DAILY CRYPTOS ESPRESSO – news from 31 Aug 2019

Ethereum price keeps dropping, and there is still no reliable answer to the issue of scalability.

Bitcoin is experimenting with “Level 2” protocols to make transactions faster. Examples are the Lightning Network, Coinbase, and Liquid paper wallets.

None of these solutions addresses the double-spending problem effectively. But as we look back at the original Satoshi Nakamoto’s statements, we see that a possible solution already exists.

Bitcoin (BTC)

  • Is Satoshi Nakamoto Proven Right as Scalability Appears Uncrackable?

    31 August 2019

    Ethereum is falling because of its failure to scale. Bitcoin hasn’t been equally affected because of its planning of a settlement layer as defined by Hal Finney. He imagined the actual bitcoin being used to only transact between banks. The argument is that Bitcoin doesn’t need capacity. Its blockchain is not for ordinary people who would instead use Lightning, Coinbase paper wallet or perhaps Liquid paper wallet.

    Ethereum miners refused to change the gas limit, and we wonder if it was miners that kept Bitcoin block limit at 1MB.

    Those who control supply, can extract rent presuming there is demand. But too high fees could reduce demand drastically.

    The Bitcoin’s ability to scale depends on the Lightning Network (LN) which, unfortunately, doesn’t solve the double-spending problem. 

    Solving the double-spending problem is extremely difficult, and no one managed to do it except for Satoshi Nakamoto.

    Without some alternative solution to the double-spending problem, then there is no second layer scalability. Nakamoto’s solution to scalability might prove to be the only good one. He wrote: “Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification (section 8) to check for double-spending, which only requires having the chain of block headers, or about 12KB per day. Only people trying to create new coins would need to run network nodes.”

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