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 Does monero scale to the merchant level though? 
 What is the problem?

Remote nodes can be used over tor. And because BTC is a perfectly decentralized store of value some centralization within Monero as medium of exchange should be acceptable.

It's only problematic when maxi ideology ignores trade-offs (perfect auditability vs perfect privacy, perfect decentralization vs scalability).

Once you accept that Monero and Bitcoin are complimentary a lot of things become much more easy.

The future is bright. 
 Sure, but if some centralization as a medium of exchange is acceptable, why not use ECash or a Bitcoin side chain? 

Then you wouldn’t have to worry about the scaling issues of a blockchain (monero is less data efficient per transaction) and you wouldn’t have to worry about currency arbitrage every time you make a trade 
 Ecash is great for small amounts. There are trade offs in all things. And in Monero even if miners and nodes would be centralized they could not censor transactions as they don't know what to censor.

Bitcoin to store value.
Monero to spend money and store privately (accepting higher risk similar to USD inflation in off shore bank accounts).
Ecash to spend change.