Whether bitcoin is used for direct payments or payment channel settlements is irrelevant. What is important is self-custody. Cash works and has the properties it does because it is a (mostly) fungible bearer bond. Bitcoin is also a (mostly) fungible bearer bond regardless of whether you transact on chain or through lightning.
Cash was the gold that you used to be able to redeem said liabilities for. These days, you can simply transfer the bank's liability to you to someone else, as a way to offset your own liability.
Just because the bank has no intention of ever paying cash at this point ever since Nixon left behind specie payments doesn't change the fact that these notes are still issued as liabilities.
And when I say issued by the central bank, I do mean only the paper bills that are issued. Most money that exists in bank accounts is issued by the various commercial banks that operate within the banking system (when they issue you a loan, they don't go out and find other money; they simply credit your account with the amount of the loan, and that money was simply loaned into existence as a liability of that bank).
There is intrinsically no difference between deciding gold is the scarce thing that we all accept as money, or some specific hard to duplicate paper money. They both serve th same purpose.
1. When will the value become relatively stable? This flies in the face of the store of value argument.
2. How is Monero-like fungibility going to be added? Good cash needs to be fungible.
You could call that historical aggregation, but normally when people talk about aggregation (as I assume you do) it refers to aggregating transactions before they're included in a block.
In other CT blockchains, that data stays around forever, hurting scalability.
In my experience when people talk about on-chain scalability, they mean transactions per second of real-time validation. Maybe I’m wrong but I don’t think anyone in this thread was talking about IBD / validation of historical data.
It is for full nodes (fully verifying nodes). They don't trust the UTXO set to be correct just because miners keep building on it.
Huge chain size is exactly the reason why there are so few Ethereum full nodes, which makes it less decentralized.
While technically SPV, this ends up being exactly the same security model overall, since an attacker that can invent (say) a full year's worth of alternate history to fool you can already perform arbitrary double-spends on main net. In addition, although this is not required, for most of bitcoin's history the last year or two of mining represents almost all of the proof of work anyway, so someone who serve you a more-work forked off false chain with a false UTXO set commitment could have also rewritten the block chain since genesis.
Bitcoin's security model already assumes this is not possible. So with UTXO set commitments (which bitcoin will eventually get in some form), you only need to IBD a few months worth of blocks, or maybe a year or so if you are truly paranoid.
Cash (and Bitcoin) are just as vulnerable to inflation as traditional currencies. If oil is more scarce, the cost of all oil-based goods will increase, regardless of whether you can mint more BTC or not. Not that it would be any serious difficulty to increase the supply of BTC either - it's ultimately just a number in some program.
Counterfeiting is fixed by all digital payment systems protect against it. Visa cards are just as secure from counterfeiting as BTC wallets.
Capital controls are much more easily enforced when you have a public ledger.
High costs are inherent to BTC, at least as the community exists today. And the network itself is completely impossible to scale to anything like a full payments system, as you yourself admit.
Also, censorship is easy to implement on top of BTC: just require miners to be licensed, require licensed miners not to validate transactions from certain wallets, and to ignore blocks proposed by non-licensed miners. Since mining is an extremely centralized and high-capex + high-opex operation, it's easy for a a powerful government to shut down any significant miners who aren't licensed. So, if BTC payments ever become a significant way of circumventing sanctions and censorship, the ban hammer will come down swiftly. Of course, so far BTC is both too low in scale for major governments to care, and too convenient as a honeypot to find sanctions breakers.
That system will allow people to buy their coffee with electronic cash, but Bitcoin will never carry every coffee purchase on-chain. Those who make the Visa-analogy either don’t understand how Visa works, or don’t understand how Bitcoin works.»