I'm used to using the bank, the apps they have and de debit cards they provide (and now also Apple Pay) to send and receive money instantly every day, and there are on average ~10 instant transfers daily to both other private accounts or businesses to pay for things.
Perhaps this is an exotic or luxury position, or there is some unseen cost to this, but I'm not aware of that at this point.
And $20 for a wire transfer pales in comparison to the fees people charge for converting bitcoin to cash https://localbitcoins.com/
Yes transferring large sums of money internationally is useful, but it is a niche, and bitcoin doesn't even do it that cheaply.
The closest thing to cancelling is making a new transaction which makes the first one invalid (e.g. by emptying the source address) and hoping the new one gets added to the block first.
Because transactions can have fees attached to them, you could presumably make it more appealing to mine the second transaction than the first, but I don't know if this is something people do, and as far as I understand it most miners prefer the first transactions they see.
there is a mechanism called replace by fee, so it becomes a question of incentives
The payment processors can scan the mempool for transactions that would invalidate the initial transaction, so then it would be a question of lead time. Great for digital services etc, not so great for in life purchases.
So if you absolutely 100% need confirmation, then yeah 10 minutes is what you need to wait, but that again is a question of probability comparative to credit card chargebacks/fees etc.
Even the next block inclusion isn't a guarantee... it just means that you have at current prices approximately 200k insurance. With enough resources and luck, someone could +EV roll back your transaction, but the cost scales exponentially.
The current viable solution for small inperson transactions is pretty much replicating the banking system. Current versions of abstracting the banking system into something decentralized are clunky/buggy to say the least.
Of course, they've been saying all of that is not so far away for a couple years now, but we will see. I'm tentatively optimistic.
And PoS has been "not so far away for a couple years now" because they keep finding problems with it.
This argument is tired. There is no rule that dictates that the same amount of work or stake is equal to the same amount of security across different coins. I trust ETH transactions just as much as I trust BTC, and there are others that I trust equally also.
And now that BTC costs more in fees, their solution is to move to less secure off-chain layers. I'll take on chain ETH, monero, BCH, and a few others any day over a low security off-chain solution like what BTC offers. I may hold BTC, but I'm not buying it, and I'm not using it.
https://github.com/ethereum/wiki/wiki/White-Paper#modified-g...
Ethereum's PoS is currently implemented in seven independent and fully interoperating clients. Multi-client testnet should roll out soon, and production is expected first quarter 2020.
9943589 (gas limit) / 21000 (minimum price of a ethereum transaction) / 14.57 (average block time) = 32.5 transactions per second.
Everyone that has replied to you is just providing more info than I did.
And your response is "ethereum's transactions per second are comically low right now"?
Making confirmations faster usually just tends to make them weaker. The security of each confirmation is based on the work down (or cpu hours). By making confirmations take half the amount of time, this only makes confirmations half as secure, because the amount of CPU hours spent is the same. You can also make confirmations faster by shrinking the amount of work done per block. This means that while confirmations are faster, it will also take longer for your transaction to get into a block in the first place.
Take a look at this and notice how coinbase requires over 10x more confirmations for ethereum than bitcoin.
https://support.coinbase.com/customer/en/portal/articles/593...
In Bitcoin, the chosen block is the one with the most hashpower in the linear chain behind it. Abandoned forks contribute nothing to that.
With GHOST, the chosen block is the one with the most hashpower descended from it, in all forks. This way all the forks contribute to a block's security.
With a linear chain, propagation time is an issue. If blocks are too short it's more likely that miners will find more than one candidate block, causing the work on abandoned blocks to be wasted. With GHOST, no work is wasted.
The original GHOST paper, which proposed the algorithm as a modification to Bitcoin, has some math to calculate, for a given propagation time, the block time that would produce equivalent security to a linear chain. It was significantly shorter.
Orphaned blocks are very rare in Bitcoin.
https://www.blockchain.com/btc/orphaned-blocks?offset=0
Even if you somehow saved all this wasted hash power, you would only maybe increase hash power by less than 1%!!!
Read my comment here for more details.
And that's how Ethereum gets away with 15-second blocks.
ETH ave. block time: 10s. Time to get to Coinbase confirmations (35): ~350s
BTC ave. block time: 10m. Time to get to Coinbase confirmations (3): ~1800s
So I can make 5-6 transactions that coinbase thinks is "secure enough" on Ethereum in the time it would take me to make one transaction with Bitcoin.
Add to that the fact that the throughput of the network is higher, and ETH is actually about 17x faster than BTC, and that's totally ignoring the on-chain scaling that ETH is much closer to than BTC.
Also I don't currently hold any crypto, so you can stop pretending that everyone who is more informed than you is actually just biased. I cashed (of my mostly BTC holdings) in 2017.
I show you this to prove to you that 1 eth confirmation isn't equal to 1 bitcoin confirmation. If it was anywhere equal in security, there would not be a >10X difference. And also multiplying confirmations by average block time and seeing that it is lower than bitcoin doesn't mean coinbase thinks it is more secure. It can also mean that the value of the average eth transaction on Coinbase is lower.
A 51% attacker will be able to churn out 100x the number of confirmations if confirmations were made 100x smaller. It doesn't matter how fast you make them or how many tricks like GHOST you add.
These are some helpful websites/articles on understanding confirmation security.
https://medium.com/@nic__carter/its-the-settlement-assurance...
Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment.
The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend.
And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.
What if the trust chain is 20 users long?
Who's going to spend the resources to find this chain? And has it been tested to scale, or is it just like Bitcoin in the early days where people said it would scale and never tested it?
People are going to gravitate to putting all their money into a large exchange like Coinbase to avoid these problems.
Every hop only knows the previous and next one, nothing else, not even the length of the chain.
Your computer/phone finds the route and if you’re ok with privacy trade off you can outsource this task to your hub for a fee in single satoshis.
People are going to gravitate towards convenient solutions making all sorts of security, privacy and financial risks, that’s why it’s important to have multiple alternatives with different trade offs.
Large centralized lightning nodes will form and they will act like banks and be able to stop payments to arbitrary entities like Paypal, and even make the payment get stuck for days or weeks depending on how long the timeout is.
From the paper itself.
"the network will look a lot like the correspondent banking network"
You need to find a path because path needs to have channel capacity required for your transaction, that’s why you can’t pick random nodes, not because you want to trust them.
Stealing somebody’s funds from channel is just as hard as stealing bitcoin - you need to crack encryption or you need a private key.
You have no idea how lightning works, please do some reading before making incorrect claims.
Each node can still steal money from the node next to them by turning hostile such as not passing the secret and closing out their channel and getting time locks to expire, which is many magnitudes easier than cracking encryption or stealing a private key. The network has already been DDoSed. Now imagine the incentive to do it when it handles millions of dollars.
Do you not see the contradiction in your statement? You can’t spend your htlc without revealing the secret to the other party. If your stealing procedure involves ddosing random unknown party from being able to access any internet whatsoever to lock them out of minuscule amounts lightning payments are used for - good luck with that.
You only need to ddos the lightning network so it won't record their HTLC when it expires. There is no need to ddos them, though I would argue it would be equally easy to do. And so while the other party will eventually see the secret on the block chain, they can't get their HTLC unlocked on the network before it expires.
And the lightning network has already been easily ddosed! We will see it happen more often if the lightning network ever gets bigger. This isn't some hypothetical situation.
this is not even a thing. lightning network is collection of independent nodes, there is no registry of payments and channels, every node keeps their own record.
> And so while the other party will eventually see the secret on the block chain, they can't get their HTLC unlocked on the network before it expires.
why? if a party is stuck in a payment and especially if they notice they are getting attacked - they will take steps to mitigate. the moment commitment with secret is broadcast and in the worst case - the moment it gets confirmed on chain the other party will know the secret and can unlock their htlc. the risk is essentially the same as with deep reorgs - very low because those are very rare events. and the hassle is most definitely not worth the value of a stolen micropayment, which is the primary purpose of LN.
If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
Edit: Here is an example of a lightning network enabled wallet that works as a lightning node itself. No payment processor needed: https://lightning-wallet.com
I think there is a fair amount of logistics to work out here. I may be wrong, and that would be great, but at the moment I'm not quite seeing how this is going to work in practice.
Because you're both connected to a common lightning node, at least indirectly. There are several public lightning nodes that accept connections and they are joined together. Connect to one and you have access to their network.
> Similarly, if I want some random person to send me money, how do I convince them to run a lightning node and to let me connect to it?
Same as above. The lightning network is, of course, only going to work with other nodes who are also connected, but there is an incentive to join, since when you do, you can transact with all of its peers.
Jesus, this is precisely what the lightning network is for! Please, do a little research before dismissing it wholesale. The node you are connected to cannot refuse to pay, because you have a signed, but unpublished transaction of what he owes you (if he owes you). If he suddenly stops contact and says fuck you, you can just publish that transaction.
Seriously, this has always been the idea from the get go, so don't go blaming that you haven't read the latest update on how lightning works. If you don't understand something, don't go around spouting that it must not work.
I'll be deeply surprised if lightning is ever used at the retail level by more than a couple shady internet casinos and John Galt themed vape stores.
Anybody here know the currency Nano? The ORV (Open Representative Voting) consensus mechanism makes it possible to find decentralized consensus in ms without the power-intensive PoW.
For a first impression, you can perform a real on-chain transaction here: https://nanospeed.live/
This technical problem has not been solved and the "lightning network" just turns exchanges like Coinbase into a bank or Paypal that can be shut down or run away with your money, which basically ruins the entire point of using Bitcoin.
Until Bitcoin can scale without "lightning network", I don't see people using it outside illegal activities. And from what I can see, the core concept of Bitcoin (and other cryptocoins) is fundamentally at odds with fast transactions. If you make confirmations 2x faster, then it just becomes 2x easier to fake a transaction. So paranoid merchants will just require double the confirmations.