How Blockstream plans to kill Bitcoin - Bitcoin Forex Loans Insurance Busines

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Saturday, September 30, 2017

How Blockstream plans to kill Bitcoin

The experiment Satoshi Nakamoto was designed to give an answer to the following question: What happens if allowed to productive people keep the fruits of their labor and their savings become resistant to both fiscal voracity as to the devastation of the cycle economic? What, ultimately, if we adopt a fair monetary system, one that is not designed to favor the parasites at the expense of adding value?

The experiment is still ongoing, and what we have seen so far was not very difficult to predict: on the one hand, the approval of the productive population; on the other hand, a strong reaction by the financial establishment.

Recall that the parasites do not aspire to wealth (because it takes them very little) and the control of the wealth produced by others, and fight to the death before giving up their privileges. If we go by historical evidence, it is more likely to see them develop colorful wings and fly like butterflies choose to make an honest living.

How will try this time, then tilt the playing field in your favor? In other words, how it is that Blockstream plans to kill Bitcoin? According to Justus Ranvier , appealing to a similar strategy to that used by governments to kill gold as a monetary standard.

Por Justus Ranvier

- The Lightning Network (the system Blockstream to be mounted to the force on the block chain) will become a payment network radial distribution (hub-and-spoke), because there is no algorithm P2P routing with acceptable performance and also because it is necessary to immobilize large amounts of capital to make payments channels work.

- The activity centers Lightning Network (LN) will, in practice, banks .

- channels of payments can be "filled", and in this state are unable to accept new flows of funds in a particular direction.

- When a payment channel is filled, the only way to resume the flow of funds is to open a new channel.

- The opening of a new payment channel requires a significant amount of capital and a transaction block chain.

- The delay in opening new channels deteriorates the user experience of the LN. Sometimes LN works well, but sometimes your channel is full and can not receive more funding until you can register in a block a transaction intended to open a new channel.

- The time it takes the network to confirm your transaction is unpredictable (it may take hours or days, depending on demand).

- There is no technical limitation that prevents a client LN work with a channel that is not yet confirmed in the chain of blocks.

- In order to solve the problem of delays and the problem of the impossibility of predicting the time after which each transaction is confirmed, both caused by the need to open new channels of payments, banks are beginning to offer portfolios "improved" that unconfirmed operated chain block channels .

- Most users happily accept this improved performance.

- Once customers begin to accept LN Unconfirmed channels, banks begin to wonder why they are bothering with the confirmation of the channels in the block chain.

- Some banks begin to manage client funds solely on unconfirmed, keeping only the actual amount of bitcoins (block chain) necessary for the settlements with other banks channels.

- These banks begin to operate with fractional reserve banking, and attract customers of banks that operate with full backup by accounts that pay interest.

- Once all operate with fractional reserve banks, they can exchange the settlement system based on Bitcoin by any other .