I see 3 scenarios right now:

1. Bitcoin + lighting network solves everything

2. Bitcoin's dominance ends and a more scalable payment-focused currency start to dominate (like Dash)

3. Bitcoin remains the main store of value, and people will convert some of their bitcoins to an altocin to do daily paymnt where there will be debates on the level of decentralization, but is designed to be extremely high (Visa level) tx/sec, and very low latency. My bet is currently EOS.

I still think any of these can become true, but I am more and more predicting (3) to be the case. (That is why my main investments are BTC and EOS, but I also have some Dash in case (2) becomes true.)

> 1. Bitcoin + lighting network solves everything

As far as I can tell, the Lightning Network's design isn't robust enough to solve everything. It allows for an arbitrary number of back-and-forth transactions between any two parties. It will be good, but it's not clear to me that this extends to solving all of the scalability problems.

What you're describing is a payment channel. The Lightning Network is that _plus_ protocols for negotiating the routing and chaining of payments across multiple channels.

Care to elaborate?

I would suggest actually learning how it works before commenting on it.

Lightning allows users to take a single bitcoin transaction, and use it over a finite space of time, in order to shift bitcoin back and forth, with no or vanishingly small transaction fees, as iou's between what are called 'lightning channels'. The actual transaction size will be the same as a normal transaction, with a flag that says it can only be committed to the blockchain at a specific time (or block depth). In effect, these lightning transactions are cryptographically signed 'iou's. The 'thousands' of back-and-forth iou changes are discarded when the channel is closed (massive privacy dividend), and only the aggregated change is committed to the blockchain. This is the great thing about lightning. It is a single transaction with as many inputs and outputs (one/two) as defined in the original transaction. Only the transaction values change.

Consider a channel link of this : John->Bob->Sally->Anne. Only the people next to each other in the chain have a 'channel open' with each other (John/Bob, Bob/Sally, Sally/Anne). Assuming each of the channels between all of the participants have adequate funds in order to achieve this, if John wanted to send 1btc to Anne. A transaction ledger would read :

John->Bob channel : John -1btc, Bob +1btc

Bob->Sally channel : Bob -1btc, Sally +1btc

Sally->Anne channel : Sally -1btc, Anne +1btc.

Anne now has 1btc more, and John has 1btc less, but the net effect in each channel is simply a modification to the distribution of bitcoin in that channel.

Imagine this happening, back and forth, and extended to thousands, tens of thousands, and millions of people. As long as there's a chain between them, you use the chain. You might even have your transaction split over multiple chains. For links that don't have a chain, you create a channel on-the-fly.

Each channel, therefore, only ends up with the same single input, and the same two outputs, just differing values.

It's significantly more complex than that (transaction routing, and channel closure mechanics), but that's the idea. I wish I could remember the lightning dev that explained it. It really is very clever. I haven't actually questioned about the effect of having channels with multiple inputs (John/Sally) and outputs (Bob/Anne) at inception. Technically, I can't see any reason why this wouldn't be possible. Just a much weirder set of ramifications.

I would suggest that the method for creating ln channels is most likely : Carol wants to pay Bob 0.5btc. She creates a ln channel with 1btc, of which Bob is allocated 0.5btc, and carol is allocated 0.5btc. Bob gets paid 0.5btc that is accessible once confirmed. Carol has 0.5btc that is now accessible once confirmed. That way the ln can be bootstrapped by existing txns.

I'd also suggest that it would be easier to understand if Bob were Bob Inc. The incentive will be for the buyer to reduce txn fees. If Carol uses a store (coffee?) she will want to reduce paying those fees. So she creates a channel with 0.1btc and 0.001 is allocated to Bob Inc. For the coffee she buys today, coffee + txn fee. Ever more? Zippo txn fee. When your channel is almost zero, you buy bitcoin, it is delivered back to you by the rebalancing of that channel. And because it's Bob Inc the path through the channels from a source of bitcoin is reduced, maybe even two hops ( exchangeA/exchangeB -> exchangeB/Bob Inc. -> Bob Inc./Carol).

If John wants to pay Sally, but the cheap/practical way is to use the existing path of channels through Bob and Carol and whatever, then it’s not peer-to-peer anymore! I don’t get why this fundamental architecture change is so appealing to some people.

Because Bob and Carol will make money by routing the transactions. They will effectively be banks.

Because you don't understand it. Do you think about the connections between your computer and the server you are reading this page from?

This is too complicated. I would gladly pay small txn fees to avoid having to manage payment channels.

The surface area of lightning scares me. Don't get me wrong, I hope it works, but it just sounds really unlikely to.

It's no more complex than running any other bitcoin wallet. It is, after all, bitcoin. The only difference really is that lightning is instantaneous and immutable, where blockchain transactions require you to wait until a transaction has been confirmed in the relevant blockchain in order to be secure.

And no-one will force you to use it. If you choose to continue using bitcoin transactions natively, no-one is going to stop you.

>3. Bitcoin remains the main store of value

I think this is probably right. And I would add 2 things

(a) The size and the hash power of BTC give it a HUGE advantage. If you want "immutable proof that you own this specific decentralized block" then BTC is the only game in town. And that comes at a cost (hence high fees because of lots of electricity, computers, ASIC fabs, etc).

(b) Secondly (and I realize this analogy has been beat to death...but), Gold didn't want Silver to exist. The gold industry naturally wanted to monopolize every transaction, but like Bitcoin, it turned out that their very strengths were also simultaneously their weaknesses.

Its an immutable law of economics that BTC isn't going to be able to be all things to all people, so I think its natural that among their various options, they will choose to be the "Store of Value". Ultimately thats the equivalent of being a reserve currency. By capturing the store of value corner, it means that alternatives like ETH, LTC, DASH, IOTA, et al will be valued against and perform a support function to Bitcoin. In a sense, by being the Store of Value, the other cryptos perform support roles that further entrench your position.

If you owned a national currency, you would have the legal taxing authority and guns behind your papers. If you owned gold, you would have a shiny incorruptible metal in your hand to hand over for industrial if not artistic uses, in a pinch. Heck, even if you owned a potato, you could eat it -- and in dire circumstances that has a huge amount of value and maybe you can convince somebody to trade something else valuable.

If you "own" bitcoins, you have some numbers graffitied over people's hard drives. Yes they can't change it because electricity, and the numbers only get so big, and you have some different numbers that can be turned into the graffitied numbers by one particular algorithm that people like at the moment. Without transactions, these properties are completely arbitrary. I don't see how by themselves they can give anything approaching the necessities for a store of value. The truth is, without competitive transactional uses bitcoin has no fundamental value. Without fundamental value it can't be much of a store of value, since literally anything else without fundamental value can be equally good. You can store something like the goodwill of the network, as now, which isn't nothing, but it can be notoriously fickle.

#3 is how I have allocated my bets as well.

Given the growth in transaction volume, it's pretty clear to me it will be the second, or possibly Ethereum will take the role of Bitcoin and fulfil the first:

https://etherscan.io/chart/tx

Eth nodes are a quarter of what they were nine months ago. Most people can't even sync a node anymore. None of this is a surprise. This is exactly the outcome expected with unrestrained blockchain expansion. Bitcoin is about decentralization. Every other altcoin, it would seem, is about trying to invent an inefficient paypal.

Bitcoin saw exactly the same drop in full nodes when light clients were first released.

Ethereum still has over two times as many full nodes as Bitcoin.

11,415 Bitcoin nodes:

https://bitnodes.earn.com/nodes/

29,805 Ethereum full nodes:

https://www.ethernodes.org/network/1

>>Most people can't even sync a node anymore.

Totally unsubstantiated.

>Bitcoin is about decentralization.

There's more to decentralization than being able to run a full node on your Raspberry Pi with a 128K modem. Like more than 500,000 people in the entire world being able to write to the blockchain with any regularity, which is not possible with a 1 MB limit on the 10-minute blocks (1.67 KB/s throughput limit). With such limited write-access to the Bitcoin blockchain, the vast majority of the world will have to rely on trusted third parties to hold their Bitcoin wealth on their behalf, since it's impossible for the vast majority of the world to have write-access to the Bitcoin blockchain in order to make use of a private key.

I'd rather Ethereum users poll multiple trusted third parties to validate the transaction data they're seeing, and be able to hold their own private keys, and write transactions to the blockchain with those keys, than Ethereum users be able to validate the blockchain trustlessly, but have to trust third parties, acting effectively as banks, to hold their ether.

Bitcoin is the long term store of value for the cryptocurrency ecosystem. It's poor for small transactions, but works well for storing large amounts of value as it is significantly more secure in terms of PoW than anything else out there.

The small transaction issue may be overcome by something like the Lightning Network, but in the short term, you can just use other cryptocurrencies with lower fees or other features that are important to you.

> It's poor for small transactions, but works well for storing large amounts of value as it is significantly more secure in terms of PoW than anything else out there.

This is only true as long as Bitcoin is worth more. But with it becoming more unusable, while other coins are growing in popularity, this will change and Bitcoin won't have any use case left.

> The small transaction issue may be overcome by something like the Lightning Network, but in the short term, you can just use other cryptocurrencies with lower fees or other features that are important to you.

The Lightning Network has too many problems to solve Bitcoin's scaling issues by itself. Including:

1. No decentralized routing 2. Hubs need to bind up large amount of capital 3. Nodes need to constantly be online and monitor the state to prevent fraud 4. It is heavily dependent on the network effect: for it to be useful the ones you want to transact with needs to be there. Kind of a chicken and egg problem. And why use it as long as other cryptocurrencies fulfill the users need, with a better user experience than LN would provide as well. 5. Settlements do not work reliably with full blocks (or they need to pay huge premiums)

LN might have a usecase for providing microtransactions, such as paying for every X second of a video or similar, but it will not solve Bitcoin's scaling problems.

I agree with most of what you said, but I would add that part of the value of Bitcoin vs other cryptocurrencies comes from its incredibly high PoW difficulty. The Bitcoin network currently completes 14 quintillion sha256 hashes every second. A similar amount of computing power would need to be controlled by a successful attacker.

I understand that miners can choose to leave Bitcoin, and this is largely dependent on price, but historically, Bitcoin provides the most security, so it is the safest crypto for storing a large amount of value.

Yes, that's exactly what I mean with it depends on the price. Historically most miners switched to Bitcoin Cash whenever it was more profitable to mine. With the new EDA the miner ratio is expected to follow the price ratio. So if Bitcoin Cash ever were to have a higher price than Bitcoin they would get the most miners. In the long run this would make Bitcoin Cash the chain with the most security.

The thing I don't understand, and am concerned about the most is that cryptocurrencies rely on public ledgers, and therefore not private. That is all monetary transactions are in essence public record, which is very odd to me, and really doesn't sit well.

Exactly.

Monero is the only real cryptocurrency because it does not have a public ledger. Monero is fungible, meaning you cannot tell two coins apart, which is an essential property of money.

This is a very real issue most people into Bitcoin does not seem to care about. Anyone you transact with can gain insight into your personal finances which at best informs your friends of how rich/poor you are and at worst making you a robbery target.

Zcash and DASH implement private transactions too. As good as, if not better than, Monero.

Why do you keep using the large phrase "chinese government controlled crypto bcash" instead of just calling it bcash?

Sincerely, someone that isn't involved in all of this.

It's not even called bcash. It's called Bitcoin Cash. The 1 MB maximalists call it bcash because they don't want it to carry Bitcoin's legacy in the public mind.

Labelling everyone who does that "1 MB maximalists" is a little extreme, and is probably why people are irritated with BCH's marketing tactics.

To view your statement in a different light.. maybe people don't care for it trying to succeed based on another coin's name, rather than trying to stand on it's own merits. Bitcoin Gold (for all it's problems) doesn't try to insist it's the real Bitcoin. And 90% of the coins out there were confident enough in their tech to not prefix "Bitcoin" to their name.

Bitcoin Cash was a hard fork of Bitcoin to implement Bitcoin's original scaling plan, and original vision to be a "peer-to-peer electronic cash", and includes all account balances from before the hard fork.

You may disagree that it's the real Bitcoin, but it's undoubtedly open to interpretation, and some of its advocates calling it that doesn't justify mislabeling it as bcash.

> and original vision

Where in the original white-paper is the emergency difficulty adjustment?

https://medium.com/@jimmysong/bitcoin-cash-difficulty-adjust...

> peer-to-peer

If you don't run a node, or you can't run a node because of resource requirements, you're not a peer.

It currently costs less to run a node per month than it does to do three transactions on the blockchain in the same period. Why would anyone care to run a node if the transactions aren't affordable.

If the blocksize was increased to double its current resource requirements, where i live in Australia, it would be impossible to run a node at any price.

And because the people who run nodes know this, they reject your proposals that reduce bitcoin network security.

You don't need to run a node unless you are a miner you should be using an SPV wallet. Chances are you already do.

The specifics of the difficulty adjustment algorithm are not critical to the original vision, but way to deflect (from the original scaling plan) to a different point.

>>If you don't run a node, or you can't run a node because of resource requirements, you're not a peer.

We had this discussion before:

https://news.ycombinator.com/item?id=15883911

Actually the white paper does not specify the details of the algorithm anyway.

> You may disagree that it's the real Bitcoin, but it's undoubtedly open to interpretation

It really isn't open to interpretation. And that is why people have been disparagingly calling it a different name; because the insistence that it's "the real Bitcoin" lessens it's credibility.

Why is Bitcoin Gold not the real Bitcoin? It's got a more ASIC-resistant proof of work, that's surely also in line with Satoshi's original vision? IMO, that's a much better reason, if adherence to the original whitepaper is what we're measuring by, since it reduces mining centralization. (Heck, if BCH adopted an ASCI-resistant PoW, I'll view in a new light!).

But you have to let things evolve. Software is rarely perfect out of the gate. Massive p2p software in particular is such a very new thing, there's going to be all kinds of bugs and dead ends. There may be ways to optimize and polish those dead ends to make them the best they can be, but it won't change the fundamentals of them.

And there's tons of levers and settings inside bitcoin. I don't think they're all set right (BCH's new difficulty algorithm seems like an interesting idea, in fact). But one thing that seems to be clear across the biggest coins... a worldwide distributed blockchain ledger just takes too darn long to handle p2p payments worldwide at a reasonable KiB/s. Even ETH, as fast as it is, was brought down by cryptokitties.

The coin that succeeds is going to have to solve that in some fashion. And running all the world's transactions through every node, upping the blocksize as needed, isn't going to solve the problem.

Because bcash is overwhelmingly run by bitmain, a chinese company, at every point in its service delivery. The miners, the nodes, and now the payment processor are all one chinese company. It is also not surprising that they have specifically disabled the privacy improvement of segwit in their altcoin. So no atomic cross-chain swaps are possible either. It is a walled garden where they control all of the access.

Bitcoin cash sounds good then

That's speculation on the level of Bitcoin taking over. There's no reason to value altcoins over sidechains, for example.

We don't know what the future will bring, only that large economies can't take place wholesale on a blockchain. But whether transactions denominated in Bitcoins will be popular is anyone's guess.

Surely some better technology will come along, but it won't be altcoins as you know them.

> There's no reason to value altcoins over sidechains, for example.

> Surely some better technology will come along, but it won't be altcoins as you know them.

There's no reason to value sidechains over other coins. Better technology will come, but it could come in the form of other coins.

Many block chains being in use is going to wreck the value of bitcoin long term.

People have this bizarre idea that cryptocurrency tokens are ‘rare’. They’re not. It’s trivial to make a new currency or fork an existing one.

Business models like NiceHash (putting aside their security issues) have elevated the price of bitcoin by letting miners mine the most profitable currency and then immediately selling it for BTC. This moves the demand off the best alt currencies onto BTC; so the more block chains the merrier as long as this kinds of business model persists, and i think it will.

Also; "People have this bizarre idea that cryptocurrency tokens are ‘rare’." the belief in value is basically the foundation of all currency, why would cryptocurrency be any different?

Creating new coins is also the easiest way to introduce new features and ideas. We’re overvaluing version 1.0 because it has the biggest install base.

Decentralized ones are rare. There are lots of centralized blockchains. The centralized ones, with their cheerleaders of pump and dump get rich quick schemes, are constantly trying to convince the unaware that they have the same security model as the decentralized ones. They don't.

The first version of new and revolutionary technology rarely (if ever?) becomes the dominant one. Obvious examples are search (Altavista -> Google) and social networks (MySpace -> Facebook).

None of these technologies are dominant enough. Not a single one is a usable product.

All cannot support a large number of transactions, not even those that do not have proof of work. There's research-level problems being solved (like bulletproofs for compact private transaction - hides amounts). After research is done there's engineering. Then testing until it is ready to use.

People really don't realize how early this is.

Lightning network, a proposed solution for Bitcoin scaling problem, was announced 2 years ago, and they identified many issues with it since then. There's talks of layer number 3 etc.

This is way too early and there's no winner. Bunch of cryptocurrencies are riding on the research-wave behind Bitcoin.

Any next system is likely to be bootstrapped from Bitcoin. That's the crucial difference.

This is crucial in the midst of loose and fast comparisons between technologies in the past and what we have now. Can a piece of complicated software like Bitcoin be re-engineered from the ground up? Yes, certainly, but that is a tough road to take, I would think, if you want to do what Bitcoin does at its core.

Bitcoin, the software, solves basic problems very well and is thus the basis of many altcoins.

I'll invest in the next big coin if it is significantly better than Bitcoin while continuing to maintain Bitcoin's core value argument.

Where is your second internet?

There's always the chance that you can evolve and improve upon the technology instead of something else coming to replace it.

For bitpay's usecase Bitcoin is being replaced by other coins because it fails to embrace on-chain scaling in favor of off-chain scaling which is far from ready. This is exactly as predicted.

Yep. If you want to get your transactions tracked by the chinese government, it is cheap. Like PayPal. If you want your transactions to be private, you use a decentralized blockchain like bitcoin.

I'm sorry but your continued comments in this thread are just play wrong.

> If you want to get your transactions tracked by the chinese government

That's such a stupid thing to say as with an open ledger everyone can track your transactions.

> If you want your transactions to be private, you use a decentralized blockchain like bitcoin.

You don't even know what a private transaction is. Bitcoin has an open ledger and all transactions are exactly as traceable.

If you don't run your own node, which is the aim of bcash, your ip address is tied to your payment. You have the payment processor, and the node, and the miner, all sharing the same information.

The chinese government appreciates your compliance with its crypto implementation.

Are you posting on the ARPANET?

I use email almost every day, yes.

You realize the arpanet is the internet right? It wasn't replaced, it was expanded. Call it layers if that would make it easier to understand.

ARPANET refers to a specific network that was decommissioned in 1990. And for 13 years of it's 21 years in existence, it was using NCP rather than TCP/IP.

I worked at BBN Technologies in the early 2000's. I was always amazed at how a company that essentially co-founded the internet and had the second domain name ever registered[1] could basically go out of business.

You just made me think that Bitcoin could definitely be the ARPANET of blockchains and Core devs could be BBN. Don't get me wrong, I worked with some extremely smart people, but in the end, Raytheon bought the whole company.

[1] - https://en.wikipedia.org/wiki/List_of_the_oldest_currently_r...

The difference of course, is that bitcoin isn't a company. And the arpanet turned into the internet. But companies come and go. By your analogy, raytheon owns the internet.

You're right, Bitcoin is not a company, it's a technology. This is the analogy I'd make.

Then (Internet) / Now (Cryptocurrencies)

  NCP[1] == Blockchain based decentralized consensus
  ARPANET == Bitcoin
  BBN Technologies == Blockstream
  TCP/IP == We are figuring this out right now
  Internet == We are figuring this out right now

The ARPANET turned into the Internet in the fact that parts of it were used to build TCP/IP and the modern Internet. Just like concepts from Bitcoin will eventually be used to build whatever decentralized byzantine fault tolerant mechanism we end up with in ten years. I don't think Bitcoin is the Internet, Bitcoin is the ARPANET. Also, I wouldn't say Raytheon owns the Internet. Today the Internet is owned and controlled by many different parties all built on the TCP/IP stack. Countries like China own their own internet.

In my mind, all of this work to find different decentralized consensus algorithms is work to build transport layer (OSI Model[2]). Bitcoin is an early application, but thousands of applications are now popping up, competing, and building healthier communities.

[1] - https://en.wikipedia.org/wiki/Network_Control_Program

[2] - https://en.wikipedia.org/wiki/OSI_model

And the bitcoin node software i use today is version 0.15.1, not 0.8.0. The segwit block structure is different to the original implementation. One turned into the other. Nothing is stopping you running a 0.8.0 node of course. But the newer implementation has more functionality.

right MySpace, was a technology?, I think they were build on php or so, was a slow site, Google is not a technology either, golang it is, and is somehow revolutionary through simplicity and first-ish.

Agreed! Bridges aren't technologies either, only rivets and steel beams! I keep telling people, but they just won't listen.

Cars? Not a technology, only wheels and motors are technologies.

I can't imagine a future where some form of cryptocurrency technology isn't in widespread use.