Bitcoin, introduced by Satoshi Nakamoto for the first time, titled “Bitcoin, a peer to peer electronic cash system.” Look for the word “Cash”. Is Bitcoin Cash Up In 10 Years? And neither, yes, because the answer to the question is quite relative and it depends on how to look at it. However, from the viewpoint of most people, this currency is not a daily basis. The fascinating article by Nic Carter discusses how we can see millions of cheap and fast deals in Bitcoin without changing Beatcoin’s identity and identity and undermining decentralization. Read the full article.
Almost from the very first days, the “scalability debate” (high speed and low transaction costs) in Bitcoin and, in general, digital currencies have been formed in a logical framework:
- Peer to peer digital counterparts are useful for online trading.
- Online sales require millions of transactions per day.
- To make this happen, digital currencies need to be scalable
This issue has been a challenge for many years among the media and decentralization activists. In this article, I will prove that this obsession has made us ignore the main subject, and for this reason, I want to show an alternative framework.
My point is that “organizational scalability” provides a method for scalability that has been somewhat underestimated. By doing this, we’re likely to be able to use Bitcoin security without worrying.
What I am talking about is the Hall of Finnic view of Bitcoin.
“Hall” (Death on August 28, 2014) can be considered the first user and developer of Bitcoin after Satoshi Nakamoto, if not Satoshi Nakamoto himself. He was one of the first people to receive the White Peppers newsletter. In the field of cryptography and security, Hall of Fine was a genius. He was the first to use Bitcoin software, file bugs, and provided feedback to improve the network.
He was also the first to get Bitcoin through a transaction. When Satoshi wanted to test for the first time, he sent 10 Bit Quinn for him. Many see him as Satoshi Nakamoto, a claim denied by himself.
Hall believes that Bitcoin banks will be established in the near future, and will issue banknotes based on the bitcoins that I and you deposit. If you look carefully, you’ll see that we have the basic version of this system right now. However, in order to protect the security that Bitcoin gives us, we are already on the way, and that is, exchange companies and other depositary institutions are constantly confirming that their reserves are in line with their debts (the amounts banks have to pay to customers).
Satoshi’s view on scalability
Satoshi Nakamoto sent October 31, 2018, Whitpiper, a Bitcoin Performance Report for a group of encryption verbs. One of the first views that was presented five hours after White Piper’s release was precise observation from James A. Donald was James A. Donald. Donald asked
If there are hundreds of millions of people doing the transaction, there is a lot of bandwidth required. Should not each of them be aware of all or a significant part of the transactions?
What James discovered is Beat Covey’s main feature. Bitcoin works only when everyone can have a copy of its entire office and remain in sync with the rest.
If this coincides with the current general office costs, only a few qualified people can stay up-to-date. This means that the hierarchy system takes itself, which is exactly the opposite of Beethoven’s main nature, in which the hierarchy does not make sense.
Satoshi replied that he did not need anyone to download the whole chain (for ordinary transactions only). He said that the SPV’s proofs make it possible for a complete node, without downloading the whole chain, to know about Bitcoin transactions. But this answer seems somewhat simplistic. We know that today SPV proofs are outdated as a scalable approach. For various reasons, these proofs cause trouble for users who need to validate the whole chain.
James discovered this. He instantly noticed that Bitcoin is a single office where all the nodes in the network should be continuously confirmed at intervals of 10 minutes. Because everything must be in front of everyone’s eyes, hundreds of millions of people who are simultaneously making a transaction cause the system to easily cope.
But now that we know that this ideal premise (ie, Bitcoin for global online commerce is peer to peer at the individual level), what should be done? That’s where Hall of Fine is arriving.
Hall of Fine’s View
In 2010, Hall Phinee, who is the pioneer of this digital cash industry, began discussing a topic that is well known for the bitcoin scalability approach and has proven to be justifiable for the best possible approach.
There is really a good reason for the establishment of the bitcoin banks. What’s more than these banks can publish their own digital currency that can be repayable with Bitcoin.
Bitcoin himself can not afford to be more scalable so that he can put any financial transaction in the world accessible to everyone in a chain of blocks; therefore, it is necessary to create secondary payment systems that are lighter and more efficient and increase the bitcoin scalability. Give Moreover, there is another problem, which is the time it takes to finalize the bitcoin transactions, which seems to be highly unlikely for a large or medium volume of trading.
Bitcoin banks will solve these problems. They can do the same as the banks did before currency was nationalized. Ie the gold standard system. Now the bitcoin system!
Different banks can have different business policies. Some of these policies can be rigorous and others are more conservative. Some banks may have some of the bitcoin reserves, and others may be 100% working with bitcoin. Their interest rates are likely to be different.
Hall of Finey had a good talent in the foreseeable future, and found that Bitcoin in his current form could never be able to scale to the desired level (unfortunately, many bitcoin developers can not understand this. The same people’s misunderstanding about the size of the block in Led by 2015-2017).
In Hall’s view, bitcoin can be a powerful currency for transferring large amounts of money between financial institutions, not a token paid as an online equivalent for very small payments.
He found that the relatively slow biycoin transfer (compared to cash or credit cards), coupled with the ineffectiveness of the chain itself, suggests that slipping bitcoin over to completely physical payments is hammering water.
What Hull saw in his dream was a system in which banks can be accountable in their capital ratios, act transparently and respond to customer requests. We could even have a free market for the proportion of capital / reserves in which depositors can choose banks according to the amount of stocks they hold. In this way, the risk that each bank faces would be identified and the depositor could make the right decision.
In such a market, limited-endowed banks would probably have failed, but this could be a sign of a healthy market, because weaker financial institutions gave them stronger institutions.
Compare this to a system that came into existence in 2009/2008: financial institutions that use leverage are like green mushrooms. They knew that if nothing went well, their job was all. But since the government has made it clear that it does not allow banks to fail, the market has been overshadowed by the “feedback mechanism” that was highly valued, and the risk was rather vague than transparency. Banks harbor the risk they face with customers (providing profits and guaranteed collateral protection despite crises). With such a system, one can not determine the amount of reserves and risk of each bank.
Elaine Ou says:
Financial institutions have secured people by hiding the risk behind layers of complexity. But cryptography places risk at the front of everyone’s eyes to decide for themselves.
Risks in the financial industry will never be eliminated, so hiding it is not beneficial. Incidentally, this concealment often has serious implications that if portrayed it depicts a much worse image of what it is.
As at that time, the risk of a slow and unconscious increase and financial institutions fail one after another in 2009, the systemic risks that have long been suppressed will gradually show themselves again.
Can Bitcoin solve this problem? maybe no. But with the same structure, it can make it easier to create an alternative financial system in which the risk level is clearer and more transparent (the bitcoin transactions are transparent and it is possible to detect the crisis by examining transactions).
This is Finery’s view of Bitcoin: We need to import Bitcoin as a virtual commodity with unencumbered reserves in financial institutions. Bitcoin is a freelance virtual merchandise that any bank can rely on its viability.
Where are Bitcoin banks?
Okay, if the bitcoin hull Bitfinex banks can help bitcoin scalability, then where are they? Big dealers and custodians do not differ much from the third parties we already have. They often act as doorbellers to the bitcoin world and, more than good, hurt the concept of open access and open access.
The Kevin Base, Bitfinex, and Xapo swap debit document can not give users the same security as the original Bitcoin. However, they still offer a scalable approach at least. There are people who believe in the organizational scalability for bitcoin. Xapo CEO Wences Casares says:
We have many transactions that are made through zapo. Since there is no need for “Xapo to Xapo” transactions to be made through the Blockchain, so we do not need to see the Chinese block. They can be done instantly and free of charge. So today, we see that there are about 20 transactions of Xapo to Xapo for each Transaction made through the Blockchain.
It’s easy to see how a bitcoin bank can publish real banknotes based on deposits that act just like connections in a side chain. It needs to be cleared for authenticity (that is, you can turn Bitcoin into Bitcoin at any time). This is the problem that Tether faced. For a long time, no one believed that they could really settle USDTs. Therefore, continuous reservoir approvals may be useful.
As we have said, the stockpile audit provides the possibility for a depository institution to prove that it has a certain amount of storage that can then be used by a credible auditor to indicate the matching of debts with its reserves.
On the other hand, if a sufficient number of users confirm that the depositories match their personal deposits, you can be sure that the exchange has the ability to pay. It should be noted that proving reserves is by no means the only possible solution. Both Bitcoin reserves and the Fiat currency are to be proven, Danny Bradbury of Coindesk says, and this is more than proof of reserves.
Historically, many exchange traders have proven reserves. It seems that the inability to pay MTG Cash Flow has contributed to expediting this. Interestingly, the history of proving reserves shows that in fact the proof of the reserve has not been realized. Because a large number of exchangers eroded any traces of proof of their previous reserves, and the others broke the promise they had made to prove the continuity of reserves.
• June 2011: Mark Karpeles performs a proof of payment capability. I mean the famous 424,242 bit quake transaction.
• February 2014: Cointicts will issue a stockpiling audit. Later removed it.
• February 2014: Due to the inability to pay Gaux, executive directors Quinn Bass, Cracken, Bitstomp, BTC China, Blackstone China, the Info and Circle publish a supplementary statement in which Promise more audit and transparency. But only Crack and Bit Stomp prove their reserves, and none of them will ever do that.
• February 2014: Kevin Bass’ sworn summons Andreas Antonopoulos to review their storage practices. Although they did not do a formal review. He subsequently deleted the corresponding blog post.
• March 2014: Bit Stamp publishes an acknowledgment as the ability to pay in the process of implementing the largest historical transaction (at the same time).
• March 2014: Cracken proves its reserves using the Merkel approach, asserting that they are consistent with regular and regular audits. Clearly that’s not the case at all.
• April 2014: British Flavors Kevin Flore (Coinfloor) publishes their first proof of payment ability. Unlike any other Bitcoin dealers, they will post another report by next month until next month. How many times did it. Last month, they released their own 60th report, which is more than the other reports of all other exchanges.
• August 2014: Stephen Thomas announces that Audit has completed the proof of its reserves for OKCoin. However, in a post-mortem that has now been cleared, the chief executive officer of the Oak Quinn subsequently claims to have made Oak Quinn Thomas mistaken and made the audit somewhat fake. An article published in the CCN, entitled “The Oak Quinn Audit Proves its Reserves,” was later cleared.
I can prove that Oak Quinn eliminated a number of his accounts (using the Oak Quinn bots) to reject the audit of its stockpile reserves in August 2014. Basically, these robots deal with partial (or dummy) stocks. Stefan Thomas was deceived during this audit. This is an undesirable limitation that unfortunately exists in the method of proving reserves.
• August 2014: Huobi publishes a stockpile audit commissioned by Stephen Thomas.
• June 2015: Bitfinex publishes a press release that says they will get rid of the Amennibus (public or free bank) model using Bitcoin’s multi-signature software and want to use the user’s coins in separate accounts So depositors can approve their holdings instantaneously on the chain.
• August 2016: Bit Phoenix hacked with 119,000 bits of Kevin, and they abandoned this multi-signature method. Bitfix subsequently publishes Bitcoin, EAS, and Ether cold wallet addresses for public scrutiny.
• November 2018: Titler issues a “quasi-proof” of reserves; their bank partner Deltec Bank and Trust Limited confirms their cash balances. It is also consistent with the amount of tread in circulation, although pessimists will never be satisfied.
Bitcoin is an enterprise technology, a country without an army. Perhaps it’s better to count on it just as it is, rather than place it in a way that is damaging it. You are right. Banks and institutions have become a lot green, many of them may have an irresponsible attitude towards user deposits. More than $ 1 billion has been stolen or embezzled by these institutions.
How can this situation correct Bitcoin’s nature? Despite all the troubles, the bitcoin banks have come to stay. A convincing reason is ease of exchange. I think it would be better to admit that these banks will stay as long as they provide us with useful services and want to add Bitcoin security to their services.
She has been ten years since Beethoven’s birth and now she has reached puberty. Maybe if we accept bitcoin as it is, it will make us a little easier. By adding institutions to a set of institutions that respond with users using the intrinsic transparency of bitcoin, we can substantially improve this situation in the bitcoin deposit industry.