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0 sats \ 7 replies \ @fiatbad 28 Dec 2023 \ parent \ on: Bitcoin fees, a worrying trend bitcoin
So what is the correct block size for true adoption?
If you start increasing it, you start getting other issues. Hash rate will go down, due to less profitability. Decentralization will decrease, due to higher hardware/network requirements to run a node.
AND you will still eventually need to move to a Layer 2/3 anyway, because onboarding the entire world for small daily transactions on Layer 1 would require massively large block sizes that will certainly centralize the system into a few massive super-nodes.
If we would need to build layers eventually anyway, why not do it now, and not make any tradeoffs that would compromise the base layer?
Look, I'm seriously concerned about this issue for BTC and I have a lot of sympathy for the things you are saying. You aren't wrong. But I also feel like you haven't thought this out completely. I don't know how to fix this, but I know a block size increase isn't the magic bullet that big-blockers think it is.
The 1Mb block-size is more than enough for layer 1 and the protocol is working as intended. The current increase in fees is due to a spam attack taking advantage of a Taproot vulnerability, not an issue related to the block size. Eventually this will be over, since the attackers need to pay higher fees to keep their scam going on. Other possible solutions are ongoing and will be implemented sooner or later. In the meantime, layer 2 & 3 provide an alternative if you are not willing to pay more for a transaction. Lightning is far from perfect, but it's very useful and their development keeps growing. Liquid is providing an interesting use case in the current situation. Soon we'll have Fedimint and other layer 3 solutions... This is how Bitcoin is intended to work, we don't need to mess with layer 1 because we require a solid foundation so that we can build a strong ecosystem on it. Of course you can add soft forks to fix bugs and add new functionalities, but the block size is one of its main foundations. Otherwise it would be in the hands of a few people.
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Those Ordinals sure seem to be able to keep the fees on the higher-end of the spectrum, they should've been "done" months ago and yet they're still here.
And sure, you can use lighting and other variants, but can the average Joe? Absolutely not, most can't or won't even self-custody, let alone try to understand what a "UTXO" is and how it affects the fees they get to pay.
These are things that have to work behind the curtains.
You can't strive for adoption and have people dive "down the Rabbit-hole" in order to not fuck themselves over while transacting and what not.
It's close to 15 years and it's still one big "Oomph" on people's faces whenever I try to dissect Bitcoin in the most simplest of terms, let alone have them do something, but maybe that's just me.
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I hear you. And I appreciate the conversation.
To me, all the other FUD has been debunked and is silly. Environmental FUD, Keynesian FUD, Altcoin FUD, PoS vs PoW FUD, Government Banning FUD, etc. All of it is dumb and Bitcoin wins every time.
The issue you are discussing here is the only piece of FUD I still struggle with.
But, to play devil's advocate with you, a few comments:
It's close to 15 years and still a big oomph on ppl's faces when trying to understand or use Bitcoin. I understand and struggle with this also. But how many of those people understand gold or fiat? Trying to self custody gold is not easy, if done correctly (let alone trying to use it as a currency). Explaining counter-party risk with gold ETF's or other equities. Explaining Forex or derivative markets, or even just how shorting an equity works, is a bitch for these normies.
It isn't the gold's fault, or fiat's fault, or the market's fault that people are intellectually lazy.
I think this is why the store-of-value narrative works so well with Bitcoin, instead of the crypto-currency narrative. Bitcoin really is more like gold than currency. It really is meant to be a censorship-resistant, borderless store of value. This is what the world needed, not a new merchant point-of-sale system. And we have to continue prioritizing decentralization and censorship-resistance above ALL other concerns.
I think Bitcoin has succeeded at this over those 15 years. It looks like it's failing if merchant adoption is your number one metric. But should that really be the most important thing? Maybe it only looks like it's failing because you're prioritizing the wrong metrics?
But I dunno.... I also share your concerns. I've been conflicted on this, and it is my number one concern about BTC as an asset. I am convinced that no other cryptocurrency offers an acceptable solution. It's either BTC or back to the fiat/gold world. Because of this realization, I'm still optimistic on BTC for the long run. There just isn't a better solution, despite the downsides.
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I don't know either... Its just that Bitcoin is still hard to get.
In your example of explaining Gold and Bitcoin to the average Joe; Explaining how to self-custody gold can be as simple as pointing them to the right manufacturer of safes, and have them put the safe in the right location.
Everybody knows what a safe is for and how it's used, right?
Self-custody of Bitcoin isn't that different; You point them to the right manufacturer of safes (hardware wallets) and tell them to store it in the right location (whatever that may be, you get what I'm saying).
With Bitcoin, however, most of the people you tell this will ask you what the hell a "hardware wallet" is, how it works, why they need one in the first place and if they can trust it, and that's just the start.
You have to explain to them that they'd do good to check the Hash of the accompanying wallet software they're most-likely going to use, before actually using it (good luck with that), what those words are and why there are so many of them, why the order of words matter and that their savings pretty much depend on that piece of paper, oh and that the wallet resets itself after three failed pin's.
Of course, as the responsible guide you are, you tell them about all the magnificent ways of backing up the seed words in steel, splitting them up yada yada, which makes it even more for them to absorb- and then we're not even started with the different extra's one could apply, such as a Passphrase or a 2/3 Multi-sig...
Phew, let's start about UTXO-management, what a "UTXO" even is and why you shouldn't start with one of those fancy auto-buying plans...
Why they should use a different address everytime they receive a deposit and that deposits to the wrong address will result in permanent loss of funds (can you smell the anxiety of sending funds? I can...), oh, and that they would do good by meticulously checking each address they'd like to receive funds to, because there's malware which changes the clipped addresses once you paste it, siphoning your funds to other addresses.
See, it's not even that people are intellectually-lazy, its just so much to take into account in order to do it right.
You and I, we get that, we understand that that's what's needed in order to make it secure and workable, they don't.
We have that intrinsic motivation to learn and understand these things because we know that Bitcoin is far more than just a fancy tech-stock-wannabe, they just want to have a smooth experience and personal profit of using it.
I think im getting a bit off the way here, I gotta go to bed.
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I see that your main concern is mainstream adoption and some of your points are totally right. Unfortunately Bitcoin is not built to "move fast and break things", as we are used to in the current tech landscape. Its purpose is to subvert the current monetary system, which has been in effect for more than a century, so it will take as long as it needs as we are too early yet.
The current situation might accelerate some of the development required to optimize it, but I think that mass adoption is still too far. The world is not ready yet. The fiat system will fall by itself first and many people will have to suffer the consequences before being aware of Bitcoin's real purpose. So let's take it easy, keep building and educating, and try to help those around us who might need our help.
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Don't get me wrong; I'm all for Bitcoin, I just don't want us to miss out on the adoption because we were too stubborn and placed our chips on the wrong horses.
There's no real use down the road in a fringe monetary Network only some "in-the-know" use, besides that the fees would be a lot lower 😉.
Fine, and what if those second / third layers are years and years down the road?
We have some potentially very potent catalysts around the corner which could multiply demand for Bitcoin fast, which ironically could cause (another) massive blow to how the public sees Bitcoin; Not just as an instrument for crime and terrorism, but an expensive one on-top.
Nice when five years down the road Lightning finally functions as intended, yet mainstream doesn't care anymore because that CBDC of them does the job just fine.
Maybe i'm seeing things too bleak, but waiting too long with certain steps could turn out as the wrong move.
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