anon155742 wrote:justfisk wrote: In the case of Bitcoin there is a Tradeoff between transactions per second and the guarantee or finality of settlement. Not just that but Bitcoin also sacrifices number of transactions per second for overall Network security and for its "unconfiscatabality".
JF
Bitcoin (and other cryptos) is the digitisation of scarcity and is increasing in value not due to increasing confidence in the technology, but from decreasing confidence in fiat currency as a store of value. If it wasnt for the excess money printing then bitcoin would probably only be worth a few thousand dollars (but still valuable).
The money printing is a huge driver in Bitcoins increase in value as a scarce asset.
I am however quite critical of other "cryptos" (or corporate blockchains
) many of which are certainly
NOT scarce,
not secure, and lack the underlying technological features of Bitcoin (such as its decentralized structure) that make it attractive to people.
Some of the popular ones are not even similar in anyway to Bitcoin as they are
application platforms and not scarce Digital Gold. These application platforms would do better to run on ordinary databases by central authorities.
The fact that
Blockchain technology does NOT scale, means that many of these other cryptos or tokens are get rich quick schemes with pre-mined coins and others have technological tradeoffs that sacrifice
decentralization,
security and
immutability. Which are the central Pillars on which the Mighty Bitcoin lies.
This unscalability makes Blockchain technology only useful for the Problem Satoshi's original invention solves solves -
Trust.
Any change to the technology that makes it more scalable ends up with less decentralization with the outcome of having to trust central 3rd party entities.
For example, the increase in the Blocksize to Bitcoin created other forms of Bitcoin which meant more cost in running Nodes that validate the Blockchain. This in turn leads to less nodes validating transactions and a centralization of nodes. It also makes Elon Musk look silly when he says he is looking to "improve transaction efficiency" in one of the cryptos . Basically expanding Blocksize or increasing Block speed compromises the Network as nodes around the world need some time to sync when validating transactions. It ends up being less secure, ironically less efficient and certainly more centralized. (
Read more details here)
Which begs the question why we would even want to abandon the environmentally unfriendly Petrodollar for these other "cryptos" which are just as centralized. The only difference being substituting the government as the central authority with a private individual or individuals with sketchy pasts. With such a choice, I might actually prefer the current fiat system.
Bitcoin thus far stands alone as a digital store of value. Scalability is not solved on-chain, but rather moved to other layers which is in line with Software development best practices.
Of course the technological superiority of Bitcoin for the problem it solves, does not stop other "cryptos" from pumping in value due to speculation. I admit that when the Bitcoin Behemoth rises, it raises the tide for the boats around it and gambling in some of these "cryptos" other than Bitcoin may earn you a buck if timed right. I would not want to be caught holding the bag when the music stops though.
Play that game at your own peril. Good luck
thanks,
JF