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You could also just not scale the blockchain, and instead use layer 2 solutions, which is the bitcoin approach.
by javert 5y ago
You could also just not scale the blockchain, and instead use layer 2 solutions, which is the bitcoin approach.
- jeremycarter 5y agoBut then what's the difference with the existing solutions involving central banks?
- gruez 5y agoBecause layer 2 solutions (eg. LN) are trustless. ie. it doesn't involve you depositing your coins with some third party and trusting that they don't run off with them.
- jeremycarter 5y agoAnd you've personally lost money from government regulated financial institutions?
- gruez 5y ago1. I'm fortunate to live in a country with a stable enough banking system that I haven't ...yet. Others are not so lucky. 2. whether you "lost money" is also the wrong question to ask. eg. if there was a massive bank failure and the government decided to bail them out by printing massive amounts of cash, you'd technically gotten your money back but you still "lost" money. 3. this feels like a derail/moving the goalposts and eventually devolving to arguments about monetary policy, intrinsic value, and whether the state should have a monopoly on currencies.
- mistrial9 5y agomy USA bank re-arranged the order of my checks and ATM on a certain day in december of 2007 to create an overdraft, which then was charged large fees, several times. At a similar time, around dec 2007, I stood next to a BofA customer being told that his cash deposit at the BofA window, would be credited on the next business day. I believe that there are documented cases much, much larger, but involving commercial transactions, that ended up with large losses also.
- mantenpanther 5y agoThat it's not centralized?
- jeremycarter 5y agoWhy does it have to be decentralized again?
- mantenpanther 5y agoMany reasons!
- 542458 5y agoBTC’s layer 2 method also doesn’t scale because (among other reasons) you still need on-chain transactions to handle opening connections and creating wallets, which the main chain does not have the throughput to do at scale. That’s also not to mention all the practical difficulties of using lightning (have to constantly monitor for fraudulent closing of connections, locks up liquidity, etc) and technical issues (route finding doesn’t scale, introduces massive DoS vulnerabilities).
- diegocg 5y agoDon't worry, bitcoin will solve these problems... With a third layer!
- gruez 5y agoMany of the problems listed are either overstated or have solutions already. eg. >you still need on-chain transactions to handle opening connections and creating wallets, which the main chain does not have the throughput to do at scale channel factories >have to constantly monitor for fraudulent closing of connections watchtowers (which are trustless) and you don't actually have to "constantly" monitor, more like once every 2 weeks.
- javert 5y agoLightning is not the only layer 2. In fact, the most obvious layer 2 is simply to use custodial solutions. However, I personally think lightning works better in practice than what you're saying.
- rawtxapp 5y agoLightning channel factories will reduce the on-chain transaction requirements very significantly by batching many channels open/closes into a single transaction.
- tromp 5y agoIt clearly offers much improved scalability since 2 on-chain transactions can support hundreds of off-chain ones. Certainly, there are still limits on the number of transactions it can support in practice, but those numbers are orders of magnitude larger.
- DennisP 5y agoEthereum is doing that today with rollups, which are capable of several thousand tx/sec without security compromises. But you multiply that if you scale the first layer too.