Please do not change Bitcoin, you'll break it!
The entire digital currency industry is in a state of worry about the bitter civil war in Bitcoin. Apparently, they are going to break it into competing chains: "BTC" and "BCC". No matter who wins, it will end badly ... and there is absolutely no need for it.
Bitcoin managed to become a "digital gold". Maybe it will be able to become a world-wide real-time payment system. Undermining Bitcoin's usefulness in the vain pursuit of victory, both factions inflict great damage on the digital industry.
Bitcoin is organic in its monetary role as a repository of value for the same reason that it is physical gold - based on global consensus. But neither Bitcoin nor gold performs another role of money, such as a means of exchange. Both of these assets are too difficult to move.
Bitcoin is now known as a repository of values
As Dominic Frisby, a shrewd British commentator, said: "Money has two main purposes: one is a means of exchange, the other is the storage of material values, you can find other characteristics in the textbook on economics, but these are the key ones. Our modern fiat monetary system is a rather useful means of exchange. "
Thanks to the Internet you can buy almost anything from anywhere in the world and instantly pay the seller. Without a single global currency that eliminates the need for currency exchange, it is difficult to imagine how modern money can be improved as a means of exchange. But to store wealth, it is not good. Every year you can buy it less and less.
Gold, of course, has established itself as an excellent repository of value. It can be stored almost forever. And you can buy it almost as much as it's always - as much energy, clothing, bread and meat, as well as 50, 500 or even 5000 years ago. Therefore, in the present era of negative real interest rates (ie, rates become negative, once you adjust them for inflation), more and more people are choosing gold as a means of storing their wealth.
Gold was the standard of wealth storage for millennia
But as a means of exchange, it left much to be desired. Around 1700, people began to prefer to use paper certificates representing gold, which eventually turned into banknotes and were used on the market instead of gold itself. And the likelihood that in the near future I will be able to go to the supermarket and pay for my purchases with a golden sovereign, is at best insignificant.
If you want to move gold, you hire a slow armored truck and carry it inside. If you want to move Bitcoin, you use the same slow Bitcoin network. Completion of this network for doubling its capacity or even increasing it by 10 times is similar to screwing the wings and propellers on the Ford T. It simply can not compete with the aircraft as a means of transportation around the world.
There are better solutions
Kitty Hawk is preparing for the flight
However, the split of the World Reserve Digital Currency into two (and, inevitably, more) competing assets destroys its usefulness as an undeniable benchmark for everyone else.
Bitcoin-industry has already lost a huge momentum as it approaches the tipping point of August 1. Uncertainty caused a serious outflow, affecting all digital currencies. And if after this date there are two Bitcoins in the world, this uncertainty will remain and throw Bitcoin a year ago or even more - just like it happened with Ethereum after the separation. Undoubtedly, this modern equivalent of the war of VHS-Betamax video tapes will ultimately reveal the winner, but only after the industry is thrown back a year ago and slows the progress of all the others.
And for what? Both versions will still not be able to scale up to the speed of transactions needed on a global scale.
Never.
And there is a very real possibility of more destructive splits in the future, as Bitcoin, like Brand, continues to move away from its role of value storage, trying to become a medium of exchange, which he will never be. BTC and BCC are counting on increasing the number of transactions per second (TPS) to only a few dozen TPS.
And this is the limit.
Other top block suites are scalable to more than 100,000 TPS as early as 2015! Why not switch to one of their technologies?
Airplanes, trains and cars.
It is no accident that we have airplanes, trains, cars and supertankers. Each of them is adapted and, therefore, more competitive in its own niche. Turning Bitcoin into a means of exchange for the world economy is like trying to turn Model T into a spaceship, adding propellers. That will not happen.
However, the world has already created a rather remarkable global transport system from airplanes, trains and cars. Of course, changing the modes of travel causes us some inconvenience, but in general the whole system provides the most practical way to travel from the porch to the porch on a global scale.
Why do not we use the same strategy to meet our needs for digital currency?
Bitcoin, BitShares and Hero.
There are many potential combinations of technologies that we could bring here, but we just choose one of them to convey the meaning: Bitcoin, BitShares and Hero. Three very different coins, which together completely solve the main problems of the industry with mass distribution and scalability. (Ethereum solves other interesting problems, but it is already full of 25 transactions per second and is not a serious contender for satisfying global demand).
Bitcoin is your storehouse of wealth. He should be in cold wallets, as gold should be in underground storages. For real-time transactions, you trade with Bitcoin checks - fast tokens that can be exchanged for Bitcoin. This is what all stock exchanges are already doing. Your Bitcoin goes to their cold wallet, and you trade surrogate stock receipts representing Bitcoins until you decide to cash out. This is how exchanges achieve acceptable trading efficiency. If these exchanges allowed you to easily transfer funds between accounts, you could pay as quickly as you currently can trade. Instead, people perform up to three hour-long transactions: they take pictures, pay, make a deposit, and all this in order to achieve, What they can do in a matter of seconds inside the exchange. Madness.
BitShares is your free counterparty exchange, operating in real time. "But payment through the exchanges does not remove the counterparty's risk," you can say. True. If you store your Bitcoins in your private wallet, you can (slowly) transfer them to another private wallet without the risk of a counterparty. But who really does this? Most Bitcoins used in real trading most of the time are under the risky control of an exchange counterpart, expecting a break-in. BitShares implements free exchange without counterparties, the so-called Bitshares DEX exchange, where all transactions and payments occur at the speed of light - less than three seconds - and without the involvement of a counterparty. It is already capable of scaling up to 100,000 TPS (transactions per second) and even to infinity,
Hero is your medium of exchange. Hero is a stable smartcone, provided equity in the BitShares platform. During the recent collapse in the industry, he kept his value well, while everything else, including BitShares, fell at an alarming rate. You can spend it in real time on the BitShares network, and it is programmed with a smart contract for a 5% annual increase against the dollar. Hero is also the subject of an advertising campaign for a billion dollars, aptly named "Billion Hero Campaign", designed to achieve worldwide distribution. Thus, you have the equivalent of a stable deposit certificate with an increasing value, which you can pay off as cash, for three seconds with a full global workload.
These three currencies already work perfectly together today, solving all the problems that caused the current BTC Civil War. There is no need to undermine the entire industry with inefficient corrections in Bitcoin. The unique power of Bitcoin is that it is a venerable, unshakable, universally recognized grandfather - the standard of value for all other currencies. And they want to share it!
Dinosaurs could not adapt and became extinct, while mammals survived and succeeded
Why are reasonable people doing this?
Well, Bitcoin-miners have invested in their equipment, and Bitcoin core developers - in their software. None will be upgraded to the level necessary for scaling, because it will leave them all out of work. They are stuck like dinosaurs in a crypto-quagmire, fiercely defending their piece, while agile little mammals are preparing to colonize the entire Earth.
We all know how it ended.
Invest intelligently.
Very well written narrative. Gold may be the best bet for now......
wow very good post