The Bitcoin big blocks farce is becoming a laugh.

Target at least 12.675 transactions per second. That is about 400.000.000.000 financial transactions per year, for starters to compete. We Nakamoto Satoshi use CPUs. After reading the enormo...

8 years ago, comments: 41, votes: 36, reward: $3.06

Target at least 12.675 transactions per second.

That is about 400.000.000.000 financial transactions per year, for starters to compete.

We Nakamoto Satoshi use CPUs.

After reading the enormo... 9 pages short Bitcoin whitepaper, again, after a couple of years, it looks more like it is just offering an idea. Like WE Nakamoto Satoshi wanted to state: "Here are the basics, go for it, innovate and develope blockchains." It was a proposal, a possible solution to challenges the tradional financial services has to deal with. And the rest it all myth, people calling themselves purists, explaining what they believe THEM Nakamoto Satoshi ment. That could write complete books for you, create hours of vodcasts/ podcasts and fill up the entire Steem blockchain. According to the whitepaper the current Bitcoin blockchain size would have to be around 43 GigaByte. That seems to be at a 140 GB at the time of writing.

Nowhere it states that Bitcoin, as proposed in the whitepaper, is supposed to replace the current financial system. Nor does it state that is has to stay pure, whatever that may mean. It is a proposal, as far as I can see. And Adam Back was part of the WE Nakamoto Satoshi group, I believe. Originally designing Proof Of Work {POW} for Hashcash in 1997, currently active in the Bitcoin Core developement. And I know there are investment groups involved with BTC, but that brought Bitcoin into orbit. Yes, the orginal Bitcoin, with SegWit, has satellites in orbit, to provide the blockchain even if no internet is available. Yet, nowhere it states that there shall only be 21 million BTC ever. Or any other do's and dont's, it is just not there in the whitepaper. All it will provide is a suggestion for an electronic payment system based on cryptographic proof. As a solution for the current financial institutions? Well, it looks like that in the whitepaper.

The numbers and figures matter.

First of all I know I am using the name of WE Nakamoto Satoshi with last name first. That is the way it is done in the far east, family name first. Anyway, back to the Bitcoin idea as it was written in the original whitepaper like: "...In this paper, we propose a solution..." Bitcoin, the software, is Free and Open Source. And the setup is indeed very basic. With the conclusion that with the build in consensus methode any rules and incentives could be enforced. Like SegWit for instance? Yes, because it is an Open system. Even bigger blocks? Yes, even bigger blocks. Well, at the same blockchain, I would state, but even that can be changed by consensus. But does it make sense to get those bigger blocks in? On average there are 3 transactions per second for Bitcoin, the original blockchain, with the BTC token. This is with a blocksize limit of 1 MB, altough it is not really one MegaByte. But that is a binary discussion for another time. SegWit could quadruple this to about 12 tx/p/s.

Wait a second...!!! Even with blocksizes of 8 or 16, or 20, it is just: 24, 48 or 60 transactions per second! With that 2 MB SegWit forking clone b2x only going for 6... Come on now, there is no such rubbish in the whitepaper. And as this is all about mathematics solving challenges for the financial industry, than even 60 transactions per second is still a laugh! It only makes the blockchain bigger, while not solving anything. Therefore Bitcoin can not ever be the peoples money. Nowhere in the whitepaper it says so. Now who did come up with that anyway. It can be used for large amounts of value, to securely move from one address to another, and that is already something. But it looks like it is a storage of value, in the first place. If it were to be used at all. But it would need innovation, horizontal wise, not vertical, meaning just increasing the blocksize. Even with an optimistic Moore's law, just forget it.

But, for sake of mathematical proof, it is possible to calculate how big the blocks would need to be to replace the whole financial system. At least 12.675 transactions per second are needed to make Bitcoin the alternative. Just bigger blocks, that would mean 12.675/3 (the current average tx/p/s) = 4225 times bigger blocks. Or about 4 GigaByte blocks per 10 minutes. Now hash that for a while... Per hour that is 6 x 4 GB = 24 GB blockchainsize growth. That is half a TeraByte harddrive per day in growth. Who could possibly make that happen? Not to mention the extreme fast internet connection that would be needed to move these enormous 4 GB blocks around the Peer To Peer {P2P} network. Hashing 4GB blocks, that would need some quite expensive ASIC hardware. Well, to those who think big blocks are needed, it is all there in the mathematics. And it is quite simple.

BTC for big value and extended by sidechains.

While I saw bgold appear in my Coinomi wallet, I noticed it was still stuck at the block where it forking cloned the orginal Bitcoin blockchain. Ah well, free Cryptos again, a chance for me to buy more BTC with it, restore the value there. Hopefully I was able to prove with arguments that can be checked by doing the math that the big blocks idea can not really be taken seriously. At some point I really would want it to be that simple, but it is not. Bitcoin {BTC}, the peoples money, forget it, not like it is right now. And it can only start to be an alternative to the current financial system if it can do 12.675 transactions per second, at least. Now going from 3 to 12.675 is quite a quantum leap. Needing 4 GB ten minute blocks. And the network with the hardware to cope with that. To me it is very improbable that it will be able to.

Vertical expansion, meaning bigger blocks, is out of the question. Things might open up though with horizontal expansion, in short meaning: sidechains. Where the mainchain does all the big number transactions at a steady 10 minute pace and sidechains take a different approach, that takes less space per transaction and pumps them out every 3 seconds, secured by DPOS. Bitshares already proved that it is much more suitable for doing those 12.675 transactions per second, just like Steem and EOS will blast even further because it was build to scale horizontally. At current affairs Bitshares does 3333 transactions per second. Still not passing 12.675, but it already could handle the debit- and creditcard transactions, just like Steem could. And way cheaper than VISA and Mastercard. Especially Steem, that charges not transaction costs at all. Still you need enough Steem Power {SP} to get the needed bandwidth.

Bitshares and Steem do beat the Bitcoin and Ethereum network combined on their own. And EOS will make them look pale, becoming the blockchain technology that can actually do 12.675 transactions per second and more, with no sweat. But that is future music. Just making it clear that the technology is already here, for a major part and it this article is written on one of them, known as the Steem blockchain. And with SegWit, Bitcoin {BTC}, the original one, could do sidechains, to do TIPS, extremely cheap, even cheaper than DOGE. While another sidechain could do high speed transactions for debit- and credit cards. This to me is the way to go for Bitcoin. And that means SegWit, connecting to other SegWit supporting cryptos. Innovation, as is common in the Free and Open Source realm. Horizontal developement, that is going to be more decentralized.

But hey, with Bitshares and Steem this is not new to you and me at all. Already at high speed of 1111 times faster than Bitcoin. Here we do blocks like 3-2-1-DONE...

Have a great one!



Resources:


From the Bitcoin whitepaper: "...In this paper, we propose a solution..."
bitcoin-tombark_cc0.jpg
Image CC0 licensed by Tom Bark as released at Pixabay.

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