You know I've been here for 3-4 years now, and I have seen Bitcoin rollercoaster from 700$ down to 100$ and now back up to 2000$. A very interesting rollercoaster indeed.
I was a Bitcoin purist, thinking that Bitcoin has to be what it was coded for, this meant no hardforks. Yet I have realized that this is a very closed-minded position, and very dogmatic.
It seems like everybody here is dogmatic about this, you think you are very smart and you know things better, it's just pure arrogance. And when anybody has a dissenting view, they get marginalized or maybe even banned.
I had an ignore list of 50+ people who were shouting very hardly that Bitcoin's current path is unsustainable. And instead of hearing their opinions, I just ignored them, because that is how an intelligent open minded person behaves.
I fully agree with the silly dogmatism that reigns in bitcoin land. I have to say I came late to bitcoin ; in mid 2014. I had heard of it before, but I thought it was something like the failed e-cash system I was very close to about 10 years earlier. Back then I was enthusiastic, I saw it fail, and I realized that "freedom money" was not going to be possible. I didn't immediately grasp the decentralized aspect of bitcoin. I was mesmerized.
THIS was finally "freedom money" !In the mean time, I saw it evolve from a system where one could, indeed, transact value in a "permissionless" way, into a speculative gambler's feast. In the beginning, I thought it was great it was taking up value.
Then it started to annoy me that people seemed to focus on speculation more than on usage. After all, "freedom money" is not to speculate or to get rich with because you happen NOT to be a person occupied doing valuable things, but because you happen to gamble some money at the right time in the beginning and just sit on your ass, right ? That's exactly the sort of financial game that is making our banking system sick, so this should NOT be the essence of "freedom money", right ?
So when was the speculative bubble of bitcoin going to crash, finally, and start following "Fisher's formula" which is the true value of a currency used to buy stuff with ? After the 2013 crash, I thought that bitcoin was going to "de-bubble" and that people had been burned enough not to start over. Bitcoin's price was happily going down, and my idea was that it was going to arrive at a few tens of $, its "Fisher price" rough estimation.
But no, speculation took of again, with the "halving", etc.... I didn't understand it. Where was this sick speculation coming from ? So I set out finding out why. I now realize that it was made that way.
"gold bug economics" but with huge initial seigniorage, can be nothing else but speculation. The more I studied the game-theoretical aspects of bitcoin, the more I realized:
this thing is broken beyond repair as a currency. About everything in it is set up for it to fail as a normal day-to-day currency. However, bitcoin is not dead, and will not die. But it is something else. It is not gold either. Gold has had the bulk of its seigniorage hundreds or thousands of years ago. Gold, economically speaking, "existed for ever". It had its "price rise" so long ago, that no economic effect is felt today. You can *reasonably" speculate on gold, like you can speculate on anything, but you won't do factors of 1000.
So what is bitcoin then ? It is simply a huge greater-fool system. No more and no less. And what's driving it ? A delusional story, of "the new money for the 21st century", what it is exactly designed not to become. It is brilliantly designed as one of the better greater-fool traps in history.
This is one of the greatest dogma's in bitcoin, that it should sustain "all payments of the world" one day. It is not going to, but if you point out that its economic design is everything but that, and is nothing else but one of the biggest pyramid games in history, you hit a dogma. I'm sorry that it is that. I would have preferred "freedom money". But it isn't. Its price in the market is not set by the demand for bitcoin in order to buy stuff with.
Its price in the market is set by the demand of speculators that want to leave it to greater fools, making a benefit on it. That's the definition of a pyramid game. If you mainly want an asset for the sole reason of selling it for a higher price to someone else later, and if this demand is what sets its price, and there's no "sound fundamental" backing it up, then this IS a pyramid game.
The other dogma is a cryptographic idiocy, namely
that bitcoin's decentralization is depending on how many copies of the sole ledger are around, which brings us to the block size. A payment system in which the ledger has to be integrally copied by all/most users, is a system of which the burden *per user* increases linearly with the size of the network. Such a thing always crumbles under its own weight. The more users the network has, the higher the burden *per user*. This is crazy.
It means that the total burden of a network goes QUADRATICALLY with the network size. No reasonable system does so.
But on top of that, it is cryptographically not necessary. If there's one block chain cryptographically available (no other one is actively being made), then *a few independent copies* are sufficient. Not every user needs such an integral copy. It doesn't help him in anything. There is cryptographically no way to "fake" block chains, because the PoW can be checked by just the header list, and in any case there's no possibility to fake it without delivering the PoW, so without genuine mining.
The only thing that must be decentralized as a check, is the *header list*. You cannot fake it. Once you have the header list, there's no way in which one can sell you "fake blocks", because their "signature", their Merkle tree hash, is in the (verified) header list.
So whether these blocks are 1 MB, 10 MB, or 50 GB each, doesn't really matter, they cannot be faked if the header list is right.
Nobody can sell you a fake block. You don't need them all. You only need those of the transactions you are concerned with, to verify that you obtained a transaction, or that you sent a transaction. (*)
If there are, say, 20 full nodes in the world, serving these data, that's largely sufficient, because no-one can fake the data, and there is no other data "in competition" available. Satoshi already explained that, his logic is correct, but is conveniently ignored.
In *such* a case, a block chain system is NOT having a burden that goes quadratically with its users, but essentially linear/logarithmic, and COULD hence perfectly sustain growth without the slightest problem. A few full nodes being the "world servers" of the single block chain is good enough, because that chain cannot be faked. You cannot receive "erroneous data" from such a server, because you can check it against the header list that you DO maintain.
So all this "block size debate" is based upon a totally erroneous/bogus argument, namely the "need for this data to be copied a number of times, proportional to the number of users", which kills its growth. It is another dogma, but this time, invented afterwards.
So, if bitcoin didn't have an economic design that induces pure speculation, it could have become a freedom currency, but its speculative behaviour transforms it in one of the better pyramid games of history ; and
if that silly dogma of "everyone needs a full copy" wasn't maintained, it could technically sustain network growth without a problem.Bitcoin has OTHER fundamental errors in its design, like using PoW for coin creation AND consensus, which industrializes and centralizes the decision-making process in bitcoin.
This is why I think bitcoin was a good idea, but is so badly designed, that essentially it KILLED the notion of freedom money it was supposed to become.
(*) edit: it is important to realize that even if there are only 20 nodes out there, you don't need to TRUST them. They cannot give you a fake block. The only blocks that you can get from them, are true blocks, because these are the only ones that comply with their Merkle hash to the header list you received. This is somewhat similar to the fact that you don't have to trust your e-mail server when you receive a cryptographically signed message. If the signature verifies, then your e-mail server gave you the right copy of that message, he cannot give you a false one. If you *know* that your e-mail server received exactly one such message (if you KNOW that you want block 480721), then the only thing that e-mail server can do, is to send you the right message, or refuse to send you a message. This is why one node would in fact be sufficient, apart from the fact that that one node could decide to deny you access. This is why some copies around are needed. But cryptographically, from the moment you know that you can get a copy of a specific block, you do not need to trust the entity that gives you that block. They cannot fake it.
You don't even need a full block, but just the "Merkle path" to the transaction that you need. It cannot be faked either.
