35 crypto companies got together to make a change dot org petition called “Bitcoin Deserves an Emoji”.
F that
There are people dedicated specifically to Monero scaling and they are a hell of a lot smarter than me and do not see any reason why it cannot be scaled properly. Look at some talks by Articmine
I’m not interested in spending a ton of time on this, but I did go and watch this short interview with him about scaling misconceptions.
Wasn’t convincing at all. For one, the guy comes across as kind of dishonest. Not scammer-level dishonest, but more like a politician. The main thing though is that he’s just a big-blocker, which is just a total dead end. Having everyone store every single transaction that was ever made until the end of time is just not realistic.
In order to scale to any globally significant number of users, a cryptocurrency needs a second layer to aggregate transactions, such as Lightning. Monero seems to have nothing in this regard beyond “However, academic and industry research is ongoing and promising in this area.”
they are a hell of a lot smarter than me
You should not be investing money in something based on this level of understanding, and you *definitely* should not be advocating it to others. Scaling is an existential problem for cryptocurrencies. Their utility is based on their monetary value, and their monetary value is based on investor assessment of their future utility. Without the ability to scale, there will be no growth in utility, which means no investment other than temporary dumb money, which becomes a vicious cycle.
While I personally agree that we should not store all transactions for all time, our storage capability is going to get exponentially better. We are able to store data in 3D discs with lasers now and can store petabytes in a single disc the size of your typical old CD-ROM and even store data in DNA if we wish. These obviously aren’t going to be included in your desktop computer anytime in the near future, but they do currently exist and show that storage will not be a problem for a very very long time.
Scalability isn’t quite as simple as “how much data can a well-off enthusiast from a developed country store”. You need to consider the behavior of your lowest common denominator users.
You want as many users as possible to run fully-verifying nodes, rather than SPV (“simplified payment verification”) nodes that can be tricked by a malicious miner. The more transactions are being done through SPV nodes, the more potential payoff there is for an attacker, and the more resources they can dedicate to an attack.
Further, if your number of full nodes gets low enough, it becomes feasible for state actors to track down and compromise the remaining node operators. At that point, you may as well just be using a centralized, government approved payment system instead.
You should not be investing money in something based on this level of understanding
IMO, you shouldn’t be investing in cryptocurrencies or any currencies for that matter. Currencies should be used, not hoarded with the expectation of gain. If you’re buying cryptocurrencies as an investment, you’ve already lost.
Where cryptocurrencies have value is as a medium of exchange. In many parts of the world, the central bank isn’t trustworthy and end up causing runaway inflation, such as in Venezuela, Argentina, and Turkey. This is because there is a lot of political gains to be had by manipulating the currency to make things appear better than they are. The US hasn’t had this issue largely because the Federal Reserve is largely immune to politics (they’re appointed by the executive and confirmed by the Senate, but that’s about it). But that’s not guaranteed to always be the case. Board members can be removed, and the President and Senate can theoretically pack the Federal Reserve board in the same way as packing the Supreme Court.
The great thing about cryptocurrencies is that you don’t need to trust anyone to use it. Here are the parties involved in a transaction:
- you
- the other party
- miners verifying blocks
- source code maintainers
Each of those has checks in place. You and the other party don’t need to exchange secrets, only information that is totally acceptable to be shared (pub keys, not private keys). With something like Monero, you can even make a separate key for each transaction if you’d like. Miners compete against each other to validate transactions accurately, and if a miner tries to cheat, their results are excluded. Source code maintainers work in the open, so researchers (or you!) can and do look at the code.
With fiat, you have to trust the central bank and banking regulators. If you don’t trust your central bank, you’re SOL.
The cost of using a cryptocurrency vs a central bank is that lack of central oversight, meaning you’ll see more variation in valuations. However, this should smooth out as more people use it as a currency (so more even inflows vs outflows). There isn’t something like the US dollar or Euro’s target 2% inflation rate, so we could see deflation instead of inflation if cryptocurrencies catch on or if people flee to it from investments in a bear market or something.
The value of a cryptocurrency is the demand for that currency. Just like fiat, it has value if we believe it has value. Fiat currencies aren’t based on anything more than supply and demand for that currency, just like crytocurrencies, with the big distinction that valuations also take into account trust in the backing back (whereas cryptocurrencies include trust in the network and code).
IMO, you shouldn’t be investing in cryptocurrencies or any currencies for that matter. Currencies should be
used, not hoarded with the expectation of gain. If you’re buying cryptocurrencies as an investment, you’ve already lost.
Cryptocurrencies literally cannot function without speculative investment. Even in the absence of formal investors, *someone* has to be the first person to accept the tokens in exchange for something of value, in hopes that they will have value of their own in the future. Until then, the tokens are unusable.
Further, the market cap and liquidity of a cryptocurrency impose practical limits on what it can be used for. You can’t very well conduct a billion dollar transaction through a cryptocurrency that has a market cap in the millions. Investment raises the market cap, “unlocking” these higher-value use cases. Conversely, loss of investor confidence will reduce the market cap, and effectively reduce the utility of the coin.
This is why ability to scale is so important. The current market values of Bitcoin and the various alts are based far more on speculative investment than they are on usage. Those investors believe that the coins will see far more usage (and have far more natural demand) in the future than they do today. If that turns out not to be the case due to an inability to scale, investors will start to flee, and the vicious cycle will start.
