You talk about BTC as a settlement layer. A settlement layer for what? The lightning network? Laughable.
BTC might have a future as a store of value like gold, and it deserves credit for establishing cryptocurrencies as an entirely novel asset class. But I think other, better protocols will be used for those coffee transactions instead of hacking on a secondary layer to BTC.
> You talk about BTC as a settlement layer. A settlement layer for what? The lightning network? Laughable.
Personal opinion: I think the part you are missing here is that lots of transactions shouldn't be occurring on the base layer. Remember that every transaction that occurs is stored in perpetuity on every node in the Bitcoin network. It should be expensive for a transaction like that to occur, and we should create incentives that limit the creation of these as much as possible.
Why is it "laughable" for the lightning network to use BTC as a settlement layer? I think it's perfectly reasonable to have second and third layer networks that sit on top of Bitcoin acting as transaction networks, while the main BTC chain is used for larger transactions or to settle large batches of transactions from other layers.
It should not. Current systems manage it fine, because they don't use an insane model which tries to distribute every transaction to everyone, a model you're saying Bitcoin should move away from, at which point, why does Bitcoin exist?
I think it's perfectly reasonable to have second and third layer networks that sit on top of Bitcoin acting as transaction networks, while the main BTC chain is used for larger transactions or to settle large batches of transactions from other layers.
Instead of think of what we can do for Bitcoin, why don't we think about what it can do for us?
I don't really need a globally distributed ledger and all the problems that brings.
I think you missed my entire point.. I am saying that Bitcoin layer 1 should be a settlement layer for other "less distributed" state systems that sit on top of it.
> I don't really need a globally distributed ledger and all the problems that brings.
I'd be curious to hear your thoughts on how to solve this.
To solve ‘this’, i.e. global payments throw bitcoin away and start again.
Focus on the problems real people have with payments, identity, trust, fees, speed, reliability, reversibility, somewhere reliable to store their money.
Blockchains fix none of that and actively make some of it worse.
I'm not convinced that niche in any way justifies the current valuation or hype, in particular from corps like Payal.
What you're really saying is that you don't think BTC should help banking the unbanked (because they often live in poor countries where their weekly salary is your cup of coffee).
> Why is it "laughable" for the lightning network to use BTC as a settlement layer?
It's laughable because people will just use another crypto, so they don't have to pay the +2 large and expensive BTC on-chain fees.
That is not at all what I am saying. I'm saying that technically only a very small subset of transactions should be settling on the base BTC layer, and hence that is how incentives should be (and are) setup.
In terms of USD vs BTC spending - I imagine a lot of people will want to spend USD, and BTC will serve as a store of value and backing asset. USD is possible via stablecoins though.
Serious question because this is something I have had trouble figuring out.
Why should transactions not be on the base layer? Isn't the whole point that the ledger is fully decentralized? How does pushing transactions into side channels (lightning, eth's layer 2) not end up centralizing transaction validation (they might not be completely centralized, but they seem by definition less centralized than the bitcoin base network)?
They're perhaps not on the general public radar yet, but Ethereum and Cardano both have a greater market cap than bitcoin had 4 years ago, and Cardano currently addresses lots of the other issues people talk about.
Why is it laughable?
The whole world doesn't need every little transaction to be permanently recorded on the public blockchain.
What is my blatant lie?
The maximum is about 8. But who cares at the end of the day. Settlement will be a rare event and needs to be for the reasons I just mentioned. Its the only system that works for decentralization and to deal with the bloating issue.
Also the btc main layer is a major settlement layer. It doesnt even compare to ACH or wires in frequency. The fees going up if its tried to be used in that way will force it, and that is a good thing.
A chain cannot grow so fast with high tx so that it bloats and exceeds hard drive capabilities for distributed nodes or it becomes centralized. Its performing exactly the way it should. L2 solutions will take care of coffee transactions.