I can imagine a situation where the transactions are of such a big value that even the 7 transactions per second are enough to pay for the whole system sustenance. But yeah the system currently burns resources on a level comparable to gold mining (https://medium.com/@zby/proof-of-work-8d8265def194) - but it is much less useful than gold (for value store).

Forgive my ignorance, but hasn't the historical value store of bitcoin eclipsed that of gold?

Yes and no. 1 Bitcoin is worth more than an ounce of gold ($2340 Bitcoin to $1215 ounce of gold). But the value of all outstanding Bitcoin vs all mined gold is much lower ($39 billion all Bitcoin to $8 Trillion all gold).

What are you really asking about? What is historical value store of bitcoin? The value stored in bitcoin is still orders of magnitude less than that stored in gold.

Sure the exchange rate of bitcoin has grown much - but it does not make it better value store now, rather the opposite.

It is too early to judge. A good store of value probably shouldn't increase in value 3-10x each year. If I were to put $1000USD in gold today, I could be fairly sure that in 30 years it will still be worth, at least, $500USD. If I were to do the same with bitcoin, I have no idea what would even happen in 5 years.

This is only layer1 (like IP in the networking world). Wait until layer2 comes (Lightning Network, TumbleBit), then we will reach the scalability levels we need for the entire planet to use the same blockchain.

But, but, but...... IP is on Layer 3 ;.;

OSI Model: http://www.webopedia.com/quick_ref/OSI_Layers.asp

Err, each layer on top of IP slows down traffic, not speeds it up. The extra overhead and retransmits result in less useful data being transferred with each packet.

Perhaps not the best example to use.

Depends on what you mean by speed doesn't it? Segmentation via additional layers certainly speeds up the network as a whole. I thought the ability to scale via adding additional layers is why SDN took off.

The keyword is wait.

Waiting. Since 2011.

I'm also surprised to learn this, quite disappointed too.

It's weird because people will argue about how bitcoin is safe because you can trust it, but it seems it's safer to pay for a centralized service and trust such a service because it's administered by very competent people with a high level of scrutiny.

If you look globally, that would mean bitcoin is much, much more expensive. It is just some kind of cool toy for people who hate the federal reserve.

The colossal compute power goes up when more fiat enter the system and traders speculate the price up. It is a security mechanism, not a throughput mechanism

> colossal combined computing power

It's colossal because of the sliding difficulty. The block period is a big portion of why the transaction rate is what it is.

That's right, the reward for mining a block doesn't change just because you put more effort into it, and the difficulty adjusts to keep the rate approximately the same over time. The only reason it takes so much power to mine is there are so many people competing for the same limited prize.