I completely agree that something that is not Bitcoin can handle worldwide transaction volume. Take Haypenny for instance.

Of course the question people will ask is, why have a 2nd layer at all? If there is a digital currency that truly scales to worldwide transaction volume (or a platform that supports a multitude of such currencies), then why worry about the "first" layer?


 


Bitcoin being widely held won't make any difference--the same technical limitations will be there regardless of how many individual holders there are.



Bitcoin (the actual Bitcoin and not some system that "theoretically represents" Bitcoin that isn't actually Bitcoin) will never get mass adoption in terms of transactions because of blockchain's technical limitations.

We are already in the final stage of Bitcoin adoption with the ETF: it is now a mainstream investment instrument. Bitcoin does not have a future as a mainstream means of transacting e.g. as a currency.



Maybe. I'm personally going to bet that even in 2045, the speed of light is still only going to travel at 186k miles per second, so blockchain's technical limitations will still be there .

For me the phases of Bitcoin will look like this:

1. Bitcoin establishes itself as a mainstream investment instrument (today).

2. A viable non-blockchain digital currency system emerges that has a better user model and can scale to worldwide transaction volume.

3. Somebody uses that currency platform to front Bitcoin transactions (and all kinds of other transactions), meaning end-users only actually interact directly with the non-blockchain system when they transact.

4. At some point lots of people wonder why Bitcoin and other blockchain currencies even exist since they never actually see them or interact with them ("what is a private key?", they ask).

Will Bitcoin survive being "layered" by systems that actually work for the masses? Who knows. But ask any major technology company whether they'd rather own layer one or layer two .

I agree it was never designed to do so, but many people talk as though it will and then thing the sky is falling when, year after year, most of the world still uses traditional sovereign currencies.

Bitcoin and cryptocurrencies in general are not meaningfully restricted. There is nothing, legally speaking, stopping them from supplanting most of the world's daily transactions. As such, I really don't see any evidence that governments like the US government would try to stop a viable digital currency from taking over most transactions. Why would they care? I guess I was never a big believer in the Illuminati .

What I want to say with that is that they've been working on LN for a very long time--might as well be centuries in the realm of technology--and yet it doesn't come even within several orders of magnitude of being able to handle worldwide transaction volume.


Well, yeah, of course it does. I guess I should have more carefully defined my context with that statement. It doesn't solve the problem I was talking about solving...


I agree. I think blockchain-based cryptos are perfectly fine as investment instruments or large-scale value stores. But they will never be, themselves, actual mainstream currencies. For that you will need a system like Haypenny, which can support currencies based on whatever value store you want in the backend, but do so in a way that supports worldwide transaction volume.

There's a lot of disinformation and incorrect notions going around about the legality of Bitcoin, cryptocurrencies and digital currencies.

Here is a good place to start if you want the facts about Bitcoin's legality:

Legality of cryptocurrency by country or territory

What you can learn from is that for almost all purposes, Bitcoin (and by extension cryptocurrencies and digital currencies) are not meaningfully curtailed by government regulation on individuals. Even China's ban on Bitcoin hasn't stopped Binance from trading $90 billion per month there. Based on this, you would be hard-pressed to find a civilized country where you could be put in jail for owning or trading Bitcoin. They exist, but they amount to a tiny fraction of the world's economy.

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it. They can't point to how exactly this works, but more importantly, they seem to ignore the fact that Bitcoin transactions can take 30 minutes to complete and cost 30 US dollars, making the transaction unthinkable for all but a microscopic fraction of worldwide daily transactions. And while more centralized blockchain-based approaches improve this situation somewhat, they are still orders of magnitude away from the scalability necessary, and the key pair requirement for end-users is clunky and makes it hard to adopt.

When I first designed the Haypenny transaction platform, my first task was to calculate the number of monetary transactions going on in the whole world on any given day, and then calculate that number for peak times of the year (e.g. Christmas), and then multiple that by a factor for the peak hours of the day, and then multiplying that by a factor of five to account for "peak-second" loads (yes, my professional background is whole-internet scale systems in case you couldn't tell ).

The number you arrive at when you do these calculations is that you'd need a system that could handle a transaction load in the signal-digit millions of transactions per second if you wanted to replace daily credit card and physical cash transactions worldwide. And you'd need to handle several hundred billion transactions a month.

That is what is required for a currency to replace the current status-quo, and Bitcoin and other blockchain-based cryptocurrencies can't do it, and they can't even get close.

And it should go without saying that transactions would need to cost far less than today's transactions in order to replace the status-quo: people don't make a major change to their long-held behavior unless there is a significant incentive to do so.

And then there's the usage model. Not only does any new technology that replaces the exact functionality of an existing one need to be far cheaper in order to have a chance, it needs to be easier for end-users, too. Requiring every consumer to have a private key is something we've been dreaming about since about 1994 (I was there ), but its a pain in the ass that most consumers don't want to deal with.

These are the reasons there is not mainstream adoption of Bitcoin for everyday payments, not some conspiracy by "the government".

What government are you talking about? In my country (USA), Bitcoin is 100% legal to hold, transact, buy and sell. That's also the case in almost every other major country. Even in China you can buy and sell Bitcoin as an individual, you just can't hold it if you are a bank.

The huge challenge with cryptocurrency is technical limitations that make it impractical to use in a mainstream way.

Crypto is 100% legal in the US and in most countries.

The problem is not legal, it's technical. Something that takes 30 minutes to complete one transaction will never EVER be a mainstream transaction platform.

No, I said it was unnecessary for most people. I said that in my original paper as well. Most average consumers simply don't need a way to evade the government.



I never said it did. If you are living in a oppressive regime, then it's proper and moral to try to evade the reach of your government (if it's safe to do so).


I'm quite aware of these injustices, and they are terrible.

But in the USA its virtually impossible to own a home without using your real name, so how is some technical means of anonymity (e.g. crypto) going to help you with this problem?

The thesis of my article here was that most people would never want to own their home based on a private key (for instance) that they could physically lose or could be physically stolen. People buy their home in their own name, as they do with their car, their savings, and their crypto accounts.

Living in a country where your home could be physically stolen from you by any sort of criminal would be a nightmare. Our system isn't perfect and has lots of problems like the one you are talking about here, but most people don't have the problem with this even though there are a few very unfortunate exceptions.

But the solution is not to wage war against your own government--that's a losing battle in the long run no matter what. The solution is to vote and to change your government. That's not a very good-sounding solution because it might not work and it's often very slow, but it's the only one that has a chance of working in the real world. Everything else is just a fantasy.

I assume no such thing, and I made that very clear.

What I assumed, and I think correctly, is that most people don't want to go against their government, either because they are not criminals, or they fear being caught regardless of the technical safeguards (and trusting your life to Bitcoin privacy, for instance, would be, well, naive ).

The fact is that most people don't have the problem that decentralized architectures purport (often incorrectly) to solve.



I don't see how that contradicts anything. People usually don't like to go against their government, even if it's the proper and moral thing to do, because they fear they may be imprisoned or killed. I don't see how that statement is particularly controversial.

I have a Social Security number, I file taxes every year, my bank can be subpoenaed for my records, my house is in my name, as is my car, brokerage accounts, crypto accounts, and so on. In this regard I am exactly like almost all voting Americans. Democracy exists just fine here.



That statement is nonsensical, but no matter: I care about privacy just like everybody else. I don't want my data shared with marketers, or companies I don't trust, or my neighbors, or even the government unless they have a valid subpoena. I simply don't have a need for a place to put my money where the government can never know about it even if they investigate me for a crime. And if I ever do have a need because the US government has collapsed to the point of lawlessness, Bitcoin isn't going to help me nor will anything else. Indeed, if you are fugitive, probably the last thing you want to do is leave a digital trail, however obscured you think it might be.

I actually thought this was an actual news story until I read that.

I don't share you pessimism for digital currencies generally, but only for centralized blockchain-based cryptocurrencies.

The reason Bitcoin hasn't taken over traditional currencies is not because of some worldwide government plot, not because people don't know about it, and not because there hasn't been billions of dollars poured on the problem.

Cryptos haven't taken off as a mainstream form of payment because they simply can't do it on a technical level. Bitcoin transactions can cost 30 US dollars and take 30 minutes. Other less-centralized approaches have cut that time and cost down, but it's still nowhere near where it needs to be to handle daily worldwide transaction volume, e.g. millions of transactions per second and tens of billions per day.

That's the bad news. The good news is that if you drop the "blockchain religion" and just create a centralized digital currency paradigm that is easier for end-users and will scale up to mainstream volume, you could truly envision it taking over and non-digital money being a thing of the past--and this will happen in just a few years, not decades.

The future is centralized. For most users of Bitcoin and other cryptos today, it is already effectively centralized since most people use some kind of broker or app that has their name and address connected to a database entry representing their holding. What this tells me is that most consumers don't care about "decentralized" and probably most don't even know what that means.

The other factor will be scalability. Decentralized architectures simply cannot scale to anywhere near the level necessary to handle worldwide transaction volume. None have even come within several orders of magnitude of the necessary scale, and after over 13 years of trying, I think it's time to concede that there's no magic that's going to overcome the speed of light limitation.

Bitcoin and cryptos have shown that consumers want memes to invest in, and they would really love it it if they could have anonymous small transactions e.g. internet cash--something that a lot of people thought cryptocurrencies would do only to find out that they don't really work.

A centralized architecture solves the scalability problem when it's done right (e.g. you ditch blockchain, which makes no sense in a centralized architecture). This approach allows digital currency to truly supplant all current sovereign physical currencies and all credit card transactions. In other words, it could actually take over the billions of worldwide daily transactions that are done today.

Haypenny is an example of a centralized digital currency usage paradigm and architecture and it's WAY easier to use than blockchain-based currencies since you don't need a key pair (or any other kind of identity): it's like pure internet cash. Once users get used to the speed and ease of use of centralized non-blockchain digital currencies, I think a big chunk of the market will move over to it.

Well, yeah  .

I was going to try to make that point in the Anon Paradox, but I couldn't figure out how to express that in an elegant and compact way.

Bitcoin, and other public ledger cryptos give you the very worst kind of non-anonymity in that they only expose your PK those who really really want to find out who you are, which means the biggest targets for hackers (i.e. they expose those who the hackers really want to spend the time triangulating).

I suppose you could say Bitcoin is effectively anonymous if you are careful... but most people aren't careful (and most consumers don't want to have to be careful all of the time). Hence, in everyday practicality, Bitcoin probably represents a big security/privacy issue for most average consumers.

Once again the paradox is that the decentralized public ledger approach is actually less private than a centralized company that legally commits to protecting your privacy/anonymity like DuckDuckGo, NordVPN or Haypenny...

Because even in that statement, he is vowing to break the NATO pact. NATO is in the best interests of the US regardless how much much money certain countries pony up.

Of course when you combine that statement with numerous others, and his opposition to funding Ukraine, and his assistance with attacking Ukraine when he tried to extort them into starting an investigation into Biden, and his obvious fealty to Putin, and his ties to Russia before he was president, and Russia's assistance in helping Trump win.... etc. etc. etc.

All of this context makes it clear he will do Putin's bidding, and breaking up NATO has been the primary military objective for Russia in the post-WWII period. Without NATO, all EU countries are essentially defenseless against the Russian military.

But hey, maybe you Bitcoin will go up (or maybe it will fall by 80% like it was priced when Trump was president), so I guess that's worth risking your country getting treated like Ukraine has been treated, right?

As I've said before, The Anon Paradox, says that most people don't want the kind of anonymity that tries to protect you from the legal authorities, but rather they want anonymity from other citizens, companies, marketers, and criminals. And the paradox here is that people want their largest holdings like their home, car and life savings held the exact opposite of anonymously: they want these things in their own name so they can never lose them.

MAGA will die once Trump loses this November and half of Trump's voters will go back to voting Democrat or not voting like they used to, and half of them will join Nicky Haley's Republican party out of sheer zombie partisanship.

 

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).

So every single voter would be required to hold a private key that could be physically lost or stolen? That sounds like it would create more problems, not fewer since you'd be dealing with anonymous private keys that could never be traced, by definition, to an actual voter.

And if you are making all voters hold a private key, why especially would you implement this system with... blockchain? Just keep a database of public keys with the vote along side of it. You don't need any sort of "chain" here.

And then there's the problem that blockchain doesn't scale when it's not centralized (centralized blockchain being a pointless oxymoron). Could you imagine every single voter waiting 30 minutes for their vote to be stored? One election would take a year.

A government, by definition, is a centralized thing. Decentralized architectures gain their advantage principally in evading governments and central authorities. (This is why blockchain doesn't work for companies either).

This article is over two years old, and all of the things it promised never happened.

The reason for this is that blockchain doesn't solve any technical problems outside of cryptocurrencies and NFTs that cannot be solved better without blockchain.

And "centralized blockchain" is essentially an oxymoron, and any institution thinking of using blockchain to solve a problem is necessarily... centralized. Blockchain outside of the context of cryptocurrencies and NFTs is a solution in search of a problem, and they still haven't found one.

No, I actually said above that I don't think presidents have anything to do with Bitcoin prices.

I can't for the life of me figure out what this has to do with my post. Can you explain?