What does this mean if you are but an intrepid traveler amongst the erstwhile numpty-folk?
Nodes are agents in a multi-agent system with an agreed set of consensus rules (https://www.cryptocompare.com/coins/guides/how-does-a-bitcoi...), which they and they alone enforce, that ensure that the system functions. Transactions are propagated through the multi-agent network based upon the agreed consensus rules by nodes, which are agents in a multi-agent system. Miners retrieve valid transactions from any of these nodes, which are agents in a multi-agent system. They then order the transactions, and perform a hashing function on them until the hashing function returns a value that is suitable to the nodes, which are agents in a multi-agent system. They then pass the new block that they've created to the nodes, which are agents in a multi-agent system. The nodes, which are agents in a multi-agent system, then validate the block to ensure that each of the transactions within the block agree with the consensus rules. Then the node, which is an agent in a multi-agent system, extends the block-chain by attaching the new block to it. They then pass the new block, if it is valid, to other nodes, which are agents in a multi-agent system. Then each of these other nodes, which are agents in a multi-agent system, each do the same validation on every block.
Nodes accept incoming transactions and validate them. Miners don't. Nodes replicate transactions to other nodes. Miners don't. Miners take transactions from nodes, and order them in a block, and perform a hashing function on them (the only thing they do). Miners pass the new block to the node. The node validates the transactions in the block. Miners don't. The node validates the block. Miners don't. The node extends the blockchain. Miners don't. The node replicates the block to other nodes. Miners don't. It is the validation of the nodes, and their CPU's, that define and police consensus in bitcoin.
There is only one function that miners do. They take transactions, put them in a block, and hash them. As soon as a miner produces a block that nodes don't want, it is rejected. Miners work. Nodes validate. So nodes are the proof in proof-of-work.
Nodes accept the transactions, validate the transactions (using their CPU), replicate the transactions, maintain the mempools, validate the blocks (using their CPU), extend the blockchain (using their CPU), replicate the blocks, serve the blockchain, and store the blockchain. Nodes even define the PoW algorithm that miners have to employ. If you can't convince these node owners that are using their node on a day-to-day basis, to uninstall their node software and install your new node client, especially when that node client decreases their node security and decreases the network security, any change you have is going to go exactly nowhere.
So nodes maintain the protocol, not miners. It is thus. It has always been thus. If you can't convince all of those node owners running their node clients to uninstall one client and re-install another, any change you have to consensus is DOA.
> A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.
There are only gold miners in the original whitepaper. At the time of writing, nodes were supposed to be miners that used their CPU[sic!] power. Presently, the hard part has been outsourced to dedicated facilities (ASIC farms). But, and that's the point, these facilities are still controlled by a node (the pool operator), which decides on the blocks to work on and subsequently has petahashes of voting power.
Changing the PoW algorithm (your example) would require these powernodes to vote for their own abolishment, if their $100M worth of ASICs can't support the change. So it's very unlikely.
You forgot to mention that nodes always consider the longest block chain to be the consensus. A 51% (majority) attack is when one miner is able to produce more blocks than the rest of the network, therefore controlling consensus.
Such a miner could do a double-spend transaction by first spending on the short chain and then reverting his transaction on the longest chain. See https://en.bitcoin.it/wiki/Majority_attack
> Nodes even define the PoW algorithm that miners have to employ.
Nodes change PoW algorithm and the old miners have expensive loud space heaters. They know this, which is why they didn't follow through on 2x. They knew that threatening that attack leads to one outcome : ruin.
It's a complex subject, sure. But I can't force you to understand how bitcoin works dude.
In spite of your condescension, I don't think you understand what a 51% attack is. You are confusing agreement on hard-forks with POW consensus in your defense of why Bitcoin is not vulnerable to a state mandated 51% attack from China.
Satoshi's brilliant solution to the Byzantine generals problem of consensus is proof of work, not "nodes decide what code to run" precisely because nodes are vulnerable to sybil attacks.
-How would these nodes know that the 51% attack history is bad?
-A proof of work change is a hard fork, and these take months to deploy properly according to core.
Bought or invested in? Bitpay was shooting themselves in the foot by not branching out into other digital assets while fees and transaction time skyrocketed. If it took Bitmain to force the issue congrats to them.
The chinese government wanted a crypto they could track, because they want to own all of the mining infrastructure, all of the nodes, all of the code base and the payment gateway to it. So that's what they got. Bcash.
Who mines a block or where the nodes are etc is irrelevant, the ledger is open and public for both Bitcoin and Bitcoin Cash. This isn't the place for wild anti-Chinese conspiracy theories.
I appreciate that there's several different opinions across this thread, but this is the 3rd or so time you've posted this exact comment (and several others); it's verging on spam by now, to me.
If people don't understand that bcash is under regulatory capture of the chinese government, then they are not understanding how cryptocurrencies work.
This does seem like a more plausible explanation. Bitcoin Cash is worse for their application than Litecoin in pretty much every way: it has slower blocks so there's more chance of the price shifting before the transaction confirms, it has less exchange support, they had to create their own address format for it that existing Bitcoin Cash wallets don't even support sending to in order to ensure people didn't accidentally send bitcoins there, and so on. However, it does have the major advantage for Bitcoin miners that their existing mining hardware can be used for it.
> Bitcoin Cash is worse for their application than Litecoin in pretty much every way
Litecoin will have the same scalability problems as bitcoin core, and it hasn't attracted a cutting edge-team that will be likely to try a different approach to improve the situation. Litecoin is a clone using recycled code and ideas from bitcoin. Clones with stale ideas don't generally eclipse their originators.
It seems clear to me at this point that the cryptocurrency revolution is now bigger than Bitcoin itself.
Years ago, I saw three long-term outcomes: Bitcoin being king and altcoins dying on the vine, Bitcoin being one of innumerable blockchains in use, and cryptocurrencies in general failing to gain adoption. I'm scratching the first outcome off the list, and my pen is hovering over the last outcome.
2. Bitcoin's dominance ends and a more scalable payment-focused currency start to dominate (like Dash)
3. Bitcoin remains the main store of value, and people will convert some of their bitcoins to an altocin to do daily paymnt where there will be debates on the level of decentralization, but is designed to be extremely high (Visa level) tx/sec, and very low latency. My bet is currently EOS.
I still think any of these can become true, but I am more and more predicting (3) to be the case. (That is why my main investments are BTC and EOS, but I also have some Dash in case (2) becomes true.)
As far as I can tell, the Lightning Network's design isn't robust enough to solve everything. It allows for an arbitrary number of back-and-forth transactions between any two parties. It will be good, but it's not clear to me that this extends to solving all of the scalability problems.
What you're describing is a payment channel. The Lightning Network is that _plus_ protocols for negotiating the routing and chaining of payments across multiple channels.
I would suggest actually learning how it works before commenting on it.
Lightning allows users to take a single bitcoin transaction, and use it over a finite space of time, in order to shift bitcoin back and forth, with no or vanishingly small transaction fees, as iou's between what are called 'lightning channels'. The actual transaction size will be the same as a normal transaction, with a flag that says it can only be committed to the blockchain at a specific time (or block depth). In effect, these lightning transactions are cryptographically signed 'iou's. The 'thousands' of back-and-forth iou changes are discarded when the channel is closed (massive privacy dividend), and only the aggregated change is committed to the blockchain. This is the great thing about lightning. It is a single transaction with as many inputs and outputs (one/two) as defined in the original transaction. Only the transaction values change.
Consider a channel link of this : John->Bob->Sally->Anne. Only the people next to each other in the chain have a 'channel open' with each other (John/Bob, Bob/Sally, Sally/Anne). Assuming each of the channels between all of the participants have adequate funds in order to achieve this, if John wanted to send 1btc to Anne. A transaction ledger would read :
John->Bob channel : John -1btc, Bob +1btc
Bob->Sally channel : Bob -1btc, Sally +1btc
Sally->Anne channel : Sally -1btc, Anne +1btc.
Anne now has 1btc more, and John has 1btc less, but the net effect in each channel is simply a modification to the distribution of bitcoin in that channel.
Imagine this happening, back and forth, and extended to thousands, tens of thousands, and millions of people. As long as there's a chain between them, you use the chain. You might even have your transaction split over multiple chains. For links that don't have a chain, you create a channel on-the-fly.
Each channel, therefore, only ends up with the same single input, and the same two outputs, just differing values.
It's significantly more complex than that (transaction routing, and channel closure mechanics), but that's the idea. I wish I could remember the lightning dev that explained it. It really is very clever. I haven't actually questioned about the effect of having channels with multiple inputs (John/Sally) and outputs (Bob/Anne) at inception. Technically, I can't see any reason why this wouldn't be possible. Just a much weirder set of ramifications.
I would suggest that the method for creating ln channels is most likely : Carol wants to pay Bob 0.5btc. She creates a ln channel with 1btc, of which Bob is allocated 0.5btc, and carol is allocated 0.5btc. Bob gets paid 0.5btc that is accessible once confirmed. Carol has 0.5btc that is now accessible once confirmed. That way the ln can be bootstrapped by existing txns.
I'd also suggest that it would be easier to understand if Bob were Bob Inc. The incentive will be for the buyer to reduce txn fees. If Carol uses a store (coffee?) she will want to reduce paying those fees. So she creates a channel with 0.1btc and 0.001 is allocated to Bob Inc. For the coffee she buys today, coffee + txn fee. Ever more? Zippo txn fee. When your channel is almost zero, you buy bitcoin, it is delivered back to you by the rebalancing of that channel. And because it's Bob Inc the path through the channels from a source of bitcoin is reduced, maybe even two hops ( exchangeA/exchangeB -> exchangeB/Bob Inc. -> Bob Inc./Carol).
If John wants to pay Sally, but the cheap/practical way is to use the existing path of channels through Bob and Carol and whatever, then it’s not peer-to-peer anymore! I don’t get why this fundamental architecture change is so appealing to some people.
It's no more complex than running any other bitcoin wallet. It is, after all, bitcoin. The only difference really is that lightning is instantaneous and immutable, where blockchain transactions require you to wait until a transaction has been confirmed in the relevant blockchain in order to be secure.
And no-one will force you to use it. If you choose to continue using bitcoin transactions natively, no-one is going to stop you.
I think this is probably right. And I would add 2 things
(a) The size and the hash power of BTC give it a HUGE advantage. If you want "immutable proof that you own this specific decentralized block" then BTC is the only game in town. And that comes at a cost (hence high fees because of lots of electricity, computers, ASIC fabs, etc).
(b) Secondly (and I realize this analogy has been beat to death...but), Gold didn't want Silver to exist. The gold industry naturally wanted to monopolize every transaction, but like Bitcoin, it turned out that their very strengths were also simultaneously their weaknesses.
Its an immutable law of economics that BTC isn't going to be able to be all things to all people, so I think its natural that among their various options, they will choose to be the "Store of Value". Ultimately thats the equivalent of being a reserve currency. By capturing the store of value corner, it means that alternatives like ETH, LTC, DASH, IOTA, et al will be valued against and perform a support function to Bitcoin. In a sense, by being the Store of Value, the other cryptos perform support roles that further entrench your position.
If you owned a national currency, you would have the legal taxing authority and guns behind your papers. If you owned gold, you would have a shiny incorruptible metal in your hand to hand over for industrial if not artistic uses, in a pinch. Heck, even if you owned a potato, you could eat it -- and in dire circumstances that has a huge amount of value and maybe you can convince somebody to trade something else valuable.
If you "own" bitcoins, you have some numbers graffitied over people's hard drives. Yes they can't change it because electricity, and the numbers only get so big, and you have some different numbers that can be turned into the graffitied numbers by one particular algorithm that people like at the moment. Without transactions, these properties are completely arbitrary. I don't see how by themselves they can give anything approaching the necessities for a store of value. The truth is, without competitive transactional uses bitcoin has no fundamental value. Without fundamental value it can't be much of a store of value, since literally anything else without fundamental value can be equally good. You can store something like the goodwill of the network, as now, which isn't nothing, but it can be notoriously fickle.
Given the growth in transaction volume, it's pretty clear to me it will be the second, or possibly Ethereum will take the role of Bitcoin and fulfil the first:
Eth nodes are a quarter of what they were nine months ago. Most people can't even sync a node anymore. None of this is a surprise. This is exactly the outcome expected with unrestrained blockchain expansion. Bitcoin is about decentralization. Every other altcoin, it would seem, is about trying to invent an inefficient paypal.
There's more to decentralization than being able to run a full node on your Raspberry Pi with a 128K modem. Like more than 500,000 people in the entire world being able to write to the blockchain with any regularity, which is not possible with a 1 MB limit on the 10-minute blocks (1.67 KB/s throughput limit). With such limited write-access to the Bitcoin blockchain, the vast majority of the world will have to rely on trusted third parties to hold their Bitcoin wealth on their behalf, since it's impossible for the vast majority of the world to have write-access to the Bitcoin blockchain in order to make use of a private key.
I'd rather Ethereum users poll multiple trusted third parties to validate the transaction data they're seeing, and be able to hold their own private keys, and write transactions to the blockchain with those keys, than Ethereum users be able to validate the blockchain trustlessly, but have to trust third parties, acting effectively as banks, to hold their ether.
Bitcoin is the long term store of value for the cryptocurrency ecosystem. It's poor for small transactions, but works well for storing large amounts of value as it is significantly more secure in terms of PoW than anything else out there.
The small transaction issue may be overcome by something like the Lightning Network, but in the short term, you can just use other cryptocurrencies with lower fees or other features that are important to you.
> It's poor for small transactions, but works well for storing large amounts of value as it is significantly more secure in terms of PoW than anything else out there.
This is only true as long as Bitcoin is worth more. But with it becoming more unusable, while other coins are growing in popularity, this will change and Bitcoin won't have any use case left.
> The small transaction issue may be overcome by something like the Lightning Network, but in the short term, you can just use other cryptocurrencies with lower fees or other features that are important to you.
The Lightning Network has too many problems to solve Bitcoin's scaling issues by itself. Including:
1. No decentralized routing
2. Hubs need to bind up large amount of capital
3. Nodes need to constantly be online and monitor the state to prevent fraud
4. It is heavily dependent on the network effect: for it to be useful the ones you want to transact with needs to be there. Kind of a chicken and egg problem. And why use it as long as other cryptocurrencies fulfill the users need, with a better user experience than LN would provide as well.
5. Settlements do not work reliably with full blocks (or they need to pay huge premiums)
LN might have a usecase for providing microtransactions, such as paying for every X second of a video or similar, but it will not solve Bitcoin's scaling problems.
I agree with most of what you said, but I would add that part of the value of Bitcoin vs other cryptocurrencies comes from its incredibly high PoW difficulty. The Bitcoin network currently completes 14 quintillion sha256 hashes every second. A similar amount of computing power would need to be controlled by a successful attacker.
I understand that miners can choose to leave Bitcoin, and this is largely dependent on price, but historically, Bitcoin provides the most security, so it is the safest crypto for storing a large amount of value.
Yes, that's exactly what I mean with it depends on the price. Historically most miners switched to Bitcoin Cash whenever it was more profitable to mine. With the new EDA the miner ratio is expected to follow the price ratio. So if Bitcoin Cash ever were to have a higher price than Bitcoin they would get the most miners. In the long run this would make Bitcoin Cash the chain with the most security.
The thing I don't understand, and am concerned about the most is that cryptocurrencies rely on public ledgers, and therefore not private. That is all monetary transactions are in essence public record, which is very odd to me, and really doesn't sit well.
Monero is the only real cryptocurrency because it does not have a public ledger. Monero is fungible, meaning you cannot tell two coins apart, which is an essential property of money.
This is a very real issue most people into Bitcoin does not seem to care about. Anyone you transact with can gain insight into your personal finances which at best informs your friends of how rich/poor you are and at worst making you a robbery target.
It's not even called bcash. It's called Bitcoin Cash. The 1 MB maximalists call it bcash because they don't want it to carry Bitcoin's legacy in the public mind.
Labelling everyone who does that "1 MB maximalists" is a little extreme, and is probably why people are irritated with BCH's marketing tactics.
To view your statement in a different light.. maybe people don't care for it trying to succeed based on another coin's name, rather than trying to stand on it's own merits. Bitcoin Gold (for all it's problems) doesn't try to insist it's the real Bitcoin. And 90% of the coins out there were confident enough in their tech to not prefix "Bitcoin" to their name.
Bitcoin Cash was a hard fork of Bitcoin to implement Bitcoin's original scaling plan, and original vision to be a "peer-to-peer electronic cash", and includes all account balances from before the hard fork.
You may disagree that it's the real Bitcoin, but it's undoubtedly open to interpretation, and some of its advocates calling it that doesn't justify mislabeling it as bcash.
It currently costs less to run a node per month than it does to do three transactions on the blockchain in the same period. Why would anyone care to run a node if the transactions aren't affordable.
If the blocksize was increased to double its current resource requirements, where i live in Australia, it would be impossible to run a node at any price.
And because the people who run nodes know this, they reject your proposals that reduce bitcoin network security.
The specifics of the difficulty adjustment algorithm are not critical to the original vision, but way to deflect (from the original scaling plan) to a different point.
>>If you don't run a node, or you can't run a node because of resource requirements, you're not a peer.
> You may disagree that it's the real Bitcoin, but it's undoubtedly open to interpretation
It really isn't open to interpretation. And that is why people have been disparagingly calling it a different name; because the insistence that it's "the real Bitcoin" lessens it's credibility.
Why is Bitcoin Gold not the real Bitcoin? It's got a more ASIC-resistant proof of work, that's surely also in line with Satoshi's original vision? IMO, that's a much better reason, if adherence to the original whitepaper is what we're measuring by, since it reduces mining centralization. (Heck, if BCH adopted an ASCI-resistant PoW, I'll view in a new light!).
But you have to let things evolve. Software is rarely perfect out of the gate. Massive p2p software in particular is such a very new thing, there's going to be all kinds of bugs and dead ends. There may be ways to optimize and polish those dead ends to make them the best they can be, but it won't change the fundamentals of them.
And there's tons of levers and settings inside bitcoin. I don't think they're all set right (BCH's new difficulty algorithm seems like an interesting idea, in fact). But one thing that seems to be clear across the biggest coins... a worldwide distributed blockchain ledger just takes too darn long to handle p2p payments worldwide at a reasonable KiB/s. Even ETH, as fast as it is, was brought down by cryptokitties.
The coin that succeeds is going to have to solve that in some fashion. And running all the world's transactions through every node, upping the blocksize as needed, isn't going to solve the problem.
Because bcash is overwhelmingly run by bitmain, a chinese company, at every point in its service delivery. The miners, the nodes, and now the payment processor are all one chinese company. It is also not surprising that they have specifically disabled the privacy improvement of segwit in their altcoin. So no atomic cross-chain swaps are possible either. It is a walled garden where they control all of the access.
That's speculation on the level of Bitcoin taking over. There's no reason to value altcoins over sidechains, for example.
We don't know what the future will bring, only that large economies can't take place wholesale on a blockchain. But whether transactions denominated in Bitcoins will be popular is anyone's guess.
Surely some better technology will come along, but it won't be altcoins as you know them.
Business models like NiceHash (putting aside their security issues) have elevated the price of bitcoin by letting miners mine the most profitable currency and then immediately selling it for BTC. This moves the demand off the best alt currencies onto BTC; so the more block chains the merrier as long as this kinds of business model persists, and i think it will.
Also; "People have this bizarre idea that cryptocurrency tokens are ‘rare’." the belief in value is basically the foundation of all currency, why would cryptocurrency be any different?
Decentralized ones are rare. There are lots of centralized blockchains. The centralized ones, with their cheerleaders of pump and dump get rich quick schemes, are constantly trying to convince the unaware that they have the same security model as the decentralized ones. They don't.
The first version of new and revolutionary technology rarely (if ever?) becomes the dominant one. Obvious examples are search (Altavista -> Google) and social networks (MySpace -> Facebook).
None of these technologies are dominant enough. Not a single one is a usable product.
All cannot support a large number of transactions, not even those that do not have proof of work. There's research-level problems being solved (like bulletproofs for compact private transaction - hides amounts). After research is done there's engineering. Then testing until it is ready to use.
People really don't realize how early this is.
Lightning network, a proposed solution for Bitcoin scaling problem, was announced 2 years ago, and they identified many issues with it since then. There's talks of layer number 3 etc.
This is way too early and there's no winner. Bunch of cryptocurrencies are riding on the research-wave behind Bitcoin.
This is crucial in the midst of loose and fast comparisons between technologies in the past and what we have now. Can a piece of complicated software like Bitcoin be re-engineered from the ground up? Yes, certainly, but that is a tough road to take, I would think, if you want to do what Bitcoin does at its core.
Bitcoin, the software, solves basic problems very well and is thus the basis of many altcoins.
I'll invest in the next big coin if it is significantly better than Bitcoin while continuing to maintain Bitcoin's core value argument.
There's always the chance that you can evolve and improve upon the technology instead of something else coming to replace it.
For bitpay's usecase Bitcoin is being replaced by other coins because it fails to embrace on-chain scaling in favor of off-chain scaling which is far from ready. This is exactly as predicted.
Yep. If you want to get your transactions tracked by the chinese government, it is cheap. Like PayPal. If you want your transactions to be private, you use a decentralized blockchain like bitcoin.
If you don't run your own node, which is the aim of bcash, your ip address is tied to your payment. You have the payment processor, and the node, and the miner, all sharing the same information.
The chinese government appreciates your compliance with its crypto implementation.
ARPANET refers to a specific network that was decommissioned in 1990. And for 13 years of it's 21 years in existence, it was using NCP rather than TCP/IP.
I worked at BBN Technologies in the early 2000's. I was always amazed at how a company that essentially co-founded the internet and had the second domain name ever registered[1] could basically go out of business.
You just made me think that Bitcoin could definitely be the ARPANET of blockchains and Core devs could be BBN. Don't get me wrong, I worked with some extremely smart people, but in the end, Raytheon bought the whole company.
The difference of course, is that bitcoin isn't a company. And the arpanet turned into the internet. But companies come and go. By your analogy, raytheon owns the internet.
You're right, Bitcoin is not a company, it's a technology. This is the analogy I'd make.
Then (Internet) / Now (Cryptocurrencies)
NCP[1] == Blockchain based decentralized consensus
ARPANET == Bitcoin
BBN Technologies == Blockstream
TCP/IP == We are figuring this out right now
Internet == We are figuring this out right now
The ARPANET turned into the Internet in the fact that parts of it were used to build TCP/IP and the modern Internet. Just like concepts from Bitcoin will eventually be used to build whatever decentralized byzantine fault tolerant mechanism we end up with in ten years. I don't think Bitcoin is the Internet, Bitcoin is the ARPANET. Also, I wouldn't say Raytheon owns the Internet. Today the Internet is owned and controlled by many different parties all built on the TCP/IP stack. Countries like China own their own internet.
In my mind, all of this work to find different decentralized consensus algorithms is work to build transport layer (OSI Model[2]). Bitcoin is an early application, but thousands of applications are now popping up, competing, and building healthier communities.
And the bitcoin node software i use today is version 0.15.1, not 0.8.0. The segwit block structure is different to the original implementation. One turned into the other. Nothing is stopping you running a 0.8.0 node of course. But the newer implementation has more functionality.
right MySpace, was a technology?, I think they were build on php or so, was a slow site, Google is not a technology either, golang it is, and is somehow revolutionary through simplicity and first-ish.
Finally. I think the bigger companies are starting to realize that bitcoin cash is taking over the smaller payments. Payments on bitcoin cash right now are under 1 penny and confirm in less than 10 minutes. Try it out for yourself, it is pretty amazing really.
bcash handles a fraction of the transactions of either bitcoin or litecoin. If you want a cheap option, litecoin is great. It's been around for years, and isn't controlled by the chinese government. In bcash, the nodes, the developers, the miners, and now the payment processor, are all owned by the same chinese company.
Currently litecoin is processing about four times the transaction count of bcash. They also have a block creation time of 1/4 of the time (2.5 minutes) to bcash or bitcoin (10 minutes), so if speed of confirmation is an issue for you, then they might meet your use-case. It obviously doesn't have the decentralization of bitcoin, but at least it isn't controlled by a single chinese company.
bcash still has lower fees. I am using exodus and I am getting quoted 2 cents for bcash. Litecoin I am getting quote of 22 cents while bitocin is like 5 bucks.
Though I would agree that litecoin is better than the original bitcoin. However, litecoin does not beat bcash, IMO.
There are lots of altcoins that have low fees. When you are getting a single company to process your payments, it is always likely to be at a lower cost. The only question is why they're even bothering to store the information in a blockchain. It would just be easier if they used an SQL database. Without the decentralization, it is the same risk profile. They know who you are, what you're spending your money on, and they can black-list your spending addresses with trivial ease. Like paypal. Just less efficient.
Those altcoins don't have the userbase that bcash has. Bcash actually has an active community that is pushing to integrate bcash into mainstream commerce and that's what I like. Store of value is nice but medium of exchange is what really appeals to me personally.
The number of transactions on the bcash blockchain gives a different impression of the 'user base'. If you want a faster blockchain with a larger user base, use litecoin. It isn't as secure as bitcoin, because it isn't as decentralized as bitcoin, but at least you don't have all of your purchases recorded (who you are, what you buy, who you buy it from, when you buy it, etc.) by the chinese government. Oh, and you don't have to worry about the chinese government blacklisting your wallet so that they can never be spent either.
Can you please explicate the means by which the chinese government could effectively trap your cash in your wallet. Couldn't you give money to any number of intermediaries?
It can be trivially done by the existing miners not committing transactions to the blockchain that they control. Because a single company, bitmain, controls more than 50% of the hashing power of bcash, they would only build on blocks that don't contain transactions from their blacklist.
That is what bcash is right now. A captured blockchain. You transact on it at the sufferance of the chinese government. If you think they won't exert that power, if they think it suits their interests, I'm not sure understanding this will convince you.
Doesn't look like any pool is dominating unless Bitmain controls many smaller pools.
However, I'd argue that any domination is a side effect of Bitmain being the 1000pound gorilla in BTC to start with. THeir BTC pool is at 20%. (there are a LOT of people unhappy with Bitmain's business practices).
I mean there is no cost effective hash/kw alternative to Bitmain S9s.
The scary thing is that my friends and colleagues are buying S9s because no real alternative exists if you want to mine BTC(and I suppose Bitcoin Cash too)
Fascinating how all the comments explaining that for fast and cheap transactions there is Litecoin (which has SegWit and Lightning) and pointing out BCash (still vulnerable to transaction malleability because it does not have SegWit) technical and governance problems immediately got downvoted into oblivion.
There is a LOT of money being invested to make BCash appear legit.
One bit I noticed was this address -- https://bitinfocharts.com/bitcoin%20cash/address/19hZx234vNt... which has been quietly accumulating (yet never spending) a massive amount of BCH. My best guess is this is bitmain accumulating part of their mining proceeds, but isolating it away to create artificial scarcity to inflate the price. (That's just one of a bunch of similar addresses).
They sort of depend on keeping the price inflated; because without that, their difficulty would adjust & drop to the point where a 51% attack was actually feasible. Per https://fork.lol/security/fork it would only take 50 days for 25% of the BTC hashrate to remine the entire BCH fork, undoing any BCH transactions the miner might have made.
It's an incredibly shaky coin in a large number of ways.
What is the value of maintaining continuity of the UTXO set?
Pretty much any BTC spinoff can and has forked the chain, auto-airdropping their coin to all BTC holders. You don't even have to go that far though, a coin could easily have a smart-contract style method of signing a message with your BTC private key, and get granted an equivalent in free starter coins.
Coins are also becoming increasingly fungible ... there's more exchanges every day, shapeshift/changelly style portals, and lightning adding atomic swaps across chains.
More importantly though, whether this is the end of the early adopter phase, or just a "late end of early adoption" phase... most people coming in won't want a coin with a lot of baggage and most of the value hoarded into a few accounts (inheriting BTC's chain could be seen as a negative there; and BCH's speedmining run didn't help it out).
I know the marketing jargon that "LiteCoin is silver to Bitcoin's gold", but can anyone explain how they differ materially, or is just another line of speculation?
The lead Litecoin dev, Charlie Lee, made an unholy alliance with Bitcoin Core. He is part of their Dragon's Den troll coordination chat room and in return for his support on issues like blocksize and segwit they throw him a bone by recommending litecoin as Bitcoin becomes unusable for smaller transactions.
Newbie ... what apps turn BitCoin into cash .... I assume Coinbase can when you sell a BitCoin or a portion of BitCoin to a third party? What other ways and or apps are people using to turn BitCoin into cash/USD?
Thanks, yet how do you find buyers .. do these marketplaces connect you with buyers?
As a newbie i went ahead and bought a tiny portion of a Bitcoin recently from say GDAX. So, since I bought it from them I can also sell it back them at a profit or I have to find another interested buyer like a friend?
Is Bitcoin Cash fast because of greater capacity or with low competition to get into blocks?
Better options for cheap + fast transactions: Litecoin or Raiblocks. Litecoin has a great history and community is ready and willing to innovate. Raiblocks has a good story too: doesn't waste the currency's OPEX on proof-of-work, accounts don't face contention on serialized resources like a linear blockchain and delivers no-fee transactions. No crazy experimental-and-vulnerable-to-differential-cryptanalysis like IOTA.
Both, they have much less transactions and their block size is 8x larger so they can do 8x more transactions/sec. But still pales in comparison to Visa’s throughput.
Bitpay is owned by bitmain, the miner that controls bcash. You will have every one of your transactions tracked if you use this alt. I'm sure the chinese government will appreciate your compliance.
Actually, I think that it's he doesn't understand that trying to uncover anonymous identities in financial transactions is a problem that governments have been solving for decades (I'd say centuries, but I'm not sure the problem is that old). Pretty much the only difference with a blockchain is that you can no longer rely on banks cooking their books to protect you.
What about it sounds like propaganda? They link to a source that currently shows an $18 fee to have a transaction in the next Bitcoin block, which seems to rule out the sort of transactions they are trying to do.
If Bitcoin/Bitcoin Cash are decentralized, why should it matter who supports them? Shouldn't they be judged on technical merits alone?
You don't have to pay $18, you can wait a little for multiple confirmations instead. By the time you're done waiting, volatility in BTC's price may put you $18 ahead. Or $18 in the hole. /s
That's why I left /r/bitcoin. Too much people just shilling like crazy and the mods are openly banning anyone who talks anything bad about bitcoin. No joke.
>Starting a new company called Apple Unlimited! Please don't confuse this with our competitor, Apple. We did "borrow" all of their code, but we claim to follow the wishes of the great Steve Jobs, because the new guys that took over are ruining everything and censoring everyone!
You can still run a 0.8 node on the bitcoin network if you are so inclined, because changes have been implemented via soft-forks. Bcash is a hard-fork of bitcoin. It is not bitcoin, or you would be able to use your existing wallets with it.
Soft doesn't mean it's still Bitcoin. This word doesn't grasp the true difference between these fork kinds. What is it? Softfok is a coercive change. You can't oppose it unless you make some counter-hardfork (this is what happened in Bitcoin Cash). Softfork is a sneaky change that non upgraded nodes don't notice. Meanwhile, hardfork (especially with replay protection) leaves everyone the freedom of accepting it or not and make it obvious to nodes that it happened.
These are technical terms that were fine when used technically by technical people who understand them. But they are kind of loaded what can be used to trick nontechnical people into believing that 'hard' means 'big' and 'soft' means 'small'. And 'big' means 'abandonment of true bitcoin' while 'soft' means 'still following the true bitcoin'.
Easy thought experiments can prove these is not the case. Let's think of some possible changes that can be made as softforks and are clearly a violation of the original idea:
- a requirement that every transaction has an additional output for tax collection
- a requirement that every transaction contains KYC/AML tag.
- addresses blacklist
- decreasing the max block size to 10 kB
- lowering the block reward to 0 from tomorrow, miners get only tx fees (it is possible because the protocol defined the max block reward rather than exact block reward)
- adding a second PoW algo (it can be put in coinbase)
- a requirement for coinbase to contain a specific Quran verse
Can we please not turn this forum ito the childish name calling of r/Bitcoin? There are good arguments for and against the two main Bitcoin forks and I’d like HN to be a place where these can be discussed without name calling and personal attacks.