An interview on the future and scale of bitcoin with the bitcoin community and core developers. Questions answered by developers have their name next to the answer.
Is there any way to get the transaction time down to below 10 seconds? (i.e. suitable for buying a coffee)
You are confusing transaction time and transaction confirmation time. Bitcoin transactions are basically instantaneous (just the time it takes to communicate the data) but it takes time for the transaction to become irreversible. The same is true for other payment mechanisms, e.g. credit card transactions can often be reversed for months, checks take weeks to clear.
Does the consumer and the retailer care about the technical nuance?
If you still think that’s a technical nuance, see the table below:
| Credit card | Bitcoin | |
| Transaction time | 5-10 sec | 1-2 sec |
| Confirmation time | 3-12 months | 10 minutes |
Is centralization of the network inevitable?
No, because of peer-to-peer (P2P) mining (bitcoin creation).
What are the economic costs to creating bitcoin?
Creating anything of value always has an economic costs. The economic costs to creating bitcoin are currently very low. As the mining difficulty rises, that value is likely to go up.
| Yearly cost (in billion $) | |
| Gold mining | 105 |
| Gold recycling | 40 |
| Paper curreny & minting | 28 |
| Banking system | 1870 |
| Bitcoin mining | 0.78 |
What is the environmental cost compared to others?
Value creation for currency or digital assets of all current forms has an impact on the energy used and tonnes of CO2 produced. Bitcoin is no exception to that but the energy usage is much lower than the others.
| Energy User (in millions GJ) | Tonnes CO2 Produced (millions) | Emission Trend | |
| Gold mining | 475 | 54 | Increasing |
| Gold recycling | 25 | 4 | Decreasing |
| Paper curreny & minting | 39.6 | 6.7 | Increasing |
| Banking system | 2340 | 390 | Increasing |
| Bitcoin mining | 3.6 | 0.6 | Decreasing |
Assuming silicon ASICs have now approached their limit, how much energy (in Watts) would be required if there were 10bn people on the planet and there was an average of 10 transactions per person, per day?
The energy requirement for processing a transaction are very small and are completely unrelated to mining ASICs. ASICs find blocks where transactions are added. Mining ASICS do not process transactions. They provably expend energy to make reversal of the history of transactions infeasible and for a given security level consume the same amount of energy regardless of the transaction level.
ASIC bitcoin miner
What do you think about bitcoin payment facilitators?
“The user experience is significantly more secure than today. Presumably the future supports many payment facilitators, including m-of-n oracles.” (Jeff Garzik, Bitcoin core developer)
What is the deal with OpenSSL 1.0.0? (a component of Bitcoin core for cryptographic functions)
OpenSSL 1.0.0p / 1.0.1k was recently released and is being pushed out by various operating system maintainers. Its incompatibility is due to the OpenSSL update changing the behavior of ECDSA validation to reject any signature which is
not encoded in a very rigid manner. Openssl1.0.1j is unaffected.
“I personally am now of the opinion that migrating Bitcoin Core to libsecp256k1 in the near future is a good idea on the grounds that it provides us with a well-written, and well-understood library designed with consensus in mind that’ll
probably give us fewer consensus problems than our existing OpenSSL dependency.” (Peter Todd, Bitcoin core developer)
Is there any bitcoin full node implementation 100% compatible with the core client?
A full node downloads every block and transaction and check them against Bitcoin’s core consensus rules.
“I would bet any amount of money that none of the complete reimplementation that I am aware of are consensus consistent. There has at least not been a new version so far which introduce an incompatibility, that we know of (frequently repeated _incorrect_ claims otherwise aside.). It wouldn’t be the most shocking thing; but enormous effort goes into preventing it.“(Gregory Maxwell, Bitcoin core developer)
Where do you think is space for improvement in the Bitcoin space?
Bitcoin has only been around for a few years compared to other financial systems. Do you think a ‘killer app’ is currently lacking?
“I think one of the biggest issues facing Bitcoin right now is not the lack of a ‘killer app.’ It is lack of insurance options. Early adopters would like to believe that the majority of users will hold their own Bitcoin, but I believe that is not a realistic option when life-changing quantities of Bitcoin are involved. We should not trust Grandma to secure her own retirement savings via complicated computer maneuvers. More to the point, she should not trust herself or anyone else (sic!) to hold it unless there is a strong protection against loss events. Right now the solution is for Grandma to avoid keeping her money in Bitcoin. Bitcoin needs a strong backbone of insured storage options so that Grandma can confidently participate in this new technology.” (Alan Reiner, Armory Bitcoin Wallet)
Sources:
- https://bitcointalk.org/index.php?topic=920007.0
- http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg06685.html
- http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg06770.html
- http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/
- https://bitcointalk.org/index.php?topic=923409.0
- http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg06746.html
All of the information on this blog is non-political and related to technology, economics and science.