There are a lot of per and cons discussions about no change at all, segwit and unlimited right now.
I want to summarize the basic problems of both and my preferred solution.
I think any kind of change of the current protocol would "mess up" bitcoin payment systems because the current crypto payment "standard" will be destroyed.
We all subscribed to 2 major bitcoin laws, when we bought or mined them:
1. The protocol is 1MB per block. Period!
2. There are only 21 Million Bitcoins. Period!
The first one may be discussable and unimportant for the majority (believe it or not, miners are actually a minority of users) the second one is more severe, than you might think.
The reason is: We would never reach 100% consensus with any kind change. Never! That's simply impossible. There will always be some stubborn people, no matter how good the arguments are...
That means, we would have a forked chain in any case. We turn our beloved bitcoin into two altcoins.
And with the fork we will automatically have 2 chains, with a maximum of 21 million each!
And that further means, we more or less double the amount of coins. We could call that a hidden "break" of the protocol.
Yes I know, its not a double actually, it's two different chains, different coins, bla bla bla... I know that, you know that.
But the uniqueness of the BTC token is gone. Many many of the investors and the press will even not understand the facts! They will just think bitcoin was hacked, unstable, unsecure, unreliable or whatsoever FUD can be used...
Consumers just don't understand it! "Which one is the 'real' one now?" talks will be everywhere ...
We had similar problems with ETH already. The fork harmed ETH a lot.
Ok, it recovered quite good afterwards, but this is, because people invested in ETH are way more technical understanding than the majority of Bitcoin owners and lately because of the entethalliance.
If we fork bitcoin the trolling will be gigantic! It could throw crypto miles back or maybe even kill it completely, if the fork is too severe. Just look at current price fluctuations because of the threat already.
Keeping that in mind I think, there is only a solution with Bitcoin as a truely "unique" bitcoin token. I know it cannot be a perfect solution, but we will suffer in any way. It's just about the least impact.
The bitcoin term is currently used for the token and the whole system, which includes the chain. But the real "value" of bitcoin is actually not the payment system itself any more.
The majority of consumers doesn't use the software. They just use the token. With bitpay, coinify, coinbase, you name it.
It's just about the limited amount and the decentralized payment system between the parties. The "kind" of system behind it is exchangeable and there are plenty of other systems available.
They even are technically improved after the 8+ years, since bitcoin was invented. All those company payment processors still build their system on an outdated protocol which should be glued now somehow to make it a little better. But the ultimate solution is out there.
The current discussed solutions are like having a 14.4k modem and debate about buying a second one or improve it to a 56k one, just because we have to stick to an analog line, but ISDN and DSL is already waiting. We just want to have fast and uncensored internet, who cares about the line?
We have to move the token!
Moving the token
So how can we move the BTC token? This are my suggestions:
1. Create or choose a enterprise ready payment system, that supports the move.
There can be build a new Bitcoin 2.0 blockchain for this use case, but I honestly don't see the point to create yet another system.
There are already plenty of systems, that can be used. The best choice would be Ethereum because its enterprise ready and has a high adaption. Further possibilities would be (in no particular order) NEM, Komodo, Waves, Lisk, Ardor/NXT, Bitshares.
2. Create a multisig bitcoin address
We need a "container" for the frozen Bitcoins, that ensures, that the moved bitcoins cannot be used on the bitcoin chain any more. They have to be locked in a multisig address. This way we can make sure, that the coins are still accessible for the way back. There should be a lot of participants on the multisig address, so that the community can be sure, that the address can't be exploited somehow.
3. Create a smart contract
If the bitcoins are sent to the container, the new BTC asset tokens should be automatically sent to a corresponding address on the other chain. Also sending it to a container address on this new chain could unfreeze the original bitcoins, so that they can be used on the bitcoin blockchain again.
This is probably the most tricky and risky part. If there are bugs in the system, it will be a mess...
But it can be done!
4. Move payment processor companies to the new system
If everything works, the companies can use the new chain for payment to each other. Using newest technologies with childchains enables an unlimited throughput, because you can switch parts to another chain as soon as there are limitations. In a centralized way bigger payment companies could also use their own way to move the tokens to another chain, if the payments stay within their system.
5. Bitcoin block generation
The bitcoin block generation would still go on like before, because bitcoins can only be generated on the bitcoin chain via PoW. So the old chain would still have its use case. There would also be some transactions, but the majority would be on the new chain.
6. Final step
The bitcoin PoW, that consumes so much energy can get obsolete, if the created coins are not worth to run a miner any more.
Further Advantages
The bitcoin consensus was ment to be for all "users". Satoshi invented the PoW consensus because in anonymity hardware is the best choice to create an equality over all participants. Sadly the asics destroyed that idea miserably. Now there is "the miners" and "the users". The worst thing is, that the users are the majority and still have no voting rights. Keeping the current system like it is this unbalance would get worse and worse. By moving the token off the chain we reduce the power of the miners to a minimum.
This is a full copy of my article on
http://cryptopay.blogspot.de/2017/03/bitcoin-scaling-proposals-another.html
