Bitcoin has clearly failed in an 'exchange' role as evidenced by still not needing to fiddle with the 7 tps transaction rate (1MB block size) and not being on a trajectory to need to do so any time soon. The reason for this is abundantly clear and I've been saying so for years: Bitcoin is simply not competitive in this role.
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I don't fully get where you're coming from on this one. Does it all boil down to your assertion that blocksize increase would have to outrun Nielsen's law in order to sustain significant transaction throughput?
Forgive me for neglecting to answer your other questions, but I like to try to keep things tight, and this is important.
Firstly, Adam cast some pearls that I'm afraid went over most people's heads which is a shame. He is not talking about exactly what I want to mention here, but the same principles apply:
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Its a little risky to play steganography arms race though because they could bypass that (at the limit steganography wins) by replacing
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So, here's the deal:
Something can act as a reserve if it is rock solid in all circumstances. Gold is a classic example.If in the future things are as they are now from a regulatory point of view, there are all kinds of instruments which could serve my purposes.
I've long said that Bitcoin is a fun little toy in today's world and hardly anything more. In a world where it is really needed there is nearly no chance that it won't be viciously attacked by those who are threatened.
The attacks possible (and likely in my opinion) against Bitcoin will drastically shrink the available bandwidth and the reliability the network. I don't give two shits what the capacity of todays or tomorrows 'consumer grade' bandwidth may be. It's an irrelevance in a situation where it matters. And even in situations where it does not (
mainstream monetary systems are working fine) there is a high likelihood that the global internet will become more restrictive and less free for other reasons.
Bitcoin really only has value to me if I can have some confidence that it will be supportable under vigorous attacks. I suspect there are many others who feel similarly and enough to result in some pretty high valuations. If Bitcoin can succeed here then that success will be (potentially) available to solutions which use Bitcoin as a backing.
Sidechains would be a good example, and by their nature they are quickly adaptable and a whack-a-mole headache to attackers.
It is this potential to possibly succeed which give Bitcoin it's value. Fortunately for Bitcoin, most of the alts are not really vying for this market-space since the very thought of a hostile global internet is widely considered to be some sort of crazed conspiricy theory...and it's no fun to restrict ones code anyway.
As I've mentioned ad-nauseam recently it does not matter how big or small the transaction rate, fees, or coinbase.
Bitcoin is economically doomed relying on the normally assumed rewards. This because the hashing power grows at a rate proportional to the reward so it relatively quickly becomes unprofitable no matter what the reward. Hashing gear is durable however, so it does not shrink. Maybe it can find something else to do or maybe not. Sidechains could help resolve this economic dilemma because they must support Bitcoin at a loss if need be...they cannot afford to let native Bitcoin be unhealthy.
The above para means that nothing good economically can be achieved by increasing the block size. The only thing doing so could achieve would be to make the solution more bloated and thus more easy to attack. To add insult to injury, the piss-ant 10x or 20x size increases would chase out another big tranche of enthusiast class infrastructure providers and not come close to supporting even a mid-sized exchange economy anyway. At least by my seat-of-the-pants estimation.
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Just a brief word about Bitcoin's competitiveness as an 'exchange currency'. It sucks. The system is a marvel of inefficiency because it was architecture to be resistant to
some aspect of the kind of nightmare attack scenarios that I allude to. Just look at the real cost of providing a transaction...it's laughably high. Also there is no reason to suspect that mainstream systems are ever going to become more secure to the Joe Sixpack class user so he'll always be struggling with secret keys. And, of course, there is the block latency which requires various shortcuts, workarounds, and throwing out of some of the security features that Bitcoin crows about in the first place. Bitcoin is also just (barely) subversive enough to create all kinds of legal-ish and regulatory-ish hassles that make it a real bitch to use, and I don't see that changing.
If it does change then Bitcoin loses almost any reason to be used. The list goes on.
this is tvbcof on the day of the last plunge down to 155. nice memorial.
