Firstly, Bitcoin does not need to scale that much to be considered widely successful. Heck, Western Union[1] averages only 10 tps, which is only 10x what Bitcoin is doing today, so such a target is clearly within reach with a 2MB block size.
Secondly, Bitcoin can actually scale by many orders of magnitudes, see the math and arguments there: https://en.bitcoin.it/wiki/Scalability You need solid counterarguments to this page to convince us it can't possibly scale.
Thirdly, Bitcoin has done 6 years in a row what critics have always said it cannot do ("nobody would want bitcoins", "the exchange rate will never reach $1/$10/$100", "it will crash and be forgotten after the Jun 2011/Mar 2013/Nov 2013 bubble", "the US govt will make it illegal", "big companies will never accept it", etc). So you need to sit back and start thinking why is it that Bitcoin keeps growing and reaching milestone after milestone, instead of throwing one more empty statement "bitcoin can't do X" with zero reasoning behind.
[1] WU does ~250 million consumer transaction/year.
Edit: @inoop I misremembered and meant WU, not Paypal
People like to quote the scalability page and claim that Bitcoin will have no problem scaling, but I don't think they really understand what Bitcoin will look like at scale. No one is saying that it _can't_ handle howevermany txs / second. But do you want it to? That is the real question.
Right now the network has <7000 nodes, a number that has dropped from almost 30K in the past few years. [0] The blockchain is <30GB and a node can expect to handle ~15GB/day of bandwidth. [1] You will also need at least a gig of RAM, preferably more. The UTXO is 500MB (which needs to be stored in memory).
So what we know is that despite the relatively low requirements of running a node, we are bleeding them faster than we can get new ones. People claim that storage space and bandwidth getting cheaper will solve the problem. Given past performance of the node landscape, that statement does not hold weight.
So what are the consequences of all this? Well, the node landscape will centralize very quickly as the bandwidth and storage requirements far outpace what most would be willing to provide the network gratis. Universities and large payment processors will be the only ones who can afford to run full (archival) nodes. Pruning and all that will help, sure. But in order for Bitcoin to remain true to its decentralized roots, a distributed node landscape is vital. If everyone isn't validating everyone else's transactions we have a big problem (imo, of course).
Yes we want it to scale, even if it means full nodes run only by large organizations. The benefits of decentralization would be very real and tangible even if only, say, 1000 organizations (companies, universities, etc) were able to host and operate Bitcoin nodes. This would still make Bitcoin clearly decentralized compared to a single company (like MasterCard) processing all your CC transactions. For example Mastercard decided of their own accord to block CC donations to Wikileaks [1] but one of these 1000 hypothetical organizations running full nodes would be unable to do such a thing and block specific transactions.
The number of full nodes decreased in large part because in the early history of Bitcoin in late 2010 or early 2011 your only option to have a secure wallet or to mine reliably was to run a full node locally. But nowadays there are many alternative lightweight clients using the SPV protocol, and a lot of reliable mining pools (it was in mid-2011 that pools started mining more coins than solo miners running full nodes). So of course many users stopped running full nodes.
I wasn't commenting on what is better or worse. I was simply stating that there is a tangible effect on the decentralization of the network when you have a limited number of nodes. For example, maintaining privacy becomes much harder as these nodes become major "pipelines" for fresh first hop transactions. The list goes on, but in reality it depends on how many there are, a number we can't predict. FWIW, I think your number is generous.
> Thirdly, Bitcoin has done 6 years in a row what critics have always said it cannot do
The one thing that hasn't changed a great deal is accessibility to them. When buying, you are either subject to waiting periods, or have to conduct the transaction in cash in person. No one in their right mind will take credit cards or PayPal for them. I believe this is the major hurdle to adoption of crypto by the mainstream public. Writing tools to make BTC easy to work with is the easy part. Until they can be bought at Walmart or your local check cashing store, it's going to be a fairly rough road for new adoption.
On the, that's probably the thing that changed the most.
Firstly, 'conduct the transaction in cash in person'. That sounds pretty accessible to me. You have cash, you press a button on your phone which shows the nearest person selling it, you go there and buy it from them. Can it get any more simple than handing over money in return for an item, like buying a coffee?
But secondly, there are various companies right now that offer quick and easy purchase. Try Circle for example, you can instantly buy bitcoin there with a bank transfer, even though the transfer takes a day you get your bitcoin, and at 0% fees, too. If you compare that to just 3 years ago when your only option was shady and risky as hell, or hell, even a year ago, it's rapidly improving.
For example here in the Netherlands I could buy bitcoin between now and one minute from now, safely and legally and I'd receive my bitcoin right away, using just my phone and not leaving my seat or registering for any account. (Bitonic)
>You have cash, you press a button on your phone which shows the nearest person selling it, you go there and buy it from them. Can it get any more simple than handing over money in return for an item, like buying a coffee?
Can it be more simple? No. Will most people do it, with the shady reputation of Bitcoin and the people involved with it? No.
That's a different question from accessibility which I was answering.
As for will people do it? The popular ways to do this (localbitcoins, mycelium) have actually showed record amount of transactions lately, so more people do it than ever.
Does that mean everyone does? No, but that has more to do with the fact it's a nascent thing rather than a shady reputation or a lack of accessibility.
If the methods to obtain them quickly either cannot or will not be used by most people (as is the case here), then they are inaccessible to most people.
> The one thing that hasn't changed a great deal is accessibility to them.
Just acquire them like you likely acquire any other currency: accept it in exchange for your labour or the goods you have to sell. That's what I do, for online math tutoring. It's just some pocket change on the side for me right now, but it's helped me buy a few Christmas gifts already.
>So you need to sit back and start thinking why is it that Bitcoin keeps growing and reaching milestone after milestone
Because it has the support of a vocal, passionate, educated community of tech people, some with a monetary stake in having it succeed, combined with the hide-in-a-bunker, sky-is-falling crowd, still feeling the effects of the financial crash.
That, and one of the biggest facilitators of remittance, a significant source of income for some of the poorest people on the planet.
That may not be very relevant in SV, but they affect a lot of lives positively.
At the same time, they charge exorbitant fees, and remittance fees are stuck at around 10%. I'm looking forward to the day they're as redundant as an expensive long-distance phone call is made redundant, which is possible when you have native digital money like we have digital mail or telephony. Bitcoin to me is the most compelling proposal for this to this date.
As the OP corrected, it's Western Union that does 10 tps. But even 100 tps would be easily within reach if the block size is bumped to 20MB, which is not that crazy.
Secondly, Bitcoin can actually scale by many orders of magnitudes, see the math and arguments there: https://en.bitcoin.it/wiki/Scalability You need solid counterarguments to this page to convince us it can't possibly scale.
Thirdly, Bitcoin has done 6 years in a row what critics have always said it cannot do ("nobody would want bitcoins", "the exchange rate will never reach $1/$10/$100", "it will crash and be forgotten after the Jun 2011/Mar 2013/Nov 2013 bubble", "the US govt will make it illegal", "big companies will never accept it", etc). So you need to sit back and start thinking why is it that Bitcoin keeps growing and reaching milestone after milestone, instead of throwing one more empty statement "bitcoin can't do X" with zero reasoning behind.
[1] WU does ~250 million consumer transaction/year.
Edit: @inoop I misremembered and meant WU, not Paypal