Andreas Antonopoulos on Forkology - My take on Segwit2X and Lightning Network

in bitcoin •  last year

We have another fork coming up around Nov 16th which is the latter half of the New York agreement. The first half happened in August and created BCH (Bitcoin Cash) with 8 MB blocks and we had another one just a few days ago with Bitcoin Gold. Now we are getting segregated witness with 2 MB blocks.

It's no surprise that the exchanges such as Coinbase want this increase because they're the ones taking up most of the block space every 10 minutes. The average hodler on the other hand seems to be content with only a few transactions a year.

The reason these forks are happening is because bitcoin is having scaling issues and fees are increasing. Andreas seems to be of the opinion that the best way to scale is off chain (he once said that block sizes would have to be many orders of magnitude larger to match Visa / MC transaction speeds). So what's the alternative? Lightning network.

Lightning network isn't online yet, but when it comes online, the blockchain will be sort of like the court system that settles disputes instead of settling every single transaction. It proposes to settle transactions off chain using multisig and only sending transactions to the block when the channels close. The Lightning Network will be many orders of magnitude faster than the current system of on chain transactions.

In the mean time there's considerable pressure to scale up by increasing block sizes and nobody seems to be in agreement as to how much.

Andreas Antonopoulos said that we're in the early 90's in the development of blockchain technology in relation to the development of the internet. We know what comes next: the search engine wars. We already have a proliferation of altcoins and this trend is likely to continue. I've said before that I think bitcoin is the Yahoo! of finance. As a result I expect to see market cap to distribute more evenly across several of the top altcoins. Eventually one of them will emerge as the next Google of finance.

I don't think we should draw too close an analogy to the search engine proliferation of the 90's and how Google is pretty much among a dozen or so left. There will probably still be thousands of altcoins. Once a dominant one emerges after scaling issues have been fixed, I do expect to see market cap to stop distributing and begin to concentrate into the most universal altcoins.

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