The "smarter" scaling solutions still aren't here after years of waiting, fees are hitting all-time highs, and other chains can do >4,000 TPS on layer 1. So no, small blocks weren't and aren't a good idea.
read: other chains are centralized databases that have no business being blockchains in the first place and can be replaced by single mysql instance.
the trick is not to have high TPS, bitcoin could have unlimited TPS too, it's just a single line of code change. the trick is to have a decentralized system that functions at saturation on commodity hardware.
the conservative minds prevailed during scaling debate in 2015-2017, creating selection pressure for scaling solutions that optimize limited resource - chain space, rather than populist simplistic "solutions" pushed by cheap propaganda slogans like "we can do this much TPS!".
> read: other chains are centralized databases that have no business being blockchains in the first place and can be replaced by single mysql instance.
This, too, has been a thought of mine, but I'm not exactly sure how I would block diagram the 'locking' mechanism for the MySQL instance.
I've come to believe the locking mechanism is the nonce produced to sufficient solution parameters that appears to use the difficulty of finding said solution as its defensibility.
So how do you get the 'strength' of the miners throwing ExaHashes at a solution with a single instance? We could easily snapshot the DB and sign them, however, the point of failure is no longer in a 50% attack, but in losing said key... which intuitively feels far less secure?
locking is needed to order transactions, mysql already has acid transactions. i use mysql metaphorically to describe a single centralized database protected by single entity that controls all the writes. we already have such payment systems: visa, mastercard, paypal, venmo, etc.
blockchain and miners only make sense if you need and actually maintain decentralization. if you don't and/or can't - miners (and validators in PoS systems) are useless overhead.
Thank you, I had never heard of ACID -- yeah, centralized vs. decentralized becomes fairly philosophical (eco vs. democratized arguments, etc).
To build on the discussion, I'm more amazed at blockchain's capabilities as a cooperation engine outside of the normal channels. To that end, I'm really surprised we haven't seen significant attrition in the current legal system to smart contract systems. I guess the lack of adoption more highlights just how 'customized' a 'standard' contract or dispute is in the real world.
blockchains are great in environments where parties can't audit and trust each other but need write access to the same database. so far it remains an open question whether blockchains will ever be useful for anything other than settlement ledger (and things you can build on top of that).
i don't believe the hype of using blockchains to track some logistical or supply chain data will prove useful simply because all these international corporations already have a system to resolve conflicts and enforce contracts - law.
Right -- many friends are lawyers and they basically say law is a slow grinding gear. So, my naive thought is that any improvement in speed should be a deterrent for the mischievous.
And thinking out loud, it sounds like if blockchain were used to run financial operations for a company, we could make the infamous audits for Luckin Coffee's and GSX's a thing of the past. Or at least after one mistake (the LC coupon issue was an interesting hack to avoid detection), update the contract, then all future instances are robust to the same issues.
GAAP Rules and Arm's Length Transactions could be factually monitored too... interesting
i'm not saying there will never be a valid use case for blockchain beyond bitcoin, i'm just skeptical about the hype of recent years where it's applied left and right to everything. so far all the use cases i've heard of could be replaced with a centralized database maintained by a consortium of interested parties.
They are here, the publicly known nodes alone on lightning have 1.2+k BTC locked in [1], that's ignoring all the private channels which form the majority of the channels (private channels are the end-user channels which don't route transactions themselves and are not broadcast publicly).
We have easy to use wallets [2], easy ways to run lightning nodes [3].
And if you look at the average transaction value, you can see that the blockchain itself is acting more of a settlement layer rather than "coffee transactions" as it should [4].
Becoming the most trusted decentralized worldwide settlement layer is considered a failure now?
Many of the cryptos that claim to scale to thousands of tps on layer 1 are all sacrificing decentralization to achieve it, at which point, I might as well use Paypal/Visa. There's no point in being able to scale to those levels in theory if in practice no one uses them.
> Becoming the most trusted decentralized worldwide settlement layer is considered a failure now?
it is, if the original goal was to be something else.
If you start a marathon and stop to eat the greatest hot dog ever made, it wouldn't be considered a successful run, although you can say "but it was the best!" and be happy about it.
Not sure if it can be called a pivot when it was in the original release of the software.
Payment channels aren't in the white paper but they were in the first public release and had dedicated opcodes. That first implementation wasn't very practical nor was it secure.
The fact that modern payment channels are implemented with other opcodes may be a pivot in implementation but not in concept.
Startups have a duty to their shareholders to make money, whereas Bitcoin has at least a nominal duty to its inventor[0] and its whitepaper.
There's nothing wrong, though, with someone taking the open source code and creating LightningCoin from it, though. That would be the equivalent of a pivot.
Payment channels were invented by Satoshi and actually baked into the transaction format from day one-- it's why transactions have locktimes and sequence numbers.
The nice thing about using blockchain for settlement is that (using lightning) you don't actually need to wait for the settlement to clear before you are certain you own funds.
What is a sign of success, multicasting every transaction in the world and storing it on a public ledger? I don't remember that being in the white paper.
Can you elaborate on your perspective? I must admit that I don't use layer2 solutions and many people that think they are, are not (ie. users of Polygon's Proof of Stake network instead of their Plasma network), but I appreciate the progress on those layer2 solutions and actively support the bridges to them
A low-priority transaction cost $2.36; medium is $4.39 and high is $7.48.
To put this into context: you can send $10,000 worth of BTC anywhere in the world in an hour for $2.36 right now.
A bank wire transfer for $10,000 is going to be at least $35; often it's more, depending on which country you're sending to and if you have to use an intermediate bank to get to the bank you're ultimately are attempting to reach.
Bank holidays, weekends, etc. don't apply to bitcoin.
Bitcoin fees have ranged between $0.79 and $33.00 within the past week (feerates between 10 sat/vB and 250 sat/vB) [0].
There have been periods where the prevailing feerate has remained over 150 sat/vB ($12 - $24) for 24 hours.
And unless you're already in $10K of BTC, you will lose exchange fees and are subject to the forex (equivalent) rate. Your receiver will have the same burdens.
Wire transfers/SWIFT/FedWire etc are effectively instantaneous, the fees are 100% predictable, and they are accepted everywhere worldwide for all legitimate business. As you note, they can be inconvenient or impossible on overnights, holidays, and weekends.
I'm not disagreeing with you -- just noting that the quoted Bitcoin fees at any point in time are not reliable, and that the whole process is more complicated than it might appear.
[0] (background for other readers) Bitcoin fees are a function of the transaction size in (virtual) bytes (minimally either ~140 vB or ~240 vB, depending on the type of addresses used), multiplied by the feerate in satoshis per virtual byte. Converting to USD, you have to consider the BTC-USD exchange rate which has been bouncing around $55K lately. So, e.g.:
240 vB * 250 sat/vB == 60_000 sat
60_000 sat == 0.0006 BTC (100_000_000 satoshis per BTC)
0.0006 BTC == 33.00 USD (at $55_000 USD per BTC)
You cannot send $10,000 anywhere in the world via Bitcoin for $2-7, you have to first convert the $10,000 to BTC at a local exchange, wait 3 days, pay 1-2%, suffer slippage, pay $2-7, wait an hour, pay 1-2% at the remote exchange and wait for the money to deposit into a bank account. This is true because you can't spend Bitcoin for goods and services - generally speaking anyways. Bitcoin in this context is just the intermediary unit which is elided in a wire.
Re: wires, domestic US wires are offered free of charge by many institutions, and are instant during regular business hours. Obviously delays apply outside. For reference, an ACH transaction costs banks $0.002 in bulk to the depository institution. A FedWire costs $0.033 in bulk to the depository institution. [1]
Transfers outside the US cost more and take longer because of AML and KYC.
Not to mention that the move in the US from ACH to RTP makes ~free and instant domestic transfers 24/7. No blockchain needed. Because of course there isn't, the current system was based on policy not technical limitations of MySQL. [2]
Those transaction cost estimates are extremely volatile. I recently tried to pay 50 sat/vB (~$4) for a transaction on a Monday and it didn’t clear until Saturday. Unfortunately mempool.space doesn’t seem to publish historical data, but it seems that weekends do affect Bitcoin, in that transactions are significantly cheaper.
My Schwab account does international wires settled in USD or in a number of foreign currencies for free. (The official fee is $15 but it’s always been refunded for me.)
As the other @garmaine mentions, the currency conversion is at mid-market rates, no fees. I've compared the rates to Wise and other options and it's far less cost, and certainly less cost than the median tx fee of BTC by itself, let alone slippage or fiat conversions or exchange fees. Anyone who thinks BTC has any advantage as a medium of exchange I'm convinced has never actually used it/compared it to existing options.
Schwab forex exchange really is without fees. It’s done at the current forex rate with no basis points taken. I’ve checked my transfers against the forex rate for the day.
Schwab operates these retail banking services as a loss-leader for their investment products.
I've never experienced a bank that hasn't silently gouged on forex, and this is the first I've even heard of one that didn't.
Definitely good to continue to be vigilant about such claims.
As for BTC, I wouldn't use it for anything other than a store of value - there are far better crypto options for transferring value. Some cost fractions of cent and take seconds.
Others cost single-digit dollars, but are fiat-pegged so there's no volatility risk at all.
I didn't do wires with Schwab but I'll trust it's cheaper than your average bank when it comes to conversion rates. (They do refund ATM withdrawal fees for international ATMs)
