The current bitcoin blocksize is limited to 1mb. This means, on average, only 1mb worth of transactions can be written to the ledger. With that 1mb we save thousands of transactions. When you pay a transaction fee you are essentially bidding on your data being written to the ledger every 10 minutes. You are correct that the more people bidding, the higher we can expect the price to be.
There is however no technical reason we should limit the blocksize to 1mb. We could have 10mb or even 100mb blocksizes easily. Realistically a 100mb block would be large enough to handle all transaction data our species currently generates.
The transaction fee is a considerable portion of miner's revenue. Miners ultimately are responsibility for making changes to the bitcoin protocol. I think it's unlikely bitcoin miners will vote for a higher blocksize because it will cause short term decreases in revenue. However, they are missing a potential boon from the Jevons paradox -- the cheaper a resource becomes to use the more of the resource we use.
So in summary, it's not really a technical limit to have a high transaction volume but we aren't likely to see it from the current big coins.
The number of real time electronic transactions is virtually guaranteed to increase. This is not only a big problem now, it's becoming a bigger problem over time. I consider the unwillingness of the bitcoin network to increase blocksize to be a critical flaw.
Edit: The problem is not 100mb is too small for the future. The problem is that just like we cannot go from 1mb to 100mb today, we would have no ability to go from 100mb to 1000mb when needed.
That was the reason for the fork of Bitcoin Cash, and indeed BCH blocks are bigger and fees are much smaller. But BTC is still inexplicably way more popular.
Value of technology is not why people aggregate towards Bitcoin.
Otherwise it would've been long superseded by other chains.
Bitcoiners still arguing about the solidity of the network guaranteed by so much mining, yet virtually all the mining is in the hands of few specialized operations all knowing each other (so it's not really decentralized) and despite Ethereum proving new protocol to be a valid and safe alternative.
None of Bitcoin cultists at the end of the day understood that it wasn't about algorithms nor computers, but consensus among people.
And that consensus voted to have Bitcoin, the oldest and least technologically developed chain to be the "store of value" of cryptocurrencies.
> Realistically a 100mb block would be large enough to handle all transaction data our species currently generates.
Nonsense.
With the current block size and average transaction size, the bitcoin network processes ~7 transactions per second. A 100X increase in block size gets you to 700 transactions per second. A quick google says global credit card transactions currently average more than 21,000 per second.
You're still almost two orders of magnitude off, and that's just existing credit card transactions.
Maybe my global transaction number is off. I'm not sure if the blockchain algo would have other bottlenecks when at 10gb blocks which is the size it would need to grow in order to accommodate 70k/sec. Certainly storage and network transfer is sufficient enough. It seems pretty feasible to process 16.67 MBps of data even on inefficient algorithms.
With 10G blocks @ ~144 block per day, that's almost 1.5 TB per day.
The complete blockchain is currently about half a TB.
According to bitcoin technology experts, a network of Full Nodes is more secure than a network of Partial Nodes. Right now almost anyone can run a Full Node. If you make the blockchain grow by 1.5 TB per day, only big corporations will be able to run Full Nodes.
So no, existing storage and network transfer is not sufficient for large block sizes, at least not for the current way we validate BTC transactions. I assume if there was a good technology fix for the full/partial node issue, it would have been implemented already.
Why are you comparing this to bitcoin, bitcoin was never meant to be a fast network lol it was to be a network for cash to sit in "digital gold"...
Other networks were designed for speed and others are working on it (etherum with layer 2 networks, and more speed focused networks, for instance as was mentioned Nano was doing 1200-1500tps years ago, with plans for increases not sure if thtey eer went further.
The problem is crypto has a few solid real projects and a billion loud useless scam/spam projects that make the idea of "crypto" look like its all trash, finding the networks that actually have something to really give to the world is hard.
That white paper was written when? 2008, give or take a couple years? "Speed," as we refer to it, is relative to the age. In 2008, the threshold for terms like "fast" was much lower than it is today.
Where are you getting "speed is relative to age" from? As far as I'm aware 100mph in 2008 is the same as 100mph today, and 10 minutes hasn't changed either.
The bitcoin white paper clearly describes the goal as a digital cash with and low fee transactions without the used of a trusted third party. We have none of those today in bitcoin.
False equivalence. Cars are much older technology than blockchain. In 1908, cars were much slower than they are today. In 1808, horse carriages were much slower. You get the point. The speed at which I expect changes to process differs over time. In some future time, we may all be in self-driving cars that are able to safely exceed 200MPH and we'll think back to our 45MPH street speed limits and laugh. Just like how in 2008, the typical home network had a 5Mbps uplink to the internet, and today it's (depending on the source) at least 135Mbps, with the availability of >1Gbps depending on your ISP and region.
I was using the term "speed" as a concept, and you were using it as a constant. I referred to "speed" as "fast" or "slow." Which is to say, the subjective judgement on what is fast. Which is a decent way to default to judging speed unless the white paper specifies a threshold of transactions per second to be considered "fast." You thought of speed as a constant unit of measurement for speed, which makes no sense unless they have a target for their transactions per second. The problem with that is, the number of transactions per second that a payment solution needs to process is pretty much only going to increase over time, and thus, the goal to be considered "fast" does actually change over time. You're just potentially thinking in too short of a time range to see much drift in that subjective judgement.
I think you're mistaking my intention too. My intention is to say that Bitcoin's perceived speed with handling transactions then, is perhaps slow by today's standards. The goal you gave:
> digital cash with and low fee transactions without the used of a trusted third party.
is at least 2/3rd of the way complete. You have digital cash, with high transaction fees, and no trusted third party. The solution that blockchain designers/engineers seem to have come up with is referred to as "layer 2 rollups" where a bunch of transactions are processed quickly by a trusted third party, bundled together, and then enforced in one big transaction on the actual network in intervals. This promises to be faster, and possibly cost less in transaction fees, but then under-delivers on the third goal of not using a trusted third party. But it is apparently the best way that blockchain engineers have thought up to compete with the transaction processing speed of entities like VISA, at least today. While it's not ideal to trust that third party, presumably you have a choice to opt in or out of the layer 2 network, and enforce your transaction on the slower, more traditional blockchain layer 1. And at least with the layer 2 network, it eventually gets trued up on the blockchain with each of the rollup intervals. It's maybe up for an argument on whether trusting the layer 2 third party is better than, or the same as, trusting VISA. I would potentially argue that it's better, with the caveat of admitting that I am not a blockchain expert. I just potentially know more than the average crypto enthusiast that trades BTC and Doge on institutions like Coinbase.
I will note that the goal you gave said absolutely nothing about speed though.
I'm not entirely sure about the point you're intending to make but I have an assumption. Perhaps your intention is to say that credit cards were faster than blockchains at processing transactions in 2008 (they still are today.) In which case, yes, I believe credit cards have been a thing since the 1950s, so they benefit a lot from the age of the technology. Credit cards are also just kind of a concept that goes almost as far back as banks and bankers do, where banks would loan out money for you to spend and pay back. Credit cards just abstracted a concept that always existed with some additional systems that were built around them over time like maintaining a trust record for individuals (credit scores) and online payment processing that benefits from the simplicity of going through a single trusted party that goes virtually unchecked for accuracy (I can't make an audit of financial transactions that VISA handled today and say "Bob had a 0 balance but they spent $6000 today somehow," for example.) Blockchain has none of that historical advantage, and has essentially only existed since 2008, and has not benefited much from mass adoption mostly because it's extremely easy for rational consumers to dismiss it as slow, or "only scammers use it," which would be even less true if legitimate users dismissed it less easily. That's not to say I think blockchain is ready for general consumers, in my opinion it's still an incubating technology.
You'll earn downvotes for the speed part, but this part is spot on;
>> The problem is crypto has a few solid real projects and a billion loud useless scam/spam projects that make the idea of "crypto" look like its all trash, finding the networks that actually have something to really give to the world is hard
Congrats to the OP who sent money to Vietnam. It's a fantastic use case. But as a non-crypto user I can't do that with crypto because I don't know which site to trust and which is a scam.
And -reputationally- they are -all scams-, some just haven't been caught yet.
(I know, I know, there are honest players, but even the -big names I recognise- get caught with their hands in the cookie jar, that taints everyone)
Incompetents like MtGox and FTX lasted only a few years. OP claims the service they used has been operating for a decade already.
Same for the underlying tech : Bitcoin, Etherium and even Monero have also been around for a decent amount of time. (Of course you might refuse to use them for other reasons, like the wasteful power usage of Bitcoin or the money laundering enabled by Monero.)
(Note that this can generally be applied to anything money-related...)
There is however no technical reason we should limit the blocksize to 1mb. We could have 10mb or even 100mb blocksizes easily. Realistically a 100mb block would be large enough to handle all transaction data our species currently generates.
The transaction fee is a considerable portion of miner's revenue. Miners ultimately are responsibility for making changes to the bitcoin protocol. I think it's unlikely bitcoin miners will vote for a higher blocksize because it will cause short term decreases in revenue. However, they are missing a potential boon from the Jevons paradox -- the cheaper a resource becomes to use the more of the resource we use.
So in summary, it's not really a technical limit to have a high transaction volume but we aren't likely to see it from the current big coins.