[Cryptography] Bitcoin is a disaster.
makgill at makgill.ch
Tue Dec 29 20:47:30 EST 2020
‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
On Tuesday, December 29, 2020 12:53 PM, John Levine <johnl at iecc.com> wrote:
> but the ten minute rule means it
> never was useful for day to day transactions even before it ran into
> scaling problems
Here's another view: it was *because* Bitcoin ran into (unnecessary imo)
scaling problems that the block time became a problem for day to day
0-conf was reasonably secure for day-to-day until RBF (which has
its own dubious origins) and more importantly, full-ish blocks. Merchants
could choose how much risk they were willing to accept, and
in most cases, the risk of a successful double spend
on a relatively inexpensive transaction was much lower than the
risk of a credit card chargeback, and the savings on
transaction fees more than made up for double spends on the whole.
Bitcoin doesn't need to be perfect, it just needs to be better
than an existing alternative. It was better despite the insistence
of certain early devs that Satoshi was wrong. Compare ten minute
settlement to 60-90 days with credit cards!
>From Satoshi to Mike Hearn: "Currently, businesses accept a certain
chargeoff rate. I believe the risk with 1 or even 0 confirming blocks
will be much less than the rate of chargebacks on verified credit card
There are also business models that could exist to offer added double
spend protection, like insurance to businesses that need it, ie, entrepreneurial
solutions to supposed technical problems. There were other things
that could be done if necessary.
But all of that was made less realistic by some people who insisted
on RBF and a hard cap on the blocksize. Mempool backlogs, high fees, and (to
a lesser extent due to the opt-in nature) the possibility of an
RBF transaction, meant the time it could take to confirm a transaction
with a reasonable fee was hours and "chargeback" risk increased. Obviously this
could never work for daily spending so in that sense I agree with you,
but I still remember halcyon days when Bitcoin's adoption in daily commerce was
growing at exciting rates even with the 10-minute block time.
I think the best criticism of Bitcoin is not a technical one at all—
it's that it was not socially robust enough to preserve the original scaling
model planned by Satoshi.
But! Number is going up! That's something at least...And to this day,
Bitcoin remains remarkably stable and inflation resistant. That counts
for something too even if it's not quite what we all hoped for...though
like I said in my last email, custodial payment layers appear to be
a ticking time bomb for state control.
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