Bitcoin is designed as a strong value store and a limited good, just like gold. But just as it is impractical to use gold as a means of payment in everyday life, so it is difficult to do so with Bitcoin – the scaling problem greets with high fees and low transaction speed. Ultimately, both physical and digital gold in their pure form are at best suitable for everyday use to a limited extent.
Just as gold ultimately had to give way to more practical paper money, more and more second-layer solutions are also finding their way through Bitcoin, through which the block chain is partially left behind. These proposals, such as the Lightning Network, no longer send Bitcoin, but digital promissory notes covered by Bitcoin, which are transferred via payment channels. Doesn’t that look familiar to you? Weren’t our banknotes originally gold covered?
What could an inflation of the news spy look like?
If we continue to transfer the news spy of gold currencies to digital gold, the next step would be to expand the money supply – i.e. the issuance of Bitcoin promissory notes – at some point. Here is the review by onlinebetrug. Just as people did not withdraw their gold from the bank at some point, it could also be that the Bitcoin would remain on the blockchain and would only be traded with digital promissory notes.
At that time the goldsmiths, who were able to store the precious metals well, gradually developed into banks. If we were to invent a digital dystopia from the idea of the Lightning Network, central distribution points (possibly so-called Lightning hubs?) would also emerge at Bitcoin. Probably these distribution points would emerge from the largest payment channels. These would gradually manage all Bitcoin and might eventually be able to issue more “Bitcoin notes” than Bitcoin.
The digital notes system would be ready. Completely transparent and without annoying cash. The original Bitcoin idea would be hijacked. This would solve the scaling problem – but it wouldn’t have much to do with the basic idea of the blockchain.
How realistic is such a dystopia?
Admittedly: This dystopia is perhaps a bit far-fetched. When US President Nixon revoked the gold standard in the 1970s, it became clear that the US might not have as much gold as they originally said. Although Bitcoin has a lot in common with gold, there is one important difference. The blockchain is open to the public. No one can lock it behind a vault and claim to have more Bitcoin than his address on the blockchain. An expansion of the issuance of Bitcoin promissory notes by (still fictional) central distribution points does not seem very realistic.
Approaches such as the Lightning Network are urgently needed. When I buy a cup of coffee, it is not necessary to obtain the approval of the entire refectory for every purchase; there must be a way in which only the approval of the seller and myself is required. But with all its usefulness, it is also important to be aware of the dangers of second-layer solutions. Decentralisation and the blockchain must be retained as a basic principle.