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Comment by repomies691 | Hacker News Reader

For online payments instant payments are actually not that important requirements. The process needs to happen just fluently from customers perspective. If the merchant is dispatching physical items, he can just wait for the transaction to confirm and dispatch the items after that. The customer won't see much difference because the biggest issue is the shipping time.

For online payments bitcoin works quite well. Still credit cards are often better for the consumer, because of the consumer protection (chargebacks).

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> For online payments bitcoin works quite well

Bitcoin payments could, theoretically, work well - but that's not currently the case given the prohibitive transaction fees.

Indeed, didn't think about it, but fees are a problem as well. Also, if bitcoin had to manage the throughput of VISA (or even a fraction of it, at this point), capacity issues would probably worsen dramatically.

It's probably best to stop hoping it will be a currency altogether (unless some radical changes occur). Best shot would be to see it as saving/investment accounts, with smart tricks like prepaid visa cards as a mean to tap into it (I want to buy a car, I charge my prepaid card and pay with it at car dealer, fast transfer compared to a wire transfer, no "weekly withdraw limit" issue and still as convenient as a debit card).

Lightning Network exceeds the throughput of VISA. The scaling problem is being addressed -- just not in the naive "let's throw away decentralization and increase the blocksize" way.

I've heard mentions about the lightning network quite a lot in previous years, but never got what the implementation was. I get it it's "offchain transactions", but how does it relate to bitcoin, exactly? Is it "sidechains", like lisk (each third party managing its own blockchain), or is it simply "outsourcing" money and transactions and waiting for a general report from the trusted party to engrave it in the blockchain?

It seems to work by setting up channels of funds between entities. To create a channel and fund it requires a bitcoin transaction. Payments from the fund to the recipient can then proceed off-chain to a maximum of the fund amount, then another on-chain transaction settles it.

This sounds somewhat cumbersome, but AFAICT the gains apparently come from routing between channels, so if A wants to pay B, and channels exist from A->C and C->B then payments can route that way, without the need for more on-chain transactions.

To me this sounds really quite complex, and also like it's going to involve intermediary 'hubs' which will process off-chain transactions and... well it sounds like banks and centralisation again, something the BTC crowd apparently hate.

I see, thanks for the explanation. As is, it kind of seems to defeat the idea of the blockchain, dropping it to do a meaningful amount of transactions. But it's well over my head, I'll wait and see how it plays out.

> For online payments instant payments are actually not that important requirements.

When the exchange rate fluctuates as much as it does, instant payment is an important requirement.

Suppose BTC is worth $15,000 today. I want to buy a widget for $150.

I want to see 0.01 BTC deducted from my balance. The merchant wants to get paid $150.

If the transaction happens instantly, everyone is happy.

If the transaction does not happen instantly...

Let's say I transact 0.01 BTC to the payment processor. It will clear tomorrow. The merchant will get paid when it clears. Tomorrow... The payment processor has 0.01 BTC in their possession.

... Except that by then, BTC went down to $13,000. The merchant still expects to be paid $150. The payment processor has 0.01 BTC on their books, which is worth $130... and a debt of $150.

That's the problem with using BTC as a currency. You either need to pay through the nose for fast confirmation, or you expose yourself to volatility risk.

This is, incidentally, why Steam has stopped accepting Bitcoin. You can't use it as a currency. [1]

[1] http://steamcommunity.com/games/593110/announcements/detail/...

For online payments bitcoin works quite well

Many people who tried to buy stuff on Steam with bitcoin seem to disagree. In fact Steam recently stopped accepting bitcoin since they apparently couldn't make it work.

I assume you mean recently. I used bitcoin on Steam a few years ago and it worked fine.

It's quite recent and I presume because of fees, delays and volatility.

Dell stopped accepting it too. Ironically the rocketing speculative value is killing the prospects for longer term use and stability.

As they should -- Lightning Network is the correct technological solution for small frequent payments such as game purchases on Steam.

Which is why I mentioned the distinction :)

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