Bitcoin vs Paypal, A fork in the road

[rogerver]

According to this link, PayPal processes 4.9 Billion transactions per year.
According to this graph, Bitcoin processes about 80 Million transactions per year.

This is about 1.6% of what PayPal's volume is.
When we compare the graph above to the one below showing an ever rising transaction fee, it is clear that the Bitcoin network has been operating at maximum capacity since around the beginning of this year. More and more uses are being priced out of the market, and being forced to use alternatives.

Examples of things being forced off the bitcoin network are fantastic tools like Bitcoin faucets and birds.bitcoin.com that are no longer feasible due to the excessive transaction fees. Layer two solutions are at least many months away from widespread use, and likely several years.
Now some people are even advocating a hard limit to the UTXO set!

A simple immediate increase in the maximum block size to even just 8mb would instantly allow Bitcoin to scale to about 1/8th the tx capacity of PayPal, with no additional protocol efficiency improvements. It would also buy several more years of time for the network to grow while additional layer two scaling mechanisms are created.

For those who are worried about "decentralization" due to increasing the block size, you seem to be ignoring the fact that Bitcoin is completely centralized and controlled by a single development team. The mining industry is completely controlled by just a small handful of mining pools, and even fewer ASIC manufacturers.

As I mentioned in my previous article, the negative consequences of this block size increase are negligible when compared with the instant benefits of finally allowing Bitcoin to scale again.

Recently I've been made aware of a number of industry participants and users who are planning to hard fork Bitcoin at a certain block height in order to allow it to scale. At that same time they will also likely change the proof of work algorithm to something much more ASIC resistant.
This will solve the current problem of the entire ecosystem being held hostage by a single development team, and just a handful of mining pools who seem paralyzed to take action.

If the current group of Bitcoin miners are not interested in following Satoshi's vision in a timely manner, my initial thought would be to support the idea of this hard fork, and to use Bitcoin.com and my influence in the ecosystem to support it. I suspect many of the biggest Bitcoin businesses will instantly follow along as well.

[rizzlarolla]

I agree Bitcoin needs to scale "now". Adoption/use is on hold at best. Probably in reverse. (as you explained businesses cannot afford the high fees and/or the unpredictable nature of conformation due to full blocks)
However, a hard fork without the present mining majority, and without the current difficulty, is not going to be "Bitcoin".

With a different set of transactions in the 2 blockchains, it is impossible for users to realistically "change over later".
Any new chain needs to quickly kill off any old chain.
I wont abandon the current bitcoin chain in favour of a new "powerless" chain - with different tx history. Everyone will know at the start it is not the real Bitcoin. Then, because of the different history being written onwards, that will never change, or anyone "would" successfully attack Bitcoin in this way.

You are asking for trust - weather I choose to trust your chain personally. But Bitcoin is trustless.
I trust the most hash power. The most hash power will not be destroyed by an attacker. The miners will act in our favour, eventually, if we are right.
If we are wrong, we are the attacker, and the hash power has "saved" Bitcoin from us!

If you think anyone can "fork" with low hash power, creating a different blockchain than the present/future Bitcoin blockchain, and take significant value from the present mining chain, and be seen as "Bitcoin", you are mistaken, I believe.

Bitcoin is designed in such a way that it is not easy to fork. This is an important defence against attackers. (core being the attacker in your instance)
Things predictably have to get bad before an overwhelming realisation/consensus is (probably suddenly) reached.

Please use the influence you have to help get rid of the current attackers.
Do you ever talk with Jihan about the present issues?

Edited - added.

[LiteCoinGuy]

"Recently I've been made aware of a number of industry participants and users who are planning to hard fork Bitcoin at a certain block height in order to allow it to scale. At that same time they will also likely change the proof of work algorithm to something much more ASIC resistant."

unlikely that they have a world class team of devs with decades of experience in cryptography and networking. i am not in bitcoin because i want some business people who develope bitcoin - i can use paypal for that.
i am fine when we see bitcoin as gold and a basic protocoll. we have to build the rest on top of it.



"However, a hard fork without the present mining majority, and without the current difficulty, is not going to be "Bitcoin". ... Please use the influence you have to help get rid of the current attackers. "

i agree on what rizzlarolla said here. i would like to see that bitcoin.com is helping the development of bitcoin, not working on a fork! developing and scaling needs time. we have to build this system on rock and not on sand.

[rogerver]

However, a hard fork without the present mining majority, and without the current difficulty, is not going to be "Bitcoin".

This is debatable as well. I think an argument can be made that a hard fork, with the same UTXO set as the current Bitcoin at the time of the fork could be just as much "Bitcoin" if people are using it.

With a different set of transactions in the 2 blockchains, it is impossible for users to realistically "change over later".
Any new chain needs to quickly kill off any old chain.

As we saw with ETC/ETC, that doesn't necessarily need to be the case.

If you think anyone can "fork" with low hash power, creating a different blockchain than the present/future Bitcoin blockchain, and take significant value from the present mining chain, and be seen as "Bitcoin", you are mistaken, I believe.

I think we just saw with ETC that this is possible.

Bitcoin is designed in such a way that it is not easy to fork. This is an important defence against attackers. (core being the attacker in your instance)
Things predictably have to get bad before an overwhelming realisation/consensus is (probably suddenly) reached.

Please use the influence you have to help get rid of the current attackers.
Do you ever talk with Jihan about the present issues?

Edited - added.

I've spoken at length with Jihan and others.
I have literally gotten down on my knees and begged them to help.
As the world knows, there haven't been any results yet, but maybe that can change soon.
I think the Bitcoin.com mining pool is likely to be able to help a lot in this area.

[rizzlarolla]

Roger,

I'm glad you saw sense and realised hash power is not debatable, instead putting your energy into a mining pool.
Nice work. Now your being heard.

I hope you also see now how Eth reacts differently in a fork situation, by design, than bitcoin. That is part of the reason Eth will fail.
You should dump that shit, concentrate on Bitcoin.

I hope your pool will stand up against segwit soon. Actually voting against rather than, in effect, abstaining.
Now is the time to show your hand to gain support?

[Rmcdermott927]

I agree. I sent a 600b tx this morning with a .0003 fee that has still not confirmed. Our common goal of mass adoption is in jeopardy as Bitcoin is becoming nearly unusable for small transactions as the fee would be almost as much as the amount sent.

[rizzlarolla]

^^^

Fees... Have you notice how https://bitcoinfees.21.co/ says
"The fastest and cheapest transaction fee is currently 100 satoshis/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 22,600 satoshis (0.17$)."

Multi-million dollar cutting edge Bitcoin company thinks 22,600 satoshi is 0.17$
see, bitcoin being over $1000, i make that 0.23$ (rounded)
Lying bastards.

Probably my mistake.. or 21.co need to add another 30% to their figures

---------------

5 min later,
"The fastest and cheapest transaction fee is currently 110 satoshis/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 24,860 satoshis (0.18$)."

0.25$... ?

[Windowly]

Recently I've been made aware of a number of industry participants and users who are planning to hard fork Bitcoin at a certain block height in order to allow it to scale. At that same time they will also likely change the proof of work algorithm to something much more ASIC resistant.
This will solve the current problem of the entire ecosystem being held hostage by a single development team, and just a handful of mining pools who seem paralyzed to take action.

If the current group of Bitcoin miners are not interested in following Satoshi's vision in a timely manner, my initial thought would be to support the idea of this hard fork, and to use Bitcoin.com and my influence in the ecosystem to support it. I suspect many of the biggest Bitcoin businesses will instantly follow along as well.

Roger, is there any more word of a bitcoin hard fork? If there are two forks of bitcoin and one is offering free transactions and another is offering very expensive transactions, it's pretty easy to see which one the economic majority will follow.

[Rmcdermott927]

An important thing to note is Bitcoins ability to be non-partial. With 2 of 3 multisig, escrow and fairness is possible with BTC.

When it comes to PayPal, they ALWAYS favor the buyer, they have focused their business model around it.

Sometimes, taking the human out of things is the best route.

[bitsko1]

Considering how contentious segregated witness is as a soft fork, and how malicious soft fork based development is toward users who dont agree with the protocol change, forking at segwit adoption should be considered justifiable ( sneaky trick in dragging everyone along )...

So I support a hardfork at the time of segwit activation. All of those interested are invited to contribute... www.reddit.com/r/btcfork bitcoinforks.org

[rogerver]

Roger, is there any more word of a bitcoin hard fork? If there are two forks of bitcoin and one is offering free transactions and another is offering very expensive transactions, it's pretty easy to see which one the economic majority will follow.

It is easy to see which one people will follow.
The security comes from the hash rate, and the hash rate comes from the value of the block reward + tx fees on a network.
Clearly the Bitcoin that is actually useful for commerce will have much more of both.