Oddbean

Except that it’s not true. The limitations of gold that led to its capture are not the same as those in Bitcoin. In fact, they scale in completely opposite ways. The higher the value transaction, the EASIER it is to settle, send globally, and sovereignly hold. This is the opposite for gold. Not to mention being digital. In other words, gold HAD to scale to larger and larger more centralized custodians on an explicitly permissioned network. Bitcoin can scale and sustain much smaller ones on a completely permissionless and open network. Whatever happened to gold that led to fiat, cannot even slightly happen the same way to Bitcoin, even without any change. There will undoubtedly be a “one step back” era of its maturation, but it will look nothing like the system we have come from.

Interesting thesis and I like it. A couple of caveats: if the big 3 miners collude it could pose some risks, though we've not seen that yet. And bear in mind that while that each halving halves supply, but also halves security, and that will be something that needs to be addressed 10-20 years from now. One way would be to increase fee bearing transactions in line with the hardware (disk, memory, network) of the day, and software capabilities. Things that could mitigate this are stratumv2, ocean mining, utreexo, increased mempool. But chain split is bigger risk than reorg for now. Still a bit of work to do before we can say btc replaces gold.

The mining problem is a completely different dynamic. The thing in reference here is the scaling problem of individual transactions. So I agree there are different concerns and considerations. In fact, I think the mining problem is far more concerning both short and long term than anything to do with blocksize. But both are just technical hurdles, and all it’s takes in a little ingenuity to solve them. We’ve solved much harder problems and do not believe either will stop us.

Also generally not that concerned about scaling. Because I genuinely suspect we don't understand the problem very well and also are applying a "retail credit cards" model to this that seems very likely to me to not be the direction this goes. I think the evolution of its use (also how we extend sovereignty/trust) will likely be different than we imagine it to be.

This is an astute observation. I agree. The solution will probably look different than everything on the table today. But failing to plan is planning to fail so this is not a reason to stop working on the problem.

> The higher the value transaction, the EASIER it is to settle, send globally, and sovereignly hold. The fundamental problem with scaling bitcoin is low value transactions. If we lock out small transactions then we lock in a permanent underclass who will be forced to interact with bitcoin through trusted custodians. Freedom for me but not for thee. Maybe you're happy to elevate your own standing and then pull the ladder up behind you. That's not why I'm here.

I have to disagree. No one is pulling the ladder out from under anyone. First, the majority of people don’t want self-custody; they prefer trusted custodians. That said, everyone still has the ability to use Layer 2 self-custodial solutions if they choose—there’s nothing stopping them. Second, it doesn’t matter to me if the majority of people don’t directly access Layer 1 UTXOs. What matters is that everyone has an equal opportunity to do so. If someone doesn’t own enough sats for a UTXO, that’s fine. When they accumulate enough, they can move their sats to Layer 1. Bitcoin isn’t built on guaranteeing equitable outcomes; it’s built on ensuring equality of opportunity.

> everyone still has the ability to use Layer 2 self-custodial solutions if they choose—there’s nothing stopping them. high fees stop them > What matters is that everyone has an equal opportunity to do so. If someone doesn’t own enough sats for a UTXO, that’s fine. you contradict yourself

Nope. You need to be able to pay the prevailing fee rates in order to use any L2. They all rely on the assumption that you can unilaterally exit, which is another way to say that you need to be able to go on-chain. If you can't afford on-chain fees then you can't afford a lightning channel. You don't have equality of opportunity if most people can't afford that opportunity. Do we have equality of opportunity for super yachts? Depends on how you define it I guess, but super yachts are a luxury item, freedom of transaction is a basic human right. I like to think we can do better than "freedom for those who can afford it".

I was going to answer until you pulled this self aggrandizing bullshit right here: "Maybe you're happy to elevate your own standing and then pull the ladder up behind you. That's not why I'm here." Quit pretending your the only person who cares about Bitcoin because you have a tagline opinion that someone doesn't regurgitate verbatim.

I thought you were gonna go with nostr:nprofile1qy2hwumn8ghj7erfw36x7tnsw43z7un9d3shjqpqqc9umgwf5thc4hndzdwk6wze6vwuk09lk2dhh7xmgpyef5zctr4qzncgxx's observation about the difference between transaction speed and settlement speed being a centralizing force. That's a better argument, IMO, but still wrong. With no improvement to on-chain throughput and a rapidly increasing bitcoin price we will see very high on-chain fees. If it costs house money to move funds on-chain then A) most people will not self-custody and B) the people who are barely able to maintain an on-chain balance will be willing to wait a long ass time for the absolute lowest fees. This increases the friction for on-chain settlement and drives settlement speed down, leading to the exact same situation we had with gold. Transactions flow at the speed of the internet but settlement runs at a snail's pace. Better entrust all my bitcoin to a custodian and handle my finances with paper (electronic) receipts. Feels like de ja vu all over again. We might have some wiggle room with low-trust options like federated side chains or fedimints. If these custodians can withstand the might of nation states then maybe we're ok. If not, we are doomed, unless we can avoid this fate through on-chain scaling. Your claim that bitcoin *cannot* fall prey to the same economic forces as gold is patently incorrect.

Over the line! , this is a league game Smokey, am I the only one who gives a shit about the rules? High value, honest conversations is what lifts up communities. Let’s keep it clean, and we’ll make it to the next round robin… there will be plenty of enemies, no need to create unnecessary ones.

No one is pulling up the later. Low value transactions will be just fine on other layers that are secured by the base layer. To say people who have less accumulated purchasing power don’t have freedom is disingenuous

Are these proper layers with unilateral exit to an on-chain UTXO like lightning or ark? If so, they are subject to the exact same scaling pressure as on-chain transactions. Are these layers secured by a multisig like Liquid or Fedimint? Can your multisig withstand the might of nation states? You better hope so because your life savings depend on it.

I would even argue that with lightning and e-cash as 2nd and 3rd layers, scaling has been fixed already. Sure, it's technically not perfect yet but it exists, it works *today* and it works better than most people realize, even those in the Bitcoin space. Both are also massive improvements in terms of privacy. The only risk left in Bitcoin that I'm watching more closely is miner centralization, as this could lead to losing censorship resistance on-chain (bad, very bad)