alleged 'illusion of bitcoin liquidity'? Citation requested. [LWN.net]

alleged 'illusion of bitcoin liquidity'? Citation requested.

Posted Jan 14, 2018 11:35 UTC (Sun) by anselm (subscriber, #2796)
In reply to: alleged 'illusion of bitcoin liquidity'? Citation requested. by Garak
Parent article: Welcome to 2018

The interesting thing to note about that picture is how the number of transactions isn't going up the way it used to (which it presumably would if Bitcoin was really catching on). This is because Bitcoin is running up against its built-in transaction limit. Credit card networks can typically handle 10,000 times the transactions per unit of time that Bitcoin can, and unlike Bitcoin they can build out their capacity if they have to.

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alleged 'illusion of bitcoin liquidity'? Citation requested.

Posted Jan 18, 2018 3:01 UTC (Thu) by Garak (guest, #99377) [Link] (1 responses)

but bitcoin isn't the only cryptocurrency. Hopefully wikipedia will have (or already has) stats on all the top cryptocurrencies. And I expect bitcoin and its competitors to continue working on and solving their scaling problems. To the point that the political challenge will come more into focus. (Nations pushing back against the competitors to their traditional currency)

alleged 'illusion of bitcoin liquidity'? Citation requested.

Posted Jan 18, 2018 9:24 UTC (Thu) by anselm (subscriber, #2796) [Link]

So far nations don't appear to have a lot to worry about, and until crypto-“currencies” become useful to let normal people buy legitimate stuff that is actually worth having, with less hassle than doing it with actual money, a credit card, or PayPal would require, that is unlikely to change.

The problem with Bitcoin is that the issues it is facing now are mostly built into the system by design and are difficult to fix because the fixes require not only technical solutions but also political buy-in from entities that are strongly invested in the status quo (remember that something conceptually quite simple like increasing the block size resulted in a blockchain fork that gives no indication of going away). This also impacts other crypto-“currencies” because many of them basically hang off Bitcoin in some way (if only that you can only buy them using Bitcoin).

Remember that the people who benefit most from a crypto-“currency” are the ones who get in on it early and can hoard a comparatively large share of the available “coins” while they are still easy to acquire. The fabled Satoshi Nakamoto, for example, apparently sits on more than 1 million Bitcoins, which would be a nice retirement package if you could actually convert it, or an appreciable fraction of it, to real money (which you can't). Similar considerations apply to most other “coins”, where the main idea behind an ICO is to get people to give you free money without your having to deal with pesky entities like the SEC.