While I agre it's possible, I don't agree that parrallel blockchains are the ideal way to deal with scaling issues. Merged mining might prove to be a viable method for securing those parrallel chains, but otherwise their very existance must reduce the security of the main blockchain or be too insecure in their own right. Merged mining is promising, but not proven to not reduce security overall.
The idea of simple bank-like insitutions with readily auditable bitcoin reserves is a much more scalable method, and they only need be trusted by those who choose to do so.
Regardless, all of these methods are likely to see production if their technical issues can be resovled; and then the market will decide.
Topic: Potential Solution to Blockchain Bloat (Read 2029 times)
In New York they have a saying "You're building a rocket-ship to go to Staten Island!"
The OP describes such a rocket-ship to overcome the problem of scaling the blockchain.
Block propagation delays could be largely mitigated through sharing headers:
https://bitcointalksearch.org/topic/m.1566307
Unspent TxOut verification can be achieved through a merge-mined alt-chain 1/1000th the size of the main blockchain.
(Or two parallel alt-chains which eliminates SatoshiDice-like bitdust spam as well).
https://bitcointalksearch.org/topic/ultimate-blockchain-compression-w-trust-free-lite-nodes-88208
Yes, there is work involved, but these powerful solutions exist within the Bitcoin domain to create a truly world-beating currency & payment system.
Why are people talking about building whole new 3rd-party systems when Bitcoin has so much untapped potential?
The OP describes such a rocket-ship to overcome the problem of scaling the blockchain.
Block propagation delays could be largely mitigated through sharing headers:
https://bitcointalksearch.org/topic/m.1566307
Unspent TxOut verification can be achieved through a merge-mined alt-chain 1/1000th the size of the main blockchain.
(Or two parallel alt-chains which eliminates SatoshiDice-like bitdust spam as well).
https://bitcointalksearch.org/topic/ultimate-blockchain-compression-w-trust-free-lite-nodes-88208
Yes, there is work involved, but these powerful solutions exist within the Bitcoin domain to create a truly world-beating currency & payment system.
Why are people talking about building whole new 3rd-party systems when Bitcoin has so much untapped potential?
why not just use Bitcoin to back the USD?
Because it's no more trustworthy than a gold backed USD. That didn't prevent the FedRes from creating more USD's than the government had in gold. There was a reason that Nixon "closed" the "gold window" (which never really did exist, anyway) in 1971. The French alone had enough USD's to take half of Fort Knox's offical stores, and probably all of what it really has.
huh? you don't consider Bitcoin trustworthy?
It's the "backing" that he doesn't trust, not bitcoin.
why not just use Bitcoin to back the USD?
Because it's no more trustworthy than a gold backed USD. That didn't prevent the FedRes from creating more USD's than the government had in gold. There was a reason that Nixon "closed" the "gold window" (which never really did exist, anyway) in 1971. The French alone had enough USD's to take half of Fort Knox's offical stores, and probably all of what it really has.
huh? you don't consider Bitcoin trustworthy?
why not just use Bitcoin to back the USD?
Because it's no more trustworthy than a gold backed USD. That didn't prevent the FedRes from creating more USD's than the government had in gold. There was a reason that Nixon "closed" the "gold window" (which never really did exist, anyway) in 1971. The French alone had enough USD's to take half of Fort Knox's offical stores, and probably all of what it really has.
why not just use Bitcoin to back the USD?
That's so far beyond my ability that I haven't given it any consideration.
Any other easy questions?
Yes. Not sure if they're easy, but:
Would it be feasible for this bank to have it's own separate network,
Yes. Search for 'bitcoin spinner' and 'stratum' for two different, functioning, overlay networks that intergrate into the main network quite well.
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with it's own separate blockchain without new units of its currency being created as an incentive to the nodes, but only transaction fees?
Perhaps, although that is not an easy technical hurdle. A parrallel blockchain is likely unnecessary anyway, once enforcable contracts are working within the blockchain itself.
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Would creating new blocks on the bank's network on a more frequent basis make this a better alternative for those who want quicker confirmations?
Practically speaking, no. Because there is no way to do truly 'instant' transactions with confirmations of any practical block interval. Instant transactions will be handled in other ways.
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Could this bank have a wallet that was able to simultaneously interact with it's own network as well as the Bitcoin network to allow for quick and simple deposits and redemptions?
Yes, see Stratum.
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Would this offer former GPU miners on the Bitcoin network a chance to still generate income by processing transactions on the bank's network?
It's not possible to answer this question at this time.
why not just use Bitcoin to back the USD?
Any other easy questions?
Yes. Not sure if they're easy, but:
Would it be feasible for this bank to have it's own separate network, with it's own separate blockchain without new units of its currency being created as an incentive to the nodes, but only transaction fees? Would creating new blocks on the bank's network on a more frequent basis make this a better alternative for those who want quicker confirmations? Could this bank have a wallet that was able to simultaneously interact with it's own network as well as the Bitcoin network to allow for quick and simple deposits and redemptions? Would this offer former GPU miners on the Bitcoin network a chance to still generate income by processing transactions on the bank's network?
I'm sure it's probably been discussed before, but instead of transacting directly in bitcoins, has someone considered creating electronic currencies that are backed with bitcoins--similar to the way Federal Reserve Notes were once backed by gold?
Yes.
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In a similar manner, couldn't a bank issue an electronic currency backed with bitcoins that it held on reserve?
Yes.
Any other easy questions?
One of the concerns that some have about Bitcoin is the blockchain's inability to scale and handle an extremely large number of transactions as it gains more acceptance.
I'm sure it's probably been discussed before, but instead of transacting directly in bitcoins, has someone considered creating electronic currencies that are backed with bitcoins--similar to the way Federal Reserve Notes were once backed by gold? As I understand it, under the classic gold standard, someone in the USA with $35 could walk into a bank and redeem it for an ounce of gold. (Something along those lines anyway. The monetary system of the USA has undergone so many tweaks and modifications over the years that it's difficult to keep track of them all.) I realize that the term "gold standard" means different things to different people, but when I use that term it means that I, as an individual, can walk into a bank and redeem their paper for my gold that they are holding on my behalf. In this scenario, dollars could essentially be considered to be "as good as gold".
In a similar manner, couldn't a bank issue an electronic currency backed with bitcoins that it held on reserve? The bank's customers would be able to deposit bitcoins and then have an account that is denominated in the bank's currency. Merchants that were willing to accept this currency would then be able to redeem the currency for bitcoins on a routine daily/weekly/monthly or as-needed basis. Would it be feasible for this bank to have it's own separate network, with it's own separate blockchain without new units of its currency being created as an incentive to the nodes, but only transaction fees? Would creating new blocks on the bank's network on a more frequent basis make this a better alternative for those who want quicker confirmations? Could this bank have a wallet that was able to simultaneously interact with it's own network as well as the Bitcoin network to allow for quick and simple deposits and redemptions? Would this offer former GPU miners on the Bitcoin network a chance to still generate income by processing transactions on the bank's network?
Right now it may not be cost effective to have an electronic currency backed with bitcoins. However, if the number of bitcoin transactions continues to grow and transaction fees become mandatory and steadily increase, perhaps it would become cost effective to implement an electronic currency of some kind that is backed with bitcoins to relieve transaction traffic on the blockchain and reduce transaction costs for bitcoin users.
I'm sure it's probably been discussed before, but instead of transacting directly in bitcoins, has someone considered creating electronic currencies that are backed with bitcoins--similar to the way Federal Reserve Notes were once backed by gold? As I understand it, under the classic gold standard, someone in the USA with $35 could walk into a bank and redeem it for an ounce of gold. (Something along those lines anyway. The monetary system of the USA has undergone so many tweaks and modifications over the years that it's difficult to keep track of them all.) I realize that the term "gold standard" means different things to different people, but when I use that term it means that I, as an individual, can walk into a bank and redeem their paper for my gold that they are holding on my behalf. In this scenario, dollars could essentially be considered to be "as good as gold".
In a similar manner, couldn't a bank issue an electronic currency backed with bitcoins that it held on reserve? The bank's customers would be able to deposit bitcoins and then have an account that is denominated in the bank's currency. Merchants that were willing to accept this currency would then be able to redeem the currency for bitcoins on a routine daily/weekly/monthly or as-needed basis. Would it be feasible for this bank to have it's own separate network, with it's own separate blockchain without new units of its currency being created as an incentive to the nodes, but only transaction fees? Would creating new blocks on the bank's network on a more frequent basis make this a better alternative for those who want quicker confirmations? Could this bank have a wallet that was able to simultaneously interact with it's own network as well as the Bitcoin network to allow for quick and simple deposits and redemptions? Would this offer former GPU miners on the Bitcoin network a chance to still generate income by processing transactions on the bank's network?
Right now it may not be cost effective to have an electronic currency backed with bitcoins. However, if the number of bitcoin transactions continues to grow and transaction fees become mandatory and steadily increase, perhaps it would become cost effective to implement an electronic currency of some kind that is backed with bitcoins to relieve transaction traffic on the blockchain and reduce transaction costs for bitcoin users.
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