Thursday, February 6, 2020

Let us add a banking layer to bitcoin

The problem is scaling. The scaling problem is solved when we introduce permissionless clearing at the local level with a scofflaw insurance fee.

Spending with the banker's insured bitcoin Hot Wallet:

The concept is simple. A group f miners organize into regional tree, a hierarchical clearing system. The bitcoin user deposits money from real blockchain to the automated hot wallet of the local bank.  Henceforth the user spends those local bitcoins in the banker's ID, they are immediately valid.  The miners on the tree clear and register their own balance adjustments to the real block chain, they thus control the transaction flow. The aggregation saves miner fees and the bnk hierarchy has already gotten proof of work.

The local banks are all digital, automated meaning that one or two month credit can be an automatic allowed variance on the users bitcoin deposit.  Thus, the local banks get extra benefit from the scofflaw chasing system.

Automatic S&L is profitless, it is a routing protocol, actually, finding the shortest set of connections between deposits and loans. As  profitless routing protocol, it can be automated, and the entire bitcoin structure would rapidly replace fiat and force the central bankers hand.

The effect of the automated S&L is to add a shock absorber letting the banking layer aggregate funds for longer before clearing across the main chain.

Chasing scofflaws:

The best defense is the secure, hand held identity.  After that, hire a collection agency.

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