1. http://hashingit.com/analysis/33-7-transactions-per-second
https://blockchain.info/charts/cost-per-transaction
Roughly, you're paying the miners. They (half of them) have to mine your transaction into the blockchain and they could be using that time to mine. So your transaction competes against mining time.
That's roughly why it's slow and expensive. I'd never use BTC unless the kidnappers demanded it.
The actual transaction costs are way under a dollar, and it is, by far, the cheapest way to move the money, it's cheaper than the European SEPA, which is normally 0.9 EUR.
When you remove the block reward of 25BTC, it's cheaper than most methods of money transfer.
I've transfered as much as $1000 for around 2.3c.
I believe, though, that there will be an upper limit transaction speed on a decentralized network which will be slower than that possible on a centralized network. This is why folks have talked about using bitcoin as an end-of-day "settlement" currency and doing the day-to-day in your local fiat.
Here's the thing- Bitcoin will thrive whenever the shit hits the fan somewhere (see: Venezuela right now). A currency controlled by no government* and weighing 0% of gold while being completely electronic, suddenly becomes quite appealing under those circumstances. Which then makes it a pretty good hedge.
* arguments about chinese miners controlling most of the mining market are allowed
Not if "somewhere" is nearby elliptic curves
That could take the form of regulated exchanges (coinbase/poloniex) or decentralized networks like lightning.
Worst case, you could imagine most Bitcoin trading going through something like Paypal, which would have some advantages over USD (you can't print Bitcoin) but many obvious disadvantages.
Better though, Bitcoin has a built in scripting language that lets you implement more complicated logic on top. The lightning network is one way to do that, which coalesces payments into only a few on chain transactions, and allows instant confirmations, with the tradeoff that nodes must remain online part of the time (compared to Bitcoin where nodes never need to be online, other than to receive and send transactions).
Also not sure what you mean by "expensive". I think I pay about 11 cents per transaction. Way less than credit cards!
Yes but you're currently competing against a lumbering, outdated and over-regulated marketplace that's ripe for renovation.
What do you think will happen the minute these banks get real competition? They will update their network and make transactions cost 5c, or N-1 where N is the current BTC transaction cost. They will always be ahead because their limits are self-imposed and solved through simple software, not intentionally and computationally difficult.
And they already are! I can instantly send money to all of my friends with venmo paying no transaction fees. And I don't even have to argue with them about the inherent value of US dollars and the problems with fiat currencies!
Bitcoin remains volatile as hell. The market is seriously thin, with single large trades sending it up or down $30. The "price" isn't one, which is why the whales can't realise the supposed valud of their holding except in a dribble.
The actual use case is 95% speculation. Next is drugs, next is ransomware. Even the actual market use case (drugs) hate using Bitcoin and find it a huge pain in the backside.
Lightning network doesn't exist yet!
However my impression after following all these "bitcoin influencer" people on Twitter is: all they talk about is how Bitcoin will take over the world, again and again, and again, and again.
They don't even try to come up with a new spin. It's always the same message, they basically write blog posts and articles about how Bitcoin is a game changer, yada yada.
I expected to gain some insights following these people, as in they would actually come up with some fresh ideas, etc. But no, all they do is just the rehash of the same stuff.
It reached the point where I feel like I'm going through the movie "groundhog day", so I unfollowed all these people and only follow a couple of bitcoin related blogs.
Seriously, the circle jerking in the bitcoin community is too excessive.
There's nothing that can allow you to move money to every country on the planet with such small fees.
However, you are correct. In order for Bitcoin's price to increase, people must value it and more people must use it.
Warren Buffett and Charlie Munger have both been around 85 years and know when something has value and when it doesn't. "Rat poison" is what Munger calls Bitcoin and Buffett also notes their worthlessness.
Why does a Bitcoin have value? There is no answer to this question. They're as worthless as Ponzi's postal reply coupons. One day, like Flooz and Beenz and other worthless "electronic currencies" before it, Bitcoin will come crashing down into worthlessness.
It's surrounded by scammers - Mt. Gox, Butterfly Labs was raided, on and on. That should tell you something.
It's money (a currency). Money has value because someone says it has value and someone else agrees. Congrats, bitcoin has value!
The nature of that value may be volatile and doomed to drop severely or go away entirely in the future, but that doesn't make it non-existent now.
Commodities have value. Until 1971 in the US, US currency had implied value because it could be exchanged for a commodity - gold, which the US has thousands of tons of in Fort Knox and other places. Then in 1971, Nixon stopped the exchange of currency for that gold.
But the tons of gold are still in Fort Knox. Why? Why store thousands of tons of gold? Obviously it is still backing the currency. Any currency panic can be ended by starting the conversion back up. US currency went from an implied conversion to an implication of an implication. It is still backed by those thousands of tons of gold though, although not explicitly.
Bitcoin is backed neither explicitly nor implicitly by an useful commodity.
Sort of like when you eat in the morning, go to work and get a paycheck, your work has value.
Now, is the Bitcoin price crazy? Maybe a little bit, but it's reacted very strongly to the Donald Trump election since it's considered to be alternative to existing remittances that cannot be taxed (IE, remittances to Mexico).
Now in regards to your scammers, Mt Gox was the only exchange and you know 'power corrupts... I forget the saying'
Butterfly Labs got raided because they took a lot of money from the community for mining gear and delivered nothing.
The blockchain is essentially a globally distributed transactional log, that allows you to build things that require synchronization and consistency, it just so happens that moving assets is the most obvious application.
Currently it's pretty slow, but work is being done, specially in ethereum to speed it up. Things like proof of stake over proof of work as well as sharding should make it a lot faster, and capable of processing several thousands of transactions a second. Ethereum is also the next step in the evolution of the blockchain, with the addition of a Turing complete virtual machine it is now possible to execute arbitrary code and have a truly programmable block chain. This allows it to be used for virtually anything without having to roll your own blockchain, for example you can program a truly distributed naming system that would allow alyisyng anything out there to human readable names, from IPs to to arbitrary hashes in a distributed file system, or even fisical people, granted they have a virtual presence of some sort and and a unique hashed handle.
The other important aspect of it is the possible symbioses with the distributed/decentralized web or web3 or next web. Decentralization seems to be the theme for the next several years, and I personally am extremely optimistic about some or all of it becoming real and currently actively trying to contribute to it in any way I can.
However for decentralization to become economically vaiable an intrinsic way of incentivation is required and this is one more place where the blockchain will be what makes it possible.
To sumarize:
* Blockchain is a platform not a currency
* It enables synchronization on a global distributed scale
* "Next web" and blockchains go hand in hand. On the one hand providing the backbone infrastructure required to run some critical parts of web3, on the other providing a transparent digital aset management system which you can build incentivation on top of.
On a side note, I wouldn't necessarily trust Buffet and company on this one, for one, it requires a pretty good understanding of the technologies involved to be able to make any sort of informed prediction, and I'm not sure if you can perform any sort of typical fundamental analysis on it at all, which is a common practice in his business line, and yes currently the bitcoin price might be somewhat speculative, but that will change as more and more core infrastructure relies on it.
As for scammers, raids and etc... That's pretty common in a nascent complex and deregulated environment such as this, remember the WWW at the beginning ;)?
https://blockchain.info/charts/market-price?scale=1×pan...
There are many ways to interpret what data says, so it's easy to fall into this trap, all you need is a certain preconceived idea and suddenly all you are looking for is confirmation, which you'll always find if you look hard enough.
