Bitcoin Scaling Debate Reaches Boiling Point

Featuring Tuur Demeester

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.

Published on
12 June, 2017
Topic
Technology, Crypto-currencies
Duration
31 minutes
Asset class
Cash, Currencies, Crypto-currencies
Rating
30

Comments

  • bs

    bob s.

    18 1 2018 19:02

    0       0

    nice guy-smart guy. agreed what is hashgraph going to do to blockchain?

  • CS

    Carey S.

    1 1 2018 09:29

    0       0

    Check out Hashgraph.

  • LC

    Lloyd C.

    28 8 2017 08:46

    0       0

    None of the key core developers now are early adopters. Not Greg, not adam, not luke jnr

  • LC

    Lloyd C.

    28 8 2017 08:44

    0       0

    He's overstating the problem of blockchain bloat

  • LC

    Lloyd C.

    28 8 2017 08:39

    0       0

    Tuur told everyone to sell ETH at the end of 2016. I'm not sure why anyone listens to him

  • RE

    Richard E.

    18 8 2017 16:14

    0       0

    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?

  • RI

    R I.

    9 7 2017 04:37

    0       1

    Interesting but Institutional money will never touch this space.

    • DH

      Dion H.

      13 7 2017 06:46

      0       0

      Oh dear.

    • LV

      Liam V.

      17 7 2017 05:34

      1       0

      That is not true. Look at the chain interview on RV - with the dude from Panterra Capital, that is exactly what he is doing

  • PZ

    Petr Z.

    29 6 2017 16:58

    0       0

    Do you see value in LTC if Segwit is activated on BTC?

  • AS

    Avneet S.

    27 6 2017 09:44

    0       0

    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?

  • JG

    Justin G.

    20 6 2017 01:50

    2       1

    Does anyone know if there is an options market for bitcoin or eretheum that I can be short through puts?

    • PN

      Paul N.

      26 6 2017 02:35

      0       0

      Dont think one exists. I know you can short on margin on sites like bitfinex.

    • BO

      Blake O.

      28 6 2017 21:31

      0       0

      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 7 2017 06:51

      0       0

      Use BitMEX. Solid platform out of HK

    • bs

      bob s.

      18 1 2018 18:37

      0       0

      look at ledger x

  • CA

    Craig A.

    18 6 2017 08:18

    1       0

    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 6 2017 06:09

      3       0

      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 6 2017 06:18

      1       0

      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.

  • RM

    Rainer M.

    16 6 2017 16:14

    1       0

    Great interview and thoughts Tuur

  • GS

    Gordon S.

    14 6 2017 13:54

    1       0

    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.

      15 6 2017 16:32

      6       1

      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.

  • sp

    shashwat p.

    14 6 2017 06:37

    2       0

    This sounds like science fiction XD

  • TS

    Thomas S.

    14 6 2017 05:33

    1       0

    Great presentation Tuur! I would like to know how you short ethereum or any other cryptocurrency?

    • TD

      Tuur D.

      14 6 2017 12:53

      7       0

      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.

  • RL

    Russell L.

    13 6 2017 11:59

    3       0

    Are there date stamps on videos? Would be useful. First thing I look for.

    • DB

      David B.

      13 6 2017 13:19

      5       0

      Intro says video recorded on June 5

  • DY

    Damian Y.

    13 6 2017 10:33

    8       6

    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 6 2017 10:52

      1       6

      ethereum. andddd you just lost all your credibilty

    • jb

      john b.

      14 6 2017 11:44

      0       1

      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 6 2017 04:56

      2       0

      ...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 6 2017 02:26

      0       0

      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.

  • KJ

    Kulbir J.

    13 6 2017 05:52

    1       0

    What is the best entry point for Bitcoin?

    • IO

      Igor O.

      13 6 2017 10:46

      4       0

      1st August

    • TD

      Tuur D.

      14 6 2017 06:00

      3       1

      That may actually not be a bad idea...

    • jb

      john b.

      14 6 2017 11:53

      1       0

      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.

      15 6 2017 22:41

      2       0

      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.

  • SR

    Steve R.

    12 6 2017 21:52

    6       3

    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 6 2017 09:40

      2       1

      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 6 2017 11:49

      1       0

      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 6 2017 13:18

      8       0

      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.

  • RA

    Robert A.

    12 6 2017 20:32

    6       1

    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!

  • CB

    Conor B.

    12 6 2017 17:10

    1       0

    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.

      12 6 2017 21:32

      4       1

      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 6 2017 21:54

      0       0

      So basically, its just down to hype then?

    • GS

      Gordon S.

      14 6 2017 13:41

      2       0

      @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"?

  • GS

    Garrett S.

    12 6 2017 17:07

    9       3

    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 6 2017 21:51

      2       1

      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 6 2017 10:36

      1       0

      where in michigan?

  • MS

    Matt S.

    12 6 2017 16:59

    6       1

    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.

      12 6 2017 21:30

      8       0

      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 6 2017 19:15

      0       0

      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.

  • MS

    Matt S.

    12 6 2017 16:40

    7       2

    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.

      14 6 2017 05:21

      1       0

      Glad it was meaningful!

  • ns

    niall s.

    12 6 2017 15:32

    4       15

    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 6 2017 16:44

      2       1

      Hmmm.... valid point.

    • JD

      Jakk D.

      12 6 2017 21:10

      8       0

      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 6 2017 09:04

      1       0

      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 6 2017 15:15

      1       0

      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 6 2017 12:01

      1       0

      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?

  • TM

    The-First-James M.

    12 6 2017 13:14

    7       1

    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 ;)).

  • EG

    Eduardo G.

    12 6 2017 12:35

    2       2

    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 6 2017 14:02

      3       0

      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.

      12 6 2017 14:16

      8       0

      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 6 2017 16:43

      0       0

      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.

      14 6 2017 05:25

      2       0

      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.

  • TJ

    Terry J.

    12 6 2017 12:24

    10       0

    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?

  • AS

    Andrew S.

    12 6 2017 11:25

    10       1

    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..