Topic: Bitcoin as a protocol (Read 178 times)

If we consider the whole universe of computers connected by TCP/IP, then I think network effect is also present in these simple networking protocols. You can do more with TCP/IP if there are a lot of other nodes which can send/receive/transmit packages.

There are lots of Bitcoiners who believe in that causality (basically Metcalfe's Law or "the network effect") or a variant of it, and the whole Stock-to-Flow "theory" (which I consider pseudoscience*) is built around that assumption.

But there are some flaws. For example: Bitcoin may be the premier protocol, at this moment, to transfer value without centralized intermediaries. However, for many use cases, intermediaries aren't that much of a problem. Or may even have advantages, for example regarding compliance. Additionally, you can introduce very slight variations into the protocol and the "value" system completely changes. The Litecoin protocol for example is basically the Bitcoin protocol with very small changes, but leads to a whole new "value system". Ethereum's protocol is a Bitcoin protocol with more changes. More Litecoin or Ethereum transactions do not mean an increase in Bitcoin usability, even if the protocol is very similar. At the contrary, it can create competition and fears that Bitcoin's advantage is decreasing, leading to price drops.

So while Bitcoin undeniably is a protocol, its value system is a bit detached from it. And there is fierce competition, both inside and outside the cryptocurrency space. We still don't know if Bitcoin can really become the premier universal money standard protocol.

And thus its price discovery will be quite erratic, and it can even fail completely, until it's used more "as a currency".

I'm however optimistic that Bitcoin can see much more adoption than now, even if it doesn't become the "universal money standard" protocol: Of all money protocols without a central intermediary, it's the most secure one. Most altcoins are vulnerable to 51% attacks or PoS Nothing-at-stake-style attacks. This sets it apart from coins like Litecoin and even Ethereum. In the long term a Lightning channel or a sidechain account can become the standard "account" for people who can't or don't want to open an account at a bank, be it because they don't want to trust a bank, or because they're not accepted by the banks, or because they need to stay away from the KYC world (e.g. dissidents in dictatorships).

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* See the following discussion: https://bitcointalksearch.org/topic/m.59101466

with a tap in to oldest satoshi nakamoto addresses you can build a direct link.

basically letting the coins sit furtheron on the wallet and streaming directly usd amounts through it.

an address shown 50 bitcoins on it. gives you hence 50 usd/per second streaming buffer.

enough to build a solid running earnings environment. cause they created the todays wealth anyways.

it is just a matter of fact what outside currency to link. if we declare only 1 per such an address. we get quite a lot of currencies directly streamed through,

imagine it like its own circle of addresses. every that has 50 on it. in sub builds the outside currency core.

could optimize existing tethers too


i would do it the following way:

the appropriate central bank for the appropriate currency. gets such an address as their streaming channel contracted.
on the other side you also have a responsible guy from this core forums side. that now through him it directs into the miner next. and he mines 50 satoshi per second with that build.

this ensures. central banker has no control over more than the channel entry
bitcoin core guy has no control over more than channel output
and miner guy has no control over more than making 50 sats per second from what comes from core guy. with 30k sats and actual marketprice around 8 usd all 10 minutes. this gives the miner a constant earning for 24 hours in 1152 usd or 34560 per month (i would also say to be on the save side solid 30k per month here for him, a safety buffer of between 4 and 5k basically (where bank managers life in monthly income)).

also explains well the Bitcoins general marketprice. we get up again if such things becoming more and more implemented and better understood. could hence as explained already give a solid 30k usd per Bitcoin marketprice new groundlevel!

system only works when both 3 are willing together. principle of a triangle basically.

and with just 50 sats inside it ensures things can be balanced best.
it stands for the creator anyways, and in his understanding a coin was originally a usd and not more.

for the new coming alivee coins for that system for the miner:

make it: 30000 USD per 10 minutes as a fixed thing from the central banks side and you are good to go.

you can do the same with gbp and eur and other currencies that resonate best.

no matter what currency. it becomes: 1 satoshi per currency unit.

the more you let it flow and work that way the more central banks will having no problems. cause the system works neutral. and this helps stabilizing economies as well into building more and more also this official world core.

you still need the central banks. cause they will be responsible that we still have border thinking towards even having an understanding that different countries and nations exist.

cause if you mix too much without a border building such things. the border will cease and you loose control too much and overview for specific local areas this wouldd give chaos where order is better to keep things running.

but bitcoin ensures best balance for all nations and countries as a more and more center core thing coming to life. no longer anyone can fuck with!

maybe this way we no longer need stable coins shown cause the central banks link the usd flow directly.
looks to me no more than a framework in building time anyways. that you will later remove when your house is finished.

contract coinbase into this as well. would make most sense.

basically this coinbase transaction always shows 30k sat per block being mined as a fixed thing.
no matter if those 30k are usd, eur, gbp, swiss franc or whatever currency out there strong enough to get his own 50 bitcoin address contracted.

you do not need more.


i would suggest making greg maxwell the core guy.

he has no more interest into than accepting a flow from the central banks side through those old addresses (let the Ethereum guys figure out the fine tuning for it)
and he has no interest to think isolated like a miner.

he furthermore has the inheritance through his last name to resonate into james clerk Maxwell. a guy without a lot of calculations for electromagnetics flow would not even work today. and this makes sure a miner has its power to run his hardware!

a best solution.
let the central banker negotiate with him or if it is not working that easily. with using an ethereum guy as an intermediary for the central banks side.
greg i bet has it easier dealing with ethereum people compared to a classic central banker from a time in thinking before bitcoin even came to life. would make things easier.

from the more technical side:

(from version 0.0.8 in node.cpp became later net.cpp)
now just change this buffer into 0x30000 as well
this gets you 196608 in decimal (contract this into 100k per side and use the remaining 3392 as a coder from the banks side as a deeper point to flow it through him cause this resonates into his monthly salary)

use further 0x chain to contract everything. https://0x.org/

this way you can do everything directly via using the hSocket
that leads into anyways. and this is a windows basic thing bankers have no problem to work with.
as well as https://man7.org/linux/man-pages/man2/socket.2.html for linux
and especially use:  AF_ALG       Interface to kernel crypto API

via: SOCK_STREAM

et voila you have the address shown 50 bitcoins on it as your door basically to stream it through. and the amount to  give the width of the stream.

basically:

banker lets flow into his 30k per 10 minute (can easily be implemented as a polled thing to contact the bitcoin network via api rpc call via pruned node, so no chain has to be saved on his side. from bitcoins side its like a pruned node contacts the network.
based on 200k on the bankers side for making the deal happen (piece of cake for him).

his tech guy makes sure it becomes 0x30000 next. by the way it gets into: 110000000000000000 in binary and this also is quite a perfect number.
cause 1 and 1 make two people using a hex value (16 zeros are perfect resonance for this) to let a usd stream buffer be run!
this is then used to be accepted by gregs side for the buffer for hSocket where it flows into next through.

and from there you give it to the miner. shown coinbase transaction block being mined with the info for 30k satoshis shown and the Root address having 50 on it (so we know what central bank it came from).

should do the job towards implementation

I think yes. It's just another communication protocol, but with the difference that there's value exchanged via cryptographic means. There are actually lots of Bitcoin protocols, such as the Bitcoin blockchain full nodes, the light client servers (SPVs), the lightning node, the block explorers etc. But the main layer is one protocol, just like TCP/IP, yes.

I don't understand how that's true. Was bitcoin more usable in 2021, valuated at $60k? Or, was it about the same usable in December 2017? Nah. The usability of the protocol improves overtime, but not accordingly to the amount of value that is inside the system.

I did not name USD instead of GBP just because it seemed to me it will be clearer. Similarly, you cannot send USD over the bitcoin blockchain without first finding the appropriate intermediaries. It's just that there will be more intermediaries for USD, so I chose to take as an example a popular currency, for which, however, there will be fewer intermediaries.


It seems to me that the problem is just that you are trying to compare things that are different in meaning. The data transfer protocols you cite are inherently not decentralized. And there are quite a lot of centralized systems for transferring various money via the Internet or in other ways.

Bitcoin is a separate system. And yes, the key thing in it in this regard is, in my opinion, decentralization. Unlike communication protocols, no one on one of the nodes in the chain will filter and replace your transaction, etc. And, perhaps, you should not try to compare bitcoin with completely different systems in terms of how they work. In the sense that similar features may turn out to be signs of something completely different from what they seem.

And yes, I agree that understanding what bitcoin actually is, how it works, what possibilities it opens up is fascinating.

Yes, I agree that you cannot transfer arbitrary money or assets through the Bitcoin system. The only way one can transfer value through the Bitcoin system is via Bitcoin. Hence my thinking is that Bitcoin is the only truly decentralized internet money protocol, and that transfer of value through this protocol can only occur via Bitcoin, whereby Bitcoin acts as the transfer medium for the protocol, say similar to data packets for TCP/IP.

I also agree that comparing data transfer protocols with the Bitcoin protocol is technically different things. Here my thought is that there hasn't really been any money protocol for the internet until Bitcoin that is decentralized and secure, and hence it would be difficult to compare existing data protocols with the Bitcoin protocol.

Regarding British pounds as an example, I think that demand for British pounds relative to Bitcoin will reduce over time as Bitcoin price discovery further matures and stabilises at a stable price range at some point in the future, at which Bitcoin could be used as a medium of exchange and possibly unit of account. If that occurs then there would be no need for British Pounds, or a relatively stable exchange rate between British Pounds and Bitcoin may exist.

I'm finding it quite challenging, fun and interesting to think about what Bitcoin really is. So far I've landed on Bitcoin being a multiple things... money that serves as store of value with soon to be the highest stock-to-flow ratio that has ever existed, medium of exchange in the future, unit of account in the future, the only secure and decentralized network for money and the only internet money protocol.

if someone living in the UK and taking a strong bridge positioning effect through his own user account into core via this forum.

then you can directly exchange british pounds in satoshi amounts.

bitcoin is not build to prohibit this. but to encourage. it may have build from mostly USD direction roots. but technically it is like the principle of a template.
it was more like an original shipyard. this can change and it did already a lot.

or in picturing this better:

[put into anything you want to that you wanna see as money numbers with currency symbol] <-- this is the true power of bitcoin. a template unit containing everything else existing out there. but without people becoming bridges into core. no walking the bridge effect and swapping.

also works for british pounds therefore. just another stable coin in principle from outside perspective.

but you still as people from the UK prefer having a more centralised chain approach here i assume. have to create the necessary illusion for this outside world.

but this needs one strong enough guy building the bridge for it.
ideally a local living person. best connections into londons city i would guess (the financial district of it).

through exchanges you just get the outside interaction best done. extensions for this core bridge guy for outside selling an from outside incoming buying. also works the other way around. Input Output in principle (utxo principle. cause it can be anything you wanna transfer. core apps just show it in bitcoin and satoshi basis)

https://coinmarketcap.com/currencies/poundtoken/

is at least a at the moments IO existing solution

if this is going to change depends on markets needs and what masses want to have using it for.

but it is if you ask me a good solid start for hence the name thether core into normal british pounds.

if you do not interpret more into this than the numbers shown. it is a stable solution for the problem.

but this people may not be satisfied yet.

but as said it can change.

bitcoin was never build to be limited on usd

usd is only so strong in it cause internets ground fundamental strucures where just invented there.

this therefore makes sense this strong roots will always show in some way how the internet looks.

but nothing speaks against about building a direct IO flow making gbp into satoshis directly.

you can do this technically with as said any currency out there.

but it needs the right people building and being those bridges. only works if someone is born into such an environment where his or her life developed into being this. here you see you cannot build new things without new people coming to life being the structural root elements for it. so it takes enough time this transitioning time into a new approach for how the internet works with how currencies interact with it.

bitcoin has the best potential. but bitcoin without people using it wont work. so until its not fully becoming bigger in such an understanding we are still in a founder phase for its later full potential i would say!

cause without them you cannot let run it stable and only most strongest centered local living people are the best choice for this. cause them rarely or never leaving their own home city!

a big important aspect of running anything stable for the internet. someone has to do the pillars for it job!

It seems to me that from a technical point of view, these are different things. When you talk about data transfer protocols, you can use them to transfer virtually any data, they only determine the format of their transfer.

You cannot transfer arbitrary money or assets through the bitcoin system. For example, if you want to transfer British Pounds, you first need to find someone willing to exchange their Bitcoins for your British Pounds at the sending location, and then someone else willing to exchange your Bitcoins for their British Pounds at the receiving location. It is impossible to do this automatically only with the functionality embedded in bitcoin.

Thus, bitcoin, of course, allows you to transfer money, but according to certain rules and in fact only bitcoins. Even if we take into account the controversial technology of Ordinals, they also allow you to operate only with certain data, you cannot transfer a random asset with their help.

Would it make sense to think of Bitcoin as a money or value protocol in a similar way to other protocols for data (TCP/IP), STMP, POP3, etc?

If so, I would think that there is a bit of a difference between Bitcoin as the money protocol and other protocols.

In particular, data transfers are not limited by protocols used to transfer data. For example, we use the same TCP/IP whether we were on 28k US Robotics modem-based connections transferring at 2-3KB/s or now on fibre connections transferring at 10-100MB/s. The usability of the protocol is not limited by the speed or bandwidth of internet connectivity.

With Bitcoin as the money protocol, I think the size of the value transferrable is dependent on the size (value) of BTC relative to e.g. USD. In other words, the usability of the protocol improves as the amount of value that can be transferred over the protocol increases. Hence, as BTC price increases, Bitcoin as the money protocol also increases in usability, which in turn increases the demand for BTC, which in turn increases the usability of the protocol, and so on.

This repeating pattern of value -> usability -> value -> usability can also be found in networks such as Facebook and WhatsApp whereby as the size of the network increases, the value of being part of the network grows exponentially. If these networks and the Bitcoin protocol are comparable in this regard, then I think we could see growth of the Bitcoin protocol as well as the BTC price increase exponentially with price discovery occurring until the protocol absorbs a significant proportion of all things that are considered valuable in this world and price stabilising thereafter.

For all things in this world that are considered valuable, I'm imagining BTC becoming the world standard money protocol by which value is exchanged, with many applications and networks that utilise this money protocol to exchange value, akin to say emails via email applications that utilise the POP3, SMTP and IMAP protocols, or website connections via web browsers that utilise the HTTP protocol.

Keen to hear your thoughts and point of views.