I find it strange that blockstream hold up Visa as the holy grail in terms of transaction throughput and the need for Bitcoin to adopt sidechains so they can reach these levels. What they fail to mention is that Visanet can get this throughput because they do not make payments. All they do is provide the checking and reporting mechanisms to support the payments. Chase Manhattan in NY and London do all the settlements ( the actual payments to accounts). Bitcoin, on the other hand, actually executes the payment. The danger here is that they will make bitcoin just another reporting system.
Pragmatic? You mean foolish and totally absent of any economic understanding.
https://np.reddit.com/r/bitcoinxt/comments/3hyb1l/it_seems_like_theres_a_nonetrivial_number_of/cuc4hj6Good article, but the first rebuttal is better :
Excellent post with much needed enlightenment around the crucial aspect which tends to be forgotten within the blocksize debate, namely, how should the "base money" of the internet be structured?
In this discussion, I would like to raise a few clarifying points:
1) Distributed asset ledgers are the first protocol instance of where the stakeholder to a ledger, and not the ledger operator, has control over the ledger assets (the importance of this cannot be overstated - it is the most crucial aspect of Satoshis discovery). Up until now, technological developments within finance have been limited to digitizing the record of account held with financial institutions. Banks have so far been shielded from disruption as the basic premise, that they are the account operator, has never before been under question.
2) As such, it is the first time that access to "base money", without counterparty risks, is available to everyone - as you mentioned, central banks only allow commercial banks to hold accounts in "base money", everyone else is left holding bank issued credit. Any limitation of this availability will ensure that we are back to the model whereby we need to trust a third party with custody of our assets.
3) Nearly every clearing model is based upon a net deferred settlement cycle, i.e. settlement does not happen until certain time-periods every day when all obligations to deliver are conducted through Delivery vs Payment (DvP) or Payment vs Payment (PvP). This is normal, and will work the same way even with the internet's "base money". When settlement is conducted, it is crucial that the multiple accounts can have a simultaneous discharge of obligations, i.e. the blocksize needs to be large enough to allow for the net settlement between the multitude of accounts/addresses to be included in one block/transaction which may be significantly larger than 1mb, even if the blockchain purely functions as a large value payments system.
In closing, I would like to raise a few points:
I understand that there is a strong desire to maintain the blockchain as trustless and distributed, but is the 1mb blocksize, whereby everyone is forced onto "commercial bank ledgers" - a.k.a. federated chains with one, or several, trusted third party, the way to go?
If we maintain the 1mb limit, will the "commercial banks" or sidechains be able to conduct settlement on a net deferred basis?
It seems to me a low blocksize will guarantee that bitcoin not only has centralized mining, but will also force people onto centrally controlled sidechains that may or may not be operated by a central account operator who can decide when you have access to your assets, under what circumstance you have access to your assets and how you will be able to access them.