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Does anyone here use Bitcoins?
Stoic Joker:
Well... BTC is certainly taking a Red Candle ride through the freaking floor now..
Renegade:
@MOUSER
The real question is.. some of you crazy people who were ranting about it, and telling us how bitcoin was going to take off during the early days of it.. are any of you rich enough to retire and bankroll the rest of us yet?
-mouser (November 06, 2017, 02:49 AM)
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Well, I can't bankroll the rest of you, but I can certainly bankroll myself.
I'm not super wealthy, but, I have options open to me and some freedom to choose what I work on.
@DEOZAAN
Would you mind briefly explaining how you solved the scalability issues? And what you mean by that? Or if it's in the whitepaper just say so and I'll try to get the time to finally read through it.
-Deozaan (November 06, 2017, 02:59 AM)
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The very short answer is "Game Channels". It's a form of trustless off-chain scaling. You can read the academic paper in the journal Leger (a crypto journal) here:
https://www.ledgerjournal.org/ojs/index.php/ledger/article/view/15/64
It's also in the endnotes in the White Paper. The White Paper explains it briefly.
You can think of it like this... You have the Chimaera blockchain, and then every single game running on the Chimaera platform has its own blockchain where size doesn't matter. (Get your mind out of the gutter!)
That's a bit crude, but should give you an idea.
But the reason I ask is because scalability seems to be a major issue in most of the major cryptos, especially Bitcoin. There are lots of interesting ideas out there on how to resolve or work around the issues, but as far as I know things like sidechains (Lightning, Raiden, Plasma, etc.,) are all still currently being researched and/or developed but nothing is actually released and running on the network(s) yet. If you're talking about scalability in a similar sense as for other blockchains, then solving the scalability issues could be really big news for cryptocurrency in general. :Thmbsup:
-Deozaan (November 06, 2017, 02:59 AM)
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What can I say? We're ahead of the curve! :D
@MOUSER
Due to encouragement of the bitcoin evangelists here on DC I did eventually provide a bitcoin address for people who wanted to donate to DC via bitcoin, back in 2015.
There have been a total of 12 payments received in that 2 year period.
Total received from those 12 payments was 287mBTC which apparently is worth about $2,000 USD currently :huh:
-mouser (November 08, 2017, 03:09 PM)
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That's great! Keep it! HODL! :D
You perked my interest, so I went back through my wallet to have a peek:
https://blockchain.info/tx/ea5e436a21d7641ebfcf6f37d7239f24f6dc41fa9786548e7e90f02934c1b170
https://blockchain.info/tx/fcab047a540f8c91edc6c5b7fd165c70ced266045239115e1a531b2cbf1fc3a6
Checking again... Geez... That's more than I've donated in fiat to you. I'm pretty sure I've donated to DC a few times with fiat.
HODL~!
@TOMOS - @DEOZAAN
That's about $5 to send a transaction at current prices. And if you have a bunch of small amounts in different addresses, which is the recommended way to do it for privacy, transactions can easily be over 1,000 bytes (or over $20 in fees to send a transaction). And if you try to pay a lower fee, you could be waiting days before your transaction finally goes through, if it ever does.
-Deozaan (November 08, 2017, 02:55 PM)
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it's ironic that it's so user-un-friendly, considering the opposite was the intention.
Was that covered here in this thread -- how that changed (I think it was, but I'm being a lazy beggar here - I mostly work on memory first, then search, but tonight I'm leaving out the search part...)
-tomos (November 08, 2017, 03:45 PM)
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A few screwey things there...
@DEOZAAN
That's about $5 to send a transaction at current prices. And if you have a bunch of small amounts in different addresses, which is the recommended way to do it for privacy, transactions can easily be over 1,000 bytes (or over $20 in fees to send a transaction). And if you try to pay a lower fee, you could be waiting days before your transaction finally goes through, if it ever does.
-Deozaan (November 08, 2017, 02:55 PM)
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You can choose your transaction fee rate. You're not forced to spend anything. The only issue is that the transaction may take longer.
I regularly send BTC to people and set a lower fee because I don't care if they get it in 12 seconds or 12 hours. It's all close enough.
@TOMOS
it's ironic that it's so user-un-friendly, considering the opposite was the intention.
-tomos (November 08, 2017, 03:45 PM)
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That's soooooo far from the truth.
Have you ever had to send money to people in another country?
It's not easy.
I recently had to send funds to a company to pay for a service.
I did it in 2 parts:
1) BTC
2) Fiat
BTC was easy. I sent it. Done.
Cost me about $1.80 CAD. I could've spent less on that fee.
Fiat? F**king nightmare.
I had to drive almost an hour to another town to get to the bank to wire $$$.
The teller there didn't know how to do it. After 10 minutes.
I waited another 15 minutes.
Then it took 30 minutes to send.
The transaction fee cost me $40 CAD. That's over 22x what I spent sending BTC.
It cost me gas. Probably around $30 or $40 CAD there. Call it $35.
So, about 3 hours of my time, plus around $75 in costs (not including paying for parking), and that's the fiat world.
Sorry. No. BTC is far better. Crypto is better. By leaps and bounds.
Summary:
BTC COSTS:
2 minutes & $1.80 CAD
FIAT COSTS:
180 minutes & $75.00 CAD
Now... for a $2 coffee at a shop... The Lightning Networks are coming. That's next year.
But, even forgetting that, it's still easier to send BTC to a friend than to send fiat.
I don't send my friends BTC. I send fiat. Because it's less valuable. I HODL. :)
@TOMOS
Was that covered here in this thread -- how that changed (I think it was, but I'm being a lazy beggar here - I mostly work on memory first, then search, but tonight I'm leaving out the search part...)
-tomos (November 08, 2017, 03:45 PM)
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We all do it. :D
@DEOZAAN
Back when I first got into Bitcoin toward the end of 2015, I sent a test transaction to Renegade after he sent me what was then just a few dollars worth of BTC (now worth almost $200! Wish I had kept it...). I paid 5 sat/byte for that transaction, which at the time was less than 1 cent. But now the recommended fee is 300 sat/byte to get your transaction included quickly.
-Deozaan (November 08, 2017, 04:43 PM)
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Heh! I remember that!
I sent at the time about $10 USD, and Deozaan sent back about $0.40.
Now, for many of my transactions I'm spending in the area of 50k satoshis to 2k satoshis. It depends on how quickly I want it to arrive.
@DEOZAAN
To further illustrate the point: Just for fun back in 2015 I gave a friend $1 worth of BTC for Christmas (the low value was an inside joke) to try to get him interested in cryptocurrency. It failed to pique his interest. With the value of BTC going up so much this year (by my calculations that $1 gift is now worth about $22.50), he has finally taken an interest in crypto, and asked me how to access the funds I gave him. But it would cost ~$5 in transaction fees for him to do anything with it so I've told him not to bother.
-Deozaan (November 08, 2017, 04:43 PM)
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You can spend MUCH less. It's not hard.
The expensive fees are all fiat fees.
@DEOZAAN
In a nutshell: The Bitcoin "Core" developers refuse to increase the blocksize limit from 1MB to anything larger even though people and developers and businesses have been clamoring for an increase for years. So the blocks are at full capacity. Which means if you want your transaction included in the blockchain, you need to compete with others for the limited space in each block. The only way to incentivize a miner to include your transaction over others is by paying higher fees than others. But everyone else is also trying to pay higher fees than everyone else so they can get their transaction included, so the fees just go higher and higher. Meanwhile more and more transactions are being added to the backlog. So if you intentionally try to get away with paying a low fee, you could be waiting days for your transaction to clear (the backlog tends to catch up over the weekend). And even if you pay what your software deems a decent fee, but for some reason fees skyrocket due to sudden increased demand (making miners consider your fee to be a comparatively "low" fee), then you could be waiting days for your transaction to clear anyway.
-Deozaan (November 08, 2017, 04:43 PM)
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The Core devs rock.
Also, in Chimaera, our Lead Blockchain Developer is a Bitcoin Core contributor.
But, for the block size, that's a bit misleading.
The idea is to off-load transactions into Lightning Networks. That will solve scaling issue massively.
Those will take off next year.
This is just the beginning. There's a long way to go.
Right now Bitcoin is NOTHING in the financial world. It's a blip. A curiosity.
If you're not in already, do your due diligence and think about whether BTC has a place in your portfolio.
Deozaan:
The Core devs rock.
-Renegade (November 10, 2017, 11:21 PM)
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I'm really surprised you support the Core devs (especially Blockstream) after all the censorship they're implicitly advocating and participating in. I would have expected you to be all over the conspiracies that they're being paid off by "the big, evil" banks to cripple or destroy Bitcoin from within. :huh:
While the rest of this is all in response to things you said, it's not necessarily all a direct response to you. :)
But, for the block size, that's a bit misleading.
The idea is to off-load transactions into Lightning Networks. That will solve scaling issue massively.
Those will take off next year.
-Renegade (November 10, 2017, 11:21 PM)
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My understanding is that the Lightning Network has been "18 months away" for over two, maybe three, years. And that they're still saying it's 18 months away. I know this is groundbreaking technology that is still being researched and developed, so delays should be expected. I'm just saying I don't think we'll see it next year. But it would be cool if I was wrong about that.
Lightning does sound like a cool scaling solution. But when I learned more about it and thought about what life would be like with Lightning, in real-life, practical, every-day use, I came to the conclusion that it naturally leads to something that is very much like the current traditional banking system. They advertise Lightning as a way to "open channels" with anybody you want so you can send funds back and forth to each other off-chain, to avoid the high fees associated with doing transactions on-chain. Sounds cool, until you realize that (1) there would not be any high fees to perform on-chain transactions if the blocksize limit was increased, so in that regard Lightning is a solution to an artificially created problem. That's not to say that it won't be a valid way to assist in scaling in the future, but at the very least there is an artificial demand being created for off-chain scaling (with technology that doesn't exist yet, such as Lightning) when currently on-chain scaling is very simple to accomplish and very doable with current technology that exists right now. But ignoring all that, (2) in order to create a Lightning channel you need to lock your funds up in the channel before you can use them. In other words, it's kind of like a pre-paid gift card. You have to preload it, and then you can pay any amount up to how much you preloaded it with, over many smaller transactions. Of course, that's not a great analogy because those people can also pay you, so you can send funds back and forth to each other. But I don't know about you, but the people I pay generally don't pay me. And the people who pay me generally don't get paid by me. In other words, for the vast majority of entities I interact with financially, the payments are largely unidirectional. So I'd need to open separate channels with each of these people in order to send/receive funds to/from them, which is a lot like the gift-card analogy after all. And don't forget that each time you open (or close) a channel it costs an expensive BTC transaction fee. It's a mess.
So the next obvious solution is for the "hub and spoke" system, where there are a few big Lightning Hubs that people create channels with, and those hubs have channels opened with each other, and instead of sending your funds straight to Alice, you send them to your hub, which sends them to Alice's hub, which sends them to Alice. And everybody (for the most part) uses one or two of the few/several big hubs and no one interacts directly with each other anymore because on-chain fees have gotten prohibitively expensive.
Starting to sound familiar? Isn't that just like our current banking system? I don't actually pay Walmart or Home Depot. I deposit my money into my bank (create a channel with a hub) and then when I want to buy something from someone, I tell my bank (my hub) to pay their bank (their hub). Only lightning is worse than the current banking system because the limited blocksize limit means it will be expensive to deposit your money into your "bank," and it will be expensive to withdraw your money from your "bank," should you ever need or want to use Bitcoin as cash (person to person) without involving one or more third-parties.
And (3) since these big banks/hubs will need a lot of money for these big channels being opened with everyone, they'll likely need to follow KYC laws, requiring you to give them your personal information so they can make sure you're not laundering money or supporting terrorists or whatever. As such, if they know who you are, and they don't like you or the causes you support (or the people you're trying to send money to), they can refuse to process your transactions, and now you've reached a point where BTC itself is too expensive to use because the blocks are full, and the Lightning networks can censor transactions they don't like (or are compelled to by governments).
I'm not saying Lightning is intrinsically bad. I think it could be a very useful tool in some circumstances. But I do think the consequences of essentially forcing it onto everyone in the BTC ecosystem is bad for everyone and is bad for BTC itself.
This is just the beginning. There's a long way to go.
-Renegade (November 10, 2017, 11:21 PM)
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Indeed. IMO, fees will continue to rise without on-chain scaling.
Right now Bitcoin is NOTHING in the financial world. It's a blip. A curiosity.
-Renegade (November 10, 2017, 11:21 PM)
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Imagine where Bitcoin could be if adoption and use hadn't been stalled for the past ~two years because of increasing fees and confirmation times. :(
If you're not in already, do your due diligence and think about whether BTC has a place in your portfolio.
-Renegade (November 10, 2017, 11:21 PM)
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I think that Segwit2X was Bitcoin's last hope of being usable as originally intended. With the cancellation of it, and it having sealed Core's scaling roadmap, I am no longer interested in what Bitcoin has to offer, technologically. It offers me virtually no benefit over the current fiat system (I've only ever wired money once in my life, and that was over 15 years ago, but yeah, it was unpleasant and expensive). I'd be a much richer man at the end of my life with inflation slowly devaluing my currency by 2-5% per year than if I had to pay $5-$25 (or more) in fees every time I spend any amount of money. And for anything that Bitcoin does do better than fiat, there are other cryptos that do it even better.
I'm not fully out of BTC yet, but I think I will be soon. I know this is probably premature to say since it has only been a few days, but the market seems to agree with me thus far, given the sharp rise in value of Bitcoin Cash and the not-insignificant drop in value in BTC since Segwit2X was canceled. I'm not saying BTC is dead or that it will be worthless or is a bad long-term investment or whatever. I'm just saying that it is not the technology that I got so excited about a couple years ago. It has been co-opted and changed into something else much less useful and much less interesting.
None of what I've said should be taken as investment advice. I definitely agree that people need to do their due diligence and decide whether BTC has a place in their portfolio. I'm just saying that in the past, Bitcoin's virtually free transactions, relatively instant payments to anyone, anywhere in the world, and at any time, were paradigm-shifting features granting enormous freedoms. But many of those freedoms have disappeared or are in the process of being hobbled. "Nobody" uses Bitcoin anymore. They just HODL, hoping the price will go up and make them rich. People are buying it because the price is going up. The price is going up because people are buying it. But I don't really see the underlying value anymore in its current form and further down the path that Core is planning to take it.
Deozaan:
This is insane!
The fastest and cheapest transaction fee is currently 950 satoshis/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 214,700 satoshis.-https://bitcoinfees.earn.com
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It seems my hypothetical example from the other day was prophetic.
I made a transaction yesterday and paid 310 satoshi/byte which was a recommended value. But there's been such a high demand that fees have shot up and now my transaction has been stuck in limbo for about 24 hours and there's nothing I can do about it.
Meanwhile, the value of my stuck transaction is plummeting and the value of virtually everything else is going up.
The only reason the price of Bitcoin isn't crashing even faster is because no one can move their funds out of it!
IainB:
What @Deozaan writes would seem to indicate that not only do bitcoin-type assets suffer from price instability, theft/fraud, inadvertent loss (QED), but the trading mechanisms for them are also subject to episodic interruptions, rendering them temporarily illiquid at those times and potentially worthless.
So, if it's not all media "hype" against bitcoins, then we seem to have:
* apparently not much good as a currency.
* apparently not a safe or liquid store of value.
* an apparently speculative/risky and costly(?) "fiduciary instrument" to trade with.
____________________________Reminds me of a friend of mine who lost his shirt and his job through betting on the gee-gees, whilst all the time telling me what big wins were in the offing.
So, in the Q: "Does anyone here use Bitcoins?":
* what exactly is the meaning and supposed purpose of "use"?
* why have Goldman Sachs expressed an interest in bitcoins?
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