vnprc on Nostr: I thought you were gonna go with LynnAlden's observation about the difference between ...
I thought you were gonna go with LynnAlden (nprofile…cgxx)'s observation about the difference between transaction speed and settlement speed being a centralizing force. That's a better argument, IMO, but still wrong.
With no improvement to on-chain throughput and a rapidly increasing bitcoin price we will see very high on-chain fees. If it costs house money to move funds on-chain then A) most people will not self-custody and B) the people who are barely able to maintain an on-chain balance will be willing to wait a long ass time for the absolute lowest fees. This increases the friction for on-chain settlement and drives settlement speed down, leading to the exact same situation we had with gold.
Transactions flow at the speed of the internet but settlement runs at a snail's pace. Better entrust all my bitcoin to a custodian and handle my finances with paper (electronic) receipts. Feels like de ja vu all over again.
We might have some wiggle room with low-trust options like federated side chains or fedimints. If these custodians can withstand the might of nation states then maybe we're ok. If not, we are doomed, unless we can avoid this fate through on-chain scaling.
Your claim that bitcoin *cannot* fall prey to the same economic forces as gold is patently incorrect.
With no improvement to on-chain throughput and a rapidly increasing bitcoin price we will see very high on-chain fees. If it costs house money to move funds on-chain then A) most people will not self-custody and B) the people who are barely able to maintain an on-chain balance will be willing to wait a long ass time for the absolute lowest fees. This increases the friction for on-chain settlement and drives settlement speed down, leading to the exact same situation we had with gold.
Transactions flow at the speed of the internet but settlement runs at a snail's pace. Better entrust all my bitcoin to a custodian and handle my finances with paper (electronic) receipts. Feels like de ja vu all over again.
We might have some wiggle room with low-trust options like federated side chains or fedimints. If these custodians can withstand the might of nation states then maybe we're ok. If not, we are doomed, unless we can avoid this fate through on-chain scaling.
Your claim that bitcoin *cannot* fall prey to the same economic forces as gold is patently incorrect.