SEC Chair Gary Gensler - Bitcoin is unlikely to become a currency

[legiteum]

Bitcoin (and blockchain generally) will never scale to mainstream transaction loads, as this is a hard architectural limitation (PoW means it is actually intentionally slow and expensive to transact). But nobody cares about that since most people don't actually transact Bitcoin directly, rather they do so through a broker, app, or an L2. But all of these things are based around the idea of Bitcoin being an investment, not a means of everyday transactions.

Yes, what I meant with "scalability" was including L2s (be it Lightning or sidechains). But including "brokers" would already be sacrificing censorship resistance and thus Bitcoin's biggest USP. So in my opinion the community should focus on making centralized brokers unnecessary in the system. Ideally there should be apps hiding the complexity from the end user.

L2s are not Bitcoin, and therefore don't have any of the benefits of Bitcoin. Indeed, an L2 simply doubles your risk because you are investing in both the L2 and Bitcoin.

And the reason users resort to L2s is the same reason they resort to brokers and apps and centralized currencies like ETH: performance and cost. There is an absolute tradeoff between Bitcoin's non-centralized nature and performance (and after 15 years I think it's time to stop saying, "someday they will find a solution").

At the same time I agree and disagree about your statement about PoW. In my opinion, it's inexact to say that PoW makes it intentionally slow to transact, instead it slows down the timestamping process of the transactions. The slowness of PoW is instead a result of physical limits associated with the timestamping/validating process due to Internet latency. That's why we need L2s.

Again, an L2 is not Bitcoin. For me, it's utterly retarded to use an L2 when you can just use a scalable L1. In an L2 scenario, you are depending on two networks instead of one--and you are dependent on the connection between the L1 and the L2, which introduces a third point of system risk, complexity, cost and speed.

In theory we could imagine a future where the latency problem is solved and even a big block coin like Solana or Bitcoin SV could be "decentralized" and serve 8 billion people, but then we'd still have an inefficient process.

Unless they repeal the laws of physics, then no, we cannot.

And if the given currency is not everything Bitcoin is, i.e. massively decentralized (that there are three companies that have >51% of the Bitcoin hashrate notwithstanding), then what value does it add over a non-blockchain architecture that actually can scale to every transaction on the planet?

Bitcoin was never meant to scale, period. And guess what: nobody cares. Bitcoin has achieved mainstream status as a meme investment and nobody cares that it will never be used as a transaction mechanism.

Why would you price something in Bitcoin? All that would do is trade a measurement everybody knows for one that very few people know.

I do think that a currency should evolve towards an "unit of account". With prices in Bitcoin, it becomes suddenly more predictable and less risky, even if these prices move over time.

So you are saying that "someday" in the distant future it will be technically possible for Bitcoin to be used as a measurement mechanism. But that doesn't explain why, at that time in the distant future, people will switch to measuring value in Bitcoin rather than the things they use today like USD and EUR. The metric system became a a perfectly viable system of measurement in 1795, yet here we are 230 years later and it's adoption is still not universal and here in the free society of the USA, where it hasn't been forcibly shoved down the throats of the population under threat of imprisonment, most people here still use the imperial system on a daily basis.

So yeah, I think I can say with a lot of confidence that Bitcoin will never ever ever be used in a widespread way as a common measurement of value unless western civilization itself collapses (at which point Bitcoin would be toast as well).

[vjudeu]

Off-chain = NOT Bitcoin

If you think, that commitments are not real, then what about Segwit? Is it also "not Bitcoin", because witness is not seen by legacy nodes?

Because the only thing that makes Segwit "on-chain" is that nodes store and verify a single value inside the coinbase transaction. If not that, then witness would be completely detached from the on-chain data.

And in the same way, if you have a signature, then you can send additional data, attached into it, which could be processed only by new nodes, while old nodes will only verify ECDSA correctness, and nothing else. Then, it is even cheaper than OP_RETURN, because you only tweak existing value, instead of adding something new, and taking some space.

Bitcoin handles about 500,000 transactions per day.

This is what you can see in blocks. Note that a single transaction can represent more than a single user. And a single coin can be moved by more than a single user. And note that if you have two transactions: "Alice -> Bob" and "Bob -> Charlie", then Alice can create a joined version by sending "Alice -> Charlie" transaction. Then, you will see a single on-chain transaction, which will serve at least two people. And then, would you tell me, that Bob never had any coins, even if Alice's signature would contain a proof of that in-between transaction?

and based on the architecture, the scaling would absolutely not be linear

Why not? If you have transaction joining, then new nodes can send already joined transactions, so that mining nodes will receive already batched versions. Then, storing commitment data is left to the user, because it is not needed during Initial Blockchain Download.

[Russlenat]

I appreciate that you all like this thread a lot, as I can see from the replies, but please stay focused on the main topic.

It was very clear from the start that the discussion is about Bitcoin becoming a legal currency, so we should keep the conversation centered around its legality, current status, or the comparison between property and currency. Discussions about its technical aspects are no longer relevant to this topic. We can cover those in other threads if you create one. Let’s try to stick to the subject here.

[legiteum]

I appreciate that you all like this thread a lot, as I can see from the replies, but please stay focused on the main topic.

It was very clear from the start that the discussion is about Bitcoin becoming a legal currency, so we should keep the conversation centered around its legality, current status, or the comparison between property and currency. Discussions about its technical aspects are no longer relevant to this topic. We can cover those in other threads if you create one. Let’s try to stick to the subject here.

Bitcoin is a legal currency. It makes no sense, in the USA at least, to talk about it "becoming" a legal currency since it already is one.

As for trying to lobby Congress to give Bitcoin special status, note that if you invest in any other country's currency and it appreciates in value, you pay capital gains taxes on that appreciation. Bitcoin is no different.

You can lobby Congress to end the capital gains tax, and many have. But this has nothing to do with Bitcoin.

Can you imagine trying to explain to people who invest in stocks, bonds, real estate, commodities, and new businesses that they need to pay taxes on their gains, but those who invest in Bitcoin specifically (or maybe all digital currencies?) don't have to pay taxes? I'm not sure that will go over too well.

[Iranus]

To be fair, bitcoin is not absolutely perfect and is not suitable as a payment method due to barriers such as transaction fees and processing speed. Even if it is legalized as a payment method, I doubt people will use it more to pay everyday bills instead of fiat.

The main reason why Bitcoin might not used widely as a currency is because of its volatility. I assume that people use fiat for daily transactions because the value doesn't fluctuate like cryptocurrencies. But this doesn't mean that these price variations cannot be managed. Transaction fees become a problem only when the mempool is attacked by ordinals, making it go high. Maybe the price of Bitcoin might become more stable in the future, but for now, it's best used as an asset or investment.

Agree with you, I forgot to mention this: its volatility is also one of the barriers that make people hesitate to use it as a currency. I bet no one bought bitcoin at $70k and when the volatile price hits $50k they'll happily use it to pay bills.

But I still believe that fees and unstable network are also big barriers. I feel very inconvenient every time I want to use it for payment but always have to check the mempool first and wait until the network is stable again, which is very time consuming and inconvenient.

Bitcoin will stabilize as it matures but once it stabilizes, will it still be attractive because most of us choose and invest in Bitcoin just because we like its volatility? For me, I don't expect it to stabilize.

[Faisal2202]

What do you guys think about this? We know only two countries have declared Bitcoin as legal currency--El Salvador (the most famous one) and the Central African Republic. If they've done it and their economies haven't seen any major issues, like a spike in crime, then why does the SEC chair say it's unlikely for Bitcoin to become a currency?

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

Even if we did not see a spike in crime, it does not mean there were not any major issues they faced economically because when El-Salvador adopted BTC, the price was as high as $50k (if I am not wrong), and after that, the price of BTC went as low as $16k, which proved to be a bad investment for El-Salvador, and all this time their economy was not so stable, or I can say was bad.

But yeah when BTC goes higher than the investment price, they start making a profit, and their economy also starts to go up and they took good benefit from such an opportunity by introducing other programs that will increase the adoption of BTC and attract more investors in the country.

I use BTC not only as a store of value, but I earn in BTC and I spend it, but I have also made investments in BTC and accumulated some, but after that point, I only use BTC for expenses. now the investment is just lying there.

[OgNasty]

Seems like Gary Gensler is on his way out anyway, so his opinion isn’t exactly the most relevant thing going forward. With a Trump victory looking like it will play out in the cards, I doubt old Gary will be making statements anyone cares about in another six months. His entire reign has been an unmitigated disaster.

[d5000]

L2s are not Bitcoin, and therefore don't have any of the benefits of Bitcoin. Indeed, an L2 simply doubles your risk because you are investing in both the L2 and Bitcoin.

That only applies to some, primarily centralized, sidechain-type L2s, i.e. those solutions generally known as "bridges", where you have counterparty risk. But if a L2 allows an "unilateral exit", like Lightning and Drivechain do, then there is not much additional risk (and much less "double" risk), and censorship resistance is also effective.

Something similar is true for decentralized sidechains, for example a Bitcoin sidechain on LTC (technically possible, only that currently there is no project having implemented that), then the L2 user would use Bitcoin's price and LTC's censorship resistance, which is of course a little bit lower than Bitcoin's (because the theoretical 51% attack potential is higher), but still very effective.

If I had to choose between "a centralized broker"/"a centralized high-performance coin" and a L2 with Litecoin's characteristics, then I would chose this L2. Of course there are slight security tradeoffs, but acceptable ones for probably 99% of the world population. In case of mass adoption of these L2s, such a decentralized L2 could also achieve a similar security than Bitcoin today, e.g. via merged mining or with an additional mined/staked coin.

Unless they repeal the laws of physics, then no, we cannot.

If Internet bandwidth continues to grow we will eventually reach the point where a big block coin could be decentralized. But that aspect isn't important in my opinion, because there are much better options.

So you are saying that "someday" in the distant future it will be technically possible for Bitcoin to be used as a measurement mechanism.

Here I'm not talking about the technical side, but about the volatility, which is a social phenomenon, although technicals (scalability) can help to lower it (due to increased liquidity for currency usage and decentralized trading).

But that doesn't explain why, at that time in the distant future, people will switch to measuring value in Bitcoin rather than the things they use today like USD and EUR.

It is not necessary that the fiat-based measurement of prices is abandoned. Both measurements can work in parallel. In countries like Argentina where a foreign currency is popular as a harder "saving currency", the population is already accustomed to use different currenties at once as measurements.

So no "switching" is necessary (I also consider a complete switch unlikely). The only thing which is necessary is that pricing in Bitcoin becomes attractive for merchants. This will become the case if the possible profits based on Bitcoin-price based promotion strategies (e.g. the one I explained in the last post) become higher than the volatility risk. As I explained in the last post this can already be the case today for creators (not re-sellers!) of digital products.

[legiteum]

L2s are not Bitcoin, and therefore don't have any of the benefits of Bitcoin. Indeed, an L2 simply doubles your risk because you are investing in both the L2 and Bitcoin.

That only applies to some, primarily centralized, sidechain-type L2s, i.e. those solutions generally known as "bridges", where you have counterparty risk. But if a L2 allows an "unilateral exit", like Lightning and Drivechain do, then there is not much additional risk (and much less "double" risk), and censorship resistance is also effective.

By definition, an L2 network is a separate network that must be judged on its own merits. If the L2 fails, then your investment is lost--and it doesn't matter what the L1 is. Every single downside of the L2 is part of an L2's investment, regardless of what the L1 is.

Hence, if you tell me there is an L2 with a bunch of traits you find desirable, then I would ask: then why have the L1? What benefit do you derive from it?

And let's be clear about the context here: the only reason you would do an L2 over Bitcoin is because plain old Bitcoin doesn't scale, and you want scalability. But Bitcoin's lack of scalability is a pure architectural tradeoff based on the laws of physics: what makes it desirable to people is also what prevents it from scaling.

If I had to choose between "a centralized broker"/"a centralized high-performance coin" and a L2 with Litecoin's characteristics, then I would chose this L2. Of course there are slight security tradeoffs, but acceptable ones for probably 99% of the world population. In case of mass adoption of these L2s, such a decentralized L2 could also achieve a similar security than Bitcoin today, e.g. via merged mining or with an additional mined/staked coin.

I think those are different considerations. People choose brokers/apps/etc. because they want to pay somebody else to physically guard their holdings. I get that everybody here has a floor safe and air-gapped paper-based key holding procedures for their life savings, but 99% of American investors just want an E-Trade or Robinhood account and to not think about it. Most people keep their life savings in a bank or other financial institution, and I personally don't see that changing. Nobody wants a reason for criminals to come and kill you in your own home.

Unless they repeal the laws of physics, then no, we cannot.

If Internet bandwidth continues to grow we will eventually reach the point where a big block coin could be decentralized. But that aspect isn't important in my opinion, because there are much better options.

It's not just bandwidth, it's hashrate. Bitcoin uses an estimated $40 billion in GPUs to perform 500k transactions per day.

And again, this is a pure architectural tradeoff: if you made the "work" in PoW less, then Bitcoin by definition would be less secure and more prone to 51% attacks. Hence if there was some breakthrough tomorrow that made GPUs 100x faster, then the core devs of Bitcoin would respond by making mining 100x harder. Being slow and expensive to transact is a feature for Bitcoin, not a bug.

So you are saying that "someday" in the distant future it will be technically possible for Bitcoin to be used as a measurement mechanism.

Here I'm not talking about the technical side, but about the volatility, which is a social phenomenon, although technicals (scalability) can help to lower it (due to increased liquidity for currency usage and decentralized trading).

But that doesn't explain why, at that time in the distant future, people will switch to measuring value in Bitcoin rather than the things they use today like USD and EUR.

It is not necessary that the fiat-based measurement of prices is abandoned. Both measurements can work in parallel. In countries like Argentina where a foreign currency is popular as a harder "saving currency", the population is already accustomed to use different currenties at once as measurements.

So no "switching" is necessary (I also consider a complete switch unlikely). The only thing which is necessary is that pricing in Bitcoin becomes attractive for merchants. This will become the case if the possible profits based on Bitcoin-price based promotion strategies (e.g. the one I explained in the last post) become higher than the volatility risk. As I explained in the last post this can already be the case today for creators (not re-sellers!) of digital products.

Why would pricing in Bitcoin ever be attractive for merchants? If almost nobody knows what it means, then the audience would be small to begin with, and even for that audience they will always have a device that will instantly translate for them so it wouldn't matter. Hence there is simply no upside for a merchant to price something in Bitcoin anymore than there is a reason an American merchant would show their prices in Euros.

USD, as a measurement device, will stay around as long as Western civilization stays around. A thousand years from now, if you tell somebody living in the US, "this thing costs $149", they are going to instantly know what that means to them. Just like if I say "that suitcase weighs 60 pounds" you know it's going to be pretty heavy and to prepare for that, as opposed to somebody saying, "that bag is 20 pounds" I know I can pretty easily move it around. Measurements are built into our brains, which is why it's so hard to get rid of them.

And again, it doesn't matter. Yes, as an American it's a bit clunky sometimes to explain that we don't use the metric system here, but for the other 99.9% of my life I simply don't care. Compared to the fuss required in changing everybody's measurement, it's not even remotely worth the trouble.

[Smack That Ace]

Seems like Gary Gensler is on his way out anyway, so his opinion isn’t exactly the most relevant thing going forward. With a Trump victory looking like it will play out in the cards, I doubt old Gary will be making statements anyone cares about in another six months. His entire reign has been an unmitigated disaster.

Even if Trump doesn't win, Gary's reign will end when his term ends in 2025. Most SEC chairs are replaced every time the US has a new president regardless of which party's candidate is elected, Gary is just Biden's choice, not Trump's or Harris's. But a Trump win would be better for us because not only would Gary be gone, but we would likely have a crypto-friendly SEC chairman.
He is truly the terror of the entire industry, but it is ridiculous that some people defend him and claim that he is just protecting investors. I even read somewhere that someone once said he was just against altcoins and he loved bitcoin  .

[freedomgo]

Even if Trump doesn't win, Gary's reign will end when his term ends in 2025. Most SEC chairs are replaced every time the US has a new president regardless of which party's candidate is elected, Gary is just Biden's choice, not Trump's or Harris's. But a Trump win would be better for us because not only would Gary be gone, but we would likely have a crypto-friendly SEC chairman.
He is truly the terror of the entire industry, but it is ridiculous that some people defend him and claim that he is just protecting investors. I even read somewhere that someone once said he was just against altcoins and he loved bitcoin  .

I hope he's true to his words, but recently, a news came out that he’s selling his shitcoin, and that doesn’t really make him look sincere.

Trump selling his own token, is it a joke?

[Marvell1]

Even if we did not see a spike in crime, it does not mean there were not any major issues they faced economically because when El-Salvador adopted BTC, the price was as high as $50k (if I am not wrong), and after that, the price of BTC went as low as $16k, which proved to be a bad investment for El-Salvador, and all this time their economy was not so stable, or I can say was bad.

But yeah when BTC goes higher than the investment price, they start making a profit, and their economy also starts to go up and they took good benefit from such an opportunity by introducing other programs that will increase the adoption of BTC and attract more investors in the country.

If I remember correctly, Bukele once stated that they only use a small portion of the national budget to invest in bitcoin and even if that investment fails, it won't affect them. Also, since they started investing in bitcoin until now, they just buy more whenever they get the chance, they have not sold any bitcoin yet. They never used their investment and are still trying to increase their bitcoin holdings. How can you say their economy is better because of bitcoin?

Is Bitcoin their national resource, what role does Bitcoin play in this country that can help them attract investors? Honestly, I can't imagine how they will attract and convince investors when bitcoin is only used as a currency in their country?

[EarnOnVictor]

Let's be thankful that he already called it a "store of value" but I challenge him, Bitcoin can do whatever fiat currency can do. The only issue here is that countries will not want to accept it as their reserve and others, and Bitcoin is dependent on the internet. What if a war or disaster breaks and the internet is not accessible? The risk is high to entirely depend on cryptocurrency.

Well i definitely disagree with you there, for the same reason that gold standard was removed from USD. Fiat money isn't just for enabling fast and high liquidity in daily use.
It's for stabilizing the country in case of an emergency, this is basic economics.]]

What has most countries of the world stabilised yet with their full control of their countries' fiat currencies at their disposal? You are mixing the point. The USD replaced Gold as the world's reserve mainly because the USA prefer their currency politically on the world front but cited some economic excuses. And the fact that the USD is justified by its nature and behaviour, the world never cared, especially as countries have their choices as sovereign states but prefer to stay with the most stable currency as fiats. What an unavoidable choice!

However, the USA must lie on something convincing to convince the world, which are the volatility of Gold (despite fixing the exchange rate) and the restriction Gold imposed on the government. But today, by comparing the USD value with that of Gold, it's clear that Gold would have been the better world reserve asset.

And if internet would break down, it wouldn't affect just on bitcoin value.

I almost totally disagree with you, but for using "affect," of course, war can't break out and the internet is seized and the value of all assets will not be affected. But one thing you did not consider is that physical paper can still be spent at that time, and the same goes for Gold and other physical valuables. How do you spend your Bitcoin then? That is what I was saying in case you missed things up.

[vjudeu]

then why have the L1? What benefit do you derive from it?

For example: initial coins are created there. If you have L2-only system, where L2 creates their own coins, then you can just have a regular debt-based system. And in general, fiat currencies are "L2s without L1", because you start from zero, you create value out of debt, and then you live with it, because then, "debt is money".

However, in case of Bitcoin, first you start from zero coins, but initial ones are not created from any kind of debt. They are mined instead. You put real computing power, to introduce first coins into the system. You cannot print them in unlimited amounts. And also, you can move only L1 coins into L2, so there are limits, how many L2 coins you can "borrow". You cannot just start some L2 node, say "borrow me 1 million BTC", and then it becomes money. No, you have to "cover" everything by L1 coins. And that coverage cannot overlap, so you cannot use a single million, to create 42 channels, and have usable 42 million coins in that way.

the only reason you would do an L2 over Bitcoin is because plain old Bitcoin doesn't scale

Well, L2s have some interesting properties, which can exist only there. For example: removing data. As long, as mainnet Initial Blockchain Download requires fetching archival data from 2009, up to today, you cannot remove anything. In L2s, you actually have a way to remove data, because you open a channel, you do some transactions, and then you close it. And everything in-between can be kept by only interested parties, and can be taken out of IBD. However, if you have only L1, then you have a problem, because you cannot remove anything. Which is why I guess, that we can have "layer zero" in the future, for example where a single block time could be 2 weeks, 4 years, or anything longer than 10 minutes, which will nicely compress the current L1.

Also, the last point is the answer, why L1 can scale: it is technically possible to introduce "layer zero", where the current L1 will work in a similar relation, as current L2s are related into L1. So, "layer zero" will have even longer block time, even less data than the current L1, and will allow a better compression. Because not only you can go from L1 to L2 to L3, and so on. You can go in the opposite direction as well, when needed.

Hence if there was some breakthrough tomorrow that made GPUs 100x faster, then the core devs of Bitcoin would respond by making mining 100x harder.

1. Difficulty adjustment is automatic, there is no need for manual intervention.
2. It can go in both directions. Which means, that the difficulty can also decrease, when needed.

[legiteum]

then why have the L1? What benefit do you derive from it?

However, in case of Bitcoin, first you start from zero coins, but initial ones are not created from any kind of debt.

Yes, but an L2 is NOT BITCOIN. Every disadvantage that the L2 network would have alone would be a disadvantage it would have together with Bitcoin.

Imagine, for instance, you bicycle was secured with a chain and two locks in sequence, one called "L1" and the other called "L2". If either lock fails, your bicycle is stolen.

So when you are investing in an L2 (or L3 or L4 or whatever), you are investing in the L2 first, and then the L1.

the only reason you would do an L2 over Bitcoin is because plain old Bitcoin doesn't scale

Also, the last point is the answer, why L1 can scale: it is technically possible to introduce "layer zero", where the current L1 will work in a similar relation,

Sure, you can introduce a Layer -1, Layer -2 and so on . All that will do is add even more software, networks and systems that can fail and lose your money.

Every "layer" you use is like using a different coin all by itself, and then adding other one on. Two things means there are two things that can fail.

There might be an L2 that's really great, and has all of the traits you want i.e. like Bitcoin has, but then you might as well just use the L2 all by itself.

And if the L2 is not decentralized, then your solution as a whole is not decentralized--so why involve Bitcoin at all?

[kawetsriyanto]

This dude is very anti-crypto and a fool. Bitcoin has already become a currency. People in El Salvador use it all the time. Not only El Salvador, people anywhere use it every day.

Yep. It is clear, he isn't a pro crypto. So, it is not surprising if he said something bad about Bitcoin.

Agree with you. We can't deny that Bitcoin has become a real-currency in 2 countries (El Salvador and Central African Republic). However, it is true that Bitcoin still doesn't become a global currency since there are 2 only countries that allow it to be legal currency. But this doesn't mean it is impossible, it needs a process and should take time.

Why would anyone even say something likes this unless he is an enemy of crypto? Too bad Kabala voters like this guy a lot. This should be a serious warning to all the people who think about voting Kabala.

Kabala or Kamala? I assume you refer to Kamala Harris.   
Kamala voters shouldn't be crypto users, they don't understand crypto. So, it makes sense if they support the statement of Gary Gensler.

Elect Trump, let him fire this clown, and the crypto ship goes to the moon!

For the crypto users who live in US, it is true that Trump is a better candidate for the president. At least, Trump promised to support crypto/Bitcoin fully. They even wants to fire Gary Gensler. If he keeps his promise, we won't see a person like Gary Gensler in SEC anymore. Then, the drama of SEC with crypto industry can be over.

[Alpha Marine]

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

I don't think he is entirely wrong. I disagree with him, but I understand where he's coming from. From his speech, he is not against crypto but he's saying people don't pay attention to the currency side of bitcoin. Everybody is only focused on the asset/investment side. As a matter of fact, some people don't even know that Bitcoin is a currency, they just know it as something you can invest in.

I don't think many countries will accept Bitcoin as legal tender, and that is fine as long as it is not illegal to use and accept it as a means of payment. There will be more countries that will make Bitcoin legal tender, but I don't think it will be much and we have to get used to that. As long as people are free to use Bitcoin anywhere and anytime then it's all good.

[d5000]

Hence, if you tell me there is an L2 with a bunch of traits you find desirable, then I would ask: then why have the L1? What benefit do you derive from it?

A higher liquidity and acceptance as payment token, which also result in less volatility.

Let's stay with the example of "Litecoin as a Bitcoin L2". I wrote LTC's security and censorship resistance would be acceptable for me. But this is not the case for its volatility over longer periods. The swings on LTC are much higher than Bitcoin and it tends to steep crashes and short, explosive growth phases, which is not ideal for people wanting to hold larger sums over longer times (like more than a month or so). That happens with most altcoins. Traders and short term speculators love that, but for a "currency" use case it's not good. And thus, I would prefer to use the Bitcoin token on the Litecoin blockchain, in this case.

A different example is Lightning, where I can't use another "token" than Bitcoin. The same would be true in the Drivechain concept, Ark and other second layer concepts (which are still in the conceptual stage).

L2s allow to keep the low volatility of a stronger L1 with (potentially much) lower fees, accepting a slightly higher "failure risk" and attack risk, which is however very low if the L2 is well designed. Many L2s are indeed high-risk, but these are mainly altcoins wanting to profit from the "L2 boom", but this is indeed an L2 category I would not trust.

And let's be clear about the context here: the only reason you would do an L2 over Bitcoin is because plain old Bitcoin doesn't scale, and you want scalability.

There are other cases where I would for example like a more expressive scripting language for smart contracts. Or to have another feature, like ring signatures.

Nobody wants a reason for criminals to come and kill you in your own home.

You can also pay someone to guard your L2 coins. In the case of Lightning, this is already a major use case.

It's not just bandwidth, it's hashrate. Bitcoin uses an estimated $40 billion in GPUs to perform 500k transactions per day.

Hashrate is not (physically) related to transaction capacity at all.

Transaction capacity depends on Internet bandwidth and RAM mainly, plus CPU usage but not for mining but for validating the transactions (to make sure that they satisfy the protocol rules). This is common to PoW coins and PoS coins.

Why would pricing in Bitcoin ever be attractive for merchants?

Let's agree to disagree in this point.

[Minor Miner]

I don't think he is entirely wrong. I disagree with him, but I understand where he's coming from. From his speech, he is not against crypto but he's saying people don't pay attention to the currency side of bitcoin. Everybody is only focused on the asset/investment side. As a matter of fact, some people don't even know that Bitcoin is a currency, they just know it as something you can invest in.

He's not against crypto, are you serious? And I also don't think he intended to remind people to consider the aspect of considering bitcoin/cryptocurrency as a currency. SEC has always wanted to make the crypto industry part of the stock market and subject to their supervision, how can you say they intend to advise people to look at the monetary aspect of crypto? Not to mention, he also asserted that bitcoin is very volatile, it is just a speculative asset and is used for illegal activities. That statement shows that he also doesn't like bitcoin and that he never considered it a currency.

I don't think many countries will accept Bitcoin as legal tender, and that is fine as long as it is not illegal to use and accept it as a means of payment. There will be more countries that will make Bitcoin legal tender, but I don't think it will be much and we have to get used to that. As long as people are free to use Bitcoin anywhere and anytime then it's all good.

I agree with you, that's what we should focus on, as long as bitcoin is legal and we can comfortably use it then that's a huge success for us.



https://coinmarketcap.com/community/articles/659f9a206d8fb40ed08a1907/

[DaNNy001]

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

I don't think he is entirely wrong. I disagree with him, but I understand where he's coming from. From his speech, he is not against crypto but he's saying people don't pay attention to the currency side of bitcoin. Everybody is only focused on the asset/investment side. As a matter of fact, some people don't even know that Bitcoin is a currency, they just know it as something you can invest in.

I don't think many countries will accept Bitcoin as legal tender, and that is fine as long as it is not illegal to use and accept it as a means of payment. There will be more countries that will make Bitcoin legal tender, but I don't think it will be much and we have to get used to that. As long as people are free to use Bitcoin anywhere and anytime then it's all good.

Well don't be so sure mate, the world is evolving and there are so many things that would change in time coming so don't be surprised to see that Bitcoin has achieved a new height sometime in the near future.

Their is no doubt that Bitcoin investment is practically the major use as of now but we can't deny the fact that even if Bitcoin is used majorly as a stored of value there are still a small portion of people that relate to it as a currency although the margin is big when you compare the two but time is something that can change a whole lot of things so am still positive that Bitcoin would achieve and more over Bitcoin is still just in it's early stages and still lots of growth to undergo