Will BTC ever become truly scalable, decentralized and secure? Trifecta problem.

[Discounted]

To me it seems like there have been talks about BTC becoming scalable for many years now. BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out? And if BTC doesn't solve the trifecta, perhaps an altcoin will; before bitcoin does.

I know Blockstream has made some interesting products, by Adam Back (most suspicious person for being Satoshi). But these are all products that are not running on the Bitcoin main network (not decentralized, secure is arguable).

It's my main fear for BTC not succeeding, never becoming scalable. The halvings have been cool in pushing us into new bullruns, but this 4th halving will be a minor decrease in mining rewards compared to the previous ones. Sure we can have other bullish catalysts, but I don't think it will cut it. We've had some of the most bullish (in theory) moments in time for BTC these recent years, but we couldn't latch on; because frankly, Bitcoin is not finished yet. If it could scale on a massive global scale like advertised - It would have been mass adopted during the pandemic and hyper inflation times.

Am I naïve, is there any reasonable chance for BTC to conquer its scalability issue? It's amazing the Byzantine General's problem got solved, but now we've got a 'trifecta' problem. A cryptocurrency can't be decentralized, scalable and secure all at the same time.

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[Smartvirus]

We've got scalability already in the stable coins if you would consider that. Although, bitcoin remains the coin most crypto enthusiast look up to but, there are phases to the currency and network. One can't rush the other. Its a highly scares commodity and to have its fit value, we don't need to rush it but, allow the laws of demand and supply play Its part in setting the ask and bid price. With a few bitcoins yet to be mined, the issue with scalability and volatility will still remain. My speculations puts me at a point of a scalable BTC when the last bitcoin is mined.

[Discounted]

We've got scalability already in the stable coins if you would consider that. Although, bitcoin remains the coin most crypto enthusiast look up to but, there are phases to the currency and network. One can't rush the other. Its a highly scares commodity and to have its fit value, we don't need to rush it but, allow the laws of demand and supply play Its part in setting the ask and bid price. With a few bitcoins yet to be mined, the issue with scalability and volatility will still remain. My speculations puts me at a point of a scalable BTC when the last bitcoin is mined.

I'm not sure I understand, which stable coins are scalable to you? Even though it'd be mostly pointless since you will not have escaped the traditional monetary system being correlated to the dollar. Most stablecoins just run on the Ethereum mainnet, with that, making them unscalable by default. Transaction times and fees of Ethereum. To me, for a cryptocurrency to reach its goal of global adoption, worldwide instant transactions, anywhere anytime. It should, ofcourse have instant transactions - and second, have extremely low fees >$0.01. Especially needed for less developed countries where sometimes in peak network stress fees can go all the way up to monthly salaries.

[Mate2237]

To me it seems like there have been talks about BTC becoming scalable for many years now. BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out? And if BTC doesn't solve the trifecta, perhaps an altcoin will; before bitcoin does.

You are contracting yourself. You said,

 BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out?

This your question is even rhetorical question because you have already answered the question by saying that btc is decentralized, and if btc is decentralized how can we solve the scalable nature of bitcoin? I dont think this can be solve. BTC is not own my individual so it will be hard to solve it.

[Welsh]

Maybe, I'm just missing your point, however; What's your problems with the current security of Bitcoin? I mean, it isn't inherently insecure, otherwise it wouldn't be worth anything. So, what specifically do you not like about it, or what security aspects do you want to improve?

Bitcoin is also almost infinitely scalable. Probably more so than our current mass preferred fiat system. So, there's that. Plus, it's already decentralised more than our fiat system, which already makes it the better option in almost all metrics. Cash isn't as secure as Bitcoin, and I'd argue that electronic money, i.e those that are stored on banking systems also aren't as secure.

So, I'm struggling to really see current problems, but would like to hear them.

A cryptocurrency can't be decentralized, scalable and secure all at the same time.

What exactly are you referring too here. Bitcoin is more scalable in certain areas, but without knowing exactly what limitations you're talking about, I can't really accurately discuss the scalability issues. Are you talking about the storage issue that we might run into etc?

[Discounted]

Maybe, I'm just missing your point, however; What's your problems with the current security of Bitcoin? I mean, it isn't inherently insecure, otherwise it wouldn't be worth anything. So, what specifically do you not like about it, or what security aspects do you want to improve?

Bitcoin is also almost infinitely scalable. Probably more so than our current mass preferred fiat system. So, there's that. Plus, it's already decentralised more than our fiat system, which already makes it the better option in almost all metrics. Cash isn't as secure as Bitcoin, and I'd argue that electronic money, i.e those that are stored on banking systems also aren't as secure.

So, I'm struggling to really see current problems, but would like to hear them.

A cryptocurrency can't be decentralized, scalable and secure all at the same time.

What exactly are you referring too here. Bitcoin is more scalable in certain areas, but without knowing exactly what limitations you're talking about, I can't really accurately discuss the scalability issues. Are you talking about the storage issue that we might run into etc?

I'm not saying Bitcoin is not secure or decentralized, if I came across that way in the post, it wasn't the intention. I'm saying Bitcoin is not even close to scalable. Transactions take way too long, and are too expensive for a globally adopted currency. It can't scale in real world adoption, unless you sacrifice security, or decentralization by using an alternate network, like El Salvador has attempted.

[Discounted]

To me it seems like there have been talks about BTC becoming scalable for many years now. BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out? And if BTC doesn't solve the trifecta, perhaps an altcoin will; before bitcoin does.

You are contracting yourself. You said,

 BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out?

This your question is even rhetorical question because you have already answered the question by saying that btc is decentralized, and if btc is decentralized how can we solve the scalable nature of bitcoin? I dont think this can be solve. BTC is not own my individual so it will be hard to solve it.

I'm not sure what's rhetorical about it. I said BTC is decentralized and secure, but not scalable. Therefor it's not possible for BTC to 'work out' meaning living up to its goals, becoming a global adopted currency. 'how can this ever work out' asking, how can BTC ever become a global adopted currency without having the trifecta (decentralization, security and scalability), is there any solution? Am I missing something? If you lack any of these 3, you cannot become the advertised global adopted cryptocurrency (as far as I know). There isn't a single cryptocurrency till date that has all 3, every single one has sacrificed one of the three. Examples:

XRP: Scalable, secure. Not decentralized.
BTC: Secure, decentralized. Not scalable.
BCH: Decentralized, scalable. Not secure.

[Welsh]

I'm not saying Bitcoin is not secure or decentralized, if I came across that way in the post, it wasn't the intention. I'm saying Bitcoin is not even close to scalable. Transactions take way too long, and are too expensive for a globally adopted currency. It can't scale in real world adoption, unless you sacrifice security, or decentralization by using an alternate network, like El Salvador has attempted.

Right, in terms of transaction times. I actually think at the moment looking at things, we'll probably see altcoins be used for lower values. This might actually be integrated in a user friendly way in the future, I don't know. However, by reducing the transaction times, and therefore the confirmations you're effectively making it a little less secure. Although, Bitcoin could potentially be used like that now. As an example, many users here feel comfortable enough to allow for 0 confirmations, and only see it broadcast on the network. I wouldn't recommend it for the security implications that could potentially impose, but most people are already doing this with cards using fiat, so maybe people don't care all too much about the additional checks to prevent double spending etc.

I'm not sure that makes Bitcoin insecure though, since Bitcoin by default would still be secure, it would be the user choosing not to use the additional checks, which means Bitcoin is secure, but the users are slightly less secure by taking risks, however small they may be in reality.

Expensive; yeah there's an issue of that. However, segwit, and Lightening offer somewhat solutions to the expense problem, and in the future we'll likely see additional steps taken to reduce the transaction fees. However, due to the nature of Bitcoin, fees will always be a part of the network, and I'd rather higher security, a decentralised system to a degree, and paying a fee than giving up those benefits. I mean, a lot of people are already getting fees associated with their cards, they just don't realise it. Especially, if you own a credit card.

Also, one could argue that Bitcoin isn't completely decentralised, and they would be right to an extent. Mining as an example takes a certain amount of hardware these days, which of course directly translates to expenses, something which prices out the poorer users among us. Plus, there's also a certain technical element to it, that not everyone will be willing to wrap their head around. Thus, mining attracts a certain demographic. 

[Discounted]

I'm not saying Bitcoin is not secure or decentralized, if I came across that way in the post, it wasn't the intention. I'm saying Bitcoin is not even close to scalable. Transactions take way too long, and are too expensive for a globally adopted currency. It can't scale in real world adoption, unless you sacrifice security, or decentralization by using an alternate network, like El Salvador has attempted.

Expensive; yeah there's an issue of that. However, segwit, and Lightening offer somewhat solutions to the expense problem, and in the future we'll likely see additional steps taken to reduce the transaction fees. However, due to the nature of Bitcoin, fees will always be a part of the network, and I'd rather higher security, a decentralised system to a degree, and paying a fee than giving up those benefits. I mean, a lot of people are already getting fees associated with their cards, they just don't realise it. Especially, if you own a credit card.

This is the reality I see for Bitcoin currently, and I agree I'd also rather have security and decentralization. But if we don't have all 3, where will that take Bitcoin? Will it ever live up to the original dream of becoming a globally mass adopted currency? The idea of being able to send money globally, instantly, securely without intermediary for super low cost was amazing. But it's not living up to that. And if it can't live up to that, where will Bitcoin end up, what will it actually be used for besides investing, trading, mining? That can't last forever, to me, if it doesn't eventually reach a point of mass adoption, being used in daily trade, it will eventually all fall down.

[Doan9269]

To me it seems like there have been talks about BTC becoming scalable for many years now. BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out? And if BTC doesn't solve the trifecta, perhaps an altcoin will; before bitcoin does.

An advise anyways, dont complicate things together, comparing bitcoin with altcoins in scalability and chances of overtaken bitcoin isn't a good idea welcome on bitcoin board here, bitcoin has nothing to do with having challenges with scalability, the only aspect you expect scalability to function well is on centralized system which that's all where alts belong, there will always be restriction and bitcoin has come to provide a solution to that, if you adopt the use of bitcoin then you stand the chance to enjoy it's benefit, part of which is the scalability challenges with centralized authorities.

[Smartvirus]

Even though it'd be mostly pointless since you will not have escaped the traditional monetary system being correlated to the dollar.

The correlation I was trying to make but, its true we can't say it's completely scalable given the fact that, you've got to pay some transaction fee of which have been on the rise due to the by pass of most projects from hosting there ICOs on the bitcoin blockchain to Ethereum's.

Most stablecoins just run on the Ethereum mainnet, with that, making them unscalable by default. Transaction times and fees of Ethereum. To me, for a cryptocurrency to reach its goal of global adoption, worldwide instant transactions, anywhere anytime. It should, ofcourse have instant transactions - and second, have extremely low fees >$0.01. Especially needed for less developed countries where sometimes in peak network stress fees can go all the way up to monthly salaries.

Speaking of instant transactions with less fees, do you doubt we won't come to that? Not to mention, you could have a fee as low as $1 using whatever exchange to transfer stable coins using Binance smartchain. When the congestion is evenly spread across for most projects, we would have a speedy transactions.

[Discounted]

Even though it'd be mostly pointless since you will not have escaped the traditional monetary system being correlated to the dollar.

The correlation I was trying to make but, its true we can't say it's completely scalable given the fact that, you've got to pay some transaction fee of which have been on the rise due to the by pass of most projects from hosting there ICOs on the bitcoin blockchain to Ethereum's.

Most stablecoins just run on the Ethereum mainnet, with that, making them unscalable by default. Transaction times and fees of Ethereum. To me, for a cryptocurrency to reach its goal of global adoption, worldwide instant transactions, anywhere anytime. It should, ofcourse have instant transactions - and second, have extremely low fees >$0.01. Especially needed for less developed countries where sometimes in peak network stress fees can go all the way up to monthly salaries.

Speaking of instant transactions with less fees, do you doubt we won't come to that? Not to mention, you could have a fee as low as $1 using whatever exchange to transfer stable coins using Binance smartchain. When the congestion is evenly spread across for most projects, we would have a speedy transactions.

Currently there is zero reason to believe Bitcoin will ever achieve instant transactions with low fees >$0,01 on a global scale. Hence why I made this post, asking if I'm naive for thinking this, is there something I don't know?

Using Binance smartchain isn't solving any existing issue, you're only proving the trifecta problem I stated in my original post. BSC has 21 validators, selected by Binance. The chain is not decentralized, it's a centralized network. You sacrificed decentralization from the trifecta in order to achieve scalability. Trifecta: (decentralization, security, scalability).

Also, $1 fee is still too high for global adoption. In the Netherlands where I live, when I use my bank card to purchase something in a store, I pay $0 in txfees. No ordinary person here will take that txfee burden from crypto. $1 is also way too much money to sacrifice as a fee for most african people, some asian countries too, or poorer people in general. If you buy a $2 coffee and pay $1 txfee. That's a 50% price increase.

[decodx]

To me it seems like there have been talks about BTC becoming scalable for many years now. BTC is decentralized and secure no doubt, but if we don't solve scalability, how can this ever work out? And if BTC doesn't solve the trifecta, perhaps an altcoin will; before bitcoin does.

An advise anyways, dont complicate things together, comparing bitcoin with altcoins in scalability and chances of overtaken bitcoin isn't a good idea welcome on bitcoin board here, bitcoin has nothing to do with having challenges with scalability, the only aspect you expect scalability to function well is on centralized system which that's all where alts belong, there will always be restriction and bitcoin has come to provide a solution to that, if you adopt the use of bitcoin then you stand the chance to enjoy it's benefit, part of which is the scalability challenges with centralized authorities.

That's just nonsense. People have been discussing altcoins and comparing them to Bitcoin since the very beginnings. What should the OP be afraid of? This is a platform for open discussion, not an echo chamber where everyone agrees with each other.

And what do you mean by "the only aspect you expect scalability to function well is on centralized system which that's all where alts belong"? That just doesn't make sense. Where did you get the idea that all alts belong to a centralized system?

[OgNasty]

Ironically, I think as Bitcoin services become more centralized (think using your coinbase or binance account to make payments to vendors without a fee) it will become an easier task to achieve true decentralization.  I think this is where we're headed and I don't think it's a bad thing.  People will be able to make their own choices about how to store their funds with regards to their skill level and risk tolerance and regardless of their choice will be able to interact seamlessly with each other.

[DooMAD]

Ironically, I think as Bitcoin services become more centralized (think using your coinbase or binance account to make payments to vendors without a fee) it will become an easier task to achieve true decentralization.  I think this is where we're headed and I don't think it's a bad thing.  People will be able to make their own choices about how to store their funds with regards to their skill level and risk tolerance and regardless of their choice will be able to interact seamlessly with each other.

I sincerely hope we can do better than that.  It would be a shame to have come this far just to propagate a new breed of middlemen who can subsequently suffer security breaches, lose funds or their customers' personally identifiable information.  All the kinds of things Bitcoin was meant to avoid.  Honestly, why even bother?  That's not scalability, that's just cutting corners and taking pointless risks for the sake of convenience.

[Welsh]

This is the reality I see for Bitcoin currently, and I agree I'd also rather have security and decentralization. But if we don't have all 3, where will that take Bitcoin? Will it ever live up to the original dream of becoming a globally mass adopted currency? The idea of being able to send money globally, instantly, securely without intermediary for super low cost was amazing. But it's not living up to that. And if it can't live up to that, where will Bitcoin end up, what will it actually be used for besides investing, trading, mining? That can't last forever, to me, if it doesn't eventually reach a point of mass adoption, being used in daily trade, it will eventually all fall down.

I'm still of the impression that Bitcoin beats our fiat system in almost every possible way, except for transaction times, and fees. However, with the former there are ways to improve it or at the very least mitigate it. However, whether it's advisable to do that remains another thing.

I genuinely believe most people will find a use for Bitcoin, however I know not everyone likes the idea of being their own bank, and I'm quite shocked it hasn't happened yet, but I can see banks making their way into Bitcoin storage, which will appeal to a certain type of person. While the very core users of Bitcoin will likely be hostile towards that, I might say it might even be necessary for mass scale adoption, since Bitcoin is a complex subject, and we can probably only simplify it so much, and therefore as long as there's complexity people aren't going to trust themselves to look after multiple thousands worth of Bitcoin, thus opting for a third party that will supposedly be more qualified in handling security issues.

So, with that in mind, as long as we continue moving forward, and we aren't too hostile to things which might go against the very core of Bitcoin principles, we should still see some major adoption. Obviously, people like us will opt to handle our own funds, but I'm just giving an example there where decentralisation might actually be harmed in the future, something along the lines of what OGNasty said.

[franky1]

many people are not using bitcoin(on the network because thats the only place bitcoin exists), because instead they are using sub networks for low fee and faster payments using different units of measure, sacrificing security and putting value at risk for that feature of convenience.. and with the sentiment  of exaggerated/over-promised but not guaranteed "privacy" poured onto them

or using central custodians for convenience of not having to worry about "techy" software of confusing jargon, but sacrificing security, control and freedoms with over-promised no guarantee personal info security, and also over-promised but no security of value(not your keys)

custodians are no better then fiat banks..
side-subnets are no better than IOU's, retail credit, redeemable loyalty points schemes
subnet.sidenet pegs are weak, meaning the security on those sub-side networks are weak.
(as learned by the luna/stablecoin fiaso's of broken pegs)

if the subnetworks are federated smart contract networks (master group signed) you have to put your faith/trust/hope into a corporate/control group not to break their promise.
there is no network wide protection against these groups managing the value

if they are co-partner smart contracts, you have to faith/hope/trust the partners promise, and their partner, and their partner and so on just to make a payment
thre are no network wide protection against these partner agreements

because subnetworks of smartcontracts design dont use a consensus (world wide enforced rules/policy of agreement(blockchain)), then there are no fixed rules at code/data level that all have to obide by, which is also audited by all to secure and ensure completeness and to ensure there are no changes to something in the payments after they are made.
the smart contract networks have no mechanism to see or stop multiple malicious things even if they are noticable/preventable if done in a blockchain system

smart contracts are not new tech, they are things that existed pre-blockchain. which is why when blockchains did become available the blockchains solved problems smart contracts did not

smartcontracts do not secure funds like blockchains do. you are at more risk, but have a convenience benefit. which is where people are willing to take more risks for convenience.
people need to be aware of risks to make well informed risk adverse decisions rather than lulled into false security pitches of lies and over promises, just to win userbase shifting to those networks

even with sidechains (bridged to another blockchain rather than a subnet of smartcontract) the pegging mechanism are also just as weak. (as learned in recent months with the luna and stablecoin fiascos of losing their promised pegs)

sidechains offer a bit of better security as long as the 'tokens' are not variable pegs. and have a consensus mechanism for all to enforce and audit(decentralised blockchain). where its at code level enforced to always be 1:1, where any deviation is rejected.  and can be secured to never deviate (some stablecoins dont even have a true 1:1 peg as they can market at variable amounts by default)

subnetworks that have no blockchain are weaker security due to lack of consensus
as for bitcoin scaling/utility
many people use fiat 4 times a day on average which over 2 weeks is over 50 times a fortnight.
there might be some stronger coded side-sub networks in the future that will bridge to bitcoin allowing the convenience of fast payments but designed to only work on a fortnightly planed spending lock.
much like credit cards that settle up each month. no matter what

allowing people to plan to lock up small risk adverse X amount per fortnight, which has to settle in that fortnight for security of the payer and payee agreement
while also doing the game theory of reducing onchain bloat.
.. without being like the current sub-side offering systems that pretends to be better security and trying to lock people in long term with most of their hoard needed to be locked in and spaced out in multiple allocations just to use the other network
(no current sub-side network offers these things but future ones might. if they are designed better)

however bitcoin network still needs to scale too, by actually allowing full unstiffled utility of the 4mb acceptable blockspace. to truly have more then 300x more utility(3x onchain x100 offchain=upto 300).

but a strong emphasis: these side/subnets of the future need better security, rules and code..
and not the current systems with silly middleman/counterparty signing requirement of pass the parcel between many people who have to sign agreement to move funds in the middle. in a silly system that has no backbone security to protect agaisnt the flaws/bugs/issues of agreements(promises)

[pooya87]

Transactions take way too long, and are too expensive for a globally adopted currency.

I suggest you start using bitcoin before giving an opinion about its speed and cost.

Bitcoin as a payment system, currently has the fastest transactions among all payment systems including the banking system. The transactions reach their destination immediately (1-2 seconds) and on average it takes 10 minutes for them to become finalized.
In comparison in the traditional systems like the banking system, it takes months for the transaction to be settled and become finalized and same with altcoins considering they need a lot more "confirmation" compared to bitcoin to be considered final and that usually takes hours.

As for transaction fees, in 99% of bitcoin's lifetime the fee has been very low. Currently a normal bitcoin transaction costs about $0.03 which is very cheap.

[2stout]

I'm not sure I am understanding as this shouldn't be a question for Bitcoin as much it is a question for shitcoins.  Again, the trifecta problem is more an issue for shitcoins as opposed to Bitcoin.

[Discounted]

Transactions take way too long, and are too expensive for a globally adopted currency.

I suggest you start using bitcoin before giving an opinion about its speed and cost.

Bitcoin as a payment system, currently has the fastest transactions among all payment systems including the banking system. The transactions reach their destination immediately (1-2 seconds) and on average it takes 10 minutes for them to become finalized.
In comparison in the traditional systems like the banking system, it takes months for the transaction to be settled and become finalized and same with altcoins considering they need a lot more "confirmation" compared to bitcoin to be considered final and that usually takes hours.

As for transaction fees, in 99% of bitcoin's lifetime the fee has been very low. Currently a normal bitcoin transaction costs about $0.03 which is very cheap.

Come on, 1-2 seconds? In a utopia maybe. In reality purchasing anything you will need to wait for network confirmations, which can take multiple hours. I've used Bitcoin countless times. Comparing that to the traditional system, my transactions don't take hours, rather seconds.

The average transaction fee per 1 September was $1.09, where do you get a $0.03 instant transaction on Bitcoin mainnet?