The long-slumbering bull awakens, leaves its pen, and ambles into the bullring. It paws dust into the air, then charges a nerve-wracked matador. Bitcoin suddenly becomes the superstar asset once again. The arena quickly surpasses capacity as roaring speculators crowd-in.
Your next of kin finally wants in on the Bitcoin action after the latest CNBC coverage told them what to think. You show them how to play it safe and be their own bank. Then they wait. The transaction takes more than a day, then they get miffed about the high fees. They aren’t impressed. Despite your advice to hold, they now plan to flip it. So will their neighbor who owns a medium-size retail business. She had acquired some Bitcoin earlier this year after reluctantly accepting it as a slow and volatile form of payment. This well-known theme leads many to wonder if the user-experience provided by Bitcoin will ever improve.
Bitcoin’s technology seems to change at a snail’s pace. Many of its developers are apprehensive towards changes that could improve scalability, often labeling them “premature optimization” despite users feeling the persistent limitations. This seemingly stodgy conservatism on the part of the Bitcoin community isn’t necessarily bad. After all, the protocol supports value amounting to hundreds-of-billions of US dollars at present. Further, the reputation of blockchain technology itself is tied to the first mover’s continued success and proven locomotive-like reliability. Many within the greater blockchain community contend that Bitcoin should simply focus on continuing as a secure means-of-ownership, which it currently does very well, instead of trying to become a convenient means-of-exchange. This may be sage thinking.
Bitcoin does have something huge – the most proven decentralized security – yet our world needs more than just better, more secure ownership. Satoshi Nakamoto’s original aspiration for Bitcoin’s usefulness included everyday purchases. This is evident in his white paper which describes “A Peer-to-Peer Electronic Cash System”, and early tech discussions about his “snack machine” concept. Innovators have been working to fulfill this greater vision and have delivered some promising designs that could give cryptocurrency, and blockchains in general, scalability – the ability to serve the needs of a growing user-base, a key to means-of-exchange.
Today one of the most promising approaches to scale Bitcoin-style networks involves combining payment channel tech like Lightning Networks with on-chain scaling such as Z-DAG, a more recent payment protocol pioneered by Syscoin (SYS). While payment channel tech on its own is important, its limitations must be acknowledged and compensated for – the biggest being payment channel availability, and the high costs and slow fulfillment incurred when they are unavailable for any reason such as lack of channel liquidity. This is where Z-DAG comes in like a star, as an effective fallback when Lightning nodes aren’t up-to-muster. Z-DAG makes unique use of Bitcoin’s own battle-tested mempool code. Combining it with payment channels leads to resilient service that is theoretically capable of reliably supporting the world population while providing the speed and convenience we are used to from credit card networks, at much lower costs across the board. Going further, Z-DAG also supports tokens like stablecoins, including ERC-20s via Syscoin’s trustless bridge, and makes them useful for fast, secure payments on a decentralized network that uses proof-of-work.
Blockchain scalability has also advanced in more experimental ways, including various Layer-2 solutions designed for Ethereum such as Matic Network (MATIC), some of which Bitcoin users can access by crossing custodial bridges provided by Ren Protocol (REN) and Wrapped Bitcoin (WBTC).
Despite the limitations Bitcoin owners still experience, there has never been a more interesting time to watch blockchain technology evolve. With the rapid pace of innovation, there’s little doubt that very interesting days are ahead for blockchain tech and its adoption for uses beyond secure ownership.
Looking to advertise? We will gladly help spread the word about your project, company, or service. CryptoMode produces high quality content for cryptocurrency companies. We have provided brand exposure for dozens of companies to date, and you can be one of them. All of our clients appreciate our value/pricing ratio. Contact us if you have any questions: [email protected]