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Understanding bitcoin transaction processing can be quite difficult. What are miners, what are blocks, what are block sizes and how does everything impact my user experience? Trying to explain bitcoin in bitcoin terms is guaranteed to lose most non-technical listeners.

Enter the bus analogy.

How bitcoin used to work.

You want to use the bus. So you buy a ticket, and you decide what fee to pay for this service. Most people pay a minimal fee per ticket, although you could decide to not pay any fee at all.

After buying your ticket, you go to the bus terminal. There are a bunch of other people there, all waiting for the bus.

Then the bus arrives. The bus driver decides who is allowed to get on, and who is not. Almost all bus drivers will accept any paying customer, and many will take non-fee paying customers too. There is always enough room in the bus. When you get on, you see that only the first few rows are in use. There is a 'do not cross' sign – all seats behind that are empty. You hardly even notice it, and sit down.

The bus system was reliable, cheap and fun to use.

How bitcoin has worked for the last few years.

Time has passed, and the bus service has become much more popular. You want to use the bus again, so you buy another ticket. You must decide what fee to pay for this service. There is no fixed price, but now you must ensure that your fee is 'sufficient'. There are no guarantees what reasonable fee will get you on the bus. You now also need to worry about your own size: large people have to pay more than skinny people. You measure your own size – it is displayed in some obscure unit you've never seen before, and then go to a fee estimator website. You type in the obscure size measurement, and now you must decide how long you would like to wait before you can get on a bus. The fee estimator will give you a fee, and you are shocked at the price increase. Where you were able to use the bus for less than one cent a few years ago, you are paying $1 to $5 for the same service now. You reconsider, but remember that you have no choice. You decide to use the bus service anyway this time. You buy the ticket at the recommended fee.

You go to the bus terminal, and there are literally thousands (and sometimes tens of thousands) of people waiting for the bus. You hear stories of people never getting on the bus. You look at the huge number of waiting people, and wonder how many buses it takes to transport them all. And still, every second, more people are arriving.

The bus shows up, and the driver gets to decide who gets on the bus. The vast majority of the people waiting for the bus will not be able to get on, there is just no room. Or, no that isn't true. You remember the 'do not cross' sign that prevents people from filling the bus. The bus is filled to its artificially restricted capacity, but it is not full. You think to yourself that it is strange that the sign is not moved.

In general, the bus driver will allow the people paying most for their ticket to get on first – but this is no guarantee. The bus driver has the ultimate say. You paid the recommended fee, but you are not getting on this time. The bus driver gives no guarantees when, or even if, you will be taken.

Another bus shows up, and another one, and another one. You are not getting on. You are starting to worry about arriving at your destination on time. You do have a deadline. Nobody guarantees anything. And then, all of a sudden, the next bus driver invites you into the bus. You feel like you have won the lottery and are grateful for your great fortune. When the bus drives off, you look at all the sad and tired faces of the people waiting for the next bus. They did not get on this time, just like you did not get on for many buses in a row just a little while ago.

You talk to the guy next to you, and mention that the bus system is over capacity. You mention to him that the bus should move the 'do not cross' sign back and allow more people on. He immediately calls you all sorts of nasty names. He loudly proclaims that there is no problem with the bus as it is. He has never had an issue getting on the bus. In fact, this time he even got on the very first bus that arrived. It was obviously your fault that you had to wait. He reasoned that everyone who did not get on, was just not paying enough. The argument that, no matter how much everyone paid – there was just not enough room for everyone in this capacity restrained bus fell on deaf ears. In fact, he ignored you right after you mentioned that.

The bus system was expensive and unreliable. Due to the uncertainty, and your deadline for arriving at your destination, it was a stressful time.

The segregated bus comes to the rescue.

The engineers who work at the bus company decided that it was impossible to move the 'do not cross' sign back, let alone to remove it completely. The arguments sounded very convincing at first, although you had no idea what the arguments meant. The engineers sound like rocket scientists working on a new interstellar jet propulsion engine, and talk in jargon. The consequences of not following their advice, however, was in plain English. And those consequences sounded dire. Fortunately, they had a solution. Rather than moving the 'do not cross' sign back, they decided that the bus should be equipped with a trailer. You go in the bus, but a part of your ticket goes on the trailer.

You never really paid close attention to your ticket, but indeed – the ticket is quite bulky. In fact, the ticket is a small box. Some people are carrying really large boxes. Those people always had to pay slightly more for their tickets.

So... that day has come again, and you need to use the bus again. You no longer use it for your pleasure, and you try to avoid it if you can. But, today, you are eager to try out the new solution. You can choose between a regular ticket and a segregated ticket. You want to purchase the segregated ticket, and again, you must decide what you would like to pay. The size calculation, that was already complex last time, has been changed to a weight calculation, but with a twist. Your weight is counted 4 times, for some reason, and your box (ticket) is counted only once. Where the size unit was already obscure last time, the weight unit this time is something right out of a science fiction horror story. You have no idea what the number means, but go to a segregated fee estimator website. You plug in the number, and it gives you a fee. You are relieved that the fee is cheaper than what you paid last time.

You go to the bus terminal, and you look around. There are still thousands and thousands of people. Some of them holding segregated tickets, most of them holding the regular ticket. The bus itself has not gotten any bigger, and you wonder how everyone will get on the segregated bus.

The bus shows up, and once again, the driver gets to decide who is allowed on. He seems to prefer people with segregated tickets, and you ask him why. He tells you that with segregated tickets, he can put the person in the bus, and the ticket on the trailer. He can squeeze more people in the bus, without adding more seats, and without moving the 'do not cross' sign back. The ticket no longer takes up space in the space-restrained bus. He prefers people with really large boxes (tickets) as he can charge for trailer cargo. The bus is still full, people are piled up, one on top of the other.

But, unfortunately, there is no room for you on the bus this time. Other people paid more. You are told to wait. Again, no-one guarantees when, or even if, you will be taken on the bus.

You look at the segregated buses that come and go, and can't help notice that the trailers are almost empty. Only a few percent of capacity has been added – or at least is used. People are still waiting for the bus, and the terminal is still full after every bus leaves.

Then, a bus arrives that seems to have your name on it. You jump with joy, but only ever so briefly. You realize that because you are getting on the bus, someone else is not. Every seat allocated, is a seat not allocated to someone else.

You talk to the guy sitting next to you. He has the largest smile on his face that you have ever seen. He proudly proclaims that the bus capacity problem has been completely solved. The trailer was an absolutely astounding idea. There is just so much unused room back there on the trailer, therefore the bus system is no longer at full capacity. You ask him how that is useful, if the bus itself is full. Still smiling, he says: “Patience, my friend. It's just a matter of time. Soon, everyone will buy segregated tickets and you will see rainbows and unicorns, life will be good.”. You look confused, and ask him: “I thought the segregated bus and segregated ticket solution was supposed to solve the capacity problem immediately. The bus service company engineers said so.”. His smile disappeared. He barked “the bus company has no engineers. Those are volunteers. And they are the absolute best at what they do. They are Wizards, I tell you. Real Wizards. Without them, the bus would have no trailer.”. You persist in your questions. “Yes, but rather than building a trailer, could we not have moved the 'do not cross' sign back a few seats?”. He never answered, and ignored all future remarks too. Why are so many people like that, you wonder.

The bus service has become confusing, unreliable and slow. It was still extremely stressful.

A competing bus service is started.

Then, a new bus service is started. It is the same as the old service in every single way, except that the 'do not cross' sign has been moved back. It doesn't have any trailers. It does have a new ticket type, the tickets from the old bus service is not valid on this new service.

Many people are excited. But some loud mouthed people know it for sure: No buses would every drive for this new service! The value of the new service would drop to pennies mere hours after the launch. It was the Chinese, they were behind this new bus service, powered with their Top Secret BusBOOST innovation. The bus schedule was so unreliable, it would be unusable. Bus drivers would switch back and forth between the two services, and that would kill the competing service somehow. And nobody, ever, would even consider using this competing service. It had no wizards! It couldn't possible work without wizards. And, the wizards of the other bus service didn't like this new competitor, thus it must be bad.

You decide to try the new service anyway. You decide what you want to pay for the service. Most people pay a minimal fee per ticket, although you could decide to not pay any fee at all.

After buying your ticket, you go to the bus terminal. There are a bunch of other people there, all waiting for the bus. They look happy, and excited.

Then the bus arrives. The bus driver decides who is allowed to get on, and who is not. Almost all bus drivers will accept anyone paying customer, and many will take non-fee paying customers too. There is always enough room in the bus. When you get on, you see that there is a lot of room, most seats are empty. You sit down.

You talk to the guy next to you, and have a pleasant conversation. You really enjoyed the trip.