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r/CryptoCurrencySee Post

New layer 1 blockchain about to be launch in 6 days. Worth a risk ? Its called exzo.

r/CryptoMoonShotsSee Post

New Layer 1 blockchain coin about to Launch Exzo in 6 days https://exzo.network

r/CryptoCurrencySee Post

Cardano: An in-depth look at its advantages an disadvantages

r/CryptoCurrencySee Post

Algorand: An in-depth look and it's advantages and disadvantages

r/CryptoMoonShotsSee Post

Sui Network - Build Beyond - Unlock the freedom to build powerful on-chain assets - Strong Community & Marketing

r/CryptoCurrencySee Post

In-depth look at the positives and negatives of Avalanche

r/CryptoCurrencySee Post

In-depth look at the positives and negatives of Avalance

r/CryptoMoonShotsSee Post

Sui Network - Build Beyond - Unlock the freedom to build powerful on-chain assets

r/CryptoCurrencySee Post

The negatives of AVAX

r/SatoshiStreetBetsSee Post

What is Maya Protocol?

r/CryptoCurrencySee Post

A primer on Fantom (FTM)

r/CryptoCurrencySee Post

A No-Shill Avalanche Deep Dive

r/CryptoCurrencySee Post

Kaspa - Embracing and Improving the Nakamoto Consensus

r/CryptoCurrencySee Post

Which projects, from a development team perspective, are you still following with interest?

r/CryptoCurrencySee Post

Kaspa - Embracing and Improving the Nakamoto Consensus

r/CryptoCurrencySee Post

Kaspa - Embracing and Improving the Nakamoto Consensus

r/CryptoMoonShotsSee Post

Exzo Network - Build without boundaries - Giveaway Contests Ongoing - All team doxxed

r/CryptoCurrencySee Post

The Tezos blockchain completes its fourth forkless protocol upgrade of the year

r/CryptoCurrencySee Post

The byzantine generals dilemma

r/CryptoMarketsSee Post

An interesting month to HODL Fan tokens

r/CryptoMarketsSee Post

Aptos Review: Use Cases, Features, and More

r/CryptoCurrencySee Post

Fan token of the national football team "protests" ahead of the 2022 World Cup

r/CryptoCurrencySee Post

How I Find Profitable Coins to Trade (works for Any Exchange)

r/CryptoCurrencySee Post

Sei - the new Layer 1 on the block

r/CryptoCurrencySee Post

Sei - The New Layer 1 on the Block

r/CryptoCurrencySee Post

Summary of Ethereum's new consensus protocol: Gasper

r/CryptoCurrencySee Post

That time I got tired of seeing Ethereum merge posts on this subreddit, so I decided to get revenge and write about Gasper--the hybrid RE:union of Ethereum's GHOST and Casper FFG (The Friendly Finality Gadget) consensus protocols. The Merge Reincarnated! (No, it's not THAT Ethereum merge. I swear!)

r/CryptoMarketsSee Post

THETA Review // Guide For Beginners

r/CryptoCurrencySee Post

Solana network - A Moderate Dive

r/CryptoCurrencySee Post

Algorand - Deep Dive

r/CryptoCurrencySee Post

Aptos, One of the "Heirs" of Meta's Blockchain Project Libra/Diem

r/CryptoCurrencySee Post

Why Proof of Stake (PoS) is not the solution to decentralised sustainable blockchains. How PoP can be the solution.

r/CryptoCurrencySee Post

New L1 Evm Compatible Blockchain

r/CryptoMoonShotsSee Post

A brand new blockchain destined for greatness has arrived!

r/CryptoCurrencySee Post

Cosmos (ATOM) Explained

r/CryptoMoonShotsSee Post

Echelon, Join the elite builders, creators, developers, and users of the upper Echelon of Blockchains.

r/CryptoCurrencySee Post

Knownsec Blockchain Lab | March Monthly Safety Report

r/CryptoMarketsSee Post

When a big whale is convincing other big boys why Cardano is a must-have: A Controversial Factsheet.

r/CryptoCurrencySee Post

Top 5 cryptocurrencies to invest in 2022

r/CryptoCurrencySee Post

Cryptolympics Game #2 - AVAX v ATOM

r/CryptoMoonShotsSee Post

BeFiT DeFi is here - Presale on Unicrypt -Governance Token - BFT - Low Marketcap - Audited- Team KYC verified- Presale Tomorrow

r/CryptoMoonShotsSee Post

BeFiT DeFi is here - Presale on Unicrypt -Governance Token - BFT - Low Marketcap - Audited- Team KYC verified- Presale Live 🔥

r/CryptoMoonShotsSee Post

BeFiT DeFi- Presale on Unicrypt -Governance Token - BFT - Low Marketcap - Audited- Team KYC verified- Presale Tomorrow

r/CryptoMoonShotsSee Post

BeFiT DeFi- Presale on Unicrypt -Gorvernance Token - BFT - Low Marketcap - Audited- Team KYC verifified

r/CryptoCurrencySee Post

Please FUD me on Cosmos. I'm a big fan right now and need some FUD to chew on.

r/CryptoCurrencySee Post

$NEAR | Near Protocol fundamental analysis | Long DD

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️| Ownership renounced 🚨| Rug-Proof | BIG Twitter calls soon 🌼

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | 🎇| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | Rug-Proof | 💲 Pre CMC and CG

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | 🎇| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | Rug-Proof | 💲 Pre CMC and CG

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | Newest gem on BSC |$BNB Dividend Token on BSC 📈 | TechRate Audit Soon 🚀 | Rug-Proof | 💲 Pre CMC and CG | Join now ‼️

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | Newest gem on BSC |$BNB Dividend Token on BSC 📈 | TechRate Audit Soon 🚀 | Rug-Proof | 💲 Pre CMC and CG | Join now ‼️

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | Low MC Stealth Launched | 💎 TechRate Audit Soon| 📈Strategic Marketing | 💲 Pre CMC and CG |

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | Low MC Stealth Launched | 💎 TechRate Audit Soon| 📈Strategic Marketing | 💲 Pre CMC and CG |

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️| Stealth Launched a few hours ago🩸| AMA’s coming up at multiple Tg groups 📢| Great marketing a head everyone joining 🚀 | Huge uptrend 🚨

r/CryptoMoonShotsSee Post

⚡️ BNBUP ☄️ | Fast growing community | $BNB Dividend Token 📈 | Based team 💲| Pre CMC and CG 🟥 | Join now and experience the and hype 🟪

r/CryptoMoonShotsSee Post

⚡️ BNBUP ☄️ | Read This 🔥| Renounced Ownership key💯 | Launched a few mins ago

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️ | Ownership renounced 🚨| Yahoo Article 🔥 |Whitepaper out soon 👑 For anyone who loves BNB and BSC

r/CryptoMoonShotsSee Post

☄️ BNBUP ☄️| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | 💲 Pre CMC and CG🦾 For anyone who loves BNB and BSC ✍️

r/CryptoMoonShotsSee Post

⚡️ BNBUP ☄️| Ownership renounced 🚨 | Rug-Proof | For anyone who loves BNB and BSC ✍️

r/CryptoCurrencySee Post

Interoperability: Quant vs Nervos CKB

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ |Launchpad is going to be live on December 19th 🎇| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | Rug-Proof | 💲 Pre CMC and CG

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Newest gem on BSC |25% $BUSD Dividend Token on BSC 📈 | TechRate Audit Soon 🚀 | Rug-Proof | 💲 Pre CMC and CG | Join now ‼️

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Low MC Stealth Launched | 💎 TechRate Audit Soon| 📈Strategic Marketing | 💲 Pre CMC and CG | ⚠️ Prize Draw, Casino and staking coming

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️| Stealth Launched a few hours ago🩸| AMA’s coming up at multiple Tg groups 📢| Great marketing a head everyone joining 🚀 | Huge uptrend 🚨

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Fast growing community | $BUSD Dividend Token 📈 | Based team 💲| Pre CMC and CG 🟥 | Join now and experience the and hype 🟪

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Read This 🔥| Renounced Ownership key💯 | Launched a couple of mins ago still early

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Ownership renounced 🚨| Yahoo Article 🔥 |Whitepaper out soon 👑 For anyone who loves BNB and BSC ✍️

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Cryptic_maestro call soon 🎇| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | 💲 Pre CMC and CG🦾 For anyone who loves BNB and BSC ✍️

r/CryptoMoonShotsSee Post

☄️ BNBFanToken ☄️ | Cryptic_maestro call soon 🎇| Ownership renounced 🚨 | CoinTelegraph Article 🔥 | 💲 Pre CMC and CG🦾 For anyone who loves BNB and BSC ✍️

r/CryptoCurrencySee Post

For the newbies: List of common abbreviations and slang used in crypto trading and investing circles

r/CryptoCurrencySee Post

STOP comparing Solana's outages to Ethereum's

r/CryptoCurrencySee Post

Let's deep dive on USDT's and USDC's much cooler older brother the Terra ecosystem. Understanding the economic model behind Terra - an ecosystem which hopes to provide global, algorithmic stablecoins.

r/CryptoMoonShotsSee Post

$BFT erc20 token a tru hidden gem with giveaways and contests | Locked LP |Anti-Bot

r/CryptoCurrencySee Post

SifChain - Newly open DEX on Cosmos Network

r/CryptoCurrencySee Post

Please help a newbie!

r/CryptoCurrencySee Post

What's the point of Terra?

r/CryptoCurrencySee Post

Harmony ONE Fundamentals

r/CryptoCurrencySee Post

Summary of the top 50 crypto coins

r/CryptoCurrencySee Post

Whats everyone buying during this sale?

r/CryptoCurrencySee Post

ATOM hits all time high at $44

r/CryptoCurrencySee Post

Beginners Guide to Cosmos (ATOM)

r/CryptoCurrencySee Post

How do Blockchains stay secure? Consensus algorithms explained!

r/CryptoCurrencySee Post

CKB vs Quant: Interoperability champion?

r/CryptoCurrencySee Post

Can someone who is familiar with Ouroboros explain its fault tolerance threshold?

r/CryptoMoonShotsSee Post

Beekeepers Fight Token, just stealth launched! Low market Cap! Doxxed dev!

r/CryptoMoonShotsSee Post

Beekeepers Fight Token, just stealth launched! Low market Cap! Poocoin ads will live within 1 hours

r/CryptoMoonShotsSee Post

Beekeepers Fight Token, just stealth launched! Poocoins ads run soon!

r/CryptoMoonShotsSee Post

Beekeepers Fight Token! Just start marketing, buy now before you late.

r/CryptoMoonShotsSee Post

Beekeepers Fight Token! Based our daddy Elon Musk Tweet! Just launched, low market cap. Big potential to reach 100k MC!

r/CryptoMoonShotsSee Post

Beekeepers Fight Token, just stealth launched! Low market Cap, only 1k mc! We are not said if Elon tweet us. But we make this cause Elon tweet it!

r/CryptoMoonShotsSee Post

Beekeepers Fight Token, just stealth launched! We are not said if Elon tweet us. But we make this cause Elon tweet it!

r/CryptoCurrencySee Post

Harmony ONE - a deep dive

r/CryptoCurrencySee Post

Brazil National Team’s Fan Token Listing (BFT) on Bitci.com

r/CryptoCurrencySee Post

Solana vs Casper

r/CryptoCurrencySee Post

ATOM: the internet of blockchain

r/CryptoCurrencySee Post

Is SOL $18bn market cap a glimpse into CSPR's future?

r/SatoshiStreetBetsSee Post

SOL hits $18bn market cap - how does it compare to CSPR?

r/CryptoCurrencySee Post

Beginners Guide to Solana

r/CryptoCurrencySee Post

Brief Guide to Solana

r/CryptoCurrencySee Post

Brief Guide to Solana

Mentions

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1e53wx6/daily_crypto_discussion_july_17_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1e3guoc/daily_crypto_discussion_july_15_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1e2omc5/daily_crypto_discussion_july_14_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1e1wjb6/daily_crypto_discussion_july_13_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dyo925/daily_crypto_discussion_july_9_2024_gmt0/).

That's why Paxos BFT and the BFT family of decentralizes and distributed database were invented. Or DoD private cloud on M365 and AWS. Entirely hosted by DoD for DoD on a private network that never touches the public Internet.

Mentions:#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dwcc8l/daily_crypto_discussion_july_6_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dut3vs/daily_crypto_discussion_july_4_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1du0klg/daily_crypto_discussion_july_3_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1du0klg/daily_crypto_discussion_july_3_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dt81li/daily_crypto_discussion_july_2_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dq60jy/daily_crypto_discussion_june_28_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1doksdb/daily_crypto_discussion_june_26_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dnsd9e/daily_crypto_discussion_june_25_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dm97fg/daily_crypto_discussion_june_23_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dkqdgb/daily_crypto_discussion_june_21_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dkqdgb/daily_crypto_discussion_june_21_2024_gmt0/).

#Hedera Con-Arguments Below is a Hedera con-argument written by a deleted user. > Hedera Hashgraph is Delware Limited Liability Company. > > **It's also a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual voting.** This is the same as Fantom, which is also a a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual elections. The main difference between the two is that Hedera is governed by a permissioned Council of 26 (up to 39) while Fantom is mostly decentralized. > > Hedera has [3-5 second deterministic finality](https://hedera.com/hbar), which is noticeably slower than Fantom's 2-second finality, but is still very fast. > > Hedera was launched in 2019 as a centralized DLT targeting institutional and enterprise companies. It is not meant for the retail sector and has almost no DeFi activity. > > ##Semi-Centralized Proof-of-Authority DLT > > - Hedera uses **Proof-of-Authority** (PoA). It has [semi-centralized governance](https://docs.hedera.com/guides/core-concepts/hashgraph-consensus-algorithms) controlled by the 26 (up to 39) members of the governing council, made up of [publicly-known companies](https://docs.hedera.com/guides/mainnet/mainnet-nodes), and the 7 board of directors. The council each control their own permissioned validator used for consensus. > - New members of the [council are approved by majority vote](https://files.hedera.com/Hedera_COUNCIL-OVERVIEW_2022_JUNE.pdf), and existing ones may be removed by 2/3 vote. Council members can serve 3-9 years consecutively before they have to take a 3-year break. > - There are barely any public details about the staking power of any of the nodes. There is also a Nothing-at-Stake issue because there is no slashing or economic punishments. They may get kicked kicked off the council for misbehaving, but there's no economic disincentive. > - The code was proprietary software that no one was allowed to fork, and it was closed source up until 2022. > - Its nodes have extremely [high enterprise-level requirements](https://docs.hedera.com/guides/mainnet/mainnet-nodes/node-requirements). 5 TB NVMe drives, a $10K NVIDIA Telsa V100 GPU, a 1 Gbps sustained network, Google Cloud Compute Engine VM. These specs are so high that they completely outclass Solana validator requirements. > - Every node has a dedicated GCP IP address, making Google Cloud Platform a possible a single point failure for outages. > > Hedera is designed to be controlled by a conglomerate. Hedera supporters truly believe that is still considered decentralized because they do not believe it's likely publicly-known companies will collude and misbehave. I do not think that design fits well with the crypto community, but acknolwedge that there is a niche community that embraces Proof-of-Authority. > > ##Untrustworthy documentation > > * Much of Hedera's documentation isn't based on the current state of Hedera Hashgraph, but on its ideal state. > * It says it has [a fully decentralized governing body](https://hedera.com/prescription)", which is misleading since they use a 26-member pre-authorized Governing Council. > * It calls itself a "[proof-of-stake public distributed ledger](https://hedera.com/learning/hedera-hashgraph/what-is-hedera-hashgraph)", but it's actually controlled by the governing council and uses Proof-of-Authority. The public hasn't been able to stake (other than the questionable "proxy staking") on it since Hedera's launch 3 years ago. > * For comparison, VeChain is more decentralized than Hedera Hashgraph with its 101 authority nodes and [publicly-available data on their nodes](https://vechainstats.com/authority-nodes/). But at least VeChain is honest about being Proof-of-Authority and even calls itself a [compromise between centralization and decentralization](https://docs.vechain.org/thor/learn/proof-of-authority.html) in their documentation. > * **Real Throughput**: 10K TPS is extremely misleading because it doesn't take into account EVM smart contracts. It published those metrics in 2019, when the smart contact throughput [was 10 TPS](https://ercwl.medium.com/hedera-hashgraph-time-for-some-fud-9e6653c11525), and that was the throughput for Hedera up until Smart Contracts 2.0 released in early 2022. > * Unfortunately, there are no good real estimations for max throughput because Hedera lacks dApps and is a ghost town. It's not congested and regularly sees 5-30 TPS without dApps, so it doesn't get pushed to its limits. With the introduction of Hedera Token Service, Hedera has now somewhat caught up to the misleading documentation it had for 3 years. HTS has an upper limit of 10K TPS, but not everything is going to use it, and [smart contract transactions are throttled at 350 TPS](https://docs.hedera.com/guides/mainnet). Some actions, like TopicCreate and AccountCreate transactions on Hedera are down to 2-5 TPS. We don't know what a real performance is going to look like until Hedera builds up its DeFi presence. What we do know is that it's going to be well below 10K TPS and that it was dishonest with throughput documentation prior this year. > > > ##Horrible Tokenomics > > - There is 38% expected supply inflation in 2022, 50% inflation in 2023, and a [whopping 83% inflation in 2024](https://messari.io/asset/hedera-hashgraph/profile/supply-schedule). I'm very skeptical that the retail sector investing in Hedera is aware of how quickly the circulating supply is increasing and has priced that in. > - Only 42% of the supply has currently been released, guaranteeing high inflation for years down the line > - Hedera very likely passes the Howey Test and would be considered a security asset. It is controlled by a council of 26 companies with a large investment of staked HBAR. Holders of HBAR have an expectation of profit derived from the work of Hedera Hashgraph. > - Nearly [50% of the supply](https://messari.io/asset/hedera-hashgraph/profile/supply-schedule) has gone to employees and the foundation. The majority of the rest (40%) is going to the Hedera Treasury. > - The tokenomics a lot like a giant cash grab ICO that will have years of high inflation. That's extremely scary for a retail investor. > - The 50B token maximum should not be trusted at all and likely will not hold. Those validator nodes that control governance are not cheap and will not run themselves freely once the supply limit is reached. By putting an arbitrarily-high supply, they've simply pushed governance change for tokenomics to be dealt with in the future. > > ##Other > > - DeFi is practically non-existent on Hedera, not surprising since it was built centralized. According to both DefiLlama and DappRadar, Hedera has only one notable DeFi project: Stader. Hedera's [total DeFi TVL of $40M](https://defillama.com/chain/Hedera) is less than 1000x smaller than [Ethereum's](https://defillama.com/chains) and 25x smaller than the nearly-identical Fantom's, which has over 100 DeFi projects on it. > - Hedera uses a [predictable fee schedule](https://docs.hedera.com/guides/mainnet/fees). Token transfers are very cheap at $0.0001. Smart contracts gas fees are considerably more expensive at $0.05 to $1. That's actually really expensive for a 25-node centralized service, but the high fees aren't too surprising because it uses EVM, which is known to be inefficient. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_hedera) to find submissions for other topics.

#Hedera Pro-Arguments Below is a Hedera pro-argument written by a deleted user. > Hedera Hashgraph is Delware Limited Liability Company. > > **It's also a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual voting.** Hedera is governed by a permissioned council of 26 (up to 39) companies. It was launched in 2019 as a centralized DLT targeting institutional and enterprise companies. It is not meant for the retail sector and has almost no DeFi activity. > > I had to dig pretty hard to find Pros arguments for Hedera. > > **High performance** > > - Hedera has [3-5 second deterministic finality](https://hedera.com/hbar), which is very fast. > - Hedera [was a 10 TPS smart contract network](https://ercwl.medium.com/hedera-hashgraph-time-for-some-fud-9e6653c11525), but that changed after Smart Contracts 2.0 and Hedera Token Service were released in early 2022. Its network is currently not congested and regularly sees 5-30 TPS without dApps, so it doesn't get pushed to its limits. HTS has an upper limit of 10K TPS with [smart contract transactions throttled at 350 TPS](https://docs.hedera.com/guides/mainnet). Theoretically, that is very fast, but keep in mind that we don't have any real metrics of what Hedera's network would look like under full DeFi load. > - Hedera uses a [predictable fee schedule](https://docs.hedera.com/guides/mainnet/fees). Token transfers are very cheap at $0.0001. Smart contracts gas fees are considerably more expensive at $0.05 to $1 depending on the contract, but that's still cheaper than Ethereum (as long as the Hedera network is being subsidized by high inflation). > - Hedera has [extremely low energy consumption](https://hedera.com/blog/power-transition-blockchain-sustainability-hedera-hashgraph), using up ~1% of the energy consumption of the average US household. > > **Strong niche following** > > - Hedera is a **Proof-of-Authority** (PoA) network. It has [semi-centralized governance](https://docs.hedera.com/guides/core-concepts/hashgraph-consensus-algorithms) controlled by the 26 (up to 39) members of the governing council, made up of [publicly-known companies](https://docs.hedera.com/guides/mainnet/mainnet-nodes), and the 7 board of directors. The council members each control their own permissioned validator used for consensus. > - The concept of being controlled by a conglomerate of tech companies clashes with the cypherpunk movement. **However, Hedera supporters truly believe that this is the ideal decentralized network because they believe a > consortium of publicly-known companies will never collude and misbehave, risking damage to reputation.** There aren't many PoA networks of this design, so it barely has any direct competitors. It has cornered this niche market. After visiting the Hedera sub, it is evident that they truly love their network and will defend it to the bone. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_hedera) to find submissions for other topics.

Mentions:#DLT#BFT#HTS

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dj5fdm/daily_crypto_discussion_june_19_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dicy5c/daily_crypto_discussion_june_18_2024_gmt0/).

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dicy5c/daily_crypto_discussion_june_18_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Hedera Con-Arguments Below is a Hedera con-argument written by a deleted user. > Hedera Hashgraph is Delware Limited Liability Company. > > **It's also a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual voting.** This is the same as Fantom, which is also a a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual elections. The main difference between the two is that Hedera is governed by a permissioned Council of 26 (up to 39) while Fantom is mostly decentralized. > > Hedera has [3-5 second deterministic finality](https://hedera.com/hbar), which is noticeably slower than Fantom's 2-second finality, but is still very fast. > > Hedera was launched in 2019 as a centralized DLT targeting institutional and enterprise companies. It is not meant for the retail sector and has almost no DeFi activity. > > ##Semi-Centralized Proof-of-Authority DLT > > - Hedera uses **Proof-of-Authority** (PoA). It has [semi-centralized governance](https://docs.hedera.com/guides/core-concepts/hashgraph-consensus-algorithms) controlled by the 26 (up to 39) members of the governing council, made up of [publicly-known companies](https://docs.hedera.com/guides/mainnet/mainnet-nodes), and the 7 board of directors. The council each control their own permissioned validator used for consensus. > - New members of the [council are approved by majority vote](https://files.hedera.com/Hedera_COUNCIL-OVERVIEW_2022_JUNE.pdf), and existing ones may be removed by 2/3 vote. Council members can serve 3-9 years consecutively before they have to take a 3-year break. > - There are barely any public details about the staking power of any of the nodes. There is also a Nothing-at-Stake issue because there is no slashing or economic punishments. They may get kicked kicked off the council for misbehaving, but there's no economic disincentive. > - The code was proprietary software that no one was allowed to fork, and it was closed source up until 2022. > - Its nodes have extremely [high enterprise-level requirements](https://docs.hedera.com/guides/mainnet/mainnet-nodes/node-requirements). 5 TB NVMe drives, a $10K NVIDIA Telsa V100 GPU, a 1 Gbps sustained network, Google Cloud Compute Engine VM. These specs are so high that they completely outclass Solana validator requirements. > - Every node has a dedicated GCP IP address, making Google Cloud Platform a possible a single point failure for outages. > > Hedera is designed to be controlled by a conglomerate. Hedera supporters truly believe that is still considered decentralized because they do not believe it's likely publicly-known companies will collude and misbehave. I do not think that design fits well with the crypto community, but acknolwedge that there is a niche community that embraces Proof-of-Authority. > > ##Untrustworthy documentation > > * Much of Hedera's documentation isn't based on the current state of Hedera Hashgraph, but on its ideal state. > * It says it has [a fully decentralized governing body](https://hedera.com/prescription)", which is misleading since they use a 26-member pre-authorized Governing Council. > * It calls itself a "[proof-of-stake public distributed ledger](https://hedera.com/learning/hedera-hashgraph/what-is-hedera-hashgraph)", but it's actually controlled by the governing council and uses Proof-of-Authority. The public hasn't been able to stake (other than the questionable "proxy staking") on it since Hedera's launch 3 years ago. > * For comparison, VeChain is more decentralized than Hedera Hashgraph with its 101 authority nodes and [publicly-available data on their nodes](https://vechainstats.com/authority-nodes/). But at least VeChain is honest about being Proof-of-Authority and even calls itself a [compromise between centralization and decentralization](https://docs.vechain.org/thor/learn/proof-of-authority.html) in their documentation. > * **Real Throughput**: 10K TPS is extremely misleading because it doesn't take into account EVM smart contracts. It published those metrics in 2019, when the smart contact throughput [was 10 TPS](https://ercwl.medium.com/hedera-hashgraph-time-for-some-fud-9e6653c11525), and that was the throughput for Hedera up until Smart Contracts 2.0 released in early 2022. > * Unfortunately, there are no good real estimations for max throughput because Hedera lacks dApps and is a ghost town. It's not congested and regularly sees 5-30 TPS without dApps, so it doesn't get pushed to its limits. With the introduction of Hedera Token Service, Hedera has now somewhat caught up to the misleading documentation it had for 3 years. HTS has an upper limit of 10K TPS, but not everything is going to use it, and [smart contract transactions are throttled at 350 TPS](https://docs.hedera.com/guides/mainnet). Some actions, like TopicCreate and AccountCreate transactions on Hedera are down to 2-5 TPS. We don't know what a real performance is going to look like until Hedera builds up its DeFi presence. What we do know is that it's going to be well below 10K TPS and that it was dishonest with throughput documentation prior this year. > > > ##Horrible Tokenomics > > - There is 38% expected supply inflation in 2022, 50% inflation in 2023, and a [whopping 83% inflation in 2024](https://messari.io/asset/hedera-hashgraph/profile/supply-schedule). I'm very skeptical that the retail sector investing in Hedera is aware of how quickly the circulating supply is increasing and has priced that in. > - Only 42% of the supply has currently been released, guaranteeing high inflation for years down the line > - Hedera very likely passes the Howey Test and would be considered a security asset. It is controlled by a council of 26 companies with a large investment of staked HBAR. Holders of HBAR have an expectation of profit derived from the work of Hedera Hashgraph. > - Nearly [50% of the supply](https://messari.io/asset/hedera-hashgraph/profile/supply-schedule) has gone to employees and the foundation. The majority of the rest (40%) is going to the Hedera Treasury. > - The tokenomics a lot like a giant cash grab ICO that will have years of high inflation. That's extremely scary for a retail investor. > - The 50B token maximum should not be trusted at all and likely will not hold. Those validator nodes that control governance are not cheap and will not run themselves freely once the supply limit is reached. By putting an arbitrarily-high supply, they've simply pushed governance change for tokenomics to be dealt with in the future. > > ##Other > > - DeFi is practically non-existent on Hedera, not surprising since it was built centralized. According to both DefiLlama and DappRadar, Hedera has only one notable DeFi project: Stader. Hedera's [total DeFi TVL of $40M](https://defillama.com/chain/Hedera) is less than 1000x smaller than [Ethereum's](https://defillama.com/chains) and 25x smaller than the nearly-identical Fantom's, which has over 100 DeFi projects on it. > - Hedera uses a [predictable fee schedule](https://docs.hedera.com/guides/mainnet/fees). Token transfers are very cheap at $0.0001. Smart contracts gas fees are considerably more expensive at $0.05 to $1. That's actually really expensive for a 25-node centralized service, but the high fees aren't too surprising because it uses EVM, which is known to be inefficient. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_hedera) to find submissions for other topics.

#Hedera Pro-Arguments Below is a Hedera pro-argument written by a deleted user. > Hedera Hashgraph is Delware Limited Liability Company. > > **It's also a Directed Acyclic Graph DLT that uses a leaderless asynchronous BFT algorithm with virtual voting.** Hedera is governed by a permissioned council of 26 (up to 39) companies. It was launched in 2019 as a centralized DLT targeting institutional and enterprise companies. It is not meant for the retail sector and has almost no DeFi activity. > > I had to dig pretty hard to find Pros arguments for Hedera. > > **High performance** > > - Hedera has [3-5 second deterministic finality](https://hedera.com/hbar), which is very fast. > - Hedera [was a 10 TPS smart contract network](https://ercwl.medium.com/hedera-hashgraph-time-for-some-fud-9e6653c11525), but that changed after Smart Contracts 2.0 and Hedera Token Service were released in early 2022. Its network is currently not congested and regularly sees 5-30 TPS without dApps, so it doesn't get pushed to its limits. HTS has an upper limit of 10K TPS with [smart contract transactions throttled at 350 TPS](https://docs.hedera.com/guides/mainnet). Theoretically, that is very fast, but keep in mind that we don't have any real metrics of what Hedera's network would look like under full DeFi load. > - Hedera uses a [predictable fee schedule](https://docs.hedera.com/guides/mainnet/fees). Token transfers are very cheap at $0.0001. Smart contracts gas fees are considerably more expensive at $0.05 to $1 depending on the contract, but that's still cheaper than Ethereum (as long as the Hedera network is being subsidized by high inflation). > - Hedera has [extremely low energy consumption](https://hedera.com/blog/power-transition-blockchain-sustainability-hedera-hashgraph), using up ~1% of the energy consumption of the average US household. > > **Strong niche following** > > - Hedera is a **Proof-of-Authority** (PoA) network. It has [semi-centralized governance](https://docs.hedera.com/guides/core-concepts/hashgraph-consensus-algorithms) controlled by the 26 (up to 39) members of the governing council, made up of [publicly-known companies](https://docs.hedera.com/guides/mainnet/mainnet-nodes), and the 7 board of directors. The council members each control their own permissioned validator used for consensus. > - The concept of being controlled by a conglomerate of tech companies clashes with the cypherpunk movement. **However, Hedera supporters truly believe that this is the ideal decentralized network because they believe a > consortium of publicly-known companies will never collude and misbehave, risking damage to reputation.** There aren't many PoA networks of this design, so it barely has any direct competitors. It has cornered this niche market. After visiting the Hedera sub, it is evident that they truly love their network and will defend it to the bone. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_hedera) to find submissions for other topics.

Mentions:#DLT#BFT#HTS

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1delgwu\/daily_crypto_discussion_june_13_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1ddt245/daily_crypto_discussion_june_12_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1dapnaf/daily_crypto_discussion_june_8_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1d8c79y/daily_crypto_discussion_june_5_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1d8c79y/daily_crypto_discussion_june_5_2024_gmt0/).

Mentions:#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1d6r63h/daily_crypto_discussion_june_3_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Avalanche Pro-Arguments Below is a Avalanche pro-argument written by a deleted user. > Avalanche is a relatively-new (only 1.5 years old) multi-blockchain crypto project whose token, AVAX, shot up into the top 10 cryptocurrencies by market cap in just 1 year. It has since fallen a bit. > > It has 3 chains on its primary network (C-Chain, X-Chain, P-Chain) and many subnets. The C-Chain is the most-used chain and almost the only one that's used by exchanges. > > I have a separate summary of [Avalanche here](https://np.reddit.com/r/MPlankton/comments/ukjt2e/avalanche_research_summary/) that discusses the platform in more detail. > > This post only lists the PROs > > ##PROs > > * The C-Chain uses an account model for transactions and is EVM-compatible. So it's easy for devs to create apps that bridge between EVM-compatible networks. > * The C-Chain EVM has many optimizations which make it much more gas-efficient than Ethereum. Most smart contract transactions cost pennies on the Avalanche network. > > **Low Transaction Costs** > > * C-Chain basic transactions (e.g. transfers/swaps) currently [$.03-$.10](https://snowtrace.io/gastracker) after the Crabada DeFi game moved to its subnet. This is way cheaper than using Ethereum (both before and after The Merge). Like Ethereum, the C-Chain also spam-resistant due to variable transaction fees. When the network was 30% congested while Crabada was running on the C-Chain, transaction fees were still only between $0.30 to $1.5 to execute. > * X-Chain and P-Chain transaction fees are fixed at a low [0.001 AVAX](https://docs.avax.network/learn/platform-overview/transaction-fees/), which are currently $0.05 - $0.10 USD (Apr 2022). Both are spam-resistant because you'd need to spend over $1M USD / hour in transaction fees before they start seeing congestion. > * However, note that transaction fees are kept artificially low because validators are paid by staking rewards, which creates high inflation (over 10%) on the circulating supply. > > **High performance and speed** > > * **Extremely fast finality**: All 3 primary chains have an extremely-fast [1-2 second deterministic finality](https://docs.avax.network/build/tutorials/platform/integrate-exchange-with-avalanche/). Avalanche uses Snow, which is a fast BFT-like consensus protocol that uses a DAG structure for network gossip. Most other BFT-class blockchains have a moderately-slower 4-10s finality time. > * **Moderately-fast TPS**: > * **C-Chain**: Highest achieved TPS was [869](https://stats.avax.network/dashboard/c-chain-activity/) on the C-Chain, which accounts for over 99% of Avalanche transactions. This is already 50x higher than Ethereum's maximum TPS of ~16 TPS. The maximum TPS depends on the type of smart contracts it sees (300 bytes on average). Currently, the Avalanche C-Chain is only seeing [10-40 TPS](https://snowtrace.io/chart/tx) because it doesn't get that many transaction requests. These are mostly from the Crabada game that's going to move into its own subnet. > * **X-Chain**: This is often quoted to be the 4500 TPS network of Avalanche (though it's quite misleading because this chain gets very little usage compared to the C-Chain). The X-Chain uses UTXO transactions and does not support smart contracts, so it's best compared to the Bitcoin network. 4500 TPS is orders of magnitude faster than Bitcoin's 5-7 TPS. In ideal test situations (150 nodes, 10kb blocks), the X-Chain can get [up to 7000 TPS](https://assets.website-files.com/5d80307810123f5ffbb34d6e/6009805681b416f34dcae012_Avalanche%20Consensus%20Whitepaper.pdf). > * **P-Chain**: The P-Chain is very similar to the X-Chain. Its purpose is for governance, staking, validators, and subnet management. Its 4500 TPS limit is way more than it will ever need. > * **High uptime**: Avalanche's primary network has had no outages. Aside from a brief minting bug in Feb 2022, it has not experienced any noticeable congestion. > > **Supports Application-Specific sidechains: Subnets** > > In addition, Avalanche uses subnets to build application-specific blockchains that connect weakly to its ecosystem. > > * Subnets allows communities to create their own flexible sidechains that are loosely connected to the Avalanche's primary network. Subnets gain access to Avalanches infrastructure and framework, but not its security. They can have their own consensus model, decide the requirements for validators, be public or private, and have their own native token for transaction fees. > * Subnet validators must validate the Primary network, which in turns validates the 3 built-in networks. As the number of subnets grow, they will contribute to the overall security and decentralization of Avalanche's primary network (but not vice-versa). ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Avalanche) to find submissions for other topics.

Mentions:#AVAX#BFT#DAG

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1d4i6m2/daily_crypto_discussion_may_31_2024_gmt0/).

Mentions:#NOT#BTC#BFT

#Bitcoin Con-Arguments Below is an argument written by a deleted user which won 1st place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ####**Intro** > > Overall, Bitcoin's conservative blockchain has failed to keep up technologically with other blockchains. Bitcoin is currently #1 not due to better design, but because it had a first-mover advantage. But how long will that hold? > > Bitcoin is a gateway cryptocurrency. Many crypto enthusiasts often started out with Bitcoin and then branched out. Once you've had a taste of newer, faster networks that offer delectable DeFi dApps and smart contracts, it's hard to go back to slow, boring old Bitcoin. > > ####**Bitcoin doesn't excel at anything** > > **Poor Medium of Exchange** > > Bitcoin is much too slow. It has a max throughput of **3-4 TPS** that takes **30-60 minutes for probabilistic finality**. It used to have a max throughput of 7 TPS, but that has gradually fallen over the years after exchanges started using batch transactions. 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 a cash register for a transaction to go through. 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. And if there's congestion, some transactions can get stuck in the mempool for hours or days. > > It's orders of magnitude slower than newer networks like Polygon PoS or Algorand, which can [process 4000+ TPS with sub-4s of deterministic finality](https://developer.algorand.org/docs/get-started/basics/why_algorand/), with transaction fees well under a penny. > > Even TradFi now has payment systems like Africa's M-Pesa, UK's Faster Payments, Australia's NPP, the US's upcoming FedNow, and Clearinghouse's RTP, which provide **near-instant** payments and peer-to-peer transactions **without fees**. > > **Unstable Store of Value** > > Bitcoin is too volatile to be considered a stable Store of Value. It lost up to 80% of its purchasing-power during previous bear markets. It's also NOT a good stock market hedge since it often moves with the stock market. > > **Lacks smart contracts and DeFi** > > Bitcoin doesn't support DeFi smart contracts with its very basic Bitcoin Script. There are smart contract protocols that use Bitcoin like Stacks, but they are very disconnected from Bitcoin. > > ####**Difficult to achieve widespread global adoption** > > At 4 TPS, Bitcoin can only make ~345K transactions/day. There are ~8B people in the world today. If Bitcoin grows to the size of 1% of the population, each person can make an average of 1 on-chain transaction every 230 days. **If Bitcoin usage grows to 10% of the population, each person can make an average of 1 on-chain transaction every 6.3 years.** To achieve 10% world adoption, everyone would need to solely be using centralized exchanges and not interacting directly with the blockchain itself. > > ####**Issues with the Lightning Network** > > **Not even the Lightning Network could save Bitcoin** because opening and closing a channel requires 2 on-chain transactions. Whenever the directional capacity of a channel is exceeded, it will need to be rebalanced, or be closed and re-opened. 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 open 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. > > **Not a true Layer 2** > > Similar to Plasma channels, **the Lightning network is not considered a true Layer 2 because it lacks global state.** There are many nodes that are not connected to the rest of the network, and onion routing issues can cause nodes to be disconnected from the rest of the network. **Channels only work if everyone's online.** If you're offline, others can force-close your channel, leading to a 1-week wait time where the channel's funds are locked and inaccessible. > > **Meant for small transactions** > > Lightning is optimal for small transactions. The larger your transaction, the higher the fees you have to pay to route it through the network. As of March 2023, the [average channel capacity](https://1ml.com/statistics) is only 0.07 BTC, and the average node capacity is only 0.33 BTC. It's not uncommon for a large 1-BTC transaction to cost $2-10 in fees to route through multiple nodes in the Lightning Network due to limited channel capacity, which can make it more expensive than L1 Bitcoin fees. Also, the total value stored on public Lightning channels account for under [0.02% of Bitcoin's total locked value](https://1ml.com/). > > **Partially-centralized, low-security layer** > > Most people just connect to centralized nodes in a spoke-hub network topology to gain access to high-capacity nodes. Even though [average capacity is getting bigger](https://bitcoinvisuals.com/ln-capacity), the [number of public channels has been on the decline since 2021](https://bitcoinvisuals.com/ln-channels), meaning that Lightning is becoming more centralized. > > **Channels require rebalancing** > > One of the biggest problems with opening channels is that they **start out with zero incoming liquidity**. Anyone who opens a channel starts out with a metaphorical "full cup of water". They can't receive any more water until they first empty the cup a little. And they can only receive additional water equivalent to the amount they removed. Similarly, people who open new channels to the Lightning network need to find a way to spend their Sats safely so that they can have incoming liquidity. Merchants and Lightning node providers often have a lack of incoming-liquidity while consumers who only spend usually run out of outbound liquidity. > > There are ways to rebalance your channel capacity, but it usually costs money to pay for a service to provide that liquidity, and it can be as expensive as a $1 fee per $1000 of liquidity. > > ####**The disadvantage of soft forks** > > The major downside of Soft forks is that they require new versions of the software to maintain backwards-compatibility with older versions, which leads to **technical debt**. This significantly slows down the adoption of new updates, which now often take 3-6 years to gain the majority. > > Due to its soft forks, the Bitcoin network has to maintain a mismatch of all sorts of different address formats: P2PK, P2PKH, P2SH, P2MS, P2WPKH, Nested P2WPKH, P2PKH, P2WSH, and P2TR. At the start of January 2023, [only 1% of transactions were using Taproot-compatible addresses](https://transactionfee.info/charts/inputs-types-by-count/) while 65% were still using inefficient legacy addresses from before 2017. > > **Almost no one is using addresses newer than the 2021 update because none of the major CEXs support them**. Most exchanges (Binance, Coinbase, Kraken) [don't support Bech32m addresses](https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges), which means they still can't send to Segwit v1 and Taproot addresses, despite that it was [an update from 2021](https://bitcoin.org/en/releases/0.21.1/). > > In comparison, networks that hard fork for protocol updates don't have these incompatibility issues between versions. Everyone is working on the same version, which allows for consistency. > > ####**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 2022, each block cost roughly $150-250K in energy to mine, which is equivalent to $80-120 of fees per transaction. 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 data centers 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 66% 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. > > This could be fixed with **Stratum v2**, but that's not available yet. And we don't even know if mining pools will enable the configuration t... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/100p7u8/top_coins_bitcoin_conarguments_january_2023/) to be taken to the original topic-thread for this argument 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/1d3qkbw/daily_crypto_discussion_may_30_2024_gmt0/).

Mentions:#NOT#BTC#BFT