Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)
None of the posts in this thread so far have really explained the problem.
Bitcoin's 0-confirmation transactions have three major flaws:
1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource. No one wants to wait 5+ seconds every time they click the mouse. The reliability against a double-spend increases as propagation of the transactions across the full node network completes. This depends on the weighted average of hashrate and the slowest latency on the network. Thus the way to improve this speed is to centralize mining, which is probably why ButtCON has been getting faster as mining has essentially become entirely centralized and only an illusion of decentralization remains.
One might argue that no one will bother to double-spend such small valued instant microtransactions, but in fact these are the most vulnerable to double-spending because the the payee can't delay the access for many seconds, the payer can't get caught in the virtual act unlike retail and because there might be an incentive to sabotage an Internet merchant or service (e.g. competing social networks attacking each other covertly, politically/religiously motivated attack, etc).
Some references:
https://www.reddit.com/r/btc/comments/3ze0sz/why_bitcoin_0_confirmation_transactions_are_safe/
https://chrispacia.wordpress.com/2015/11/29/on-zero-confirmation-transactions/
https://blog.blockcypher.com/from-zero-to-hero-bitcoin-transactions-in-8-seconds-7c9edcb3b734
2. The Bitcoin block chain can't scale to handle the level of transaction rate that microtransactions would require without being centralized.
3. It seems the core developers may be intent on implementing Replace-by-Fee and destroying 0-confirmations, although RBF will apparently be opt-in so it wouldn't destroy all 0-confirmations. Although RBF seems to have a legitimate use-case for being able to prevent transactions from getting stuck if the fee ends up being too low in a free market competition for setting transaction fees:
https://bitcoinmagazine.com/articles/bitcoin-core-developer-jonas-schnelli-explains-controversial-transaction-replace-by-fee-feature-1454343556
Also the collusion between Blockstream and the Chinese mining cartel potentially breaks 0-confirmations by not increasing the block size sufficiently to handle all transactions that have a sufficient fee, which by definition is not spam. Which btw may incentivize payers to use RBF. Perhaps Blockstream may be trying to push towards Lightning Networks, which is also flawed and can't scale decentralized either.
Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.
Bitcoin's 0-confirmation transactions have three major flaws:
1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource. No one wants to wait 5+ seconds every time they click the mouse. The reliability against a double-spend increases as propagation of the transactions across the full node network completes. This depends on the weighted average of hashrate and the slowest latency on the network. Thus the way to improve this speed is to centralize mining, which is probably why ButtCON has been getting faster as mining has essentially become entirely centralized and only an illusion of decentralization remains.
One might argue that no one will bother to double-spend such small valued instant microtransactions, but in fact these are the most vulnerable to double-spending because the the payee can't delay the access for many seconds, the payer can't get caught in the virtual act unlike retail and because there might be an incentive to sabotage an Internet merchant or service (e.g. competing social networks attacking each other covertly, politically/religiously motivated attack, etc).
Some references:
https://www.reddit.com/r/btc/comments/3ze0sz/why_bitcoin_0_confirmation_transactions_are_safe/
https://chrispacia.wordpress.com/2015/11/29/on-zero-confirmation-transactions/
https://blog.blockcypher.com/from-zero-to-hero-bitcoin-transactions-in-8-seconds-7c9edcb3b734
2. The Bitcoin block chain can't scale to handle the level of transaction rate that microtransactions would require without being centralized.
3. It seems the core developers may be intent on implementing Replace-by-Fee and destroying 0-confirmations, although RBF will apparently be opt-in so it wouldn't destroy all 0-confirmations. Although RBF seems to have a legitimate use-case for being able to prevent transactions from getting stuck if the fee ends up being too low in a free market competition for setting transaction fees:
https://bitcoinmagazine.com/articles/bitcoin-core-developer-jonas-schnelli-explains-controversial-transaction-replace-by-fee-feature-1454343556
Also the collusion between Blockstream and the Chinese mining cartel potentially breaks 0-confirmations by not increasing the block size sufficiently to handle all transactions that have a sufficient fee, which by definition is not spam. Which btw may incentivize payers to use RBF. Perhaps Blockstream may be trying to push towards Lightning Networks, which is also flawed and can't scale decentralized either.
Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.
BCT Staff replied:
Bitcoin's 0-confirmation transactions have three major flaws:
1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource.
...
Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.
1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource.
...
Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.
Bitcoin was never meant for these types of microtransactions. That's where alt coins and lightning and other off-chain transactions come in. Or giant online wallets. Or whatever.
So you've answered the OP's question about do we need another coin.
Follow up:
"Just pay a higher fee" isn't a proper solution though, if we would all pay the recommended fee, than that fee would keep on increasing, because there can only be so many transactions in a block, eventually the fee will become high enough that people will start to move over to other blockchains with proper scaling solutions.
Quote from: /u/Vibr8Kiwi
You can't fix a capacity problem with fees. If there are only 20 seats on the bus and 25 people that want to ride there is no ticket price where everyone gets a seat. You don't even know how much you have to over pay to get a seat. This is a bus business where customers are going to leave... especially when they discover there are many alt-bus companies that do the same thing better and for less and without capacity restraints.
Thanks. How hard to understand that can that be?
And to think this was "planned" by Core. This is Cores dynamic fee market. It is not some f*** up!
And it will get worse and worse every day, until segwit is rushed out.
More likely, with the ensuing loss of faith in Core, a sudden hard fork to bigger blocks.
(For the median transaction size of 333 bytes, this results in a fee of 26,640 satoshis (0.17$).
If something doesn't make sense, follow the money to find the motivation.
I had linked to this in my first post in this thread, but here is the relevant quote:
It appears the Chinese mining cartel and Blockstream are in bed together because you can note that the Chinese cartel used the lame and technically incorrect excuse that the Great Firewall of China prevented them from approving larger block size increases of Bitcoin XT and Classic. But what is really going on, is as explained in my discussion with Professor Jorge Stolfi, that the Chinese cartel wants to be able to control the block size increase so as to maximize the equation for transaction fees.
How do you calculate that Blockstream is for small blocks 
Blockstream is for making sure they and the Chinese mining cartel control how fast the block size increases, so they can squeeze maximum transactions fees that the market will bear. You could read the Reddit discussion between Professor Jorge Stolfi and TPTB_need_war, which explained this.
Blockstream is for making sure they and the Chinese mining cartel control how fast the block size increases, so they can squeeze maximum transactions fees that the market will bear. You could read the Reddit discussion between Professor Jorge Stolfi and TPTB_need_war, which explained this.