Topic: What will happen with Bitcoin if it never scales? - page 17. (Read 11417 times)

You explained perfectly well the deflationary spiral, and the fact that it ends all economic activity.  Until everyone is sitting on his stash of deflationary money, and has no bowl of rice to eat.  Because he sold it to get more deflationary money.

Well, if you can still easily transact in the old mode, then the LN doesn't make sense.  The LN only makes sense if it carries orders of magnitude more transactions than "the old mode" CAN sustain ; and if it carries orders of magnitude more transactions than the old mode can handle, the old mode is simply not available any more, because of full blocks, high fees, and maybe monopoly agreements with miners selling their exclusive bloc space only to big LN hubs to settle.

In other words, as long as there is room on the block, nobody will use the LN.  It is only when you are FORCED on the LN, that you will use it.  And if you are forced onto the LN, it means that the old mode is simply almost not available (difficult, expensive, rare).

As long as you can still transact in the old mode, all the differences you were going to mention after that are irrelevant (I didn't read past that since it was an evident red flag where to stop). That's the basic point which you should address first. If people can transact in the "old-fashioned" way, they will continue to trust Bitcoin. Indeed, some of them may not quite like that (i.e. payment channels via LN), but since Bitcoin is essentially an open source project, it all comes down to just personal likes or dislikes

You may finally want to learn how to explain things in a concise and predictable way

Indeed, bitcoin can very well stay what it is ; there will be a natural market limiting transactions to those that are worth it within the space that is allocated on its block chain.  The only thing that this is harming, is the fundamental belief system that needs to propagate the myth that bitcoin is going to be "the world's currency".  As long as people are somehow *believing* that, they can make silly projections of like "hell, if all fiat is going to be in bitcoin, and I'm holding 20 bitcoin, I'm holding a millionth's worth of the world's cash !".

So there needs to be sufficient technobabble that can make it *credible* that bitcoin is going to be the world's cash even though it won't ever.  There needs to be a technological projection that bitcoin COULD eventually handle the world's transactions, if that is needed to have sufficient belief in it to keep the *speculation* coming ; even if the true usage of bitcoin is speculation, and that this speculation needs only a few MB of transaction bloc size ; the technological adaptation to the real usage (shifting coins between speculator clearing houses: exchanges) would kill the myth that keeps the speculation going.   My stake is that that is what the LN is about.

As to the question on whether it makes sense for bitcoin to be a "sleazy big business reserve currency", I have to say I don't know.  This would be the case if bitcoin were the absolute monopolist in cryptoland, which it has been for 8 years, but which is seriously put in doubt with the recent fall in market share - although this has to be confirmed long term.  In speculation land, I don't see how one asset can be the obvious undisputed monopolist leader, because that would be in contradiction with the efficient market hypothesis.

It wasn't that hard to anticipate that blockchains would become bloated and the network would get congested - people have made jokes for years about "write-only databases" and other such broken constructs. Even a child will tell you that if you have to keep adding pages to a book forever, after awhile you won't be able to read the book or even lift it off the (broken) table. I always laugh when some corporate doofus yaps on about the "genius of blockchain", since it's actually a fairly flawed concept. Unfortunately pruning hasn't solved the bloat problem.

Of course, the consensus algorithms and novel use of cryptography in bitcoin are strokes of Satoshi genius, and they are what made the whole thing work. Ironic that we would be embroiled in a 3 year fight about this very subject, with certain Core devs going so far as to edit Satoshi's original whitepaper.

As far as the Lightning Network goes, first off, it doesn't exist. Second, as you point out, people's trust in it will need to be earned. Finally, starting people off on LN with "you now must use this because Bitcoin has been artificially limited based on intangible threats" is really not a good beginning. Personally, I became intuitively skeptical of the concepts the minute I heard those words...

I absolutely agree that the crypto space as a whole could easily approach VISA levels, or even pass them. Trying to reach VISA transaction volume with bitcoin is a mistake in so many ways.

deisik: I think it's time to open your heart and your mind to the world of ideas out there. You seem emotional and distressed. If something you believe ends up being wrong, you can just change your mind.

Technically, of course it can be used.  But bitcoin's "trust model" was essentially that, if you were the owner of a coin, you could transact it to just any other user, that did not have to be a "declared user" or "have an account in a bank somewhere" or anything like that ; that the P2P network would propagate your transaction to a miner, just ANY miner, and that it was sufficient that ONE of the miners included your transaction in a bloc, and that was it: your transaction was done and valid.  In other words, the only way that bitcoin can censor your transaction, is by having ALL miners reject your transaction, or by a majority of miners *forbidding* you to transact (soft fork against your transaction).  Other than that, you have a permission-less system.

In the LN network, this is totally different.  You have to be on the network with a GIVEN PARTNER of which you cannot change  because you locked in your coins with him (*) and you only can transact with someone who *is already a customer on the network*, and you are totally dependent on the approval of your transaction by all the intermediate partners (of your partner, of your partner's partners / etc...).  In the LN, you cannot just see that A is not transmitting your transaction, and then switch to B.  If you have your funds locked up with A, then B is of no use to you (*).

(*) yes, of course you can eventually try to settle on-chain.  But the whole point of the LN is that there's by far (orders of magnitude) not enough room on chain to do all transactions.  So while *exceptionally* you can try to settle on chain, for MOST if not ALL of your transactions, you are dependent on your partner.

This is a totally different trust model of "transacting".  I'm not saying that it cannot work out somehow.  But it is much more involved, with much more complicated power games possible, than the simple "bitcoin way".  This is why I say that it is radically different, as a NOTION OF TRANSACTING COINS, to be forced on the LN or to do things "on chain".   BTW, the LN makes only sense when you are forced onto it of course (in other words, when the block chain is mostly unavailable/too costly).  Because if you can do a transaction on chain, there's no reason to go through all  the hassle of the LN.  It is only when the block chain is totally congested and way too expensive to use, that you are going to consider the LN, so you have to see its "power model" in that frame: "essentially no possibility (or way too expensive) to do on chain transactions, or to settle".  In that light, the LN *is* a radically different way of doing transactions than bitcoin's standard way of doing so.

The emphasized part is where you go totally nuts (again)

Not that you are rational in the previous parts (preceding that), but they at least have some veil of rationality cast over them even if the latter is entirely superficial and thus any feeling thereof is purely fictional and misleading. But that's not my point. I don't think that LN is so different that it can't be used over the current Bitcoin blockchain. But since it can, then you can't possibly claim that all confidence and trust that Bitcoin acquired during these years goes down the drain or out the window (you choose which way you are wrong). Otherwise I could claim that any update would effectively make Bitcoin into an altcoin

Well, I think that, because Core has some smart guys in there, they are *realizing* the problem that was pointed out to Satoshi way back, that his solution to make a world currency, fancy, smart and successful as it seemed, simply didn't cut it.  These are hard words and of course, coming from me, insignificant being as compared to God Satoshi, who am I to speak such blasphemy, but it was almost IMMEDIATELY pointed out to Satoshi that his system, where ALL users need to know in principle ALL transactions EVERYWHERE, and EVER, was going to have a scaling problem, and Satoshi uttered something like that a few big data centres could take care of that, essentially admitting that his solution could only work when centralized again.

In a certain way, Core has been working on a *totally different kind of payment system*, namely the LN.  But, *it is a totally different payment system*.  It simply isn't bitcoin.  Even if it is using bitcoin as an underlying system, it is a totally different way of transmitting payments, the concepts are totally different, and the trust relations and the power structures are totally different.   One could almost say that LN and bitcoin are about as different, in their concepts, as was Schaum's e-cash and bitcoin.  So all preciously gained confidence and trust of bitcoin is going out of the window with LN.  This doesn't mean that LN is bad, but it is SO DIFFERENT in its approach to transactions, that most alt coins look more like bitcoin as it is now, than the LN looks like bitcoin.

And, again, people have raised some fundamental issues of the LN idea.  Like people told Satoshi he had a problem with scaling and Satoshi replied with centralization as a solution (without calling it that way), people are telling the LN proponents it has scaling problems leading to centralization, and that is also brushed under the carpet.

And finally, all of this is in the idea that one day, bitcoin would scale "to VISA levels".  But the *economic model* of bitcoin and many alt coins doesn't look AT ALL like most fiat currency economic models.  Most of these systems have economic models that look like highly speculative assets, not like currencies.

So it might very well be that bitcoin, nor most altcoins, ever NEED these big volumes, because as speculative assets and not currencies, they don't need VISA level scaling, as "the masses" will never buy coffee (on chain or off chain) with speculative assets that aren't reliable units of account (= with relatively stable predictable values).

Very good points. Changes come very quickly in technology, and even faster in the crypto space. Perhaps coins get more mired in power struggles as the financial interests in them diversify and become more at odds with each other? Maybe we'll just have to keep moving on to the next coin, as corporations continually try to take over whatever the currently hyped coin is? It's a crazy concept. Bitcoin dominance is essentially over - it's about to drop below 50% as we speak. It could well be a shitcoin in a year if no one takes the helm and scales the network logically and simply. 

The "engineer's fight" has been ironic, because the most technically skilled people (Core) are arguing for a technically deficient solution (Segwit). I suppose that they have no choice. Blockstream's $75 mil will pay their salaries for a few more years, long enough for them to transition to another coin's dev team...

Bitcoin cannot reach what it meant to be, I think it could reach at least $10,000-$20,000 per bitcoin while others expected bitcoin could achieve $1 Million, we hope so. People may invest on another coin which has good devs team and easier to handle by layman such as some coins here which has potential to reach that point. But, we don't know what will happen with bitcoin whether it can or stuck in this condition.

Lean toward the second option it will remain a store of value but it may become dated and stagnate given long enough, that said the first mover ability is one that takes a while to be destroyed. It's similar to the facebook vs myspace which one retains usage in the long game is the utility.
We still have quite some time till that stage though but altcoins are already starting to see uses and conversions the main coin that people adopt first though remains Bitcoin and will likely remain so for some time yet.

If it is not difficult, what are you waiting for?

The problem is that just implementing SegWit in a brand new coin won't help you a lot, if at all. Simply because SegWit aims at solving the problem of scalability which is already there. But to run into that problem in the first place, you should already have wide adoption, otherwise SegWit will be of no help to you altogether. Further, SegWit itself is no more than an interim solution which somewhat fixes current issues (which a brand new coin wouldn't have anyway), but it doesn't allow infinite scalability in the way Lightning Network does. So more power to you implementing the latter from scratch if you think it is as easy

if it was possible, it would have happened already!
nobody is stopping anybody from doing it and we all know code is open and you can just copy it and start a new coin with any specification.
the problem however is the adoption, nobody will give up bitcoin which has been around for a long time and trusted to go to a new thing.
and on top of that the developers these days are only looking for profit and their own pocket, they don't care about developing a good coin. so they never do it.

What are the scales?

Scale or small is just in the map image so you can know the core path they want.

Exactly. I mean, it's not that difficult to create a coin that would surpass Bitcoin in market cap and adoption. All its needs it's to implement SegWit at launch, establish a very limited supply with no premine or ICO, and have active development to be able to surpass Bitcoin. By having a deflationary model and everything else just like Bitcoin, it would quickly gain traction. Especially by having SegWit within the first day of launch, which will be a huge booster for the new coin.

Also, there could exist a possibility of an existent altcoin to take over Bitcoin too. In my own opinion, both Ethereum and Dash look like the ideal candidates to become the top cryptocurrency in market cap. Just sharing my thoughts. 

Wtf, have you been conscripted into the shills team?

Regarding shit coins they are really shit coins, by any name. You may want to actually pay a visit to Yobit exchange and see for yourself how it looks (and feels) in practice. It kinda seems that you completely got lost in your ivory tower. Most altcoins are outright scams that were intended as scams right from the start. If it is a matter of difference between Bitcoin and the rest of the pack, why then the Chinese mining barons are opposing the SegWit activation in Litecoin so hard? Kiss goodbye to common sense and basic logic?

Maybe you're right, But i don't see that bitcoin does not manage to scale this year, I will predict that bitcoin price will increase to 2000$ before the end of this years, So in a couple of years there is no crypto can take this place, Even if the ethereum will keep developing as you said.

I also believe other platforms, like ETH, WAVES, STRATIS etc will take over where Bitcoin has left off and other alts like LTC will take the merchant market share. Bitcoin will be remembered as the first large scale digital currency and may still have some value, but won't be used for small day to day transactions if they don't get their act together re the scaling problem.

I agree with your analysis, and I would even add something to it.  The "fight" has cleared up an issue and broken a taboo:

1) the issue that "bitcoin as the world currency, to buy coffee, and to buy sky scrapers", has some fundamental problems to it, and things are not as simple as it seems, that bitcoin is subject to power structures just as well as any other financial system, and the technical challenges to turn bitcoin in a world-monetary system without being under the control of some Chinese dudes, or some other banking cartel, are far from resolved.  In as much as this was thought to be an "engineers' fight", it turns out that, well, bitcoin as a world currency will not come without another form of obscure power over people's money.

2) all the discussions about the BU hard fork or the segwit soft fork, or the hard fork to another mining algorithm to piss off bitmain have shown that an alt coin is not so very different from bitcoin, after all, and that those "shit coins" are often technically superior, and only differ from bitcoin by a brand name.  Thinking of alt coins anything different than shit coin was taboo for a true bitcoin believer, but now that the filosophical discussion arose whether one shouldn't actually turn bitcoin into an altcoin to save us from the "other side" killed somehow the belief in a fundamental difference between an alt coin and bitcoin.  This belief was necessary to refrain from taking alt coins seriously.