This assumes that miners or holders have a natural interest in effectively contributing to the protocol rather than riding on the coattails of others.
Crypto communities have created effective methods of coordinating in the past. Hell, a bunch of people got together and raised $47 million to buy a copy of the constitution. It seems trivial to make a smart contract where people can contribute funds will only be released if some minimum threshold of money is raised.
It seems to me like the problem is most Bitcoiners do not WANT any change, because most of them don’t see Bitcoin as anything other than digital gold.
No, people figured out the throughput of the Bitcoin network was going to remain basically the same long term, so they built things on top of the network like cryptocurrency exchanges and begun to use those to transact Bitcoin as well. The volumes on those exchanges and layer 2 networks has not remained the same since early 2017, not even close.
Ok, this is an area where I am actually pretty uneducated, so forgive me if this is a stupid question, but what has the actual increase in Bitcoin L2 throughput been? The only one I know about is Lightning, but last time I checked they had only done about 700 transactions total in over a year. Unless there has been a massive change since then, I don’t see L2s solving the problem. For a variety of reasons (some technical, some regulatory), it doesn’t seem like these solutions will solve the problem in any but a narrow set of use cases. It seems like you have to create at minimum two transactions (one to fund an L2 smart contract and one to distribute money afterwards). I can see this making sense for like a revolving line of credit, but not that much else.
It also seems like it negates most of the actual benefits of blockchain (guaranteed security, decentralization, immutability and transparency)
That’s fine because “Bitcoin is not the actually reasonable bull position you have to “debunk”, here. Things don’t have to be “the future of money” to be worth a trillion dollars.
Yes, I agree. That’s the point I was trying to make in the first place: Bitcoin’s value is not based on the belief that it will be the future of money. It’s based entirely on the faith of its holders that other buyers will come in and drive up the price in the future.
This analysis assumes that the market cap of Bitcoin as a currency ought to be a fixed multiple by the amount of transaction fees captured on the mannet by miners. I really don’t understand why it assumes that, and it’s wrong. This is like looking at the amount people spend moving cash in armored cars, then comparing that to the amount of dollars in circulation, and going “see, the dollar can’t possibly be valued as a medium of exchange or store of value, it must be an elaborate scam”.
Very few people hold dollars as a store of value. They’re too vulnerable to inflation. Most people buy real estate, stock, bonds, or gold to store wealth in. The value of dollars is determined by their ability to facilitate commerce, which as I established above, Bitcoin seems unlikely to do at scale.
My central thesis is simply that Bitcoin is a more robust type of ponzi scheme, and that is why it has reached a trillion dollars in value. I don’t think my thesis really even undermines the case for owning it that much (hence the title of the article; Ponzi schemes can be highly profitable if your timing is good).
Crypto communities have created effective methods of coordinating in the past. Hell, a bunch of people got together and raised $47 million to buy a copy of the constitution. It seems trivial to make a smart contract where people can contribute funds will only be released if some minimum threshold of money is raised.
It seems to me like the problem is most Bitcoiners do not WANT any change, because most of them don’t see Bitcoin as anything other than digital gold.
Ok, this is an area where I am actually pretty uneducated, so forgive me if this is a stupid question, but what has the actual increase in Bitcoin L2 throughput been? The only one I know about is Lightning, but last time I checked they had only done about 700 transactions total in over a year. Unless there has been a massive change since then, I don’t see L2s solving the problem. For a variety of reasons (some technical, some regulatory), it doesn’t seem like these solutions will solve the problem in any but a narrow set of use cases. It seems like you have to create at minimum two transactions (one to fund an L2 smart contract and one to distribute money afterwards). I can see this making sense for like a revolving line of credit, but not that much else.
It also seems like it negates most of the actual benefits of blockchain (guaranteed security, decentralization, immutability and transparency)
Yes, I agree. That’s the point I was trying to make in the first place: Bitcoin’s value is not based on the belief that it will be the future of money. It’s based entirely on the faith of its holders that other buyers will come in and drive up the price in the future.
Very few people hold dollars as a store of value. They’re too vulnerable to inflation. Most people buy real estate, stock, bonds, or gold to store wealth in. The value of dollars is determined by their ability to facilitate commerce, which as I established above, Bitcoin seems unlikely to do at scale.
My central thesis is simply that Bitcoin is a more robust type of ponzi scheme, and that is why it has reached a trillion dollars in value. I don’t think my thesis really even undermines the case for owning it that much (hence the title of the article; Ponzi schemes can be highly profitable if your timing is good).