Author: Venzen Khaosan 2015-07-30 13:33:09
Published on: 2015-07-30T13:33:09+00:00
The email thread dated July 30, 2015, discusses Bitcoin's protocol functions and the implications of this innovation for the future. The discussion revolves around decentralization, scalability, and speed in light of Bitcoin's payment network ("Layer 1"). Axioms have been established that determine the options for Bitcoin going forward. According to the understanding of the author, a high degree of decentralization is the most important factor for Bitcoin. Bitcoin is much more than just a payment network, and non-payment features are what gives Bitcoin most of its value. It is agreed that Bitcoin should scale subject to the axiom of decentralization. Bitcoin's payment network cannot compete with centralized transmission channels for speed or transaction volume and cannot handle the transaction requirements of the world's population. The addition of "layer 2" protocols (such as Lightning and other sidechains) will allow fast, low-fee bitcoin transactions within two years. This will simplify the scaling (blocksize) debate because it separates security and fidelity via decentralization from the ideal of universal accessibility via fast, low-fee transactions. The email thread also discusses the implementation of Bip100's 2MB block size proposals in a testnet as an insurance against a capacity crisis before layer 2 is deployed. Furthermore, the email thread talks about how a slow or lack of increase to maximum transaction rate will cause pressure on fees. The benefit of additional decentralization will have to be demonstrated by some power attacking and destroying a less decentralized currency before the benefit of this feature is given monetary value by the market. Until then, value will bleed to the network with the least friction. The blockchain with adequate features and cheapest fees will eventually have the largest market share.Bitcoin's powerful features have led some users to be willing to pay higher fees and wait longer for transactions to execute. The argument that limiting the size of the blockchain is an attempt to artificially raise transaction fees has been refuted by Greg Maxwell, who explained that the protocol's current state of development relies on blocksize for security and as a means of protecting its degree of decentralization. This concern should be obvious even to those who are campaigning for Bitcoin to become a "faster, cheaper alternative" to Visa or PayPal, as losing decentralization would mean losing the whole thing. The discussion about scalability can proceed with the knowledge that Lightning and other "layer 2" sidechains will make Bitcoin accessible to the global majority. The bitcoin-dev mailing list can be used to stay up-to-date with developments in the Bitcoin community.
Updated on: 2023-06-10T04:17:15.068932+00:00