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In a test of Bitcoin's ability to adapt to its own growing popularity, the Bitcoin community is facing a dilemma: how to change Bitcoin's core software so that the growing volume of transactions doesn't overwhelm the network. Some fear that the network, as it's currently designed, could become overwhelmed as early as next year.
The answer will help determine the form Bitcoin's network takes as it matures. But the loose-knit community of Bitcoin users is not in agreement over how it should proceed, and the nature of Bitcoin, a technology neither owned nor controlled by any one person or entity, could make the impending decision-making process challenging. At the very least it represents a cloud of uncertainty hanging over Bitcoin's long-term future.
The technical problem, which most agree is solvable, is that Bitcoin's network now has a fixed capacity for transactions. Before he or she disappeared, Bitcoin's mysterious creator, Satoshi Nakamoto, limited the size of a "block," or group of transactions, to one megabyte.
Under the one-megabyte-per-block limit, the network can process only about three transactions per second. If Bitcoin becomes a mainstream payment system, or even a platform for all kinds of other online business besides payments (see "Why Bitcoin Could Be Much More Than a Currency"), it's going to have to process a lot more. Visa, by comparison, says its network can process more than 24,000 transactions per second.
(Score: 2) by JNCF on Thursday May 21 2015, @12:58AM
I am in total agreement that the government is watching and trying to track all Bitcoin transactions, but I doubt they have a full picture. I've never tried to obscure my ownership of coins, but I think it could be done. Some day I intend to, just for the sake of it. It is certainly work, and more work than the average user is willing to put in.
Not sure why the government would be interested in my grocery purchases.
Corporations are mostly interested in marketing to you and making predictions about your life. [forbes.com] Governments, well, they're governments. Read chapter 2 of SuperFreakonomics, titled "Why Suicide Bombers Should Buy Life Insurance." Long story short: they usually don't, and this is a red flag to intelligence agencies who are sifting through metadata in search of terrorists. They're also passing on information to law enforcement agencies such as the DEA (which engage in illegal, unconstitutional parallel construction to cover this up). They're also building a database which any future totalitarian state could use against us. Don't think that your purchases aren't being stored right alongside your emails and telephone conversations, it would be silly if they weren't.
If you are extremely careful, you probably can stay anonymous for a while. But it only takes one mistake to reveal your identity and to unwind all your accounts, automatically and at zero cost.
Disagree. If you've compartmentalised things correctly, a data leak in one part of your operation shouldn't expose all of your addresses' ownership.
Compare to spying by the bank and the government. First, they have no intent to steal your money.
I guess we see taxation quite differently. To me, it seems like they want to steal my money and use it fund wars for the sake of oil companies (among other travesties).
Second, the collected data is kept secret, available only to a few analysts.
Hopefully. Hopefully, they aren't selling it to insurance companies and debt collection agencies. Hopefully, nobody leaks all of your personal information to the internet. Hopefully. I'd rather try to obscure it from everyone, so that I'm not trusting some corporation with my data. It seems that I view this as a more obtainable goal than you do, but I fully accept that I could be underestimating the difficulty. It's impossible to tell what the government's data analysis is capable of, compared to the tools that are public knowledge.
A BTC equivalent, however, could find its use as a global coin for transfers of money between banks. The main advantage of BTC there is that no government can print more of them. The BTC will be a modern equivalent of the gold supply; and each BTC would be enormously expensive. But in this use none of the BTC's problems matter. Then the population could use any currency that their government decides to print - as long as it is fully backed by BTC.
This doesn't seem like an unrealistic outcome to me, but it certainly isn't the only possible outcome.
People do want those features. There is a reason why cash remains in use only among the poorest people, those who cannot get a credit card.
I own a card, but pretty much only use it for occasional online purchases. I prefer to pay in cash for idealistic/paranoid reasons, and I know a couple of people who do the same. Not many, I'll give you that. Most people do like being coddled. I don't think I've ever argued that Bitcoin is destined for mainstream adoption.
Besides, why are you afraid of reversible transactions? It's not like they can be done without you knowing. You can debate the chargeback in court of law, if you want to. All the records are available. Chargebacks are not done for no reason at all.
Courts cost money, and I don't want to deal with their rigmaroll. I've never been bitten by a reversed transaction, but I know people who have (with PayPal, not credit cards). You can't find people who will sell bitcoins via PayPal because it is ridiculously easy for the buyer to get the transaction reversed, PayPal basically defaults to siding with whoever complains first.
I think it comes down to this: I don't want to be treated like a child who is incapable of handling my own funds, and I don't want to trust corporations with data about my purchases. I don't want the government/banks to control my money. I know they're corrupt, and I don't trust them one bit. I see the blockchain as a new model that could replace ones of the needs for these centralised institutions, whether or not Bitcoin is the currency that implements it correctly.
(Score: 1) by tftp on Thursday May 21 2015, @01:38AM
I've never tried to obscure my ownership of coins, but I think it could be done. Some day I intend to, just for the sake of it.
You either do it, or do not. There is no "some day" here. The blockchain contains all the history of your accounts, and they can be tracked backward in time until the chain hits one of your current, known accounts. You can try to break the chain - for example, by selling your coins for cash and then going to another city and buying new BTC, in a different batch size. It's hard on you, but it's not too hard for a computer to calculate probable edges of the graph.
Corporations are mostly interested in marketing to you and making predictions about your life.
I'm not sure how they can market anything to me. I receive no spam, and I don't read flyers, and my answering machine on the phone rejects all incoming calls unless you know a secret code. I cannot say for the rest of the population, but whatever can be gathered from my c/c purchases is entirely useless. It doesn't even correspond to my home address.
If you've compartmentalised things correctly, a data leak in one part of your operation shouldn't expose all of your addresses' ownership.
Most of the population of this country doesn't even understand all the words that you wrote :-) Sure, if you are a crypto geek you can do better than most. Perhaps you don't need to outrun the bear, after all.
I don't think I've ever argued that Bitcoin is destined for mainstream adoption.
Do you know many viable currencies that are not mainstream? The problem here is that there can be only one. Every alternative currency dies out. I can think of only few scenarios - primarily in times of war or instability - when foreign currencies are widely used as a payment instrument. But even then those are mainstream currencies, like USD and Euro, that are a reliable store of wealth.
I understand your approach to money, and you are not entirely alone in this outlook. However you are in a terribly small minority. What you choose and what you do does not really matter to the society. The reason is that most people do not make money into a separate object of value that is worth of complicated housekeeping. To most people money is just a tool, a token that they are in a hurry to exchange for more useful goods. This is why so many companies are trying to further simplify payments - even though they are pretty simple already. That's where all this RFID and NFC comes from, and all those ideas of using a smartphone as a wallet, and lots more. The chance of winning is low, but if they win they own the world, for a while, joining the credit card giants in skimming a little from each and every transaction on the planet. Perhaps BTC is not all that different, given millions of coins generated by early adopters and stashed away. The only clear winner of the BTC craze so far is the companies that manufacture mining equipment. Everyone else loses.
(Score: 2) by JNCF on Thursday May 21 2015, @02:22AM
You either do it, or do not. There is no "some day" here. The blockchain contains all the history of your accounts, and they can be tracked backward in time until the chain hits one of your current, known accounts. You can try to break the chain - for example, by selling your coins for cash and then going to another city and buying new BTC, in a different batch size. It's hard on you, but it's not too hard for a computer to calculate probable edges of the graph.
Disagree. As I noted earlier, there are mixers (and clever decentralised mixers are on their way). I think that it is possible to pseudonymise coins that have previously been attached to an identity, but you must be very careful. Even if somebody did as you suggested - buying the coins with cash in a city you don't have other business in, and have travelled to discretely - they would still be smart to take other precautions.
I'm not sure how they can market anything to me. I receive no spam, and I don't read flyers, and my answering machine on the phone rejects all incoming calls unless you know a secret code. I cannot say for the rest of the population, but whatever can be gathered from my c/c purchases is entirely useless. It doesn't even correspond to my home address.
Good for you. I mean that, I'm not being snarky :)
Do you know many viable currencies that are not mainstream? The problem here is that there can be only one. Every alternative currency dies out. I can think of only few scenarios - primarily in times of war or instability - when foreign currencies are widely used as a payment instrument. But even then those are mainstream currencies, like USD and Euro, that are a reliable store of wealth.
History is weird; wampum beads used to be legal tender in New Amsterdam. Precious metals of various types used to be our primary means of exchange, sometimes interchangeably and with exchange rates set by custom rather than supply and demand. The lines between currencies and commodities aren't always clearly drawn. The paradigm of today is not necessarily the paradigm of tomorrow. A basket of cryptocurrencies with different properties of liquidity, stability, etc., doesn't seem unreasonable to me. It doesn't seem like a sure thing, either. I'm not sure where this train is headed.
The only clear winner of the BTC craze so far is the companies that manufacture mining equipment. Everyone else loses.
That's a bit of an overstatement. Plenty of others have profited from the roller-coaster ride, and plenty of others have lost out. More importantly, we've gained a really cool tool; the blockchain. Even if it is only used by governments and banks to back their paper bills, as you suggested earlier, it's still a great improvement over the current state of printing money willy-nilly (I'm not actually arguing for deflationary economics here, there are inflationary implementations of the blockchain, it's the incorruptible decentralised system that I'm arguing for). Even if we just use it for specific applications, like Namecoin, society will benefit from this. I suspect we will use it for a whole lot more. I can't wait for Decentralised Autonomous Organisations. [wikipedia.org] Those seem reasonable to me.