"you can already have fast and scalable transactions through normal banking."

I see this repeated a lot. I think you're saying bitcoin is no better than normal banking for moving value.

Do you really believe this? Yes, in the US I can immediately wire money somewhere as long as:

1) I do it within east coast business hours. Weekend? Sorry, wait til Monday 2) I have the correct information for the receiving institution, some of which require a small transfer up front to confirm the setup. 3) My bank actually supports wiring (Wealthfront, for example, only supports ACH transfers which take a few days) 4) I'm sending within the US, otherwise there are a bunch of other complications and requirements

I also need to trust that the bank actually has my money.

With cryptocurrency you can confirm that your stored value exists and is stilled owned by you, and transfer it to anywhere else within 30 minutes, in a provably secure and verifiable way.

If the number of people tried who try to transfer money between banks tried to do it on the bitcoin network, you would be waiting months for the same transaction that is taking you a couple business days with banks.

On top of that, you'd also have all the additional risk and liability of dealing with potential fraud and uninsured institutions.

It seems absurd that transfers between two accounts you own at large financial institutions take 3 days to process. There are obvious safety concerns, but there should be provably safe and faster ways of transferring value at minimal cost. People should be able to specify their security level; you could even gate-keep it with licensing, but we should make it an option for people.

In the EU, bank transfers (in €) have to clear within one working day. Transfers between your own accounts at one bank are typically instant. There is no fundamental reason for bank transfers to be slow. And unlike bitcoin, banks can handle more than a few transactions per second worldwide without grinding to a halt.

I've transferred 5-figures of fiat a couple of times and it always makes me sweat. Sure those transactions make me sweat with bitcoin as well, but the difference is that the process is 100% transparent.

Plus the incredible annoyance of having to go through the KYC/AML procedures everywhere to do any kind of meaningful transactions. And still risk getting flagged for fraudulent transactions and possibly having your funds locked/confiscated.

One day, when Tether finally breaks, books will be written, trying to explain how something so plainly fraudulent was able to persist for so long. The game theory behind its persistence is fascinating: only the last guy in stands to lose anything, so each transaction moved through Tether is basically pricing in a tiny chance of collapse.

I suspect that in retrospect it will seem obvious that a USD-equivalent that is effectively out of US jurisdiction (for the time being) will be seen as providing obvious value to money launderers and criminals, and that the counterparty risk they take is a small price to pay.

I would personally love to see a writeup on that which shows some data on how big the market is for these illegal bitcoin transactions.

Spot on. Lightning, while it scales with transactions, doesn't scale with users.

This means transactions have to go unverified and that you have to trust the person you transact with by design.

What do you mean by layer of trust? Bitcoin is definitely not "trustless" its trust minimized for sure. Lightning also minimizes trust in a very similar way. As a user you don't have to make any more assumptions when using lightning than you do already using the bitcoin base layer.

With bitcoin you can send funds peer to peer. No trusted intermediaries. Routing through a network of exchanges is more like routing through SWIFT or ACH.

For a large fee and with a lot of uncertainty on if it will make it into a block. Try the fork of Bitcoin that still operates like Bitcoin used to up until 2016: Bitcoin Cash.

Bitcoin cash is just another alt coin at this point. Transactions have been dwindling and it hasn't even had a reason to flex it's larger block size yet (which is why it was created).

Yes, it's a pity people are so easily manipulated.

There are no trusted intermediary in lightning.

If an intermediary is not behaving, the worst that can happen is that your found are blocked for a small amount of time.

1) You don't need trust the watch tower, they can't steel your money. 2) you can host a watch tower yourself on your server.

If a payment channel is still open, then the blockchain hasn't confirmed anything yet, the only speedup is to reduce roundtrips to the blockchain in the case of a series of transactions. So you are still limited by the speed of the blockchain, unless you decide to trust parties in the Lightning Network.

Onion routing also requires trust that there is no collusion between nodes

You seem to dislike lightning network, but the reason given are not accurate.

What would happen if there was collusion between nodes?

And while it is true that you are still limited by the Blockchain speed if the nodes don't cooperate, all the incentives are made so they do cooperate and that transactions happen near instantly.

Incentives in the existing ACH and SWIFT systems are such that transactions are fast and accurate.

But businesses have to follow the law. If a regulation were imposed, people would feel a need to comply. If they said to block transactions from Iran, on penalty of imprisonment, then they would do so. Etc. Avoiding all of that was the exact motivation for bitcoin. Adding all of the features and drawbacks of existing systems into bitcoin would undermine bitcoin's reason for existence.

Centralization at every layer of bitcoin has been the rule. Mining, exchanges, etc. Their dominance is so complete that if only a few of the primary exchanges were to blacklist an individual, they would have a very difficult time. In the same way that Mastercard and VISA banning PornHub is a major harm to that website.

Censorship-resistance is thus out the window, and there really isn't that many benefits left for bitcoin after that.

> As for lightning, it adds a layer of trust into a system whose reason for existence is trustlessness.

That's not true. That's the beauty of lightning, it manages to add a layer without needing to trust any of the intermediate party

For one, it uses onion routing, which means you are trusting that nodes are not colluding which each other to share information. In addition to the trusted watchtowers. If people start trusting the intermediate states of the payment channel then you could get into some really hairy territory in terms of trust.