To be fair, those credit card processors are not running as fast as they could in theory either.

You can find another 3 orders of magnitude in certain financial exchanges. In some cases, those millions of transactions per second are being managed on a single thread.

LMAX Disruptor is living proof of that.

https://martinfowler.com/articles/lmax.html

This is precisely what I was referring to. I sometimes wonder if the dev community has blinders on regarding how much elegance lives with this technique.

Why do you suspect blinders? Do you know of many cases where the disruptor pattern should be used by isn't?

> Do you know of many cases where the disruptor pattern should be used by isn't?

The disruptor pattern is the way to solve any problem where you need to process events/transactions/commands/et. al. in a serialized fashion [0] as quickly as possible.

This problem space involves almost all business software, databases, simulations, etc.

I do not know of any other technique that would allow for faster serial processing of data, especially when controlling for practical applicability.

When I refer to blinders, I think I am mostly pointing to the ignorance regarding what is actually possible with the hardware (if you get the software out of its way). Any other technique involving cache-friendly structures, ring buffers, etc. is in the same league as far as I am concerned.

[0] To be as clear as possible, "serialized" in this context means that the consequences of event #1 may alter how event #2 would be processed, and so on.

Well, certainly not on Robin Hood's servers.

Robin Hood isn't a credit card processor -- they're stock traders.

Oh yeah, the exchanges are great on throughput.

The two-(business!-)day lag for finality really hurts their latency figures though.

Why do people always forget that credit cards are powered not only by electricity, but with an absurd amount of bureaucracy as well. Has it ever crossed your mind how many man power and work hours goes into management of traditional banking systems? And how much energy that consumes? Across every country and every town.

In PoW blockchains, on the other hand, it's just electricity.

You don't have to imagine, because VISA is a public company.

According to their 2021 financial report (year end Sept 30, 2020), VISA logged $8.3B in operating expenses. The majority of this is "personnel" at $4.2B (covering the salaries, benefits, etc. for their staff), $0.7B is "network and processing" (covering the expenses to operating their payments network), and the remainder is stuff like general administrative, marketing, professional fees and legal fees. But for comparison I'll use the $8.3B in total operating expenses.

Over the same period VISA processed 164.7B transactions, so if you divide you get that on average it costs VISA $0.05 in total expenses to process a transaction, of which $0.004 is for actually operating the payments network.

By comparison, it currently costs the Bitcoin network $176.39 to process a transaction (transaction fees plus block rewards per day / total transactions per day), over 3500x the expenses of VISA.

Maybe you'll say that's still not the same thing, because "total transaction fees" represents _revenue_ to miners, not expenses. Fine. VISA's revenue over the same period was $24.1B, which works out to revenue-per-transaction of $0.14. That's still over 1200x as much as VISA.

https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc... https://ycharts.com/indicators/bitcoin_average_cost_per_tran...

> it currently costs the Bitcoin network $176.39 to process a transaction

Depends. With the Bitcoin lightning network live now it's only a tiny fraction of that price. I use FLUX for my crypto transactions: 0,00002951 USD per transaction, and that is PoW! LTC (Litecoin) is another great coin with super cheap transactions. There are so many :)

I often see on HN the mostly negative comments and attitude against this new technology, why? Do you really think the current system is better? With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it..

Soon your government will present you a new digital wallet based on the same tech. Only with one difference compared to the original crypto currencies: they will have full control over your wallet. And your wallet will have smart contracts, so they can decide where you are allowed to spend you money on and on what conditions. Let that sink in for a while before you start criticizing the real decentralized crypto currencies.

Crypto currencies are a dream come true and everyone should embrace it.

> With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it..

I'll take steady, minor inflation over crypto's love affair with hyper-deflation for Bitcoin, hyperinflation for most altcoins after their bubbles burst, and general instability.

And you want to talk about corruption? Crypto has a new scandal, scam, or rugpull nearly every month, and that's not even limited to altcoins. Then there's the whole thing with NFTs, which I repeatedly seen linked to the money laundering that used to go on in the art world[1]. Bad actors are attracted to crypto precisely because it's decentralized and unregulated. It's a dream come true for them, certainly.

[1] https://techcrunch.com/2021/03/24/nft_users/

According to panama papers, professional money launderers mostly use normal bank accounts and offshores just fine.

you want to talk about corruption? look at pelosi's investment portfolio. Minor inflation? Look at the cost of food and housing (which are left out of the CPI to make things look less bad)

>Minor inflation? Look at the cost of food and housing

Housing costs have roughly doubled in the past decade (not accounting for inflation; if you account for that, it's only by 50%). Bitcoin has, on multiple occasions, changed by that same factor of two in the span of a month. Anyone who thinks cryptocurrencies represent anything other than a volatile investment vehicle at the present moment is not living in reality.

source? I'll tell you rite now that housing prices increased 13.5% over the last year https://www.redfin.com/us-housing-market this corresponds with 4 trillion fiat dollars being printed in the same time period https://libertyconservativenews.com/more-than-35-of-us-dolla... So say what you just said to the minimum wage worker who's food and housing prices are going up

> Soon your government will present you a new digital wallet based on the same tech. Only with one difference compared to the original crypto currencies: they will have full control over your wallet. And your wallet will have smart contracts, so they can decide where you are allowed to spend you money on and on what conditions. Let that sink in for a while before you start criticizing the real decentralized crypto currencies.

This attitude is what really irks me about cryptobros. "You can't criticize crypto because [insert dystopian sci-fi novel scenario] might happen"

Cryptocurrencies, in general, are not in fixed supply. Some coins do not have fixed supplies, and even if you choose one that does, it can be forked, or new coins can be issued. I don’t see any reason why a government couldn’t implement QE with crypto.

The mechanics would work differently, but the value of an IOU issued by a global superpower has intrinsic worth regardless of how it is assigned. Governments are not powerful because of their currencies; their currencies have value because of their power. If the US Treasury forked bitcoin tomorrow, it would certainly have positive value.

> Cryptocurrencies, in general, are not in fixed supply.

Cryptocurrencies, in general, are not all valued the same. And why stop at crypto—surely the same reasoning would apply to USD supply inflation, if you're just going to lump all (crypto-)currencies together as a single good?

Sure, you can introduce new types of coins or massively inflate the ones which don't have a fixed supply, but that doesn't impact (for example) the limited supply of bitcoins. The overall effect is mainly just to devalue the inflated coins relative to other currencies.

I 100% agree with you. But as Satoshi famously said, you either get it or you don't; I don't have time to convince you. All these ESG shills hating on Bitcoin because they ignored it till now aren't going to accept it. Might as well leave them in the dust and focus attention on building great tools to use on Bitcoin

To also be fair, most of VISA is overhead and marketing.

Only a tiny fraction of the costs have anything to do with the actual network.

Also, the most important thing, is power and incumbency.

VISA made sense 50 years ago - it was a financial innovation.

But now, they refuse to adapt their pricing, and the cost is just not worth it.

The Banks are raking it in in processing charges that are not commensurate to the value created.

This is actually the 'true hope' of Crypto, that we can get around ugly costs.

Do you know when smartphones first started, Verizon and AT&T were charging 5 cents each to visit those stupid little WAP pages with a bit of text and a few combo boxes?

Imagine if the internet was ruled by Verizon and AT&T and their 5-cents-per-visit crap pages.

I loathe BTC and most of the Crypto world because it's all MLM, but, as a currency there's definitely material opportunity there.

Processing charges? Compared to what? The processing charges of BTC or ETH?

Every single digital transaction visa VISA/MC etc. is taking 2-3% off the top.

That's ridiculous.

Those fee structures were designed for an alternate universe.

It made sense in 1970 - not on the internet today.

If we invented an 'interbank exchange' scheme today, which would probably include some decent form of identity management, it could operate at less than 1/10th of that fee.

The entire industry, which is controlled by the banks, is pure incumbency.

Not only is there value lost to that tax, but that network holds transactions back to some extent.

The real economic value of crypto is there, not in the current form of deflationary shenanigans.

For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by itself.

Bitcoin dwarfs the electricity usage from the US Mint, the literal money printers.

The US Bureau of Engraving and Printing has a $1 Billion budget for manufacturing.

https://home.treasury.gov/system/files/266/24.-BEP-FY-2022-B...

How far down the rabbit hole do you want to go? No matter how you look at it, Bitcoin is horribly inefficient. Compared to the US Dollar (the literal physical dollar), credit cards, banks, or other institutions.

--------

Mind you: Coinbase is _NOT_ part of the bitcoin mining network, despite being a "bank" or "exchange" that processes a huge number of bitcoin transactions. Even when we ignore the electricity costs of Coinbase (and other servers), the BTC electricity usage is colossal.

There's US MINT, then there is Canadian MINT, then there is China MINT, ... Bitcoin is fully autonomous system serving all layers (from settlement to Lightning payments) without thousands of expensive shiny buildings and state armies to protect it.

We're comparing transactions per second, are we not?

The US Dollar has far more transactions per second than the measly 7 transactions per second.

on which layer? Bitcoin base layer has 7 TPS for which is able to guarantee its security properties. if you want to have fair comparison than maybe interbank settlements is close to what we are talking about. once we are talking about VISAs and Venmos we should pull Lightning network into discussion for which base layer provides security anchor.

Any and all layers.

Bitcoin is miniscule, far smaller than the US Dollar. Do whatever you want to make BTC as big as possible. Artificially inflate the value and scope of BTC as much as you wish.

It won't be anything close to the US Dollar. And yet, the electricity usage of BTC is absolutely colossal.

More the better. Makes me sleep good at night knowing my money are secured by the wall of energy. Also, mining is competitive business and more miners every day going off-grid plugging to energy source that would have been otherwise strained (solar, wind, hydro, flared gas, ..).

And you decided again to ignore my words about man hours. My point was NOT about electricity. I was saying how much money and energy all traditional finance related jobs consume.

What about the man hours behind Coinbase? ProShares Bitcoin ETF? Etc. etc.

As if BTC were absolutely free to use and maintain? Sure, its "just a private key", except no one I know can use GPG or PGP on their emails, so its a bit harder than that ya think?

The typical non-techie out there relies upon a techie to handle the details of private key, transactions and so forth. A BTC transaction will be handled by coinbase (or some other crypto-exchange + transaction processor) rather than by the users directly.

> What about the man hours behind Coinbase? ProShares Bitcoin ETF? Etc. etc.

"Etc. etc." being how much? There aren't that many crypto exchanges. They don't have personnel in any way comparable in size to that of traditional finances. Also they're not part of bitcoin. It can operate without them. Centralized exchanges are actually part of traditional finance.

Two last paragraphs in your comment are completely out of context, but how is owning a private key for a wallet any different than owning and managing a password for your account on an exchange?

Your local bank branch running a few ATMs is not exactly a mining farm and provides other services other than "processing transactions". Even the central banks are just office buildings with regular data centers.

You missed the part where I said that this is not about electricity but man hours. Those office buildings are filled with people whose whole lives are to be spent managing these traditional finance institutions. That wastes much more energy, money, and human life.

Bitcoin doesn’t operate without the traditional finance system, either. Exchanges interface with it all the time.

It does operate without those systems just fine. But even if we include those exchanges, how much energy do they spend, and how many people work in that sphere? I don't know the number, but there are not more than a hundred big crypto exchanges. And they don't have hundreds of people working inside them. That is incomparable to the traditional finance system.

Bitcoin without any way to exchange into traditional currency would be a very different scenario than what currently exists. It makes no sense to talk about it since we’re discussing energy use here and now.

So if we need to consider the resources used by the whole banking system when thinking about VISA etc, we must do so for Bitcoin as well. Otherwise we’re just playing with blue-sky hypotheticals.

I’m confused. How would adding more stuff change the picture that dramatically? No matter how you slice it Bitcoin has extremely prohibitive transaction costs

I wouldn't describe the fees as "extremely prohibitive"...

https://ycharts.com/indicators/bitcoin_average_transaction_f...

"Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD.

Bitcoin Average Transaction Fee is at a current level of 1.560, down from 1.798 yesterday and down from 15.45 one year ago. This is a change of -13.20% from yesterday and -89.90% from one year ago."

Obviously it depends on the use case but for most things it is. Not only is it random but 1.5 dollars is a lot! I think PayPal is like .3 + 2.3 percent? Basically anything under $5 would be almost impossible to sell. Not only that but having a chance for the fees to go incredibly high ($15) it’s just not worth it.

The factors I came up with, 1200x and 3500x, leave plenty of margin for including more actors if that's the comparison you want to make, while still ending up with more or less the same result.

If the other credit cards were several orders of magnitude more expensive to process transactions they wouldn't be in business.

I think the penultimate sentence in your comment should start, “Bitcoin miners’ revenue over the same period…”

No, that sentence looks correct: if you treat bitcoin transaction fees as revenue, then you compare to Visa's revenue, which was $24.1B.

That's right, no wasted man hours or pointless nonsense in the blockchain world. Side note, got a hot tip on an ICO I can invest in?

i like visa being able to reverse fraudulent transactions

It is not just electricity. For companies and individuals involved with Bitcoin there is still marketing, flying and meetings around the globe, managing infrastructure etc. And Bitcoin adoption is still relatively small - especially for everyday use. I can imagine that centralized bureaucracy of VISA per volume of that market will always be smaller then Bitcoin.

anything based on PoW has to fail long term. PoW benefits from economy of scale, which leads to centralization, which defeats the purpose of the thing being PoW'd

This assumes the use-case is small credit-card like transactions.

The real (unspoken) use-case of bitcoin is large-scale international money laundering.

careful there cowboy -- the law of your land is not the law of your neighbor's land. James Bond provides one view of the world, and the stars and stripes seem to have some blinding power in Hollywood, but in reality, tax and tax enforcement is not perfectly molded or enforced. The Tax Sheriff and his men drive very new models of auto, ever noticed that?

I don't understand the point of this comment.

I'm not making any judgements in my comment above, I'm merely stating my perception.

I think they were trying to argue in favor of tax evasion, which is both illegal and a different topic than money laundering. Sure is interesting the kind of defensive comments you get on any story negative about crypto.

Greed of capital gain. Everyone I know is talking about crypto in terms of USD price. Not a single person I know (including some miners) able to explain Ethereum usage other than USD pricing per token. Basically the whole crypto is running on ponzi fuel. Once that settle, we will see big corporations and governments putting in supercomputers to circumvent pheasants hash processsing. Look at China able to create 5G network in Shanghai that makes NY look like rural places and their big firewall that are able to hold out majority of western online contents. We basically help governments to establish blockchain uses by being the guinea pigs to fund the gpu cards development.

> lagging 4 orders of magnitude behind the capability of credit cards

How can you transfer large amounts of money between countries with minimal fees using credit cards?

The amount of people who need to transfer anything more than 10k (let alone millions) per year is so tiny it's a laughable argument.

I said large amounts, but small amounts might even be a bigger problem...

About 1% by card with fraud prevention options forced. Spendable money directly into my account.

The sender doesn't have to buy Bitcoin first. They don't have to wire it to me. I don't have to turn it back into money (at God knows what rate). Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end.

And 1% is expensive. My bank charges a flat £25 for sending internationally. Many other banks and companies charge considerably less.

> Coinbase looks like it would take 1.49%+$2.99 at each end for a large end-to-end.

You should look into other cryptos.... bitcoin is not the one with least fees...

Rather than me "doing my own research", you could provide some indicative figures, like I did. It speeds up discussion.

But whoever you pick, if you have to buy it with a card, chances are you're going to pay that card processing fee and a withdrawal fee at the other end. However you look at it, it's three transactions instead of one.

I'm not sure which one has the least fees (which is why I didn't go into specifics).. and it probably changes often... (but Bitcoin isn't one of them).

Ideally, an app would pick the best one at the time of transaction?

Edit: and just today I had issues receiving a wire transfer from Canada, again, and it was less then $1k (because of my home address)

It's maybe not apples-to-apples, but it's an instructive comparison like comparing the energy consumption of a day of Zoom calls to a business flight.

But you totally forget that for credit cards to work, we need all the merchant terminals and ATMS where people make cash advances. How much electricity does THAT use? I guarantee you it's not trivial.

So long as centrally managed currencies are designed to rob the public through inflation, nothing else about Bitcoin's weaknesses really matters to its users.

Pointing out how it's inefficient means nothing if the alternative means that you're robbed blind.

What are the cons of a deflationary currency?

For a cryptocurrency, the cons of diminishing block subsidies (as required by a capped supply) are

1) concentration of wealth on early adopters

2) no long term security unless you have a constant backlog of high-fee paying transactions

I think an uncapped, disinflationary emission is to be preferred [1].

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

I suppose the textbook Keynesian argument would be that everybody would have an incentive to save as much of their money for as long as possible because it goes up in value over time, leading to incentivizing less short-term economic consumption, which would be harmful.

Is it harmful though? Whether this is a good or bad thing might come down to how much importance you place on random consumption vs capital investment as the real engine of society. The Keynesian viewpoint is more favorable towards the importance of random consumption, the Austrian mentality would put a lot more weight on the value of saving for future investment and building.

"how much importance you place on random consumption vs capital investment as the real engine of society"

Deflationary currency competes with investment, not with consumption. For example investing in infrastructure, is a safe, low return investment. in single percentage digits. If the deflation of the currency is faster than that rate of return, then nobody will ever invest in infrastructure. People will never install solar panels on their house, etc.

If people don't spend on goods and services, where do wages come from?

As a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment. You'll be very-well incentivized to work in a deflationary environment, you just might think a lot harder about buying something like a movie ticket if that money might be worth more in the future.

Right, so discretionary spending goes way down. I may be incentivized to work, but who can afford to employ me?

"Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment."

EDIT: to add onto that answer, I'd say that just as there are still savers in an inflationary environment, there will still be consumers in a deflationary environment. Incentives matter, but are not absolute drivers.

I'm not convinced this logic holds up. It is counter intuitive with economic theory and history

> "It is counter intuitive with economic theory"

If you said "It is counter intuitive with Keynesian economic theory", I'd see your point a bit more. But different schools of thought like the Austrians view the importance of short-term consumption differently than what is a sort of textbook model of the world.

sharecropping - feudalism

You mean https://youtu.be/ZtYU87QNjPw ?

Ok but Bitcoin is not currency.