Transaction fees and confirmation times

in #blockchain7 years ago (edited)

I've been on Steem for over 20 months now, when I first got around to read the whitepaper it felt like I was reading something that sounded "too good to be true". The fact that I stayed and didn't listen to FUD'ers was primarely cause I had happened to read upon Proof-of-Stake coin earlier in time when many were saying that they were "too experimental" and "unsafe" since they didn't require miners on the network but stakeholders. I had recently also been involved with Lisk so I was aware of how DPoS worked too.

Over time I've fallen in love with the currency more and more and to this day I don't understand how not more people are aware of its technological advantages, it reminds me a bit about the early days of blockchain when I felt the same. How can people not understand that you can send Bitcoin for no fees worldwide within a few hours and how different it is from banks or other transaction services such as Western Union. It took the world some time to get around it, when they did I had already moved on to Ethereum because Bitcoin started feeling like I was playing on a Game Boy when there was a Playstation I could spend time on instead. Now I'm here, again, getting bored of the Playstation but have just found out that there is another currency that let's me do so much more and at the same time earn more of it for my time playing with it. Compared to the Game Boy and Playstation it feels as if I've upgraded to the latest PC hardware with a 4k screen and unlimited frames per second. #pcmasterrace

Yet I am confused why most others are still throwing so much money at the old machines and don't seem to want to play on the new ones even though it offers them to try it out for free and if you spend enough time playing it you get one yourself.

It seems weird looking back that Bitcoin used to be known about its low transaction costs and how much better it was compared to older middlemen services. It thrived on it. Even today on Bitcoin.org you still see this on the front-page.

Yet only one of those stays true to this day which you can probably guess which one it is.

Some of you might know I may not be a fan of Blockstream and their future plans of a Lightning Network but its so early to be able to tell what really is going down so I don't want to misguide readers or that my words convince them to some trading actions they might later regret. For all I know these things I keep hearing lately could just be FUD attacks for another clone which could end up being worse than Bitcoin.

So please take the next video with a grain of Salt, the good thing about these hardforks is that if you haven't touched your Bitcoin which have been secure in cold wallets it probably means you still have an equal amount of your Bitcoin Cash too. Being on a platform that thrives on its censorship resistance though and knowing a lot of places where discussions about these would instantly get silenced or never even see the light of day - I think its important for us to try and look from all perspectives at things and how they are evolving.

For disclosure, I own neither BTC nor BCH and won't touch them unless I'm actively trading something else with them. I don't really understand why else they would on purpose leave blocks at 1 megabyte and make the confirmation times so slow, there are currently over 130,000 unconfirmed transactions on the Bitcoin blockchain and the recipients have no certainty in knowing when they will confirm to be usable. Even Ethereum has unconfirmed transactions now even though its over 50x faster than Bitcoin and can fit in more transactions per blocks, all because of some kitties.

Looking at blockchain.info this is a chart of the average cost per transaction in USD for Bitcoin right now.

It just feels so silly to me that a currency that marketed low transaction costs is becoming worse than the services it wanted to eliminate. It feels even more silly considering as Steemians we pay absolutely zero transaction fees and in the inner market don't even have to pay for trading fees which is what is making all these exchanges around us rich.

Are we just really really early adopters of a technologically advanced blockchain and the rest of the world hasn't caught up to us yet? Or are they just hearing about Bitcoin and it will take some time for them to find out about alternatives? For all we know the next pump in Steem price could be a few unconfirmed Bitcoin transactions away.

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Any way I don't have any Bitcoin and similar ones.
Totally agree with you.
Steem will be the next winner

I got into steem april 2016 and still waiting for it to moon.. next year a guess

How did you discover sir ? I think you re so lucky . I was too late to discover it

I would say that people who discover Steem and Steemit these days are still early adopters, and you most likely have a decent amount of time to collect tokens now while they are cheap.

I bet it will be a nice rise when SMTs are released. Think of the wait as a good opportunity to collect even more tokens before it takes off :)

Thanks for your illuminating comment :)

The only point more or less valid that I could agree of normal POW blockchain against DPOS based blockchain is the "semi-centralization" of DPOS with the witnesses but minning Bitcoin at the moment is not so "decentralized" as people would like to believe.

Beyond that, the Blockchain of Steem (DPOS) is superior thousands of times. You can see on the Blocktivity website the Tx number of each Blockchain https://www.blocktivity.info/. Steem and Bitshares use less than 1% capacity with the same or more amount of Txs sometimes than Ethereum and Bitcoin ... and without fees.

I am also surprised that it is still so little known when everyone can see how good it is.. Well, the market is crazy and people are stranger.

blockivity.info. I need to bookmark that puppy

For a while I ought it was me. Glad to know I’m stil kinda an early adopter.

I think it is the second, that people just havent discovered steem or are thinking if they do know it (but not to much) that it wont take off. Time will be a crucial factor here. Give it a few years and we'll see more and more alts becoming adopted to buy/sell stuff with just like bitcoin did. Also 1year and 9 months is still young right? let it grow out to the beautiful strong horse it will become. Soon enough they will discover it by people spreading the word on all kinds of media. The world is just discovering the cryptoworld. Give it some time :)

Sadly many people can only jump on a bandwagon. They don't really know how to go out and explore for themselves. Certainly there is room for improvement on the platform and user retention is probably a bit of an issue but if anyone sticks around theycdiscover they actually have an influence on the direction of the platform and want to stick around.

I think it's only weeks before steemit catches on though. With all the people starting crypto portfolios from nothing and crypto finally going mainstream, it won't be long before we don't know what to do with all the new users.

Great post, really important considerations.

Personally I believe that using bitcoin as money will continue to became harder day by day, considering that as bitcoin grows we are observing in last days

  • increasing volatility: there are a lot of new low-skilled trader, the so-called weak hands, that are basically trend-follower and contribute to amplificate price variation
  • higher fees (they're calculated in BTC and fee market is competitive so fee/BTC ratio doesn't decrease as BTC rises.

Last week steam announced that it will no long accept Bitcoin as payment system and other similar announcements from other companyes will probably follow.

Consider also that another bitcoin difficulty retarget at 18-19 december will worse BTC network situation.( https://fork.lol/pow/retarget)

So fees aren't a problem: fees are THE problem that can kill bitcoin

What's your take on Lightning? The three major competing implementations have just proved compatibility, and small tests are live on the main network already. Timing seems rather perfect actually, for this to come online just as transaction fees and wait times are getting absurd.

Lighting network massive and user-friendly applications are forecasted for the early months of 2019, maybe Christmas 2018 in the best scenario.
Interesting, but out of time. At the moment, lightning is working only on a testnet and it is still in developement phase... Significative adoption is still really, really distant

Forecasted by whom? Just curious.

When I move money form one exchange to another I use bitcoin cash because it's cheaper than bitcoin and litecoin and i seem to enjoy it. But looking ahead, I don't see how bitcoin cash will solve the problem. It is just a matter of time until bitcoin cash starts facing the same problem. Steam on the other hand is truly underestimated.

Bitcoin has become a bit of a joke. It's lost its way and the mainstream and institutional investors are piling in without understanding it but they're going to get burnt.

Sooner the better I reckon as it'll actually cause less devastation than letting it go on like this because if this mania continues it will just drag more suckers in and the crash will be harder.

great metaphors for cryptos, totally agree

I got into steemit not quite long. I love in here, you are given chance to express your mind and even get paid for it. I really love it in here. I also love their registration style they confirm people before getting them registered and it's cool. I love steemit. I am @popson the blockchain blogger.

I like how you compared the to different games, gameboy.. playstation... :) hahahha!

keep holding onto that Steem!

More and more users will be joining steemit, the snowball effect I think has started and it only takes one big influencer to come over here for us to see exponentially increase in numbers of users thank to his/her fans.

The idea of rewarding users directly for their content is a killer to sites like twitter for example.

This project has a long way to go for sure! And we are lucky to be here.

Iv already got several friends interested!

I feel the same way. I can't understand how bitcoin can be seen as having any sort of adoptions when it isn't the best in any class. It is way to slow and expensive to ever be used as a currency, and even for money transfers it is beat out by Western union. Especially because you don't have to convert money that is sent via WU before you can spend it. There are so many cryptocurrencies that have unique use-cases today, and bitcoin offers nothing of worth in the current landscape. I'm not sure that the hype train is ending any time soon, but it is a hype train.

It is the best in what many deem the most important class: security. It has, by far, the most participants ($) actively protecting the integrity of the blockchain. That IS valuable.

Also worth mentioning, what some consider a weakness, in Bitcoin's seeming inability to evolve, others see as a strength. We can't forget to factor in the number of years of proven reliability and the fact that Bitcoin's blockchain has so far held to its initial claim of being an immutable ledger.

I think this is super important and easy to miss. While the price may be volatile, everything else about Bitcoin is not. Its blockchain is arguably the hardest thing to change in the world, and that's the class it's best in.

Like it or not, being first to the party and gaining the name recognition isn't just hype, it's branding, and that will make a world of difference in what people choose to adopt, for better or worse.

Its only a matter of time before bitcoin collapses. Blockchain technology will eventually become the norm in economies. At this time people will realize that bitcoin is far inferior compared to other alt coins. Stock up on altcoins before this happens!!

Ripple went up over 70% today!!! YESSSS

The problem with stacking altcoins is that most of them won't make it. There are hundreds of time, and only a few of them will probably reach Bitcoin levels, so it's kind of a gamble to find the correct one.

Glad I own a few ripple myself. One day it will get much bigger and widely used.

I was never really into crypto before I got started on Steemit, so I had not really been aware of how good this blockchain technology was until very recently. A few days ago I bought my first ETH to get some cryotpkitties, and man, my first time using the Ethereum blockchain was not good. It was extremely expensive to get transactions done, and I even had to try a few times to get it done (while having to pay a transaction fee even if it failed). I missed the Steem blockchain after using it for only a few minutes!

The story above is the reason why I think it will succeed. Once people just start using it and we get the ball rolling, then there's no going back to the "worse" blockchains!

From game boy to PlayStation to a monster upgraded PC haha I love the metaphors and I agree with what you are saying.

I think the reason why many people haven't invested more into Steem is because they just haven't read the white paper or used Steemit.

Apple was ahead of its time and it took some time for people to catch up. I think the same thing goes for Steem, it's just a question of time'

Absolutely spot on! I was just reading this post by @netuoso too:

https://steemit.com/steem/@netuoso/steem-and-ethereum-still-fighting-for-the-most-transactions-processed-per-day

Twice the number of transactions as the Bitcoin blockchain, and equal or greater to the number processed by Ethereum.

Imagine if we could:

  • Launch ICO (SMTs?).
  • Buy STEEM with fiat more easily (SteemCreate.com?)
    And,
  • Introduce smart contracts. (No idea if that would be possible).

I get the "why haven't people found steem yet?" thing, too. It's an awesome crypto with so much relevant development. It could still be super early days, and within the next year we will see Steem move like litecoin is right now. :)

@shayne

True! Steem is by far one of the best cryptos! Too many technical reasons as to why it will explode sooner or later! It's just too early yet! There's plenty of room for exponential growth! 2018 is going to be a BIG year for Steem. Moreover, not even Bitcoin can be considered mainstream yet! Steem?? The masses are still asleep and enslaved to the banking cartels! Just give it some time! It's not just a breakthrough, it's the beginning of a new chapter in global economic history!

Or not. STEEM needs to be useful for transactions if it is going to be wildly popular.

I like the way witnesses system in steem and in that way there will get no threat against steem.
It is just awesome that steem was made to combat central banks control that will eventualy make life hard for people.

It's crazy. The whole reason I got into crypto was the idea of "internet money", and the whole appeal was that it would be instant and free.

I am confident Bitcoin Cash will be increasing more in value than Bitcoin long term. It is the real bitcoin after all. Incredible fast increasing merchant adoption. While bitcoin have decreasing merchant adoption. Not hard to see what will happen next.

Screen Shot 2017-12-12 at 23.28.37.png

Bitcoin is outrageously overvalued especially for what it is. I think of it as a Model-T while revolutionary for its time, there have been major advancements and people have moved on. It's time the newer, more advanced cryptos that actually benefit users start to shine. Just sending a few .0001 btc costs a ridiculous amount of fees.

HODL is the name of the game!! By far Steem has the lowest transaction fees. Well, maybe on exchangers like Openledger and Blocktrades or maybe Bittrex. I had a hard time being convinced too but i just gave it a try voila!!

Steem vs iota

I only discouvered steemit a few months ago but i am liking it more and more every day, and i don't make almost any money here but i learn allot of new things :)

Para los nuevos integrantes de este mundo steemit es muy difícil entender lo que explicas. Ya que en mi ejemplo no conozco el significado de las palabras que usas, tocaría anotar e investigar todo lo que vas nombrando para estar clara de los beneficios.

Hola @luzfermin, si quieres entender el significado de POW y DPOS, te recomiendo este post, allí comprenderás muchas cosas y el por qué Steemit es tan rápido y sin comisiones.
Si quieres entender más como funciona bitcoin y el POW también en este otro post lo explico de una forma sencilla.

Gracias @jga leeré la información para ver si aclaro mi mente.

Always a great read from you, and an awesome video. That explains a lot about what is currently happening to bitcoin which was puzzeling me for quite some time now.

How exactly did bitcoin get in banksters hands?

By not having a way to confidently communicate with those invested, and agree on direction. Like steemit and witnesses..

Many things can be learned from this post. thanks for sharing important post @acidy

It just feels so silly to me that a currency that marketed low transaction costs is becoming worse than the services it wanted to eliminate.

It's become far worse and far more expensive and Wall Street's lapping that bull jive up... Unbelievable...

I feel the same as you and am equally baffled as to why STEEM is not higher up the market cap table, when you consider all that it offers it should easily be a top 10 coin in my opinion. I've doubted myself at times but the more I compare STEEM to other projects the more rational it seems that sooner or later we'll see a big upwards price movement

Really? What purchases have you made with STEEM recently?

Well almost every day I've been buying btc and alts with my SBDs

"For all we know the next pump in Steem price could be a few unconfirmed Bitcoin transactions away." that hit me soo good :D

And it's only picking up more steem. Sorry. I said it. #pun

Yea I have noticed the payment transaction fee is through the roof lately. What if they made a monetized sight for a exchange...
We would all be rich lol

I couldn't agree more.

If there was only a Steem to USD option, then I would never have to deal in bitcoin or ethereum again! Like a bitpay, or coinbase, that would be amazing.

Let's get steeming!

When I first joined I also thought this was all just too good to be true. Luckily for all of us it is.

Great work...

What i think makes the value of the bitcoin is that it is the original idea, it i think it will always be the base value of the others blockchains.

That is why so many people call it a store of value and compare it with gold. Nobody trade with gold, but it was the base of today money.

My guess is that in the future, it wont be bitcoin that will be used. A lot of new coins do transactions better than BTC, but BTC will always have its value.

Just like gold.

For the new members of this steemit world, it is very difficult to understand what you are explaining. Since in my example I do not know the meaning of the words that you use, I would write down and investigate everything you are naming to be clear of the benéfico.

I'm new comer to steemit platform. I saw same problem when you show to us from this post. Yeah...that's big issue. Currently transaction fees and transaction times go higher like as a SBD or BTC pumping. Pls refer the "cost per transaction" chart. Most of exchange sites currently have huge traffic bcoz big no. of un-confirmed transactions.
In present, peoples going backward to money but don't know what the cheapest way money transfer or exchange via internet. Like as me...lol. @acidyo, I see your past post of what's the way money transfer to our paypal account. If you can give me answer, Is the Paypal transfer service better and secure more? I have no I idea,so I ask you.
In this fact i trust BTC and steem market cap not to be lower. But big traffic happened here then if introduce new coin peoples can be go there.

Some people tend to overthink a lot although they don't need to spend a single cent as they feel reward based social media is too good to be true

Bitcoin a once great coin fallen from grace. Give it credit, it brought decentralization more to this world. Bitcoin is falling behind it still dominates whether it can be the roman empire where it loses power and then gains power and becomes the more "powerful" coin is uncertain. Bitcoin last hope is the lightning network . If it can be put successfully it may regain dominance and develop and eth killer. Time will tell......

I think the same thing about the transactions, it is amazing. To be able to make money online, do transactions instantly and free is going to boom eventually. I just need to get more people interested on my post to get some more upvotes....

I think we are at the beginning of a huge shift in the economic evolution.

The consistent winners in the crypto game are the exchanges. I'm waiting for a controlled risk method to invest in them. Perhaps there are ways, but I haven't found them yet.

Excellent your post and the truth had not fallen into account that Bitcoin was supposed to eliminate the old banking system can make transactions From anywhere in the world and it would only take minutes and low cost per commission but now it basically became its own enemy.

Zero transaction fees?? You ever done any business with blocktrades.

That money changer is making some serious coin, to mix my metaphors.

It is different. zero transaction fees mean that you can send steem or SBD to anyone without fees. Try to send 0.001 steem and you will see zero fees.
The business with @blocktrades is different, over there you are exchanging coins!, and the counterpart always want a fee for his work.

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