On Mon, Nov 25 2013, Javier Liendo wrote:
isn't the real problem with bitcoin becoming a global currency an issue of how to best manage the potential exponential growth in size of the blockchain?
i know this is cypherpunks but please explain like i'm five...
Hopefully Moore's Law will save us, but I actually expect that, should Bitcoin continue to grow, most payments will be made through payment services of some kind, with the actual transactions only used to deposit money in your account with the payment service. This is analogous to how gold was used once banking became popular. Should these payment services become full-fledged banks, they could help with the deflation problem as well by engaging in fractional reserve banking, the same way banks did with gold. Many people have a negative impression of fractional reserve banking, but in fact most of the instability experienced in the US was actually caused by restrictions on branching and requirements that banks invest in the debt of states that kept defaulting. Bank failures were much rarer in countries without these requirements. For example, Canada had *zero* bank failures during the Great Depression and only created a central bank for the purpose of facilitating international payments, so that Canadian banks and businesses didn't need accounts in London. -- Sean Richard Lynch <seanl@literati.org> http://www.literati.org/~seanl/