please delete

[NotATether]

Except of course, if an L2 solution emerges and establishes itself, that doesn't require a hot wallet.

That basically means an L2 solution where nodes can disconnect from the internet for long periods of time without losing state. It's hard to do that without a central [group of] node(s) or a distributed blockchain similar to L1.

I mean, let's see how satellite internet goes first. Bitcoin itself was only possible because of the internet and TCP & UDP connections.

[n0nce]

Except of course, if an L2 solution emerges and establishes itself, that doesn't require a hot wallet.

That basically means an L2 solution where nodes can disconnect from the internet for long periods of time without losing state. It's hard to do that without a central [group of] node(s) or a distributed blockchain similar to L1.

Yes, exactly. Decentralization should definitely be kept, but without simply building a blockchain on a blockchain, with PoW and everything.. It's a tough problem.
If it was possible to achieve the same amount of decentralization, security and ability to go offline, it could just as well be implemented on L1. So there will need to be some compromise, in exchange for faster and cheaper transactions.

Maybe some relatively small amount of trust placed in a decentralized (but less than L1) group of nodes and additional timelocks which require you / your watchtower (or similar concept) to go online once a month or some really long time interval like that.

I mean, let's see how satellite internet goes first. Bitcoin itself was only possible because of the internet and TCP & UDP connections.

What does satellite internet have to do with Bitcoin scaling?
In my humble opinion, internet for the masses will always be on the ground.

One satellite can only serve so many customers, and just adding more doesn't work. Not only due to the Kessler syndrome, but also due to the astronomical cost of satellite launches and maintenance.

Right now, Starlink's 3000 satellites provide 500,000 people with internet. Let's say they can do 600k, that's only 200 base stations per satellite. Even if we only needed 1 billion base stations to serve the whole planet, it would require 5 million satellites; I hope it's easy to see how even a tenth or a hundredth of that is technically impossible.

[BlackHatCoiner]

Except of course, if an L2 solution emerges and establishes itself, that doesn't require a hot wallet. Then there may even be L2-capable hardware wallets and the attack surface would be similar to a layer 1 wallet. I am hopeful!

The only case wherein a Layer-2 solution has the equivalent attack surface of Layer-1 is a Layer-2 solution with zero added risks. Layer-2 migrates the same risks Layer-1 does, plus some extra. It's true provided that Layer-2 operates in the same decentralized, trustless manner. Liquid, for example, doesn't fit here, because it requires faith to federations.

There is work done on airgapped Lightning ownership, but as far as I can tell, the added risks are far from 0.

[thecodebear]

With the network hash rate so extraordinarily high, why is the transaction capacity so low?  Wouldn't it be great if we could focus all that hash power on faster transaction processing instead of a high block hash difficulty?  Well, we can!

The best blockchain is the longest chain with the greatest POW, therefore, for any given network hash rate, blockchain length and block difficulty are interchangeable.  Transaction capacity per second is the average transactions per block divided by the average block interval in seconds. To increase transaction capacity, the block interval can be reduced by reducing the block hash difficulty.  The protocol tightly regulates the block hash difficulty to maintain a predictable rate of inflation, however, if the block reward is reduced from the norm by the same proportion as the block hash difficulty, it will increase transaction capacity and maintain the target rate of inflation, all with the same level of security.

In short, Bitcoin can be faster than VISA if it needs to be.

Transaction capacity and hash rate have nothing to do with each other. As an aside, this is why all the articles/people saying "Bitcoin uses so-and-so much energy per transaction" is nonsensical because hash rate (or power usage) is in no way connected to transaction capacity.

Transaction capacity has to do with the amount of data sent to and stored on the blockchain, not the number of hashes processed by mining machines. Two completely different systems in Bitcoin.

Only way to increase transactions is to increase the amount of data being processed by, and stored to, the Bitcoin network.

There are two levers to change this: the block time and the block limit. But increasing the data sent to Bitcoin would at some point affect the operation of the network by creating many more orphaned blocks as well as hurting decentralization by making it harder and more expensive to run nodes. And Bitcoin's utility is essentially entirely based around its decentralization. That's where all its revolutionary features come from and that is a lot of what separates it from every other cryptocurrency out there. Crypto chose to abandon what makes Bitcoin strong in order to have more transactions. Bitcoin stayed unique and irreplaceable by being the first and only cryptocurrency totally committed to be really f**king good money and decentralization is an absolute requirement for that.

Just look at Ethereum. It has to do much faster transactions and more transactions and has to handle much more data due to smart contracts. And the operation of its nodes are very centralized, plus now with PoS its transaction validators are very centralized as well. A lot of the Ethereum network runs off AWS because it is too much of a hassle to run your own nodes, and there are not a whole lot of full archival nodes that the network relies on because the requirement are too high for the average Ethereum crypto super user.

Now could Bitcoin change one or both of those levers a bit (block time and block limit) to increase transactions? Sure. It's not like changing it a bit is going to suddenly destroy Bitcoin's decentralization. It'd be weakening Bitcoin's decentralization on a sliding scale, so if you didn't change the numbers too much Bitcoin would still be extremely decentralized, just a bit less so. But that would require a hard fork and one of the main facts that makes Bitcoin extremely good money is that it is immutable: it doesn't hard fork. This was the debate in 2017 that led to little sections of the community breaking off to create the sh*tcoin BCH, which then further broke into BCH and BSV, both of which are completely irrelevant. Meanwhile Bitcoin soft-forked with Segwit and remained immutable.

And what would be the upside to hard forking Bitcoin to get more transactions? What maybe you like 4x the number of transactions. Okay great then Bitcoin can handle like 20 tx/s which is still nothing compared to secondary networks in the finance world so you're still left with a Bitcoin network that can't handle much on the base layer, but you've broken Bitcoin's promise of immutability and made the whole network less decentralized and therefore weakened every use case for Bitcoin.

All payment systems have a secure slower base layer and then build more efficient networks on top. You compare Bitcoin to VISA. VISA is not a base layer network for fiat transactions. The base layer is like Fedwire or something and it is much much slower. VISA is a secondary network. So if you want to compare Bitcoin to VISA you have to make the comparison with the LN. LN is, so far, the main network built on top of bitcoin for more efficient payments. It's VISA vs Bitcoin LN, not VISA vs Bitcoin. And LN is both much cheaper and much faster than VISA, though granted it still needs a lot of work to be ready for mass usage.

[NotATether]

Side note, is VISA even the fastest transaction settler anymore, or has it been overtaken by competitors such as Paypal or possibly even UnionPay?

Only way to increase transactions is to increase the amount of data being processed by, and stored to, the Bitcoin network.

This would have to be ruled out for reasons that you wrote, making the only possible strategy to scale Bitcoin transactions is by using a (possibly more centralized) Layer 2 network.

[thecodebear]

Side note, is VISA even the fastest transaction settler anymore, or has it been overtaken by competitors such as Paypal or possibly even UnionPay?

Only way to increase transactions is to increase the amount of data being processed by, and stored to, the Bitcoin network.

This would have to be ruled out for reasons that you wrote, making the only possible strategy to scale Bitcoin transactions is by using a (possibly more centralized) Layer 2 network.

Yup that's the whole point. That's why Bitcoiners rejected the idea of turning Bitcoin into a s**tcoin when BCH broke off and fell into obscurity. You don't scale a blockchain on L1. All that does is make it weaker. Just look at every single other cryptocurrency to see this.

L2 is where you scale blockchains. Same as any other payment rails the world uses. Security is on the base layer, transaction capacity is built into higher layers. Which is why we have the Lightning Network. And who knows there may be other L2 implementations built on Bitcoin in the future, but LN already provides better features than VISA does.

[BlackHatCoiner]

You don't scale a blockchain on L1.

To explain further: you can't scale L1 essentially without L2. SegWit did help a little bit, but since scaling is "making transactions' size less" and NOT "making number of transactions per block more", to scale you need to figure out a clever way to settle transactions, provided that they take the minimum size on-chain. The answer is: do it off-chain. Two on-chain transactions can equate to nearly infinite transactions now more. This means that the size of all these transactions divided by the size of the two multi-sig transactions increases abruptly.

[NotATether]

SegWit did help a little bit, but since scaling is "making transactions' size less" and NOT "making number of transactions per block more", to scale you need to figure out a clever way to settle transactions, provided that they take the minimum size on-chain.

I've always contended that Segwit was never intended to be a scalability solution or even a band-aid in the first place. It had a specific problem to solve - transaction malleability - and solved that by disabling some parts of the transaction, so then they had to figure out how to remove the charges for the dead bytes in transactions.

[takuma sato]

Changing these things on Bitcoin is like trying to switch a motor from a plane that is flying at full speed. The game theory involved requires that everyone is onboard. Many tried in the past and failed. The fact that you cannot easily change Bitcoin to "go faster" or "be cheaper" and whatnot gives it value since certainty has value even if at the cost of slower more expensive transactions.

[Wind_FURY]

Reducing block time is bad for security. Just look at exchanges: the faster the block times, the more the confirmations they want for deposits.
Bitcoin ~10 minute blocks were pretty well thought and I would not expect that to change in the near future.

If one wants fast transactions, he should look at LN, not try to change a perfectly working bitcoin.

Plus not many people, especially newbies, have considered that it's about settlement assurances. Other blockchains might be "faster", but the settlement assurances are lower. If compared to Bitcoin, 1 confirmation would be equal to 50 or more confirmations for that other blockchain, neutralizing the "advantage" because Bitcoin blocks have more accumulated miner-costs.