If you want a trustless system, you have to sacrifice performance.
At least the proof of stake blockchains like Ethereum don’t use that much energy, and you get a pretty cheap and fast transaction with layer 2 solutions on par with credit card transactions.
Sure, but what real-world problem does a trustless solve? I thought this was all very interesting years ago but now that we’ve had blockchain for years it seems it’s only good for illegal or morally questionable transactions.
Would you trust your money with a bank in China? It was only a year ago that people lost their savings and couldn’t withdraw money for food after a major bank was on the brink of bankruptcy due to the Evergrande scheme.
I guess you can call it questionable, but if I buy a VPN, I’m not going to pay with a credit card linked to my name. I use Monero. If I want to transfer money to my family in another country, crypto is faster, cheaper, and has no restrictions. I can’t even pay my student loans from my home country because my current bank blocks foreign credit card transactions, even if they are important.
This is very niche and not something an average Joe needs, but cryptocurrency isn’t for the average Joe to begin with.
See I think more nuanced takes like this are good. I’m not familiar with the Chinese banking issue that you are describing, but it sounds like deposit insurance (like the FDIC) might be a better solution than cryptocurrency, and it’s definitely better understood. Since the real world value of cryptocurrencies are so volatile they are a questionable store of value, and taking a risk on a poorly regulated bank might be better than taking a risk on storing your money in a volatile and unregulated security like cryptocurrency. Honestly it’s hard to know which is the better risk. So it could be better or it could be worse.
I agree with your point about transferring money internationally, and even within the US transferring money used to be a real pain. So I’m still interested to see if cryptocurrency can be a better medium of exchange or medium of transfer than traditional ways, or at least give traditional systems incentive to improve. But again the volatility is a concern so for most people the best move is probably to get in and out of the crypto market as quickly as possible or else risk getting a vastly different amount of money out of it than you put in. Admittedly it could appreciate, but when I’m transferring money to someone I don’t want that to simultaneously be an investment. The few times I have used Bitcoin to purchase something the whole process has taken hours, and there’s no guarantee there will be price swings a lot could happen in those hours.
I appreciate the brutal honesty about cryptocurrency not being for the average Joe. It’s not that long since many cryptocurrency boosters were hoping it would replace fiat currency, but now that I think about it I haven’t heard as much about that recently. In its current state it is really not for the average Joe.
Bingo. Capitalism has thus far rejected the blockchain, which is generally evidence that it doesn’t solve an important problem either efficiently, safely or cheaply.
To be fair, there are plenty of other reasons capitalism might have rejected blockchain: market failure, interference by government, etc.
I’m not saying that to defend cryptocurrency, by the way, but rather to point out that capitalism isn’t perfect at allocating resources in every situation.
capitalism is generally terrible at allocating ressources. It will always win to externalize costs, and if the people footing the bill cannot participate in the market, like for instance future generations, the result is always a self destructive system.
Bitcoin had its official ETF approved and started the other week and Ethereum is soon to follow. so I would say capitalism is very much not rejecting blockchain technology. Didn’t blackrock and other giants put a ton in?
Trusting Humans is literally a security flaw. Any system with trust you can find examples with fraud and abuse from those who held power by holding that trust.
We trusted bankers to invest our money, and some short sold the housing market with that money
I could go on, but trust really is a security issue. Decentralization has its efficiency issues, but saying “Bitcoin uses as much power as the 90th largest nation” is peanuts when you consider the energy inequality that America spends and compare what Bitcoin delivers with that energy versus how much energy centralized banks need to deliver a system that’s easier to fraud
More seriously, every system can be used for fraud. The question is whether the solution is actually better overall. We could prevent all wire fraud by returning to a cash-only economy. But that would be hugely inconvenient and therefore create a huge drag on the economy compared to a world where we can do electronic transfers even though electronic transfers open us up to wire fraud. Returning to cash-only is not worth the increase in security, and it opens us up to other issues (e.g., bank runs and someone stealing all the money under my mattress).
And while power use is a problem with Proof of Work coins, it’s not my biggest concern about cryptocurrency because Proof of Stake can fix that issue. It’s a shame that the biggest coin now is PoW but hopefully that will change. The bigger issue is “is cryptocurrency better than traditional currency?” So far it hasn’t proven to be better except in extremely limited circumstances. And a lot of the ways cryptocurrency is better will go away if governments start regulating it like other forms of finance. Having your money in cryptocurrency won’t protect you from the police and courts.
We trusted bankers to invest our money, and some short sold the housing market with that money
Okay? You could do that with cryptocurrency if traders started accepting cryptocurrency for shorts. The only reason you can’t do that today is traders won’t accept cryptocurrency for shorts, and that’s basically security through obscurity.
Exactly, and using Bitcoin does not solve that because you still have to transact with humans. If you buy something with Bitcoin and the seller never sends you anything, you’re out of luck. Your money is gone.
If you use a regulated financial system you have some options. If you paid with credit card you can charge back and dispute the charge. Your money in the bank is backed by insurance that is guaranteed by the government.
Bitcoin only cuts out the middleman. Every other issue of trust with the recipient still exists, and those are the problems regulation solves, and the reason fraudsters love Bitcoin so much.
With all the information available at your fingertips being ignorant is a choice.
“this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out. In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a hefty portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that doesn’t require an intermediary to approve transactions can be a vital lifeline for survival”
This isn’t Reddit, you don’t have to turn every discussion into a fight. I’m genuinely interested in cryptocurrency for reasons such as the article you linked: there are areas where traditional finance genuinely has failed to meet people’s needs. Providing a medium of exchange for the unbanked is a great example of something it could possibly help with, and I think that’s a good thing if it happens. But we should also be able to talk about the problems with cryptocurrencies and the cases where it doesn’t work as well as traditional finance. And if this prediction doesn’t pan out and cryptocurrency doesn’t become a major way of banking the unbanked, we should be able to consider what could accomplish that goal. It might be a different cryptocurrency, or a new thing inspired by cryptocurrency, or something that has nothing to do with cryptocurrency. After all, cryptocurrency is not a goal in itself.
13.15 is the average number of transactions per second. Max TPS (57.91) is the largest recorded TPS, not the capacity of the blockchain. Max TPS will rise as more people use layer 2. Layer 2 solutions can handle 2,000-4,000 TPS, and there are 24 commonly known ones that can do these transactions in parallel.
Yes but 65000 TPS for Bitcoin would likely have the planet glowing much brighter in the infrared… possibly even the visible, for all the heat we’d need to dump.
I’m personally advocating for Ethereum which is Proof of Stake and uses a fraction of the energy Bitcoin does.
However, correct me if I’m wrong here because I’m not that much invested in bitcoin as a tech or investment, but isn’t almost half of the energy used on bitcoin generated from renewables? I could swear I saw an article about it somewhere.
Although nowadays people seem busy heating up the world telling AI to cheat on their homework, so I wonder if this is a problem with society rather than technology.
It may very well be renewable. I’m really more referring to the inefficient way in which the sums are calculated. Those data centers get warmish.
And yeah, AI is just the next thing we decided to punish our GPUs with. Crazy how we’ve used that part of the computer these last few decades…
I’m more engaged in a chat gpt session that I am staying up till 4 am watching line graphs of crypto prices, guilty as charged 😁. Not sure what comment it makes about society other than “we seem pretty lonely, everything ok?”
I think it depends on the layer 2 solution, but as far as I understand, each of these layer 2 solutions independently have 2000-4000 as theoretical max, and only after bulking transactions together do they affect layer 1, so you should be able to add all layer 2 together for the total.
I guess the spatial sharding update will further increase the maximum number of transactions you can bulk by a factor or two so an individual layer 2 solution becomes comparable with visa, but I don’t think that update is coming to Ethereum in several years. Then again, Ethereum needing to perform 60,000 TPS is likely not happening this decade either.
For now at least, layer 2 is fast and cheap, although a bit difficult to use.
Oh nice, that’s how high Solana’s TPS has gone in testing (in practice it hovers around 5-10k TPS). There’s also newer chains like Aptos that claim to be able to handle 150k TPS with subsecond finality. Of course, neither of these chains are very decentralised, but at least they aren’t fully permissioned and centralised. Especially on a network belonging to a partisan, anti-competitive, anti-trust law-breaking, Wikileaks funding thieving Israel supporters like Visa.
Bitcoin is open-source software, a network of nodes running Bitcoin core, the source code for which you can find here: https://github.com/bitcoin/bitcoin
Morals are a consequence of free will, which Bitcoin does not have. There are valid moralistic concerns about Bitcoin, but they are related to the impact of Bitcoin, rather than whether it is a moral system.
General question, because I don’t give a shit about blockchain to research it.
Does it have a way to quickly and effectively handle fraud? And don’t tell me “there’s no way to commit fraud” because people can steal wallet passwords no fucking problem. With most banks they will actively track fraud, cancel those transactions, and restore your funds and possibly shut down the card automatically while still allowing the account to exist so you can access your money. Is that the case with blockchain?
Yes. There are Escrow services in crypto that hold and issue chargebacks, but it is to to you if you want to use such a service.
centralized crypto exchanges also have fraud combatting teams. An example is that exchange that sponsors kitboga, the youtuber who screws around with Indian scammers. They lock scammers’ accounts from withdrawing but not depositing so they keep sending victims’ money to these accounts, and then eventually they lock the accounts and transfer the money back to the victims.
Obviously an issue with this approach is the scammers can just use decentralized wallets, but recently exchanges started blocking transactions to these too unless you provide KYC info about them, so they’re trying at least.
If you do things right, you can be relatively safe from fraud and scams, but most people won’t do things the right way.
It depends on whether you’re interacting with the blockchain directly, or via a custodial solution more appropriate for end consumers. Same like how you don’t get a refund if you operate a western union branch and fuck up the wire.
If you want a trustless system, you have to sacrifice performance. At least the proof of stake blockchains like Ethereum don’t use that much energy, and you get a pretty cheap and fast transaction with layer 2 solutions on par with credit card transactions.
Sure, but what real-world problem does a trustless solve? I thought this was all very interesting years ago but now that we’ve had blockchain for years it seems it’s only good for illegal or morally questionable transactions.
Would you trust your money with a bank in China? It was only a year ago that people lost their savings and couldn’t withdraw money for food after a major bank was on the brink of bankruptcy due to the Evergrande scheme.
I guess you can call it questionable, but if I buy a VPN, I’m not going to pay with a credit card linked to my name. I use Monero. If I want to transfer money to my family in another country, crypto is faster, cheaper, and has no restrictions. I can’t even pay my student loans from my home country because my current bank blocks foreign credit card transactions, even if they are important.
This is very niche and not something an average Joe needs, but cryptocurrency isn’t for the average Joe to begin with.
See I think more nuanced takes like this are good. I’m not familiar with the Chinese banking issue that you are describing, but it sounds like deposit insurance (like the FDIC) might be a better solution than cryptocurrency, and it’s definitely better understood. Since the real world value of cryptocurrencies are so volatile they are a questionable store of value, and taking a risk on a poorly regulated bank might be better than taking a risk on storing your money in a volatile and unregulated security like cryptocurrency. Honestly it’s hard to know which is the better risk. So it could be better or it could be worse.
I agree with your point about transferring money internationally, and even within the US transferring money used to be a real pain. So I’m still interested to see if cryptocurrency can be a better medium of exchange or medium of transfer than traditional ways, or at least give traditional systems incentive to improve. But again the volatility is a concern so for most people the best move is probably to get in and out of the crypto market as quickly as possible or else risk getting a vastly different amount of money out of it than you put in. Admittedly it could appreciate, but when I’m transferring money to someone I don’t want that to simultaneously be an investment. The few times I have used Bitcoin to purchase something the whole process has taken hours, and there’s no guarantee there will be price swings a lot could happen in those hours.
I appreciate the brutal honesty about cryptocurrency not being for the average Joe. It’s not that long since many cryptocurrency boosters were hoping it would replace fiat currency, but now that I think about it I haven’t heard as much about that recently. In its current state it is really not for the average Joe.
Bingo. Capitalism has thus far rejected the blockchain, which is generally evidence that it doesn’t solve an important problem either efficiently, safely or cheaply.
Capitalism rejects solutions to climate change as well
To be fair, there are plenty of other reasons capitalism might have rejected blockchain: market failure, interference by government, etc.
I’m not saying that to defend cryptocurrency, by the way, but rather to point out that capitalism isn’t perfect at allocating resources in every situation.
capitalism is generally terrible at allocating ressources. It will always win to externalize costs, and if the people footing the bill cannot participate in the market, like for instance future generations, the result is always a self destructive system.
Isn’t one of its goals to be free from government influence? That’s not a valid excuse.
Blockchain is just a technology. It doesn’t have “goals.”
If a government explicitly blocks it and tries to find and punish trading off or in cryptocurrencies that will cause interference.
that is talking about blockchain as a technology for cryptocurrencies.
Bitcoin had its official ETF approved and started the other week and Ethereum is soon to follow. so I would say capitalism is very much not rejecting blockchain technology. Didn’t blackrock and other giants put a ton in?
They put money in Bitcoin, but not the tech behind it. To them it’s just stocks to be manipulated in order to get a profit.
Trusting Humans is literally a security flaw. Any system with trust you can find examples with fraud and abuse from those who held power by holding that trust.
We trusted bankers to invest our money, and some short sold the housing market with that money
I could go on, but trust really is a security issue. Decentralization has its efficiency issues, but saying “Bitcoin uses as much power as the 90th largest nation” is peanuts when you consider the energy inequality that America spends and compare what Bitcoin delivers with that energy versus how much energy centralized banks need to deliver a system that’s easier to fraud
Ah yes Bitcoin, famously free of fraud and abuse.
More seriously, every system can be used for fraud. The question is whether the solution is actually better overall. We could prevent all wire fraud by returning to a cash-only economy. But that would be hugely inconvenient and therefore create a huge drag on the economy compared to a world where we can do electronic transfers even though electronic transfers open us up to wire fraud. Returning to cash-only is not worth the increase in security, and it opens us up to other issues (e.g., bank runs and someone stealing all the money under my mattress).
And while power use is a problem with Proof of Work coins, it’s not my biggest concern about cryptocurrency because Proof of Stake can fix that issue. It’s a shame that the biggest coin now is PoW but hopefully that will change. The bigger issue is “is cryptocurrency better than traditional currency?” So far it hasn’t proven to be better except in extremely limited circumstances. And a lot of the ways cryptocurrency is better will go away if governments start regulating it like other forms of finance. Having your money in cryptocurrency won’t protect you from the police and courts.
Okay? You could do that with cryptocurrency if traders started accepting cryptocurrency for shorts. The only reason you can’t do that today is traders won’t accept cryptocurrency for shorts, and that’s basically security through obscurity.
Exactly, and using Bitcoin does not solve that because you still have to transact with humans. If you buy something with Bitcoin and the seller never sends you anything, you’re out of luck. Your money is gone.
If you use a regulated financial system you have some options. If you paid with credit card you can charge back and dispute the charge. Your money in the bank is backed by insurance that is guaranteed by the government.
Bitcoin only cuts out the middleman. Every other issue of trust with the recipient still exists, and those are the problems regulation solves, and the reason fraudsters love Bitcoin so much.
With all the information available at your fingertips being ignorant is a choice.
“this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out. In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a hefty portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that doesn’t require an intermediary to approve transactions can be a vital lifeline for survival”
Bitcoin is poised to blow up Africa’s $86 billion banking system
This isn’t Reddit, you don’t have to turn every discussion into a fight. I’m genuinely interested in cryptocurrency for reasons such as the article you linked: there are areas where traditional finance genuinely has failed to meet people’s needs. Providing a medium of exchange for the unbanked is a great example of something it could possibly help with, and I think that’s a good thing if it happens. But we should also be able to talk about the problems with cryptocurrencies and the cases where it doesn’t work as well as traditional finance. And if this prediction doesn’t pan out and cryptocurrency doesn’t become a major way of banking the unbanked, we should be able to consider what could accomplish that goal. It might be a different cryptocurrency, or a new thing inspired by cryptocurrency, or something that has nothing to do with cryptocurrency. After all, cryptocurrency is not a goal in itself.
TPS metrics of the most popular blockchains
As a global payments network Visa has the capacity to execute more than 65,000 transactions per second.
13.15 is the average number of transactions per second. Max TPS (57.91) is the largest recorded TPS, not the capacity of the blockchain. Max TPS will rise as more people use layer 2. Layer 2 solutions can handle 2,000-4,000 TPS, and there are 24 commonly known ones that can do these transactions in parallel.
Yes but 65000 TPS for Bitcoin would likely have the planet glowing much brighter in the infrared… possibly even the visible, for all the heat we’d need to dump.
A rich, warm, and sterilized world!
I’m personally advocating for Ethereum which is Proof of Stake and uses a fraction of the energy Bitcoin does.
However, correct me if I’m wrong here because I’m not that much invested in bitcoin as a tech or investment, but isn’t almost half of the energy used on bitcoin generated from renewables? I could swear I saw an article about it somewhere.
Although nowadays people seem busy heating up the world telling AI to cheat on their homework, so I wonder if this is a problem with society rather than technology.
It may very well be renewable. I’m really more referring to the inefficient way in which the sums are calculated. Those data centers get warmish.
And yeah, AI is just the next thing we decided to punish our GPUs with. Crazy how we’ve used that part of the computer these last few decades…
I’m more engaged in a chat gpt session that I am staying up till 4 am watching line graphs of crypto prices, guilty as charged 😁. Not sure what comment it makes about society other than “we seem pretty lonely, everything ok?”
Isn’t that still an order of magnitude less than what Visa can do? Or is there some extra math involved that I don’t know about
I think it depends on the layer 2 solution, but as far as I understand, each of these layer 2 solutions independently have 2000-4000 as theoretical max, and only after bulking transactions together do they affect layer 1, so you should be able to add all layer 2 together for the total.
I guess the spatial sharding update will further increase the maximum number of transactions you can bulk by a factor or two so an individual layer 2 solution becomes comparable with visa, but I don’t think that update is coming to Ethereum in several years. Then again, Ethereum needing to perform 60,000 TPS is likely not happening this decade either.
For now at least, layer 2 is fast and cheap, although a bit difficult to use.
Oh nice, that’s how high Solana’s TPS has gone in testing (in practice it hovers around 5-10k TPS). There’s also newer chains like Aptos that claim to be able to handle 150k TPS with subsecond finality. Of course, neither of these chains are very decentralised, but at least they aren’t fully permissioned and centralised. Especially on a network belonging to a partisan, anti-competitive, anti-trust law-breaking, Wikileaks funding thieving Israel supporters like Visa.
And of course we can rest assured that nobody profiting off bitcoin is morally questionable
Ah yes, Bitcoin bad because some people that use it are bad, how did I never think of that
I’m not saying that, rather I’m saying that I don’t see how either thing is clearly morally superior.
Bitcoin is open-source software, a network of nodes running Bitcoin core, the source code for which you can find here: https://github.com/bitcoin/bitcoin
Morals are a consequence of free will, which Bitcoin does not have. There are valid moralistic concerns about Bitcoin, but they are related to the impact of Bitcoin, rather than whether it is a moral system.
General question, because I don’t give a shit about blockchain to research it.
Does it have a way to quickly and effectively handle fraud? And don’t tell me “there’s no way to commit fraud” because people can steal wallet passwords no fucking problem. With most banks they will actively track fraud, cancel those transactions, and restore your funds and possibly shut down the card automatically while still allowing the account to exist so you can access your money. Is that the case with blockchain?
Yes. There are Escrow services in crypto that hold and issue chargebacks, but it is to to you if you want to use such a service.
centralized crypto exchanges also have fraud combatting teams. An example is that exchange that sponsors kitboga, the youtuber who screws around with Indian scammers. They lock scammers’ accounts from withdrawing but not depositing so they keep sending victims’ money to these accounts, and then eventually they lock the accounts and transfer the money back to the victims.
Obviously an issue with this approach is the scammers can just use decentralized wallets, but recently exchanges started blocking transactions to these too unless you provide KYC info about them, so they’re trying at least.
If you do things right, you can be relatively safe from fraud and scams, but most people won’t do things the right way.
It depends on whether you’re interacting with the blockchain directly, or via a custodial solution more appropriate for end consumers. Same like how you don’t get a refund if you operate a western union branch and fuck up the wire.
there’s the small issue of proof of stake being subjective…