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.
