Comment by Taek | Hacker News Reader

Comment by Taek | Hacker News Reader

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In some senses it's not a lot, in other senses it is a lot. Large systems (like the US banking system) only do a few intra-bank settlements per day, 100 tps is well beyond what you need for nation states to do business with eachother.

And then down at the consumer level it's nothing at all. During peak hours of the peak season (Christmas), Visa does something like 50,000 tps.

What makes Bitcoin interesting is the trustlessness of the transfers, and that tends to be more interesting higher up the stack (at the inter-bank and inter-national levels) than at the consumer level. But you can also combine this with layer two technologies like payment channels, ILP (interledger protocol), and the lightning network to get rapid transfers where most of the transactions never hit the chain.

The Sia network for example does something like 30 million transactions per day (that's about 300 tps), but only about 500 of those are actually on-chain at the settlement layer. The rest are ultra efficient off-chain payments that only require a packet or two to be sent between two machines (as opposed to broadcast).

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From the perspective of "everyone can own and use bitcoin", 100 tps is not quite enough. To support 1 billion people on Bitcoin even with the best layer 2 systems we have in theory, you need about 400 tps. So 7 billion would need like 3,000 tps.

> What makes Bitcoin interesting is the trustlessness of the transfers, and that tends to be more interesting higher up the stack (at the inter-bank and inter-national levels) than at the consumer level

What's interesting about that? Higher up the stack, trustlessness is not compelling at all - if I'm transacting with you on the scale of six-plus figures, I absolutely won't transact with someone I don't trust, and anonymity is a defect - I want to know who you are so I can sue you if our deal goes sideways.

The whole point of a trustless transaction is that you don't need to worry about who the counterparty is. You don't need the leverage to sue somebody because fraud is not possible. For digital transactions, the lack of trust can be two-way - two mutually distrusting people can confidently exchange Bitcoin for Ethereum in a transaction, because the software and math behind the blockchain prevents fraud from happening at all.

For meatspace the best you can do is one-way. If I'm buying a car with Bitcoin, I still need to trust the car manufacturer to deliver, but the car manufacturer does not need to trust me. They don't need to know who I am or how deep my credit line is, as soon as the bitcoin hits their wallets they have extreme confidence that the transaction won't be reverted. No bounced checks, no chargebacks, etc. It's a zero fraud system, and there's also no intermediate party (like PayPal or a bank) that can decide the transaction shouldn't happen. Whether or not the payment is accepted is at the sole discretion of the recipient.

> The whole point of a trustless transaction is that you don't need to worry about who the counterparty is. You don't need the leverage to sue somebody because fraud is not possible.

Payment reversal is not possible, fraud is still just as possible as it is with a traditional transaction. If I were selling a fake van Gogh, I'd prefer BTC for the transaction, but if I were selling a legit van Gogh I'm not worried about being sued over, a wire would suffice. I would think more than twice about transacting with anyone in large amounts who insists on transacting in BTC.

> Whether or not the payment is accepted is at the sole discretion of the recipient.

Forgot to mention - no? This isn't how the protocol works, you have zero discretion about whether to accept payment or not in BTC. If ISIL sends your wallet a million dollars then that's that, you've just received money from a terrorist group, the whole world knows it, and now the feds want to talk to you.

I'm sure the banks will love when they their lowly paid employee/contractor accidentally moves the money to wrong address or some bit flip happens... Or targeted attack...

With current system money is still somewhere and you can drag them to court as final step. With crypto, no luck it is just lost.

When you're talking international, there is little trust and little legal recourse. It is absolutely a problem that bitcoin can solve exceptionally well.

And yet, people do huge deals involving millions of crypto everyday.

This is a great way to put it. If you look at settlement times 3tps is great. If you’re actively transacting as a consumer then that won’t cut it.

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