Literally everything @Blockstream is working on is to scale #Bitcoin to serve billions of users. You’d have to be willfully ignorant to think there was no other choice but to roll your own shitcoin @Libra_. https://t.co/luAvg1sXuS
Unfortunately, we haven't yet demonstrated the safe and practical
operation of BCH with 6 GB blocks. No doubt this could be done but it would require a significant amount of investment, including protocol development, software performance improvement, performance modeling, test network development, etc.
So they initially planned on using something they had absolutely no control over, but since it was borked by incompetent technical vision they decided to do something utterly different that they had complete control over. That doesn't sound very likely.
It is a good illustration backed with facts and evidence that the greatest invention since the Internet has been mismanaged and more likely sabotaged NOT to become an instrument global payments.
Isn't that a concern for you?
No, it's not a concern.
There were attempts at digital cash before. All of them failed, maybe Bitcoin got closer, but might fail, too. The genie is out of the bottle now, even if Bitcoin fails, I think digital assets are here to stay and one of them is going to get it right, eventually.
Bill Barhydt, CEO of Bitcoin investment platform Abra, claims that Facebook staffers told him the company wanted to use Bitcoin as a cryptocurrency to power its payment platforms. But the social media giant had “no choice” except to develop its own cryptocurrency, due to Bitcoin’s inability to scale
They've looked at Lightning, they’ve looked at Bitcoin [Core], they’ve thought this through. And they came to the conclusion that Bitcoin [Core] is not optimized to be a payment network...
This doesn't really make sense. Suppose this was true and the "real problem" was BItcoin scaling, why would they then opt for federated consensus instead of just copying Bitcoin's design minus scaling issues, like Bitcoin Cash? This is a PR hit piece on Bitcoin to discredit it's brand in favor of Libra.
No wonder BTC is so scared of Bitcoin Cash because Bitcoin Cash has much higher scalability at the moment and is at the front seat for these huge corporations to use. The only way to stop Bitcoin Cash is through lies and propaganda, which is exactly what they are using now to delay Bitcoin Cash.
> Bitcoin Cash has much higher scalability at the moment
32MB blocks are way too small for a large scale adoption. And except for a few short stress test spikes, BCH is even not running with the actual 32MB blocks yet. The only blockchains with high sustained usage are ETH and BTC.
You are assuming everyone will start using it but that's usually not the case. I remember when Facebook launched their Facebook Credits and not enough people use it and eventually they shut it down. I think maybe only less than 1% of daily active users will use it even at best once a month.
I would assume the market value (and being a minority SHA256 chain) makes it less attractive. They are probably also hoping to scale well beyond even BCH's current capacity, so it would be risky for them to build on it with an uncertain future. Instead, they have "solved" the scaling problem by essentially eschewing decentralization and the permissionless aspect of public cryptocurrencies. That's also what Blockstream have done with Liquid.
I think their solution is fine for what it is, but I want nothing to do with it. They compromised the core principals that make cryptocurrency interesting to me, so I don't see any advantage to it beyond what the legacy financial system already offers.
That's a lack of determination on their part. Instead of creating some sort of stable coin based on a basket of fiat currency they could have issued a Bitcoin backed stable coin until Lightning becomes ready for prime time and then later do a one-to-one trade-in.
I think the reason why they went with a basket of fiat is because they can trade your fiat for a token and get a good return on that fiat money while you get nothing on their token. This logic though may soon melt away and central banks flirt with negative rates.
They can always adjust the basket from time to time with a mix of other assets such as crypto, precious metal, etc.
I call it pure bullshit. Facebook is all about control. With bitcoin they would have no control. Also there’s no way they could shield their users from wild price fluctuations in bitcoin. Can you imagine the backlash (and nightmare liability) if someone put $1,000 into Facebook as bitcoin and 1 year later was told it was only worth $200?
There would have been much less congressional (FED/FTC?) pressure if Facebook hadn't tried to make their own money and just adopted an existing crypto, BTC being a great choice, but LTC, ETH, XRP would also have worked.
What they really want though is a stable coin. People love when their $100 in bitcoin is now $110, but they hate and more importantly remember when their $100 became $90 while they slept.
And there's a handful of stable coins out there that could be scaled to handle the volume.
Stablecoins (where $100 will always be $100 - like cash) will never be allowed or they will heavily regulated (amount you can transfer/hold), otherwise it bankrupts commercial banks in an age of negative interest rates which we are facing right now. It would lead to an electronic bank run of epic proportions, they would run out of their reserves long before all claims can be covered, because they are fractional reserve banks.
Are any stable coins fractional reserve? I don't think that's true. Its of course hard to verify, but are any claiming that they do that? Regardless, a stable coin certainly doesn't \*need\* to do fractional reserve - full reserve is definitely doable.
My point was that stable coins will suck up all the reserves from fractional reserve banks and bankrupt them.
Stable coins can be full reserve only, since they do not create loans and are not chartered as commercial banks. If they run fractional reserve nonetheless it is fraud and not a stable coin anymore.
How do we know a stable coin is full reserve? Money they deposit in the bank? That does not make it full reserve unless you have the hard cash issued by the central bank in a vault under you control or deposited in an account with the central bank. Most stable coin issuers probably try to make money investing your cash in short term Treasury bonds that are 100% guaranteed by the issuing government. Banks do the same with overnight rates of central banks.
This is correct. If Stablecoins keep their backing money in banks, then the banks are usually fractionally reserved. So the stablecoin holder must now have a look at the reliability of its bank to understand the risks.Some of the risks, anyway.
From the aricle:
*Barhydt said that Facebook had considered all the options, including Bitcoin’s scaling solution, the Lighting Network. "These are smart people. They've looked at Lighting, they’ve looked at Bitcoin, they’ve thought this through."*
I dont think anyone ever says lightning is the ultimate answer, merely an improvement in certain use cases like micro transactions with both parties being online at the same time.
Im certain there will be others too.
The utopia of free instant fungible global scalable finite money is not solved just yet...
I've entertained it, and there are plenty of alternatives in the shadows.
It's just that SO MANY incredible minds right now are working on this problem it simply just doesn't have a chance of lasting much longer. Like putting a simple algebra equation in front of a stadium full of PhDs and then offering a huge bounty to solve it.
Well that's not true, there are other second layer solutions but they're not as decentralized as lightning network. While Bakkt is initially launching futures their plan is also to operate as a second layer payment processor as well, which is why companies like Starbucks are on-board as well. Cash app will likely have their own internal payments layer, Coinbase already has their own internal payments layer, etc.
There are also on chain improvements that will help LN but also provide some scaling of their own, like Schnorr signatures and whatnot.
But it would be nice if someone came up with another great idea that could massively scale Bitcoin in a decentralized manner.
> Barhydt said that Facebook had considered all the options, including Bitcoin’s scaling solution, the Lighting Network.
Would be interesting to know what it would take Facebook to reconsider Lightning. The technology has been advancing very rapidly since early 2018.
> But while Barhydt admitted that Libra may currently be little more than a private database, he said Facebook had future plans to create something akin to a “scalable Bitcoin.” But “you can’t go fully permission-less out of the gate.”
The question seems to be whether it will ultimately be easier to scale a censorship resistant system (Bitcoin) or make a fast centralized system censorship resistant.
My money is on the former because groups generally cling to power even if it sends them over a cliff. If Facebook really cares more about empowering users than controlling users they'll be back with Bitcoin eventually.