Bitcoin Scaling Debate Reaches Boiling Point

Published on
June 12th, 2017
Topic
Technology, Crypto-currencies
Duration
31 minutes
Asset class
Crypto-currencies, Currencies, Cash

Bitcoin Scaling Debate Reaches Boiling Point

·
Featuring Tuur Demeester

Published on: June 12th, 2017 • Duration: 31 minutes • Asset Class: Crypto-currencies, Currencies, Cash • Topic: Technology, Crypto-currencies

Tuur Demeester of Adamant Research, examines how far cryptocurrencies have come in the past eight years, questioning whether we are in a bubble or state of viral adoption in the sector, while also providing some essential analysis on the current scaling debate in Bitcoin. Filmed on June 5, 2017, in Fort Worth.

Comments

  • AS
    Andrew S.
    12 June 2017 @ 11:25
    Great interview. No one knows exactly how the bitcoin story plays out but it is unthinkable not to have some exposure to this wave of the future....... and yes, you can own both gold and bitcoin at the same time and still retain the ability to function..
  • TJ
    Terry J.
    12 June 2017 @ 12:24
    Awesome way to start the week with this masterclass on bitcoin and cryptocurrencies. I learnt so much. I can see why bitcoin is rightly or wrongly perceived as more attractive than gold by most millennials, hence the reference to "digital gold", but as Andrew S suggested, why not hold both?
  • EG
    Eduardo G.
    12 June 2017 @ 12:35
    I'm only half way through the video, but the chain split which may happen in a couple of months sounds like a "mutation" of Bitcoin, where if you end up on the "wrong chain" you'll face extinction. Amazing! ...right, I'll geek-off now :)
    • EF
      E F.
      12 June 2017 @ 14:02
      I believe in the case of a split you would own your "old" coins on both new chains, somebody correct me if I misunderstood
    • TD
      Tuur D. | Contributor
      12 June 2017 @ 14:16
      In the case of a hard-fork you'd own coins on both chains forever (like with ETH and ETC). In the case of a User Activated Soft Fork (UASF), you'd also own coins on both sides, but one side would disappear if the new UASF wins over more than 50% of the bitcoin mining hash rate.
    • MS
      Matt S.
      12 June 2017 @ 16:43
      when does this decision get made? seems pretty massive. hopefully it will shake out all the "retail" traders (cough cough not us) and then we will be able to jump on the winning side at low prices. Am I naive to day this? (probably)
    • TD
      Tuur D. | Contributor
      14 June 2017 @ 05:25
      1st of August is an important date imo, but if the UASF doesn't get 5 or 10% of mining support from the getgo, it's likely that it'll be considered a non-event and that the Bitcoin status quo will be maintained for the time being.
  • TM
    The-First-James M.
    12 June 2017 @ 13:14
    This was an awesome summary of the present situation; particularly with respect to the scaling debate. It's clear there are still significant risks, but fortune favours the bold (or is that, the foolish ;)).
  • ns
    niall s.
    12 June 2017 @ 15:32
    Back in 1999 financial TV was loaded with Geeks talking riddles about the dangers of Y2K , Billions was spent ( flushed down the toilet ) to "tackle the problem" . In 2017 the Geeks are back in force , listen to Geeks at your peril .
    • MS
      Matt S.
      12 June 2017 @ 16:44
      Hmmm.... valid point.
    • JD
      Jakk D.
      12 June 2017 @ 21:10
      This "geek" is telling you the good and bad, the upcoming nuance and everything in between. He's not the charlatan you're alluding to. Also, those geeks who talked about Y2K, they also had the solution... the media however ran wild with the fear piece and used it to sell media assets instead of discussing the solution. Listen to biased news at your peril.
    • KV
      Koen V.
      13 June 2017 @ 09:04
      Back in 1989 Bulletin Board Systems were loaded with Geeks talking riddles about the prospects of the tech boom , Billions were invested ( flushed down into Apple, Microsoft and similar stock ) to "tackle the problem of getting filthy rich" . In 2017 the Geeks are back in force , listen to Geeks at your peril .
    • ns
      niall s.
      13 June 2017 @ 15:15
      There was no Y2K solution because there was no problem , i was an engineer working in Power Generation for GE at the time and was put on alert to support clients as we entered year 2000 , there was no problem what so ever , it was all BS and billions were wasted by fools . Those Geek junkies that bought Apple in 1989 had a very bumpy ride ,it could have been bought much cheaper after the Geeks departed I predict they same for the Bitcoin bulls. Simply put if Bitcoin is such an advance why do they have to invent a new language to talk about it ?
    • jb
      john b.
      14 June 2017 @ 12:01
      What new language are you talking about Niall S? New terms come along with everything new. Not some bitcoin bull or anything just don't understand what you mean by the language comment?
  • MS
    Matt S.
    12 June 2017 @ 16:40
    Really fantastic - I think finally, I "get it" ! (not what it is, but what it means to the world) This guy is smart and lucid - great video!
    • TD
      Tuur D. | Contributor
      14 June 2017 @ 05:21
      Glad it was meaningful!
  • MS
    Matt S.
    12 June 2017 @ 16:59
    Isn't there a danger... that these "core developers" as this thing takes off really big time... see themselves as the overlords of Bitcoin? I mean, it's human nature. If big money is at stake, fiat currencies are potentially threatened, governments are becoming involved in a big way as is the law.... these people will become increasingly more prominent and revered in the same way Janet Yellen of the Fed is today? Their decisions will be affecting many people and much money. So in a way... it may be "decentralized" now but in the future.... these core developers will essentially centralize it. No?
    • TD
      Tuur D. | Contributor
      12 June 2017 @ 21:30
      That's unlikely imo, as it is an open source project. Just like with the internet protocols (TCP, IP, UDP, ...) once enough people start disagreeing over where a protocol should go, it tends to freeze into place and serve as a foundation that higher level protocols are built on top of.
    • LS
      Lorenz S.
      15 June 2017 @ 19:15
      think about democracy and its history. people as a collective tend not to do very well in their decision process. Bitcoin won't be an exception to that rule. It would truly be shortsighted to see it any other way.
  • GS
    Garrett S.
    12 June 2017 @ 17:07
    I love reading gold and PGM bulls negative comments on the Bitcoin. For a living, I'm a partner of the biggest processor of automobile catalysts for Platinum, Palladium, and Rhodium recovery in Michigan. I'd like to meet some of these so called "gold PGM bulls, bitcoin bears" and talk to them about my true feelings of why I'm so bullish the Bitcoin long term. I'd also like to show them I buy and sell more ounces PGMs in one week than they probably will in their lifetime. Yes I'm bragging but that isn't the complete reason of why I'm stating that. I'm stating that for one reason and one reason only. In my business hedging metals on a weekly basis is vital in retaining profits. With that said, I think these gold bulls bitcoin bears fear that in a gold bull market the Bitcoin has the possibility to take some of their market cap. Accepting that possibility should ultimately make them want to diversify. From my experience, accepting the idea of no absolutes is always the better way to profit.
    • EF
      E F.
      12 June 2017 @ 21:51
      I don't exactly see what your argument is. I feel you will find a lot of people on here who are bullish both compared to twitter and other channels. I personally think we need to see the next bad event (post 3k rally) in one of the cryptos to judge whether it is in strong or weakish hands. And goldbugs will naturally be suspicious about this community buying into an exponential rise and declining market share of the once 90% asset in the space.
    • js
      jacob s.
      13 June 2017 @ 10:36
      where in michigan?
  • CB
    Conor B.
    12 June 2017 @ 17:10
    Did he say he was short Ethereum last year? How do you short CCs? Also what was the logic behind being short in 2016? Sounds like a wildly asymmetric position in the wrong direction.
    • TD
      Tuur D. | Contributor
      12 June 2017 @ 21:32
      Yeah, I was short and closed that position in December 2016 - so was a profitable trade. My fundamental concerns about ETH have changed little, even though the market is clearly excited about the platform's promises.
    • SR
      Steve R.
      12 June 2017 @ 21:54
      So basically, its just down to hype then?
    • GS
      Gordon S.
      14 June 2017 @ 13:41
      @Conor: You can short CCs on specific exchanges. I guess in the background it works like any short, you borrow someone else's coins, sell them and then buy them back at some point in the future. Or an exchange might issue a CC IOU to someone that bought a coin and offset the position "synthetic" position by someone else's short. But that would probably make the exchange "less pristine"?
  • RA
    Robert A.
    12 June 2017 @ 20:32
    Another excellent BC presentation. Even within our RV TV eco system there is a meaningful and well reasoned debate, e.g., Raoul and Mark Hart. Very exciting to see and experience this whole digital currency evolution and as usual, RV is on the cutting edge for us!
  • SR
    Steve R.
    12 June 2017 @ 21:52
    I think Raoul totally nailed it in his last GMI report - If I have 1Kg of gold and keep it for 10 years then I will still have 1Kg of gold in 10 years - it does not change its form. Bitcoin (as Tuur is describing here) is changing constantly and (under certain circumstances) you may loose your bitcoins. If I put 100 bitcoins in a 'vault' for 10 years, would they still exist after 10 years? Its highly unlikely IMO. What guarantees exist? They don't. Its just software, and software changes are happening exponentially. Bitcoin therefore cannot be a store of value, its mutatable. Blockchain is the 'break-through' technology. Bitcoin is just a transfer of value mechanism.
    • PN
      Paul N.
      13 June 2017 @ 09:40
      The blockchain doesn't work without the digital bearer asset (bitcoin), nor is there much use for it other than digital bearer assets. The people making private blockchains are selling vaporware which is less efficient than existing database tech.
    • jb
      john b.
      14 June 2017 @ 11:49
      Btc is certainly a high risk investment and I wouldn't tell anyone to lock it away for ten days let alone ten years. And you certainly shouldn't be doing all your investing in btc/cryto. It depends on your conditions. Worth, appetite for risk, time you are willing to monitor it(because as I said its very high risk)..
    • MC
      Mike C.
      14 June 2017 @ 13:18
      Steve....hence why the transformation from physical to digital/virtual realm is one of the most difficult to conceptualize but one which is paramount to grasp because it's happening. I can't touch or feel WI-FI internet but I know it's real, that it exists, everybody is using it and it works. As long as a utility is being utilized providing function, confidence in that network grows and it's existence continuously validated.
  • SS
    Steve S.
    13 June 2017 @ 05:52
    What is the best entry point for Bitcoin?
    • IO
      Igor O.
      13 June 2017 @ 10:46
      1st August
    • TD
      Tuur D. | Contributor
      14 June 2017 @ 06:00
      That may actually not be a bad idea...
    • jb
      john b.
      14 June 2017 @ 11:53
      Would you think it a bad idea for someone at it a while to go mid july.. okay I've done very well.. lets go to fiat and see how this plays out over next month or so.. upside is little if you've been at it a while.. downside not so little?.. people have to make their own mind upI fully appreciate that just interested in your thoughts on this
    • TD
      Tuur D. | Contributor
      15 June 2017 @ 22:41
      It all depends on your personal situation, conviction level, tolerance for volatility, etc. Markets are pretty liquid so it should be fairly easy to get in and out as a retail investor.
  • DY
    Damian Y.
    13 June 2017 @ 10:33
    Yeah Bitcoin is the future. Visa 24,000 transaction per second. Bitcoin 7 transactions per second One Bitcoin transaction uses more than 1,000 times more energy than one Visa transaction. Visa has already developed B2B Connect using blockchain infrastructure. Technology changes very quickly and in the near future you'll be hearing about some new amazing technology. Now it's ethereal that will be the next big thing, what will it be next? Bitcoin is a bubble waiting to explode.
    • js
      jacob s.
      13 June 2017 @ 10:52
      ethereum. andddd you just lost all your credibilty
    • jb
      john b.
      14 June 2017 @ 11:44
      Don't think their he mentioned anything about Visa. Why do you mention it? Genuine q. Hadn't seen it before
    • MM
      Michael M.
      16 June 2017 @ 04:56
      ...and if you're correct nothing changes for you. On the other hand if you short bitcoin now when you're scenario unfolds you'll be left with something less ephemeral than smugness.
    • PN
      Paul N.
      26 June 2017 @ 02:26
      Scaling in a centrally controlled system is easy and has been done before. Scaling while remaining decentralized is a new frontier that Bitcoin is working its way through.
  • RL
    Russell L.
    13 June 2017 @ 11:59
    Are there date stamps on videos? Would be useful. First thing I look for.
    • DB
      David B.
      13 June 2017 @ 13:19
      Intro says video recorded on June 5
  • TS
    Thomas S.
    14 June 2017 @ 05:33
    Great presentation Tuur! I would like to know how you short ethereum or any other cryptocurrency?
    • TD
      Tuur D. | Contributor
      14 June 2017 @ 12:53
      Thanks, appreciated. Exchanges like Kraken, Bitfinex, Poloniex have many inter-cryptocurrency pairs. E.g. ETC/ETH, or LTC/BTC, or ETH/BTC. And they offer margin trading. So even if you don't have ETH in your account, one could "sell" ETH for BTC on margin, and then later buy it back.
  • sp
    shashwat p.
    14 June 2017 @ 06:37
    This sounds like science fiction XD
  • GS
    Gordon S.
    14 June 2017 @ 13:54
    Excellent presentation, thank you Tuur and also thank you for taking the time to reply to comments here! Assuming no hard or soft fork, how would the transaction cost vary over time? How much are those transaction costs dependent on the price of BTC itself? I wound be interested, if assuming a price crash, could the relative transaction cost explode so much as to basically suffocate BTC? (I.e. transaction cost higher than the price of BTC?) Could something like that even be induced by a flash crash?
    • TD
      Tuur D. | Contributor
      15 June 2017 @ 16:32
      Hi Gordon - glad the presentation was valuable! Assuming the Bitcoin core protocol freezes in place, transaction volumes would be mostly taken care of in 2nd layer protocols (which in absence of segwit would take longer to develop) such as sidechains and the lightning network. In those environments fees would range from zero (like how you can browse a web page for free as a compensation for using the platform) to higher, depending on the particular security/volume trade-offs. It's impossible to predict the price of tx on the main chain, this would depend on how much security would be reduced on 2nd layer solutions. It could be $100, $1,000 or even $10,000 per tx over time, all would be decided by the market - and no I don't think TX cost would ever be higher than the price of BTC (though 1 btc in reality is an arbitrarily chosen unit, as 1/21millionth of total supply). Also keep in mind that Bitcoin is already scaling like Nick Szabo (2009) and Hal Finney (2010) envisioned: millions of tx daily off-chain, processed by trusted entities like exchanges, gambling websites, etc.
  • RM
    Rainer M.
    16 June 2017 @ 16:14
    Great interview and thoughts Tuur
  • CA
    Craig A.
    18 June 2017 @ 08:18
    Do you mind putting the names of sources in writing. There were some complex names there. Also I was recently told that Ethereuem is now more secure than Bitcoin by a friend of mine. It that true, and if it is have does this affect Bitcoin?
    • PN
      Paul N.
      21 June 2017 @ 06:09
      Spencer Boghart. Aaron Van Wirdum.. Adam Back. Greg Maxwell. Eric Lombrozo. Peter Wuille. Andreas Antonopolous. I would add a few more. Peter Todd, Lukedashjr, WhalePanda, Riccardo Spagni, Jimmy Song. Most of the people listed are on twitter, a few on reddit, and also post on the bitcoin dev mailing list
    • PN
      Paul N.
      21 June 2017 @ 06:18
      Ethereum isnt more secure than bitcoin by any stretch of the imagination. Last i checked the hashrate of eth was 50 TH/s and btc was 5 million TH/s. and once they switch to Proof of Stake there will be no mining power behind it just a group of trusted holders.
  • JG
    Justin G.
    20 June 2017 @ 01:50
    Does anyone know if there is an options market for bitcoin or eretheum that I can be short through puts?
    • PN
      Paul N.
      26 June 2017 @ 02:35
      Dont think one exists. I know you can short on margin on sites like bitfinex.
    • BO
      Blake O.
      28 June 2017 @ 21:31
      I have never used this exchange and have no further knowledge of their operations or reputation but they offer Bitcoin options trading. https://www.deribit.com/
    • EM
      Ewan M.
      14 July 2017 @ 06:51
      Use BitMEX. Solid platform out of HK
    • bs
      bob s.
      18 January 2018 @ 18:37
      look at ledger x
  • AS
    Avneet S.
    27 June 2017 @ 09:44
    In terms of UASF happening and the new UASF winning over 50% mining, what would stop someone from spending the coins they had on the losing chain before UASF won over 50% and retaining the coins they had on the winning chain?
  • PZ
    Petr Z.
    29 June 2017 @ 16:58
    Do you see value in LTC if Segwit is activated on BTC?
  • RI
    R I.
    9 July 2017 @ 04:37
    Interesting but Institutional money will never touch this space.
    • DH
      Dion H.
      13 July 2017 @ 06:46
      Oh dear.
    • LV
      Liam V.
      17 July 2017 @ 05:34
      That is not true. Look at the chain interview on RV - with the dude from Panterra Capital, that is exactly what he is doing
  • RE
    Richard E. | Contributor
    18 August 2017 @ 16:14
    Is it true that 3 of the top 4 miners are Chinese firms? If so, do we really think there are no 'state actors' in the bitcoin network? Is that a little naive?
  • LC
    Lloyd C.
    28 August 2017 @ 08:39
    Tuur told everyone to sell ETH at the end of 2016. I'm not sure why anyone listens to him
  • LC
    Lloyd C.
    28 August 2017 @ 08:44
    He's overstating the problem of blockchain bloat
  • LC
    Lloyd C.
    28 August 2017 @ 08:46
    None of the key core developers now are early adopters. Not Greg, not adam, not luke jnr
  • CS
    Carey S.
    1 January 2018 @ 09:29
    Check out Hashgraph.
  • bs
    bob s.
    18 January 2018 @ 19:02
    nice guy-smart guy. agreed what is hashgraph going to do to blockchain?

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