Tuesday, February 21, 2017

Jimmy Song on the future of bitcoin

The fellow is smart and I agree with his view in general. He st technology in the sandbox, leave arts with the congestion problem on the bitcoin ledger net.  He gets all  the points about pricing of ledger services to manage ledger congestion.  Then he goes into deferred ledger services by arrangement between trusted parties.   But he missed  one element, what if everyone carried a trusted, verifiable cash device?  When that happens, bitcoin becomes base money, use it with S&L technology on side chain for years, you have 3 billion trusted counter parties. Bitcoin is backed by the willingness of governments to introduce arbitrage moments in the currency, a guarantee.

So what does this mean for bitcoin?

First of all, the doom and gloom coming from both sides of this debate about how we need to scale right now is a lot of hot air. Large demand is often the fertile ground from which innovation sprouts. Demand for block space will allow businesses and individuals a chance to create solutions.
Second, on-chain fees will not be increasing linearly. If anything, there will be times when transaction fees go down, not up, as large numbers of transactions move off-chain. Thus, any predictions of future transaction fees are speculative at best and we should not be paying much attention to them.
Third, the dream of paying for everything on-chain is dead. No, you’re not going to pay for your coffee every morning with an on-chain transaction. There will be more convenient services designed with better user experiences in mind that use bitcoin to transfer value off-chain, though.
In short, bitcoin is maturing and the market is starting to define what bitcoin is going to be. I’m sure there are people on both sides of the debate that won’t like what it’s going to become, but that’s what you get with a decentralized currency.

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