I acknowledge that FIAT has attributes & qualities but that doesn't make it perfect. It's the nature of things that we devise better systems. I'm not suggesting that crypto's are a panacea. However, I do believe that they bring something to the party and have several use cases.tecate why has the whole World adopted Fiat?
THEY? A wickeid elite who encashed all their currency for gold and then conned the rest of us by issuing Fiat?
This is what they teach in the universities.
It was recognised that part of the problem of the Great Depression was the deflationary influence of the gold standard
The gold standard was abandoned and one of the greatest leaps in modern economic management was launched - Fiat currency, freely manageable in supply to support the economy's real needs.
The result has been the most remarkable transformation of human economic activity which has resulted in growth beyond anybody's wildest dreams
Nobody uses a gold standard any more.
But hey, the whole World is dominated by elites engaged in this gigantic fraud.
No I am not confused in this regard. Now FR would take us way off topic but as you may have guessed I am a fan of FR.I think you may be confused about something Duke.
It's the Fractional Reserve system that has enabled banks to loan money it doesn't have.
Whether that currency is commodity based or FIAT.
The gold standard would have been hugely deflationary and giving people a big incentive to hoard would have seriously held back growth.
It is a major advance for civilization that its money can be managed to meet the needs of the economy and is not artificially tied to the supply of some commodity.
I could never ever see salvation in bitcoin.
There is reasonable arguement, considering the environmental dangers facing the planet that growth restraint, or preferably growth measurements based on sustainable practices and not solely on shallow mathematical equations such as GDP are the way forward for bringing greater prosperity to all corners of the planet.
Sure, it's an issue. However, are we going to look at that in isolation and not bear in mind that it's still a developing situation? As and when Layer 2 solutions come on stream, whilst current energy consumption won't go down, the number of transactions completed has the potential to increase exponentially without the need for more energy usage.And Bitcoin is really helping here isn't it?
I think you know it won't happen in the case of bitcoin. The protocol is set up to control the timing of the release of bitcoin. The timing is dictated by the amount of CPU power devoted to the puzzles. The amount of CPU power is dictated by the rewards in being allocated new bitcoins for solving the puzzles. No amount of layers or changing the nature of the puzzle (from POW to POS) can alter these bitcoin economic realities.Lastly, the use of Proof of Stake rather than a Proof of Work validation system (the latter being the energy hungry one) is being mulled over. May not happen in the case of Bitcoin as there are other considerations.
Yes, I agree that it's unlikely that they would make such a fundamental change in the case of bitcoin (although a leading Bitcoin Developer recently called for the change). However, there are other crypto's using Proof of Stake.I think you know it won't happen in the case of bitcoin.
If you are suggesting that in a scenario where the use of Layer 2 applications was to be exponential, you're absolutely wrong in saying that it won't have an effect in terms of overall energy usage / energy usage proportional to the number of transactions.No amount of layers or changing the nature of the puzzle (from POW to POS) can alter these bitcoin economic realities.
You've been told countless times before but you won't take it on board. It's not an all or nothing deal. Crypto and FIAT will co-exist. You are entrenched in a position where you maintain FIAT good, CRYPTO bad. Nothing is ever black and white.But yes of course both monetary policy and fiscal management are open to abuse. I was a tad nervous during the crisis but I could never ever see salvation in bitcoin. I genuinely just can’t figure that one out at all.
Let's leave the handbags at the door just for a moment. It is possibleIf you are suggesting that in a scenario where the use of Layer 2 applications was to be exponential, you're absolutely wrong in saying that it won't have an effect in terms of overall energy usage / energy usage proportional to the number of transactions.
I never brought mine - I suggest you decommission yours permanently.Let's leave the handbags at the door just for a moment.
Well, if it doesn't, you'll get your wish as I think Bitcoin would be toast and until actual implementation, it remains to be seen if it does so.Layer 2 aspires to address scalability issues, and I presume it will achieve that.
If most of the transactions end up being carried out off-chain, then there's less puzzles to be solved. The backbone will still have the same existing overhead (the chain itself as it exists right now). However, the energy requirement of that chain won't grow in proportion to an escalation in the number of actual transactions - if those transactions occur via Layer 2 - off-chain.But what is driving the energy usage in bitcoin's case is the hunger of the miners to get more bitcoin at these prices. Even if main blockchain activity were to fall to a trickle the protocol says the reward for the puzzles can only be allocated every 10 minutes on average. The number of transaction per block may fall off dramatically with Layer 2 but that doesn't change the economics of the puzzle. It is a race by the CPU power to solve the puzzle and get the rewards. The more CPU power is dedicated to the race the harder the puzzles are made thus underpinning the energy usage. Validating the transactions and the number of transactions are completely irrelevant to this game. The economics would stay the same even if there was only one transaction per new block.
I don't think that's right.If most of the transactions end up being carried out off-chain, then there's less puzzles to be solved.
Well, sure, can't argue with that.A volume of transactions off-chain without the need for additional hash power means less energy requirement proportional to the overall volume of transactions achieved.
Statement edited . Ergo, it can scale without expanding energy requirement.Well, sure, can't argue with that.
And Bitcoin is really helping here isn't it?
Schnorr signatures being another one ....and of course, Segwit impementation is still only at 30%.I would like to add that a layer2 solution is only one of the possible options for scaling bitcoin without extra hashing power. Hashing power and amount of transactions are not related if we ignore the competition to get transaction fees
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