BCH

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

EastCoastGrows

BCH is the real btc. BTC was never supposed to be a speculative asset. It was supposed to be cash.

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

coinfeeds-bot

tldr; Bitcoin Cash (BCH) advocate Roger Ver has been sued by a unit of crypto lending firm Genesis over unsettled crypto options amounting to $20.8 million. GGC International, a part of the bankrupt crypto lender, filed the suit against Ver in the New York State Supreme Court on Jan. 23, claiming that the BCH proponent has failed to settle crypto options transactions that expired back on December 30. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

nota80T

You could take the bitcoin contrarian view by buying BCH near its ATL, rather than chasing that BTC monkey.

bojack-horsey

I just asked ChatGPT which coins to buy - at first it didn't want to because "I am a language model and do not have the ability to predict future market conditions or provide financial advice.", but then I told it, it should pretend to be a financial advisor. Then it just advised me to buy the classics, haha "As a financial advisor, my general advice would be to diversify your portfolio by investing in a variety of different cryptocurrencies. It is important to conduct thorough research and understand the underlying technology and fundamentals of each coin before making an investment. Here are a few things to consider: 1. Bitcoin (BTC) is the largest and most well-known cryptocurrency, and it has a strong track record of stability and growth. It can be a good choice for those looking for a long-term investment. 1. Ethereum (ETH) is the second-largest cryptocurrency by market capitalization and it has a strong developer community working on its ecosystem. It's also the most used blockchain for smart contracts and decentralized application, that's why it can be a good choice for those who believe in the power of smart contract and the decentralized ecosystem. 1. Litecoin (LTC) can be considered as a good alternative to Bitcoin, it's a peer-to-peer digital currency that enables instant, near-zero cost payments to anyone in the world. 1. Ripple (XRP) is a digital asset designed to work as a medium of exchange that uses cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. 1. Bitcoin Cash (BCH) is a cryptocurrency that was created in 2017 as a hard fork of Bitcoin. It has faster transaction times and lower fees than Bitcoin. It's important to note that cryptocurrency investments can be highly volatile and the market is still in a nascent stage, so it's important to invest only what you can afford to lose. Additionally, it's advisable to keep an eye on the latest news and regulations that may affect the crypto market."

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Cardano Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Cardano Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##**Cardano Cons** > > It has been almost a year since the Alonzo (smart contract) release, which revealed that it's difficult to build a DEX for eUXTO transactions instead of account transactions. Even after the release of SundaeSwap and MinSwap, we've seen issues for DEX development related to slow smart contract transaction speeds. Cardano is currently releasing a much-needed Vasil update to help with smart contracts by increasing throughput and reducing transaction fees. **Overall, Cardano is better than Bitcoin, but much worse than most other newer smart contract networks that have much higher throughput and lower transaction fees, often 100x better than Cardano's.** > > ###Extremely slow network > > * ADA's current **max TPS with smart contracts is ~1.2** based on the [peak network activity and congestion in Mar 2022](https://messari.io/asset/cardano/chart/txn-cnt). Without smart contracts, it's 8 TPS. This could supposedly rise to 30 TPS after the Vasil update and block size and speed adjustments. I see a max of 250 TPS quoted a lot, but it's not valid because that's with major block size/speed adjustments and without smart contracts. Even though eUTXO transactions can process batch transactions and often include multiple inputs and outputs, this is really slow. It's nowhere near the limits needed for global adoption on Layer 1. Many of Cardano's competitors like Avalanche, Polygon, Algorand, and most 3rd-generation EVM-compatible networks, have already surpassed Cardano's TPS by 100x. Their transactions fees are also usually much lower at under $0.01 each. > * The distant Basho update is also supposed to bring further scaling increases, but we don't have any solid details on it. Scaling via Hydra sharding is far away on their timeline. Hydra also uses multi-party state channels, which are not as simple or convenient to use as Layer 1. > * **Storage inefficiency**: [Cardano's average transaction size](https://blockchair.com/cardano) has now doubled to 1500 bytes / transaction since the introduction of smart contracts. [Ethereum](https://blockchair.com/ethereum) is 7x more storage-efficient than Cardano even though Cardano has very little smart contract activity. > > ###Cardano Smart Contracts and DEXs > > - **Programming adoption**: For Cardano's Plutus smart contract, Haskell is not a well-liked programming language and feels arcane in comparison the Javascript-like language of Ethereum's Solidity. It's been difficult to onboard smart contract developers, especially since Ethereum is already so far ahead on adoption. And most other smart contract networks also support Solidity. Cardano is alone on Haskell, making it expensive to develop for it. > * **Tiny Total Value Locked**: The TVL on Cardano is currently [$135M](https://defillama.com/chain/Cardano), which is 400x smaller than Ethereum's TVL at [$56B](https://defillama.com/chain/Ethereum) or 40x smaller than Avalanche's C-Chain. It's about the same size as [MoonRiver](https://defillama.com/chain/Moonriver), which is a test parachain on the test network, Kusama. Cardano's DeFi is a ghost town. > * **DEX rollout** in the past year was an absolute mess. Concurrency failures for the Minswap Dex during their Alonzo smart contract test revealed that it's much harder to develop a DEX on Cardano smart contracts due to the limitation of eUXTOs. Back in September, SundaeSwap published [a detailed explanation of the concurrency issues](https://sundaeswap-finance.medium.com/concurrency-state-cardano-c160f8c07575) plaguing Cardano. Proposed solutions involved centralization of the smart contract and using multiple UXTOs on a higher layer that would later settle on Layer 1. > * **SundaeSwap** finally released [an incomplete and slightly-buggy DEX](https://cryptobriefing.com/sundaeswap-promises-first-functional-dex-on-cardano/) on the testnet after many months of delays. It had [extremely slow speeds on SundaeSwap](https://beincrypto.com/cardanos-first-dex-sundaeswap-fails-to-impress-on-launch/) with a limit of only [9 users operations per minute per scooper](https://sundaeswap-finance.medium.com/expectations-congestion-mainnet-launch-e9da5abfd819). > > ###Competitors > > * Cardano's development has been extremely slow and delayed. There are so many monolithic Layer 1 smart contract competitors that can already do DEXs much more efficiently with higher scalability than Cardano: Polygon, Avalanche, Algorand, Elrond, many Tendermint networks. > > ###Moderately-expensive Fees > > * Cardano Transactions [fees](https://messari.io/asset/cardano/chart/txn-fee-avg) are currently about $0.15 - 0.50 USD as of May 2022. While these are cheaper than current Bitcoin network transaction fees of ~1-4 USD and much cheaper than Ethereum network transaction fees of 2-10+ USD, they're way more expensive than those of other many other competing crypto networks. Nano, ALGO, XLM, XRP, DASH, BCH, and MATIC fees are all below $0.01 on average, which makes them appropriate for microtransactions. > * Swap fees on MinSwap and SundaeSwap are way cheaper than on Ethereum, but still expensive at $0.50+ due to processing fees. > > ###Diminishing Staking Rewards in the long run > > * Cardano is currently inflationary to about [5-6% annually](https://solberginvest.com/blog/is-cardano-deflationary/). The inflation by itself isn't bad, but it's coming from a diminishing rewards pool that will gradually disappear by 2030. In just 4 years from now, the staking reward will drop to 2-3% unless transaction fees rise drastically to replace the rewards pool. If it drops that low, people will stop staking Cardano, leading to less security and decentralization. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/tuwvvo/top_coins_cardano_conarguments_april_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Cardano_(blockchain_platform\)) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10kkgfg/daily_general_discussion_january_25_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

Set1Less

Coinbase has been pumping dumping coins for YEARS Remember BCH listing back in 2017 when it spiked insanely on Coinbase to almost 0.12 ? Ever since that, to.... Just the last month, MAGIC pumped few days before coinbase listing (by pumped I mean it went up 100%), everyone was wondering why its pumping so much and then Coinbase listed it Here is coinbase adding MAGIC on Dec 7th: https://twitter.com/CoinbaseAssets/status/1600532914365677570 And how much did MAGIC pump the week leading up to Coinbase announcement? Take a wild gues.... https://imgur.com/a/YAn593P 150% +.... What a fucking joke

KallistiOW

Monero or BCH

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining equipment to compromise the Bitcoin network**, and this is a drop in a bucket for many billionaires and nation states. > > What's preventing others from attacking Bitcoin isn't the monetary cost but the difficulty of acquiring sufficient mining equipment. But as halvings continue, if the price of Bitcoin doesn't double every 4 years, miners will eventually sell their equipment. Some nation state or billionaire could acquire them at a discount, short Bitcoin, and then 51% attack the network. **All they would have to do is produce empty blocks, and the network would halt.** The brilliant part of this is that producing empty blocks does not break any Bitcoin protocols, so they would still earn the block rewards. (In fact, during several months of 2015-2016, about 10% of blocks were empty due to selfish mining. After all, why bother waiting to package transactions when only 1% of the reward is from transaction fees?) > > ####**Negative-sum investment** > > Stock investments of profitable companies are a positive-sum investments. Investors buy and sell from other investors. In addition, money flows from customers to the company, and then to the investors in the form of capital, stock buybacks, and dividends. > > In contrast, Bitcoin investors pay massive block rewards (subsidy + fees) to miners, so it's negative-sum investment for everyone but miners. > > ####**Transaction Backlog** > > Because of Bitcoin's low throughput, there is often a backlog during busy periods. The backlog, as shown via the [Mempool](https://www.blockchain.com/charts/mempool-count), has gotten as high as 100K+ transactions several times in 2021, which is equivalent to waiting 7-9 hours for settlement on average. Transaction fees for confirmed transactions also rise greatly during these periods. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10iydf2/daily_general_discussion_january_23_2023_gmt0/).

CointestMod

#Bitcoin Con-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##CONs > > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up with other blockchains technology-wise, which have evolved features and efficiencies way beyond Bitcoin. If all the cryptocurrencies were re-released today simultaneously, it is very unlikely Bitcoin would make it into the top 100 by market cap. It's currently #1 because it had a first-mover advantage and has enjoyed the network effect. > > ####**Much too slow** > > Bitcoin is now a **[3 TPS](https://blockchair.com/bitcoin)** blockchain with a **30-60 minute probabilistic finality**. It used to have a maximum of 7 TPS, but that has gradually fallen over the years after the Segwit update. It's much too slow to be used for point-of-sales merchant transactions. No one is ever going to want to **wait 30-60+ minutes** at cash register for a transaction to go through that's not even guaranteed to succeed. Block times average 10 minutes, but they are very variable. 14% of blocks take longer than 20 minutes, and 5% are longer than 30 minutes [[Source](https://bitcoin.stackexchange.com/questions/25293/probablity-distribution-of-mining/43592#43592)], causing stress for those waiting for confirmation, let alone finality. Some transactions get stuck in the mempool for weeks when there's congestion. > > **Competition**: It's orders of magnitude slower than newer networks like Avalanche's X-Chain and Algorand, which can process 4000+ TPS with sub-5s of deterministic finality, with transaction fees under a penny. > > Competition from Traditional Finance has also skyrocketed as payment systems like M-Pesa in Africa, UK's Faster Payments, Australia's NPP, Clearinghouse's RTP now provide near-instant payments and peer-to-peer transactions **without fees**. > > ####**Batch UTXO transactions have scalability limits** > > Some Bitcoin proponents have argued that TPS is a misleading metric due to UTXO batching. However, you can't just increase useful transfers 100x by batching 100x transactions. This is because UTXO addresses take up space, so there is a limit to batched storage savings: ~40% (160 vbytes vs 258 vbytes when batching 2 basic transactions of 3 UTXO each) [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. **Even if each block were a single batched transaction, Bitcoin would only increase from 3 to 5 effective transfers per second.** Also, this isn't unique to Bitcoin. Account transactions can batch using smart contracts to save fees and space. > > ####**Difficult to achieve widespread global adoption** > > At 3 TPS, Bitcoin can only make ~260K transaction/day. **If Bitcoin grows to the size of 1% of the 8B global population, each person can make an average of 1 on-chain transaction every 300 days.** Imagine 10% of world using Bitcoin, and each person being able to make a single transaction once every 8 years. > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Each Lightning channel has directional capacity, and whenever that gets exceeded, it will need to be closed and reopened with new capacity. You can't expect people to store months of funds on a single channel. Half of the US is living paycheck to paycheck and would unlikely be able to keep channels opened for long periods. If even 1% of the world used the Lightning Network and opens/closes their channels twice a year, the Bitcoin Network would become completely congested. > > ####**Extremely inefficient and wasteful** > > To protect against Sybil and 51% attacks, Bitcoin's PoW consensus achieves greater security through greater **redundancy**. Out of a million miners, only one of them is producing the actual block while the rest of them are just wasting energy and electric waste. Full nodes also hold redundant copies of the blockchain ledger, leading to wasted storage. > > In 2021, each block cost roughly $150-300K in energy to mine, which is equivalent to $100-150 of fees per transaction. **A single Bitcoin transaction uses about the same energy as a typical [US household over 2 months](https://digiconomist.net/bitcoin-energy-consumption)**. The total Bitcoin network energy consumption of ~150 TWh/yr is equivalent to [**18-24 US nuclear power plants**](https://www.energy.gov/ne/articles/5-fast-facts-about-nuclear-energy). Another way of looking at this is that Bitcoin consumes about as much energy as all datacenters globally [[Source](https://digiconomist.net/bitcoin-may-consume-as-much-energy-as-all-data-centers-globally)]. > > In comparison, other distributed consensus methods such as BFT are [10^7 x more efficient for energy use](https://link.springer.com/article/10.1007/s12599-020-00656-x). There is a silver lining: the energy waste (and security) will slowly decrease with each block subsidy halving, at the cost of decreased security. > > ####**Mining Pool Centralization** > > **The top 3 mining pools own 60% of the network hash rate** [[Source](https://btc.com/stats/pool)]. Individual miners have no financial incentive to run full nodes, so it's rare for them to be auditing their pool operators and won't notice attacks until it's too late. (To prevent miners from stealing block rewards, mining pool servers do not provide enough info to miners for them to be able to see attacks ahead of time.) > > ####**Moderately-high transaction fees** > > Transaction fees have risen over time. Layer 1 transfer fees are currently $1-2 USD and even briefly rose [past $50 in May 2021](https://ycharts.com/indicators/bitcoin_average_transaction_fee) during congestion. That's way more than [its competitors](https://blog.nano.org/cryptocurrency-fee-comparison-which-crypto-has-the-lowest-fees-4e9118590e1f) (e.g. XLM, XRP, Nano, BCH) that have average transfer fees under 0.5 US cents. > > Currently, revenue from the transaction fees are only [1-2% of the block rewards](https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html). Thus, when the block subsidy eventually disappears, transaction fees would need to be much higher to make up for the subsidy. > > ####**Chance of reorgs and invalidated blocks** > > Bitcoin's PoW has probabilistic finality, and there's always a chance a previous block could be orphaned and invalidated. This is known as a reorg, which is when the previously-longest chain is overtaken by a new longest chain. **There have been at least 2 reorgs longer than 20 blocks**: 51 blocks in Aug 2010 and 24 blocks on Mar 12, 2013 [[Source 1](https://coingeek.com/what-the-fork-happened-to-bitcoin/), [Source 2](https://blog.bitmex.com/bitcoins-consensus-forks/)]. The 2010 reorg actually caused Bitcoin to mint 184.4 billion Bitcoins, way past its 21 million cap. There have also been at least [three 4-block reorgs prior to 2017](https://bitcoin.stackexchange.com/questions/3343/what-is-the-longest-blockchain-fork-that-has-been-orphaned-to-date). So the typical 3-6 block confirmations are not guaranteed to be safe. > > ####**Possibility of 51% attacks in the future** > > Bitcoin has a long-term economic incentive issue known as the [Tragedy of the Commons](https://en.bitcoin.it/wiki/Tragedy_of_the_Commons), and here is one realistic example of how it could happen. Unlike some smaller PoW networks, Bitcoin lacks finality checkpoints. **It only takes $5-10B of mining e