Topic: Gary Gensler: "Bitcoin is not that decentralized" - page 3. (Read 1105 times)

LN is nine years old this month. It hasn't solved anything because like every decentralized architecture, it will never scale to mainstream transaction volume. These architectures can only be viable for that purpose if somebody figures out how to increase the speed of light. LN is an improvement because its "more centralized" than Bitcoin, but is still not centralized enough to solve the problem. Of course you can make it even more centralized to increase the scalability, but then you are not meaningfully differentiating yourself from a centralized architecture--at which point the use of blockchain is superfluous and indeed a hinderance to both scalability and usability.

Haypenny is the only digital currency paradigm out there that will truly scale to the millions of transactions per second required to handle worldwide daily demand, replacing credit cards and physical cash. Nothing else comes close.

And the block-split-combine paradigm is unique, and there has never been a simpler form of numerically-delineated value transfer ever invented. It's a game-changer. And it's more private than cryptocurrency could ever be since it doesn't rely on a private key, and it enables instant adoption since it doesn't require the user to have a key pair. And currencies are locked in at the same minting amount (100T), meaning that all currencies are the same, making it much more transparent for end-users (fixing the problem NFTs have).

(And yes, using Haypenny as Bitcoin's defacto L2 network is one way people are looking at using the platform).

Ehm, do you know what "scaling" means? It doesn't mean increasing the block size (Of course they could go the BSV way but that would lead to massive centralization). The whole point of scaling solutions is that the smaller transactions should be only stored by a subset of the nodes.

And as I wrote, solutions are already there. LN is such a solution, only that it is still in its infancy. If you think that a couple of years (LN is developed since 2016 but usable since 2018) is enough in the case of an extremely difficult problem, you're wrong. Lightning is not centralized, or why do you think so? The only drawback is that it is only trustless if you monitor your payment channels carefully and are ready to close the channel in case of misbehaviour. And yes, I think this makes it not ideal and not a solution for big amounts, at this moment.

I agree that current sidechain models have still centralization problems, but if the 2-way peg for example of Nomic works, then there could be decentralized derivatives soon (And Paul Sztorc a long time ago has proposed a really decentralized sidechain/L2 paradigm with Drivechain.)

By the way, your currency platform seems to be similar to 90's and early 00's "web currencies".

Speaking of scalability, this same issue lead to a hard fork that created bch, even with segwit increasing the block size to 4mb we still have high gas fees on time of network congestion, so many Companies and developers has been working on this same issue, lighting network was introduced and its so complex to run a node that my dad wouldn't be able to understand shit, I don't think bitcoin would ever get passed the issue of scalability in the next 10 years, but we still have to be optimistic about it.

So for now we have no choice than to use bitcoin as an investment asset that it is Currently playing a perfect role at beign.

You can still use decentralized exchanges and don't need KYC, many DEX are still active and you can use them these days. No one has the right to force you to use CEX and provide KYC to buy bitcoin. It's simply your choice. Furthermore, we should also adapt and accept what is happening because if we want bitcoin to become popular and increasingly valuable, having to face what is happening is inevitable. How can bitcoin gain popularity and become big without government recognition and without the participation of large financial institutions? That's the price we have to pay.

That's why most people want to return back to the old way of trading which is using decentralized exchanges and some exchanges that didn't require KYC. I missed those days when you didn't really need to send exchanges your personal info just to trade bitcoins but right now, you have to, especially for local exchanges that didn't require this method before, they need to ask their users for it because the government is also monitoring their activities. this all happened due to the recent incidence of multi-million scams across the country and the result was tight security of all exchanges. Nevertheless, if you don't do anything wrong, then you have nothing to worry about because you are clean, but if we have another good choice like some exchanges offer full anonymity, that would be good.

gensler does know about bitcoin, he taught it at mit..
also without just reading this topic title and instead listening to the actual whole context of the interview. he was not talking about bitcoin the  technology he was talking about btc the currency unit.. which if you done a UTXO count and minus-ed off the unspendable dust utxo.. to count spendable utxo's and compare it to user count of CEX. majority of people that think they are "bitcoin owners" dont actually have sole control, key ownership of bitcoin because its in a CEX. and what does the C stand for.. centralised

i know some people want to only scream utopian happiness thoughts of dreams and potentials.. but readers of this forum already got the advertising to hear about bitcoin to then come hear looking for information to do due diligence, so they want to hear good and bad, to risk mitigate and understand things for real. not the hippy utopian version that slides things under the rug or tells people to not think about and go to sleep with a warm hug version

He doesn't know what he's talking about.

Layer 1 where the blockchain is is strongly decentralized.

A bunch of people storing their life savings in Coinbase or Binance does not change that.

If any of these exchanges were to fall, like FTX did in 2022, it will drag the Bitcoin price down as people look to exit the BTC market, but ultimately, bitcoin will become more scarce and the price eventually goes even higher.

This is why I am not concerned about things like Coinbase having custody of 1 million bitcoins.

sorry to inform you but LN is not the solution you think it is..
it does NOT have the "security" you think it does

the work arounds to some of the flaws involve people depositing coins into a cex and then 'renting' a channel with inbound msats on the CEX side of the channel allotted as unsettled balance for you to then request passing back to the cex channel manager to route around the subnetwork in 99% of users cases, where the coins are not user owed when renting inbound balance.. (with no actual confirmed sat on any key the user has)
there are numerous other flaws yet to be fixed or worked around, amny mentioned in many topics. even by LN devs themselves

the future will see people create new/better next gen subnetworks that fill a niche, but LN is not the answer, nor solution. its the gimmick sandbox testing ground to make mistakes on.. but treated as the promoted solution promiseland everyone should move over too, but not many want to nor should due to issues..(over 7 years only gained 5000coin and declining.. other main networks that bridge pegged tokens of btc representation had more then 5k btc locked and pegged in a shorter growth period, which should tell you something)

..
as for your recent drop into reciting the usual promotions of idiots and then reciting the extreme idiocy of thinking bitcoin should leap to GB per second.. id advise you to not fall down that cultish path before you earn a reputation worthy of being called an idiot like the other tribe of idiots you are recently now citing as your rebuttals

escape while you still can
bitcoin scaling is different to bitcoin jumping/leaping so dont do the stupid never before been proposed "GB/sec soon" stupid narrative, instead try to stick to proposals that are logical and are not obsurd. learn about SCALING not the extreme leaps used as rebuttals to avoid any progress..
things such as:
fee formulaes to penalise only the spammers/junks(not everyone) to reduce spam filling blocks to allow more genuine users
lean transactions to allow more transactions without blocksize leaping
uncludging block format code(1xbase 3xweight) to allow more lean tx's to fill the 4mb space rather then the miscount, misplacement strategy
then when blocks fill at a majority of blocks per timescale with fee above rate for timescale. triggers a commonsense scale increase of a block. without needing dev politics to decide, and not be some stupid miniscule increase as a dev chosen compromise to oppose the crowd, and not a extreme size to just go full anal.

and yes some next gen subnetworks yet to be released that actually are more secure in their pegging of value, and more secure from theft and actually do as promised for the niche usecase that may want to use it

Yes, I agree with that statement, Bitcoin is not as decentralized as it used to be and every year this situation is getting worse because people with more money and power gain control of it. We wanted massive adoption and we got it but sadly, that comes with costs. Bitcoin exchanges, casinos and many other crypto-related services are regulated and are forced to ask you for KYC documents. Bitcoin mixers will probably soon become illegal to use and privacy coins might also be in danger.

I always say that 2010-2016 were golden times, this was the time when Bitcoin was decentralized and without KYC. When price started booming, many companies showed interest in Bitcoin and with money, they bought much of it and gained control. While you could mine Bitcoins in post 2016 at your home, now it's not possible and mining become only a commercial business.

It's a "free market", anyways. There's nothing we can do about CEXs and institutional investment firms acquiring BTC. After all, Bitcoin is decentralized and open to anyone. We must encourage people to store their coins on non-custodial wallets to prevent the wealthy from dominating the market. Only this way, Bitcoin can remain truly-decentralized and equitable for all.

Ultimately, network consensus lies in the hands of nodes and miners themselves (not BTC holders). As long as everything is done in the best interest of the Bitcoin blockchain, there should be nothing to worry about. Hopefully, Bitcoin will last for generations alongside government-issued digital currencies (CBDCs). No one can predict the future, so lets hope for the best.

windfury, you are soo boring that you cant even realise how much of a copycat you are
find a new script

if subnetworks were human.you would be one.. you try to be someone else, not realising your position in the eco-space. find your own identity and opinion.. you are not helping yourself.

firstly roger, hearn had their own idea's that opposed the core roadmap. separate and unrelated to me
secondly roger, hearn went their own directions, nothing related to me

jonald was a troll,much like you. emulating other. and even i told him to stop being a copycat. i dont like kiss-asses. i prefer people to think of ro themselves and actually learn things from data and facts. not some social media member they read and blindly copy/follow

---

anyway back to the topic
in the gensler video he was not talking about bitcoin the network, nor bitcoin the code. he was talking about BTC the coin.. which if you look at the number of utxo's which indicate a limit of individual holders being X and then if you total up how many customers are signed upto CEX's shows the majority of people whom assume themselves to be calling themselves "bitcoiners" actually dont majority hold coin in their own utxo. instead they are other system balance holder, of some middleman service, centralised around half a dozen services

but also.
if you look at the bitcoin control triangle.. (mining pools, devs, economic nodes) certain actions in this last decade have shown that bitcoin is not powered by thousands of separate entities.. but instead entities that total under 100.. yep less then 100 entities that control the 3 main central points of the influential control triangle

less than a dozen devs with reference client maintainer keys and technical discussion moderation positions
less than 2 dozen mining pool managers
less than 5 dozen economic node CEO's

me saying the obvious is not negative.. its to make people aware of the risks, rather then other people who want people to close their eyes and dream of utopia

we need to stay vigilant and actually look for the changes and risks, rather then play dead and say "its decentralised simply because that was a buzzword of 2009 so must be true now"

Yes you do frankandbeans, and it's Roger Ver, Mike Hearn , Jihan Wu, and all of those who spread the same FUD now and during the scaling debate. Plus where's your other mentor Jonald_Fyookball. Although I respect Jonald, I believe he's merely naive/misinformed, and gaslighted thanks to people like you. The problem is he doubled down when he should have tried to be more objective and neutral.

Plus where is the other big blocker who also sold all of his Bitcoin for the forked shitcoin. The popular one, Kevin Pham. That's another person who was influenced by the wrong people, making them believe that they are HODLing the real Bitcoin.

That's pretty poor logic to be honest with you because Satoshi certainly didn't invent Bitcoin to be massively bought on CEX with KYC and holded in custodial wallets, but I doubt you even understand what I'm saying.

I am not surprised by what GG says, the operation of Bitcoin is decentralized but its use today passes in many cases by centralized entities, so today most governments have stopped seeing it as an enemy and think of bans, they know that with the current use and legislation can control it to a great extent.

How can I believe what Gary Gensler is saying? Who do we believe more? the one who invented or created Bitcoin or blockchain technology? or the person who didn't invent it, but what he says is just an opinion and assessment?

Apparently Satoshi Nakamoto is the Bitcoin inventor, while Gary Gensler is not! Instead, I can even consider Gensler a story inventor. It can never happen that the one who didn't invent Bitcoin knows more than the one who invented it. That's a simple question: who do you believe more, the creator or the created? See the logic?

What is the advantage of doing very large transactions on-chain though? At that point, why not just do all of the transactions off-chain?

The bigger the transaction, the more people want real identity (unless you are doing money laundering or tax evasion or whatever).

In other words, I think people want the very opposite of what you are proposing: they want anonymity for small transactions and personal identity for big ones. Who would want to buy their house or car or keep their life savings with a private key they could physically lose or be stolen? My house is in my name and nobody can take that away from me. Same with my car. Same with my savings account.

The cash in my wallet, on the other hand, is not connected to anything and that's the way I like it. If I lose it then I'm fine with that--I'll trade that off for the anonymity physical cash gives me.

Cryptos are great as investment instruments, but in terms of what consumers want in currency, it has it exactly backwards.

While it is true bitcoins never leave the blockchain, because that's literally the only place they exist, building layers on top of Bitcoin is very useful. All payment networks have layers, with a security focus on the bottom layer, and higher layers for more efficient transactions (hence 30-60min $5 fee transactions drop to 1 sec <1cent fee transactions). I know I know you are well known for hating LN will a fiery passion. But that doesn't change the fact that higher layers are very useful and allow Bitcoin to have all its revolutionary properties while still being something that people can/will be able to use for actual commerce.


Commerce with Bitcoin is going to be:
Very large transactions on-chain.
"Everyday" small transactions on 2nd layer like LN or on centralized subnetworks in the ecosystem built by companies like PayPal, Venmo, Coinbase, banks, Binance, etc

It simply doesn't make sense any other way. It's this way or you either give up on Bitcoin being a currency and instead it just acts as a pure store of value like Gold that rarely gets moved, or you go the altcoin route of taking away everything that makes Bitcoin special in order to centralize the blockchain for high throughput. So it's either accept layers and different ways to use Bitcoin as a natural way to build a digital payment system, or accept it turning into "only" being digital gold, or crumbling into XRP where its basically crypto-fiat but run by an organization/company instead of a central bank.

Not accepting layers would be Gensler's dream for sure because then that means either it only competes with Gold and never with national currencies, or it's centralized and therefore can managed by the whims of the govt.

But I know I know now you'll say how much you hate "IOUs" and stuff.


Secure decentralized base layer, with efficient transaction layers built on top for mass use. FTW.

The only better option would be if somebody figured out how to make Bitcoin handle GBs of data per second while still being globally secure, reliable, and decentralized. Plenty of altcoins have done the first part (or at least a lot more than a few MB), but they all had to abandon most of the second part, which for digital money of course is the important part. If someone figures out that technological revolution I'd be all for updating Bitcoin with that tech, but until that theoretical day, let's stick with Bitcoin combining security, reliability, decentralization, with fast cheap transactions in a way that makes sense, which is the current path of Bitcoin.

Don't "economic nodes" also have a say in the network? There's nothing stopping big institutional investment companies and mainstream governments from running their own nodes. Lets not forget that miners also choose the transactions with the highest fees out of greed. The more fees collected, the better for the miners.

Hopefully, Bitcoin will stay decentralized and censorship-resistant for generations. Who knows what will happen in the future? 

They've been working on the scalability problem for 13 years now, which in the realm of high-tech might as well be a thousand years. It's not a problem that's going to get solved. The idea that every daily worldwide transaction that occurs in the whole world gets copied thousands of times to thousands of servers is simply not viable.

And Lightning is both not a solution at high scale and it is also centralized. Same with the L2 solutions. They are no different than any standard bank or Paypal transaction. If you are going to use a centralized architecture, Haypenny is the way to do it since it's a paradigm that is centralized from the very beginning. "Centralized blockchain" is like alcohol-free vodka: it's a waste of time. Regardless, even centralized blockchain won't get you the scale necessary to be a real alternative to today's bank and physical cash transactions, and it's needlessly complicated for the end-user.

And if Bitcoin isn't valuable purely an investment vehicle, that is... news to most retail Bitcoin investors who don't hold their own physical private key and probably don't even know what that is . Millions of people clearly love the idea of an investment vehicle and don't care about the technical details. I don't think that's... pessimistic...

This SEC employee is very wrong in my eyes since he does not understand bitcoin correctly. Bitcoin is not dependent on any kind of exchange or other institution. The users can go to another exchange in a matter of hours if one exchange would abuse their power. This is different in the fiat banking system. If you understand that you will understand why Bitcoin is decentralised and fiat is not.

bitcoin never leaves the blockchain.. thats the point of one of its security features (unable to take off or put bitcoin onto the blockchain outside of the reward rules of auditing a block)
anything else reporting to be playing with bitcoin but not using the blockchain are just IOU tokens or pegged units of another medium

ETF's for instance are just pegged share units.. they are not even IOU because  by law, and regulation and many other things share holders cannot redeem "in-kind"

other things like subnetworks or CEX databases are IOU unsettled claims. that need to be see a broadcast and confirmed tx to confirm/settle the IOU

remember
#not-your-key-not-your-coin