Thread by @thatguyintech

#TheBWord conference notes:

Debunking "Bitcoin is Unscalable" 👇

slides and talk by @arjunblj

@arjunblj A common refrain: "Bitcoin can't scale"

however, this question is not new, it was there since day 0

@arjunblj Fundamental scaling constraints:

- @Bitcoin's theoretical TPS: 4-7 txns/sec
- @Visa's theoretical TPS: 24,000 txns/sec

question: why can't we just multiply the constants? I.e. increase block size to include more transactions in each "block"

@arjunblj @Bitcoin @Visa When building a network like this, you can optimize at most 2 out of 3:

1. Scalable
2. Decentralized
3. Secure

Bitcoin so far has optimized for 2 & 3.

By doing something "simple" like increasing block size, you increase 1 at the expense of 2 or 3.

@arjunblj @Bitcoin @Visa Bitcoin's blockchain is already 350GB.

So what is the "right" way to scale Bitcoin?

A: Use Bitcoin as a settlement layer, with "layer 2", sidechains, and bitcoin banks that serve as faster ways to move Bitcoin temporarily.

having these options allow users to choose tradeoffs

@arjunblj @Bitcoin @Visa deferred settlement on layer 2 solutions is just like maintaining a tab at a bar

@arjunblj @Bitcoin @Visa Examples of Bitcoin's federated pegs, sidechains, l2, etc.:

@BTC_LN - layer 2 settlement
@Liquid_BTC - federated peg
@WrappedBTC - BTC on Ethereum

these options all help speed up transactions, extend utility, lower cost, etc.

@arjunblj @Bitcoin @Visa @BTC_LN @Liquid_BTC @WrappedBTC Sure, bitcoin banks may seem counter-intuitive to the original Bitcoin vision, but in reality the idea of banks being the main players in the Bitcoin future is an old idea.

@halfin: "Different banks can have different policies, some more aggressive, some more conservative."

@arjunblj @Bitcoin @Visa @BTC_LN @Liquid_BTC @WrappedBTC @halfin today, ~8% of BTC is held in exchanges

@arjunblj @Bitcoin @Visa @BTC_LN @Liquid_BTC @WrappedBTC @halfin conclusion:

"Bitcoin's settlement assurance can securely scale in layers" - @arjunblj

@arjunblj @Bitcoin @Visa @BTC_LN @Liquid_BTC @WrappedBTC @halfin Big purchases and big players will use the base layer.

Micro-transactions that need to happen fast and cheap will happen on secondary layers.