Opinion About Future of Bitcoin Scalability

[mboxdk]

I suspect there are no good solution for cryptocurrency microtransactions. We cannot record billions of transactions of all people in the blockchain every day. I believe that Lightning Network is not good and safe solution.
These days, we can potentially use fast and centralized stablecoins, but not store large amounts in them.


But in the distant future it might look like this:

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.
Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).
If you are very rich guy or cypherpunk or cryptoanarchist or Satoshi Nakamoto you can still use your cold wallet to keep your money and use paper bitcoins for micro-transactions.
If you are ordinary person you can keep some money in centralized "bitcoin banks" to use their fast network like Visa for fast small transactions. If you keep all money in that bank and that bank goes bankrupt, then it's only your fault.
If you have a lot of paper bitcoins and they are actually not backed by real BTC -  it's only your fault.

What do you think about it?

[DooMAD]

I suspect there are no good solution for cryptocurrency microtransactions. We cannot record billions of transactions of all people in the blockchain every day. I believe that Lightning Network is not good and safe solution.
These days, we can potentially use fast and centralized stablecoins, but not store large amounts in them.


But in the distant future it might look like this:

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.

I think much of it will come down to individual preference.  People tend to lean towards saying there's a "right" or "wrong" way to handle microtransactions, but I suspect, whether it be off-chain methods, custodial services, altcoins or indeed something else entirely, it's likely everyone will have their choice catered to.  One way or another, people will find a way to do what they want.  That's part of the beauty of crypto.

[mboxdk]

I think much of it will come down to individual preference.  People tend to lean towards saying there's a "right" or "wrong" way to handle microtransactions, but I suspect, whether it be off-chain methods, custodial services, altcoins or indeed something else entirely, it's likely everyone will have their choice catered to.  One way or another, people will find a way to do what they want.  That's part of the beauty of crypto.

Yes, I just wanted to discuss the possible prospects and perhaps to be convinced that microtransactions without centralization are possible.

[androyster]

If the credit card companies can do it so can crypto.

[joniboini]

If the credit card companies can do it so can crypto.

Crypto and credit card are way too different, especially if we're talking about Bitcoin here. I don't know why you think a decentralized entity could move as fast as a centralized one where a number of people can easily decide which protocol they'll use and at what cost. Obviously, this is oversimplified, but the "just because" argument is weak here.

OP, your idea might happen (actually there are several opinions with more or less the same idea), but I personally won't use it. IMO there's no point storing my bitcoin to a third-party. I'd rather use fiat if I need microtransaction, or other chains with a very small fee but good enough security (or a second layer with Bitcoin at its core).

[Upgrade00]

I believe that Lightning Network is not good and safe solution.

Do you have any reason to back up your claim? Lightening network is still growing in adoption, but it has a lot of potential to positively affect scalability.

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.
Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).

Putting a decentralized currency in a centralized system is wrong use in my opinion.

[NeuroticFish]

Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).

Bank notes are IOU ("I owe you") papers. Central banks keep large quantities of gold to back that.
You want to give banks one more tool for printing more paper? What would make these Bitcoin-backed IOU banknotes better than the current fiat currency?
And the next step a bank would do is fractional reserve (print 5, 10, 100 Bitcoin IOU papers for each Bitcoin they own). No.

What you propose is to use Bitcoin in complete contradiction of the reason it was created and be used in the same way the already established fiat is working. I see no usefulness in this. Zero. Sorry.

[phreess]

I suspect there are no good solution for cryptocurrency microtransactions. We cannot record billions of transactions of all people in the blockchain every day. I believe that Lightning Network is not good and safe solution.
These days, we can potentially use fast and centralized stablecoins, but not store large amounts in them.


But in the distant future it might look like this:

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.
Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).
If you are very rich guy or cypherpunk or cryptoanarchist or Satoshi Nakamoto you can still use your cold wallet to keep your money and use paper bitcoins for micro-transactions.
If you are ordinary person you can keep some money in centralized "bitcoin banks" to use their fast network like Visa for fast small transactions. If you keep all money in that bank and that bank goes bankrupt, then it's only your fault.
If you have a lot of paper bitcoins and they are actually not backed by real BTC -  it's only your fault.

What do you think about it?

So basically, getting back to the days where fiat was backed up by gold,, but now it will be backed by bitcoin instead of gold?!

Then history would repeat itself

[mboxdk]

Do you have any reason to back up your claim? Lightening network is still growing in adoption, but it has a lot of potential to positively affect scalability.

Lightning Network security is obliviously very much lower than security of the blockchain.

Putting a decentralized currency in a centralized system is wrong use in my opinion.

Wrong for big money but more safe and faster for microtransactions.

What you propose is to use Bitcoin in complete contradiction of the reason it was created and be used in the same way the already established fiat is working. I see no usefulness in this. Zero. Sorry.

So basically, getting back to the days where fiat was backed up by gold,, but now it will be backed by bitcoin instead of gold?!
Then history would repeat itself

We will not avoid that anyway. Banks will do that and they will not ask us. Also banks should give credits to people and business. "Legacy mode" support will be needed for some people.
But you can be responsible for most amount of your money, just hold it on your cold wallet and history will not repeat itself.

Also most people will be scared to lose access to their wallets, they will use banks anyway.

[20kevin20]

I've seen quite a lot of posts and "opinions" recently about Bitcoin in which banks are included. Why? Where are these opinions coming from all of a sudden?

Banks. Institutions of enslavement.
Bitcoin. Currency of freedom.

How are these two supposed to go together, honestly? They never will. You have to choose between the two.

[NeuroticFish]

But you can be responsible for most amount of your money, just hold it on your cold wallet and history will not repeat itself.
Also most people will be scared to lose access to their wallets, they will use banks anyway.

OK, for the small fast transactions I see that centralization may come upon us.
But I expect to have it in the form of web wallets and centralized exchanges which will have LN capabilities and will allow people even "pay for their coffee".
If banks join the party... well, it's a free world.

But I don't see why we would go back to banknotes.

[mboxdk]

I've seen quite a lot of posts and "opinions" recently about Bitcoin in which banks are included. Why? Where are these opinions coming from all of a sudden?

Banks. Institutions of enslavement.
Bitcoin. Currency of freedom.

How are these two supposed to go together, honestly? They never will. You have to choose between the two.

You are right - Currency of freedom. Nobody will take your freedom if banks will exist. You still have your personal wallet.dat, nobody will forbid that..
They can only exist together or Bitcoin will die.

OK, for the small fast transactions I see that centralization may come upon us.
But I expect to have it in the form of web wallets and centralized exchanges which will have LN capabilities and will allow people even "pay for their coffee".
If banks join the party... well, it's a free world.

Banks and centralized  exchanges will be the same thing.

But I don't see why we would go back to banknotes.

Because "Legacy Mode" should be supported!
Not everyone can have internet and electricity everywhere. There will still be many old-fashioned people. Also this is additional way of anonymity.

[NeuroticFish]

Not everyone can have internet and electricity everywhere. There will still be many old-fashioned people.

Sure. That's what there's fiat for.

Or you are expecting it to disappear? No. Governments will keep their claws in the monetary politics, hence they'll keep centralized money. Your banknotes may work with govt issued stablecoins. But should not be mixed with Bitcoin.

[mboxdk]

Not everyone can have internet and electricity everywhere. There will still be many old-fashioned people.

Sure. That's what there's fiat for.

Or you are expecting it to disappear? No. Governments will keep their claws in the monetary politics, hence they'll keep centralized money. Your banknotes may work with govt issued stablecoins. But should not be mixed with Bitcoin.

I don't think this is a working system. What is the point of centralized money if no one keeps their savings there but keeps them in bitcoin?
On the other hand, why do you need bitcoin if you do not store your savings there?
To store all savings in bitcoin, it must become a unit of value. Everything else will have no value.

[stompix]

But in the distant future it might look like this:

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.

If you are ordinary person you can keep some money in centralized "bitcoin banks" to use their fast network like Visa for fast small transactions. If you keep all money in that bank and that bank goes bankrupt, then it's only your fault.
If you have a lot of paper bitcoins and they are actually not backed by real BTC -  it's only your fault.

How is this distant future?

We already have the banks with the vaults, Coinbase, Gemini, or smaller ones like Bitcoin Suisse, we have the standard banks that also offer trading and a visa card, with Binance and Crypto, we have the bankruptcy with MtGox or the total failure like Quadriga or MintPal or god how many examples of this type we have.

The distant future is already here.
Come to think of it, I'm actually part of the problem, I think I've used more my Binance and Wirex cards for buying stuff than real BTC, I need to go in the garage and flog myself for 600 seconds.

Bank notes are IOU ("I owe you") papers. Central banks keep large quantities of gold to back that.
You want to give banks one more tool for printing more paper? What would make these Bitcoin-backed IOU banknotes better than the current fiat currency?

We could use real bitcoin banknotes, like the ones Tangem was developing, although I don't know how things are going with their project.
But, I don't see any point or real-life actual usage for any of those.

[mboxdk]

We could use real bitcoin banknotes, like the ones Tangem was developing, although I don't know how things are going with their project.
But, I don't see any point or real-life actual usage for any of those.

It depends on distance to that future. Maybe we will not use that. By the way papers will not be a big issue.

How is this distant future?

We already have the banks with the vaults, Coinbase, Gemini, or smaller ones like Bitcoin Suisse, we have the standard banks that also offer trading and a visa card, with Binance and Crypto, we have the bankruptcy with MtGox or the total failure like Quadriga or MintPal or god how many examples of this type we have.

The distant future is already here.
Come to think of it, I'm actually part of the problem, I think I've used more my Binance and Wirex cards for buying stuff than real BTC, I need to go in the garage and flog myself for 600 seconds.

There are only 2 kinds of the future.
1) Bitcoin and other cryptocurrencies will die.
2) Bitcoin is reserve currency and new gold standard.
Should I explain why?

[franky1]

I believe that Lightning Network is not good and safe solution.

Do you have any reason to back up your claim? Lightening network is still growing in adoption, but it has a lot of potential to positively affect scalability.

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.
Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).

Putting a decentralized currency in a centralized system is wrong use in my opinion.

guess you missed the memo
LN has loads of vulnerabilities..
remember account transaction(channels) have been around for decades.. then bitcoin came around as something new and more secure then channels..
LN has many vulnerabilities.
LN has the same flaws as the banking system and yes hubs are just bank2.0 with a catchier title
heck its not even a 'push' method. but instead 'handshake'(cooperative signing)
its not even a network wide audited method

imagine having a fiat bank. but if your wife wants you to pay the electric. you cant just transfer $100 to the electric company
you have to daisy chain many partnership handshake agreements.. and hope that everyone on the line is awake and has funds for you to hot-potato your payment through your wife.then the neighbour then their boss who then has access to the electric company

LN payment success/achievement rate is not 100%..(unless <3sat) heck not even 50%(unless under the price to buy a mcdonalds happy meal)

seems backwards to me.
bitcoin solved many bank problems.
LN is reopening old problems and adding more problems ontop.
and thats without discussing all the bugs, code and feature vulnerabilities

[20kevin20]

You are right - Currency of freedom. Nobody will take your freedom if banks will exist. You still have your personal wallet.dat, nobody will forbid that..
They can only exist together or Bitcoin will die.

Banks are taking your freedom, but partially and so smoothly you don't notice. They're just disguising removal of freedoms into freedom. Bitcoin doesn't need banks. It'd be straight against Satoshi's whitepaper.

How does storing BTC under a third party's custody even make sense? I mean, first and foremost, why have BTC banks if the customers have their own ".dat" files? We need to eliminate 3rd parties, not promote them. Bitcoin certainly isn't the best system when it comes to convenience, but this is the best we can do to be under control of our own money.

[mboxdk]

I believe that Lightning Network is not good and safe solution.

Do you have any reason to back up your claim? Lightening network is still growing in adoption, but it has a lot of potential to positively affect scalability.

We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.
Banks can also print bitcoin banknotes that are backed by real BTC (legacy mode support).

Putting a decentralized currency in a centralized system is wrong use in my opinion.

guess you missed the memo
LN has loads of vulnerabilities..
remember account transaction(channels) have been around for decades.. then bitcoin came around as something new and more secure then channels..
LN has many vulnerabilities.
LN has the same flaws as the banking system and yes hubs are just bank2.0 with a catchier title
heck its not even a 'push' method. but instead 'handshake'(cooperative signing)
its not even a network wide audited method

imagine having a fiat bank. but if your wife wants you to pay the electric. you cant just transfer $100 to the electric company
you have to daisy chain many partnership handshake agreements.. and hope that everyone on the line is awake and has funds for you to hot-potato your payment through your wife.then the neighbour then their boss who then has access to the electric company

LN payment success/achievement rate is not 100%..(unless <3sat) heck not even 50%(unless under the price to buy a mcdonalds happy meal)

seems backwards to me.
bitcoin solved many bank problems.
LN is reopening old problems and adding more problems ontop.
and thats without discussing all the bugs, code and feature vulnerabilities

If so, then I also had such suspicions, but I do not have time to thoroughly understand the protocol in order to give arguments. It's just that I, as a programmer, understand the potential fragility of security. I do not consider the centralization of micropayments to be a big problem, I think this cannot be avoided.
I would never use LN.

You are right - Currency of freedom. Nobody will take your freedom if banks will exist. You still have your personal wallet.dat, nobody will forbid that..
They can only exist together or Bitcoin will die.

Banks are taking your freedom, but partially and so smoothly you don't notice. They're just disguising removal of freedoms into freedom. Bitcoin doesn't need banks. It'd be straight against Satoshi's whitepaper.

How does storing BTC under a third party's custody even make sense? I mean, first and foremost, why have BTC banks if the customers have their own ".dat" files? We need to eliminate 3rd parties, not promote them. Bitcoin certainly isn't the best system when it comes to convenience, but this is the best we can do to be under control of our own money.

You forget about other people, not everyone is cypherpunk and crypto enthusiast. There is no way you can convince others not to use banks. Nobody forces you personally to use banks, it gives enough freedom for those who need it.

[pooya87]

I believe that Lightning Network is not good and safe solution.

Using a second layer solution is the only way that we can scale bitcoin. If LN is not completely safe right now it doesn't mean it is unsafe as a solution.

These days, we can potentially use fast and centralized stablecoins, but not store large amounts in them.

The problem is the "centralized" part which makes them useless because if you want to use a centralized cryptocurrency then it is best if you stick to centralized fiat, it is more stable than stable coin that is supposedly backed by it (eg. USD instead of USDT) and it is much safer because fiat is backed by the country not some shady company that could disappear.

But in the distant future it might look like this:
We can use some centralized "bitcoin banks" where ordinary people will keep their bitcoins.

Same as above, centralized custodial service to hold bitcoin is pointless when you can use the same service to hold fiat. Why bother with bitcoin then?

What do you think about it?

What you call "bank" already happened a long time ago with services such as Coinbase and other custodial wallets. They will be used by some people as long as price keeps going up. The day price reaches a more stable state (ie. when mass adoption occurs) these services become obsolete.