Immutability is not a decision, it is a phenomenon.  "falling from a mountain until you crash" is not stupidity, it is gravity.
The only way to break out of immutability is forking.  But if your whole value depends on you being "first mover" and have nothing else going for you, forking is not appealing.

No, bitcoin is what it is and will stay that way.  It is in the nature of immutable consensus systems not to change.  The bickering you see in bitcoin's world is the mechanism of immutability: no agreement can be found on change, so nothing changes.  It is this mechanism that protects the protocol: disagreement on change.
So don't count on bitcoin "upgrading".  It won't happen.

Realism.  If I write a paper that starts with "airplanes are made to go to the moon", it turns out that you can fly with an airplane, but that airplane tech is never going to get you to the moon.

The way bitcoin was constructed makes it impossible to use as digital cash (note that DASH won't be digital cash either, it is bitcoin with extras: tumblers and mem pool certification - I say this because of the name).
A block chain having each and every transaction ever to be had by the users and proof of work that must be more expensive than the value of what is secured by it, can never be "digital cash".  Moreover, there are monetary parameters (block reward halving shocks, block size limits....) that make that this is not going to be a high-liquidity asset but a speculative asset.

In other words, bitcoin's DESIGN, from the start, made that this was not going to be digital cash.

Now, whether the designers (Satoshi) didn't realize the power of immutability and thought that one could change things on the fly in the sense "let us already start with this test version, and move on", or whether they were more sophisticated and somewhat less honest in their sayings, is an open question - my idea is rather the former, but I don't exclude the latter.

In a sense, they were right, new systems have been developed, but they weren't bitcoin evolutions, but alt coins, because *changing* a coin is essentially impossible, but making a new one, is.

That said, as of today, there is not yet a solution for "digital cash" apart things like the LN, which re-introduce normal banking.

It is not sorta.   It IS a normal bank.  It IS fiat.  It is a fiat bank: Google bank. 
Paypal does the same.   Are you discovering that most payments you can do with fiat ?

Hence, my long standing question: what are you doing in crypto ?

So what is the niche where crypto has a competitive edge ?  Mmmm ?  That what will not be possible with normal banking.  That what normal banks will not want to do, or where it is too risky to do with normal banking.  Capice ?

Amen.

LN is banking all over.  But the niche is taken by fiat banks.  LN just brings in extra hassle.  Crypto, needing to be censorship resistant, trustless, decentralized etc.... has a huge burden in comparison with a centralized fiat bank ; that burden needs to be offset by an advantage in order to be competitive.  When there were 20 transactions a day, it seemed naively that this burden didn't really exist.   Click, and 10 minutes later, $10, or $100 000, was securely on the other side of the world.  The growth was financing the inflation and the PoW, everything was still small-scale, so it seemed simple, "if only everybody used it".  
No, the needs for censorship resistance, trustlessness, security, decentralization etc... are big resource hogs, and in order for it to be competitive with fiat banking, it has to bring in something that you cannot do or cannot do as well with fiat banking.

So crypto will always be a niche applications for those things you cannot do with fiat: everything which is illegal, lawless, unregulated, or where a good legal system doesn't exist, in those cases where the legal system is too corrupt, or when international situations make the connection between several legal systems too difficult.

And coffee buying is none of them.

Bitcoin is costing about $400 million a year in PoW only.  Add to that all the network and computing infrastructure, and you see that bitcoin, as a payment system allowing for 3 transactions a second, is not cheap.  It costs about $4 a transaction.  This is now compensated still by inflation which is not seen because of growth (greater fool growth), but the real cost is there.  You need to have a niche where a transaction is worth $4 as a competitive edge in order to do so.

It might very well be, but because the ecological niche will be taken already by bitcoin.  Unless bitcoin leaves that niche.  But bitcoin, being first mover, and being highest market cap and being most integrated already with 'the big boys', may very well keep that place.  Or not.

It is a bit: "why is gold put in vaults and used for ages as reserve currency, and why not, say, iridium ?".  Because gold took that place first.

That said, there's nothing wrong with bitcoin leaving the room for something else if that something else works better.  The thing that bitcoin has going for it, is a brand name.  But deep down, it is just a game with big numbers.  Replacing a game with big numbers by another game with big numbers that turns out to be more practical, I don't see what's the problem.  Replacing a Ford-T with a Toyota, what's the problem, if it drives you better to where you want to go ?


Because it wasn't correctly designed for that, and immutability makes that it cannot change fundamentally.

I am not sure I solved this entirely, but the general idea is to have to have sufficient "stake signature".  The difficulty is this: ideally, you'd want to have, say, 10% or 20% of all stake to sign off your wallet, but that is not realistic.  So I'm thinking of someone being able to delegate its stake signature to other wallets in a kind of pseudo random way.

My idea is that one should be able to prevent a Sybil attack, but that one makes the hypothesis that randomly selected stake wallets are most of the time sufficiently honest to do the job correctly.  Thus I'm not starting with "trustlessness", but rather with "most randomly selected users are to be trusted, but some can be evil".  This is like a randomly selected jury on a trial. 

Well, ETH and Monero have no block size limit.  That doesn't mean they can scale indefinitely - they can't because they are block chain coins.  But at least, the limit is just the technological resource usage, and hence, there is no inelastic offer of transaction space.  If technology (network, processing, storage) goes up by a factor of 10, then ETH and Monero can handle 10 times more transactions at the same cost.  That's about every 5-6 years according to Moore's law.  This means that there is no lucrative fee market.  Both ETH and Monero have tail emission, meaning that there will not be the battle for fees.

Moreover, ETH as well as Monero have regular hard forks, so they can much easier update to newer technology.  For instance, recently, monero switched to ring CT from the former cryptonote tech.  That is a more involved and deeper modification than Segwit activation.   

Both these coins will face scaling problems, and are not able to allow the earth to buy their morning coffee in the foreseeable future, but at least they will never hit the hard and frozen wall bitcoin set for itself.

DASH is a copy of bitcoin with integrated automatic tumblers.  However, DASH being "governed" (and most probably CENTRALLY governed), it can also adapt much easier if something must be changed, like block size.  This is even somewhat scary with DASH: in early history, the coin emission has been divided by 4 (there were going to be 84 million coins, and after the 2 million instamine, this has been lowered to 21 million coins, like bitcoin  ). 

So even though all these coins are block chain based coins that don't scale well, they are in much, much better shape to scale somewhat than bitcoin with its hard wall.

That stability can be appreciated too.

Nah, that would be a hard fork.



That it is no different from the fiat banking layer, just more hassle.  Why on earth would you use a crypto bank instead of a normal bank ?

Amen.  However, it is indeed what crypto became.... unfortunately.

Well, they can sustain a certain time the "greater fool game" between big fish.  But in the end, it will just become a currency, but for very big amounts and relatively few transactions, used between big financial players to settle their unregulated financial affairs.  Then, Fisher's formula applies.  It is then a currency, but for big stuff.  For instance, circuits between exchanges, online casinos, dark markets and (big) private investors, to whitewash dark market money.
Or banking and big online stores like Amazon in war-prone and unstable regions where one cannot count on the legal system.  
You can think of many examples where one cannot count on the legal system to make sure that value can be transferred between big players.

There is more chance for this to "go in circles" than to have a fully closed economy with normal goods and services.

Network effect.  First mover.  Pristine origin.

This will take a long time to erode away.

And bitcoin will remain a kind of reserve currency, it can remain at the top of market cap.  But it won't be an affordable currency (to pay with) any more.  Subtly built in from the start.

Bitcoin's crypto tech is the most primitive and clunky.  But it is good enough for a "vault gold".

Normally, a hard fork splits the market cap over the two branches, because all previous owners now have the two coins in equal amounts. 

First part, yes, second, no, I don't think so any more.  It is now a whale's sports.  Look, about 2 million bitcoin users, market cap 20 billion, AVERAGE bitcoin holding hence $10 000.  Apply power-distribution law Pareto style, and you see who is important.
If you're below $100 000,- you're not counting. 

   Funny joke.

DASH is just the new name for darkcoin, when the promotion machine realized that the dark in darkcoin was going to push away potential "investors".  Darkcoin was to get it going, the new feature was automatic mixing.  But then, better anon cryptography came out (cryptonote and zerocoin) and their anon feature was clunky.  So they changed communication strategy, and changed names.

You should ask yourself: what motivates MOST people to buy and hold coin X ?
if:
1) it is because they want to use it (as a currency, a contract....) for something else than crypto itself, then that's great.

2) if it is because they expect it to increase in value and sell it when it is more expensive

then it is a greater fool game.

Most alt coins are like that, but bitcoin too.  Yes, a FEW people buy stuff with bitcoin.  MOST of them buy it to hope to make profit = to sell it to a greater fool.

There's no fundamental difference between bitcoin and alt coins here.

That's banking.  The bank is called blockchain.info.  You are not handling bitcoin, but a bitcoin IOU. 

There are different statements, and arguments for these statements, which are mixed here.

The first statement is:
"The claim that, for a crypto currency based upon PoW leads to centralisation, is bogus".  

The example crypto currency can be a HYPOTHETICAL bitcoin with 32 MB blocks, or any other crypto currency with free block size.  This is where I argued that:
1) as long as the miners agree and make only one block chain, nodes can only copy that block chain, there ain't any other around.  So whether there are LOTS of proxy servers (nodes), or just a few, doesn't matter, what matters is the miners that make that chain.  Users only need to access A node with their wallets, and *if they really want to, for themselves, can download the entire block chain to verify*.
2) even 32 MB blocks every 10 minutes doesn't require extra ordinary computing and network equipment as of today.

Mind you that we are not talking about the real bitcoin of today, but about a hypothetical bitcoin, or another crypto, with blocks that can be 32 MB.

The second statement is:
"Given that the actual bitcoin protocol is blocks of 1MB, and that the only agents capable of modifying this, are miners (they make the blocs !), in order for this potentially to happen, there has to be a huge consensus between miners to do so, and to do so with the same protocol change ; this won't happen, because there is NO incentive AT ALL for ANY MINER to go to bigger blocs and release pressure on the fee market".

Here, my argument is that small fish don't matter, because increasing bloc size to allow smaller fish to transact some bitcoin, doesn't increase miner revenue, on the contrary.  This means that miners have no incentive, not only to get these fish to bitcoin and transact and they CERTAINLY have no incentive to try to make them do so with a 2nd tier network because these poor suckers can't even download a bloc chain.

In other words, the original lowering of the bloc size from 32 MB to 1 MB, to "allow poor suckers to use bitcoin over their 56kb lines" is totally BS.  But now that that 1 MB limit is part of the protocol, the only people that could, eventually, decide to lift it, the miners, have absolutely no reason to remove that bonus for them, not with bigger blocs, and not with a second tier network.  

Miners don't need small fish adoption.  They want big whale usage of bitcoin, with few transactions of large amounts, and the current protocol is perfect for that.  It didn't need to be so, but by error or by intend, it has been designed that way, and they would be crazy to remove this.

Those people are totally unimportant: they will not weight in on the market price of bitcoin (their market share is way too small, their financial capacity is way to small).  As such, they are not a source of profit for the miners.  Their transactions are not profitable, small fish.

A PoW system is optimising itself to extract a maximum of value out of its users.  In the first phase, that's by block reward, in the second phase, that is by fees.  These coin incomes have to be sold at market price. 

So a PoW system will optimise the expenditure of (block reward + fees) x market price, to produce the largest amount of PoW possible, the product sold to the users.  This system is sensitive to market price, and hence market makers on one hand (big fish) and the fee incentive (fee market) on the other.

Increasing the block size, and releasing pressure on the fee market, to gain some transactions from small fish that cannot afford more than a 56Kb line, is ridiculous: the relief on the fee market to get these guys in would plummet the fee income much more, than that these players are capable of pumping up the market price.

If anything, I expect soft forks to REDUCE the block size in the long run.  When bitcoin is a reserve currency, and a coin is over $100 000,- it would be tempting to increase the fees by lowering the room on the block chain, and have all these big investors fight for the small transaction room.

But what counters this, is that "room on the block" will probably be bulk-sold contractually (human contractually) between mining pools and big users (exchanges, on line casinos, and all those other players needing a non-regulated reserve currency for their unregulated financial affairs).  So limiting the stuff you can sell expensively would be good for the miners, but they will not respect it amongst themselves.