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Bitcoin's Nightmare Scenario Has Come To Pass
HughPickens.com writes: Ben Popper writes at The Verge that bitcoin's nightmare scenario has come to pass as the bitcoin network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out. For those who want the Bitcoin system to continue to grow and thrive, this is troubling. Merchants can't rely on digital transactions that can take minutes or hours to validate. A number of prominent voices in the Bitcoin community have been warning over the past year that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. A schism has developed between the team in charge of the original codebase for Bitcoin, known as Core, and a rival faction pushing its own version of that open source code with a block size increase added in, known as Classic. "Many in the US Bitcoin community had hoped that hitting this crisis point — a network maxed out, transactions faltering — would result in closure, with miners quickly moving to adopt whichever chain proved more valuable to their economic interests," says Popper. "But so far the debate is dragging on without one side claiming a clear victory, leaving tens of thousands of consumer transactions stranded in limbo."
I don't need any of your fiat currency .
Gold is great until you need more of it, which you always do, because economies grow (all being well) and extra money is needed to support that. The other problem would be getting too much of it too quickly (ie building a mine) and ending up with a glut inflation. Fiat currencies are the only way to have a quantity of money that matches the size of the economy. I know we all want to believe that there's some quantity of precious metal somewhere that backs our cash, it's comforting, but real economies don't work well like that.
Pay higher fees if you are in a hurry.
The demand for most goods tends towards infinity as the cost drops. Bitcoin transactions have been fantastically cheap, which everyone sensible knew couldn't possibly last.
So, do we make bigger blocks, or increase fees? Miners should get more fees from either option. Users would prefer bigger blocks, since it keeps their costs artificially low.
But the real problem is the relay node shortage. Running a node is no longer trivial, and there is no mechanism to recover costs. The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.
Someone made a distro that ran bitcoin entirely out of tmpfs. I once had a bunch of super-fast nodes using it. When the blockchain finally exceeded my ability to add more RAM to those boxes, the average time for a new node on the network to sync up increased by a factor of 3 or so.
That's just my personal example. Hundreds of other nodes have dropped off for their own reasons.
See that "Preview" button?
US coins do not contain tin.
"I'm not sure I like the fugnutish tone you used in your post!" -RogL (608926)-
People are happily exchanging bitcoins for goods and services and back again. In fact they're so happy with it that they exceed the capacity of the network.
Well they aren't going to be exchanging them for much longer, because the exchange mechanism is broken (sort of) by design.
If you sell some stuff for bitcoins, then buy some other stuff for bitcoins, then it is just inane to claim that you have been scammed.
It wasn't intended as a scam by the creator, but it became one because of the developers that took over, that didn't view bitcoins as a currency, but rather as a store of value. They don't care that it takes hours or days to close a transaction, because they are not really on board with the idea that bitcoins can be used like money. They only see it as an investment.
Mike Hearn lays out the issues much better than I can, in his open resignation letter. Everyone knew it was coming but the people in charge refused to do anything about it despite the warnings. I really think it's because they don't care about the use of bitcoin in commerce. They view it as nothing but mattress money or a digital investment. Only time will tell how much people lose as there will be less and less people interested in bitcoin at all.
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
For most of my lifetime, if a U.S. retailer accepted checks, one of two things happened: You wrote your check and went on your way with your goods, and either the check cleared within a few days, or the check did not clear. If your check didn't clear due to insufficient funds, the merchant could go after you for the amount of the check plus a "returned check" service fee. If you wrote a "worthless check" intentionally, you could be charged with a crime.
Major retailers had their own solutions. I remember Gold Circle (predecessor of the Target store chain) having a check approval counter where you had to get your checks OKed — presumably to make sure you weren't a habitual writer of bad checks. At smaller businesses, it wasn't uncommon to see photocopies of people's bad checks pinned to the wall behind the cash register, or a sign boldly telling staff (and customers) not to accept checks from the below-named people. (There was an episode of "Seinfeld" that involved this, IIRC.)
After 9/11, using the delays caused by the attack as a stated reason, the government and banking system changed it so that now, at most major retailers, writing a check is handled as an electronic debit of your bank account. Many retailers don't even keep the paper check — they print transaction information on it and hand it right back. This caused a little consternation among people who used to "float" a check, writing it a day or two before the money actually made it to the bank and betting the check would arrive after their pay did.
And that's your history lesson. Hope it was worth the read. :-)
Its "Classic" as in Satoshi's original design where increasing the block size was expected. Its the current core developers that are deviating from that original. The audience for this debate are the miners who are somewhat technically informed and understand the context. Users are irrelevant to the discussion, only miners control what incarnation of the software gets used.