The intellectual content of the comments has increased significantly. I appreciate this one:
toknormal, I already explained upthread that offchain accounts lead to fractional reserves and failure
LoL. That's like saying that "not trading in gold" leads to fractional reserves and failure. Is that gold's problem ?
Yes it is gold's fault (and kudos/thanks for pointing that out), because gold has severe weaknesses such that it can't be realistically employed in commerce and thus lead to the use of proxies instead:
- Can't be instantly transferred across distance
- Physically visible thus a target for theft and confiscation- think roadblocks and holdups
- Each unit of gold has only one copy, thus if you lose the one copy you've lost its value.
- Standardized units (e.g. coins) depend on centralized authority for reputation, are not easily divisible, and can be shaved or filled with impurities.
If you've noticed, crypto-currency doesn't have those weaknesses, yet also lacks one critically important quality that gold has:
You haven't thought this through. I'm afraid the only alternative to trading in proxies for value is a barter economy.
That changed when Satoshi invented a solution to the Byzantine General's problem, known as proof-of-work.
Whatever the pros and cons of a crypto-economy, speed of transactions, consumer protection et al have nothing to do with a given medium's suitability to act as a store of value.
Disagree. Gold maintains value because it has physical rareness (along with being durable, fungible, divisible with some effort, etc). Crypto-currency has no such rareness and can be easily duplicated. The value of crypto-currency has always been its ability to do autonomous (i.e. onchain) decentralized transactions due to proof-of-work.
If you remove that with offchain, then you've destroyed the only value that was there.
It is hoped that if there is value due to the onchain capability that the community will not prefer duplicates. It may also be the case that over time there will be too many network effects of higher degree (not just merchants who only accept one of the crypto-currencies), so duplicates are not desirable. We don't yet have that with Bitcoin because it doesn't have anonymity and also it can't do everything onchain including represent stocks, contracts, etc...partially due to technical reasons and partially due to lack of development and community adoption of decentralized onchain paradigms.
He is wrong. Just like he was wrong about Microsoft and Facebook.
Can you please explain why he is wrong
Bitcoin protocol is akin to tcp/ip for authenticated messaging.
Sure it is being used and pushed as a payment process.
Unlike promissory notes from one bank to another (not all banks trust one another), the present use of this protocol and its network participants is just one way to utilize this tool.
This technology has far greater implications and usage than most "established" businessmen understand.
+1. Very astute. Thanks.