The idea is cool but it might be too early for people to use the blockchain like this as right now BitCoin can support 7 transactions per second.
Once that hard limit is lifted, and things like this can scale and support demand, applications like this could be very interesting.
One thing though, it says the BTC involved in the transaction is unspendable, isn't that a bad thing? I imagine an idea like this that didn't render any amount of BTC unspendable would be ideal.
Wow, didn't realize that! That's bad news, since the current daily transaction rate (~100k) is within an order of magnitude of the daily limit (~600k = 7 x 3600 x 24).
Fortunately, the doubling time is, from eyeballing the chart below, about 6 months, so that allows ~1-2 years for a fix.
Well I was expecting there would be a significant jump in transaction volume as news spreads, prices rise, more services were offered in BTC and more countries get local exchanges. You also seem to miss that its not the total number of transactions per day you need to worry about, its the transactions per second.
There are surely periods of frenzy in the day where we cannot support 7 transactions per second as more economic activity takes place, even if the total transactions for the day is well under 600000. Its not like the transactions are neatly distributed on a flat line throughout the day.
There must also be some consideration that each time this is done, the BTC in the transaction is rendered unspendable and so it is taken out of the market. So I guess its not good if something like this could scale on top of BitCoin.
It doesn't really matter, it's not like they're at all close to that limit. The limit is there to create a market with transaction fees, so it's not just going to be "removed" any time soon.
It used to be 250K and then this year was raised to 1M so it probably will get lifted again. That is the goal of the project, to allow it to scale to at least PayPal numbers (46 transfers per second).
The limit is actually there to limit the size of a block. It has nothing to do with transaction fees.
Again, the limit is there to create a market with transaction fees. People jostle for space in the block and a market develops around how much people are willing to pay to get into the next block. It's based on the assumption that miners pick the transactions with the highest fees to include in their blocks, which does happen to a certain degree.
No. That is redefining the purpose of this limit. It was meant only as a anti-spam measure and now people like you claim it is necessary. There is a _natural_ limit to the minimum transaction fee which is determined by the orphan cost (including transactions means slower block propagation means higher chance of a found block being orphaned by another, concurrent block). Bitcoin needs to eventually scale to survive and that means removing the block size limit and optimizing the protocol for lowest possible orphan cost.
Huh? If Bitcoin is really successful and eventually used by everyone on the planet and people use it with about constant rate, the blockchain will grow linearly. Until then bitcoin will grow presumably S-shaped which means that there will be a phase of exponential growth that we are in now. If it is crippled by people insisting on 7txn/s for "economic reasons", its transaction rate will probably peak and then decay.
Comments
The idea is cool but it might be too early for people to use the blockchain like this as right now BitCoin can support 7 transactions per second.
Once that hard limit is lifted, and things like this can scale and support demand, applications like this could be very interesting.
One thing though, it says the BTC involved in the transaction is unspendable, isn't that a bad thing? I imagine an idea like this that didn't render any amount of BTC unspendable would be ideal.
https://en.bitcoin.it/wiki/Scalability#Current_bottlenecks
Wow, didn't realize that! That's bad news, since the current daily transaction rate (~100k) is within an order of magnitude of the daily limit (~600k = 7 x 3600 x 24).
Fortunately, the doubling time is, from eyeballing the chart below, about 6 months, so that allows ~1-2 years for a fix.
https://blockchain.info/charts/n-transactions?timespan=30day...
Well I was expecting there would be a significant jump in transaction volume as news spreads, prices rise, more services were offered in BTC and more countries get local exchanges. You also seem to miss that its not the total number of transactions per day you need to worry about, its the transactions per second.
There are surely periods of frenzy in the day where we cannot support 7 transactions per second as more economic activity takes place, even if the total transactions for the day is well under 600000. Its not like the transactions are neatly distributed on a flat line throughout the day.
There must also be some consideration that each time this is done, the BTC in the transaction is rendered unspendable and so it is taken out of the market. So I guess its not good if something like this could scale on top of BitCoin.
It doesn't really matter, it's not like they're at all close to that limit. The limit is there to create a market with transaction fees, so it's not just going to be "removed" any time soon.
The limit is actually there to limit the size of a block. It has nothing to do with transaction fees. Click the link I posted: https://en.bitcoin.it/wiki/Scalability#Current_bottlenecks
It used to be 250K and then this year was raised to 1M so it probably will get lifted again. That is the goal of the project, to allow it to scale to at least PayPal numbers (46 transfers per second).
Again, the limit is there to create a market with transaction fees. People jostle for space in the block and a market develops around how much people are willing to pay to get into the next block. It's based on the assumption that miners pick the transactions with the highest fees to include in their blocks, which does happen to a certain degree.
So then isn't this (or satoshi dice) the sort of thing the limit is trying to create a disincentive for?
No. That is redefining the purpose of this limit. It was meant only as a anti-spam measure and now people like you claim it is necessary. There is a _natural_ limit to the minimum transaction fee which is determined by the orphan cost (including transactions means slower block propagation means higher chance of a found block being orphaned by another, concurrent block). Bitcoin needs to eventually scale to survive and that means removing the block size limit and optimizing the protocol for lowest possible orphan cost.
It's limited so that the blockchain grows at a linear rate instead of an exponential rate.
Huh? If Bitcoin is really successful and eventually used by everyone on the planet and people use it with about constant rate, the blockchain will grow linearly. Until then bitcoin will grow presumably S-shaped which means that there will be a phase of exponential growth that we are in now. If it is crippled by people insisting on 7txn/s for "economic reasons", its transaction rate will probably peak and then decay.