Post
Topic
Board Bitcoin Discussion
Re: Off chain transactions (trigger warning)
by
witcher_sense
on 21/10/2021, 09:28:11 UTC
Controversial opinion.

I love Bitcoin the currency, but IMO a major barrier to adoption has been the community's reluctance to embrace "off chain" payment systems. Bitcoin's network is simply too slow and expensive for the majority of day to day transactions. And there are fundamental reasons for that which can't be fixed with a fork or an altcoin. It should be used as a settlement system, for moving between payment systems and for large transactions (e.g. Coinbase -> Hardware wallet, Hardware wallet -> Pay credit card bill, Kraken <-> Binance, etc.).

Now what if Visa added BTC as a supported currency? That would be big for adoption. Consumers could pay their bills directly in BTC. Merchants could receive BTC from Visa. What if some entity (El Salvador?) issued BTC backed bank notes? BTC could be used just like cash. Basically, all criticism about the Bitcoin payment network would become moot. But the "on chain" system would still exist when you need it and the currency would still retain its important properties.

Is the above vision still considered taboo?
From my point of view, your opinion can barely be considered controversial on the grounds that there is a clear distinction between a base layer (final settlement layer) and secondary layers (payment layers). There is also a difference between such concepts as "a medium of exchange" and "a means of payment", which may seem not so obvious at first glance. Bitcoin is a medium of exchange that is, in effect, a currency of a base layer. Once a bitcoin transaction has received at least one to six confirmations, the payment can be considered finally settled. A medium of exchange has changed its owner. A means of payment, on the other hand, is not a currency, it is simply a method with which we facilitate our transactions before they are settled. Banknotes, Lightning Network, Opendime, PayPal, Visa - these are all just methods that can be employed for making transactions in bitcoin. The key thing to realize is that a payment is not finished until it is settled on a base layer.