Why SatoshiDice, Bitcoin’s biggest success, will eventually kill Bitcoin.
For the uninitiated, SatoshiDice is a Bitcoin gambling site described as a ”blockchain-based betting game,” accused of being a DDoS against Bitcoin by Luke-jr (notable for his fanatical devotion to “Tonal Bitcoin,” which as far as anyone can tell is actually a joke.) Users send an amount of their bitcoins to a SatoshiDice address, the “service” then determines whether the “bet” wins or loses, then returns a transaction with winnings or a fraction of the house winnings, since they’re such great guys.
The “bets” on SatoshiDice generate a tremendous volume of microtransactions (each bet takes two transactions to complete,) which spam up the Bitcoin network, and those who play SatoshiDice pay elevated transaction fees (which are, for the most part, ignored or not paid by many users,) and as a result SatoshiDice transactions receive priority when processed, forcing other transactions to wait for the next block. SatoshiDice transactions account for most of the content of the blocks generated now and its transactions filling blocks helped contribute to the blockchain fork, which caused chaos and allowed someone to perform the infamous double-spend attack. This problem has been known for at least a year yet nothing was done to patch or prevent SatoshiDice from forking Bitcoin.
The chart below illustrates the damage SatoshiDice does to Bitcoin.
The vast majority of the blue markers are SatoshiDice and because they pay the transaction fee, they have priority over normal transactions and are effectively choking out the rest of the economy and causing long delays in confirmations.
March 12, 2013 @ 5:25 pm
“yesterday
March 12, 2013 @ 9:22 pm
Couldn’t agree more.
March 28, 2013 @ 5:16 pm
lol you don’t think banks have transfer issues? ever???? Happens all the time, just like with BTC they come back online and process.
The reason why you see it as worse now, is because BTC is much more strict on confirming actual funds. Where as banks are bigger and been around so the speed of a transaction can be faster due to essentially trust and the risk limit of the institution. Heck I can put a blank piece of paper in an ATM and pull out cash, usually $100 against that plain paper. The bank will find out in a day or so its not worth anything.
March 12, 2013 @ 9:25 pm
You’re ok with a currency being down “for a couple hours”?
That doesn’t sound horrifying to you?
March 21, 2013 @ 8:35 pm
I went to the store yesterday and all of my dollar bills in my pockets and everybody else’s dollar bills in the entire nation were stuck in a “wrong fork” processing loop.
It took a couple of hours, but the store was okay with me and everyone else putting the merchandise back on the shelf.
It wasn’t so pleasant at the fast food restaurant though.
Now try this with BITCOINS.
March 28, 2013 @ 5:13 pm
Yup, never in the entire history of purchasing stuff has a credit card machine been down, or no electricity to run the register…
Actually you could with bitcoins, you can email yourself bitcoins. Bitcoins can be in a file, on a usb drive in your pocket to hand over. Now convincing someone that usb drive is worth whatever is a different story. BTW the same issue occurred through history with cash… until it became trusted usually backed by something physical (gold) or someone with money (government).
BreakThru Radio
April 15, 2013 @ 12:47 am
[…] some people have taken advantage of this by spending this currency on things like illegal drugs or gambling with it on an unregulated site. Of course, humans have long done all types of illicit acts with their currency (regardless of […]
June 7, 2013 @ 12:46 pm
I understand some legitimate concerns.
Though that makes me remember banks require their 3 day processing time and yet, everyone seems to survive quite well. So while such events with the Bitcoin network are indeed bad, what does people do when VISA is down in their favorite store? They either come back a few hours later or pay with cash. Maybe that is a good demonstation that no system should ever replace all existing systems ever.
August 24, 2013 @ 5:04 pm
he wants to pay his own taxes, what’s the problem ? paradox again.
October 29, 2013 @ 9:30 am
i don’t see any Satoshi dice spam. most block sizes are under 200 kilobytes these days. looks like something changed in the 0.8 Qt client. Not sure if the 5430 Satoshi limit affects the gambling site either.