[cryptography] bitcoin scalability to high transaction rates

[Nathan Loofbourrow]

On Thu, Jul 21, 2011 at 8:41 AM, Sampo Syreeni <decoy at iki.fi> wrote:

> On 2011-07-21, Marsh Ray wrote:
>
>  I guess I don't see the need to do bitcoin crypto transactions at that
>> speed any more than the other high-speed exchanges need to rapidly move
>> stock certificates, hard cash, or perform ACH/EFTs.
>>
>
> That's probably true. But then, HST is just an example of a mechanism which
> creates prodigious amounts of transaction data. There are others, starting
> simply with wide enough adoption of Bitcoin. So if the amount of transaction
> data being shipped around can become a bottleneck here, it could indicate a
> scalability limit on Bitcoin in more realistic situations.


In practice, trades on Bitcoin exchanges don't create transactions in the
Bitcoin crypto log; you can even give Bitcoins to one another within an
exchange for the cost of an API call. It's only when money is transferred
into our out of the exchange that a "real" transaction needs to be created,
whether though Bitcoin or through a bank. Private markets can help aggregate
small transactions.

Of course, this presumes you trust the exchange, which is a different
matter.

n

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