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Bitcoin [BTC] scalability solution cannot be solved entirely, says Andreas Antonopoulos

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Bitcoin [BTC] scalability solution cannot be solved entirely, says Andreas Antonopoulos
Source: Pixabay

Andreas Antonopoulos, who has been a popular face in the cryptocurrency ecosystem, recently addressed the scalability conundrum plaguing the Bitcoin [BTC] blockchain. As he continued to discuss important topics, Antonopoulos, in a recent Bitcoin Q/A session on his official YouTube channel, said that the long-winded scalability problem will always exist.

According to the Bitcoin patron, scalability cannot be solved permanently. He was of the opinion that there is no such “final solution” for the scalability issue on the BTC blockchain. Even as SegWit improves scaling difficulty, “it is not enough for future mass adoption”, according to Antonopoulos.

Citing a more mainstream example of the Internet, Antonopoulos said that the scalability issues with email-related problems would require a different set of solutions than problems associated with the scalability of emails with attachments.

He added that solving the scaling difficulty issue at each level would be different and while scaling one problem, a whole new avenue for applications open up, and this, in turn, would bring about another set of scaling issues. He stated,

“..and you can’t, in the beginning, solves the problem for the end there is no end and also if you prematurely optimize if you try to solve scale problems for a scale that doesn’t yet exist you shift the problem somewhere else in the case of cryptocurrencies”

In the case of virtual assets, this process of what he calls as “premature optimization” ends up damaging decentralization to solve a problem that does not exist yet.

One of the earliest supporters of the crypto-assets, Antonopoulos, also admitted that solving the scalability issue was possible and added that SegWit was just the first step of many optimizations.

Painting a potential scenario, the Bitcoin maximalist predicted that Schnorr Signatures were likely to be the next step for optimization. With subsequent optimizations, scalability issues would be sold at every step. This digital signature introduces a 25% to 35% improvement in terms of capacity by optimizing signatures.





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Chayanika holds a Journalism degree and is currently working with AMBCrypto. She is inquisitive about everything that the Blockchain Technology has to offer.

Bitcoin

Is the scarcity principle a factor in Bitcoin’s valuation or is it just crypto white noise?

Biraajmaan Tamuly

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Is Bitcoin being scarce changes the way we put forward its valuation or is it just Crypto white noise?
Source: Pixabay

The aspect of scarcity is fundamental to the Bitcoin community, with its limited availability often seen as a virtue in a world where governments have unlimited power to print fiat currencies. With the value of Bitcoin increasing day by day, the virtual asset is getting close to its saturation point.

At press time, 17,763,712 BTC were in supply, very close to the 21 million Bitcoin supply cap. However, the last BTC will be minted on 7th May 2140. That is almost 100 years from now. So, there is still a significant period of time before Bitcoin’s production halts for good.

Many in the community have suggested that Bitcoin’s scarcity has genuine value because it makes the virtual asset “deflationary.” In light of Facebook’s announcement of “Libra” coin, it has been argued that it will not generate any circumstantial threat to Bitcoin, solely on the fact that Bitcoin was scarce and Libra was not.

A recent Medium article released by Forbes summed up the scenario. It stated,

“It will take time, but Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason — bitcoin is scarce, while Facebook’s cryptocurrency is not.”

Another aspect that explains the importance of Bitcoin’s scarcity value is its comparison with Gold, which is also a scarce commodity. A key model that explains Gold’s intrinsic value in the market is the Stock to Flow ratio.

The S2F ratio of a commodity explains the scarcity value as it is the amount of an asset that is available to the amount that is produced annually. Moreover, the higher the S2F value of an asset, the lesser the inflation rate attached to it. At press time, Gold had the highest S2F value, but Bitcoin was close behind and it was stated that by August 2020, Bitcoins S2F’s value would be 55.2 to Gold’s 62.

However, a significant counter-argument against Bitcoin’s scarcity in the community was put forth, with none other than legendary investor, Warren Buffet, claiming that Bitcoin had no “intrinsic value.”

Recently, Peter Schiff, CEO at Euro Pacific Capital, explained that Bitcoin was not scarce due to the availability of other crypto-assets which made Bitcoin’s scarce value quite redundant since crypto assets, with better properties and characteristics, could be created anytime.

The argument was widely opposed by a majority of the community, with certain crypto-enthusiasts deciding to respond to the post. Twitter user, @Sisko8, said,

“The Mona Lisa is not really scarce, as there is an infinite supply of other paintings with identical or superior painting techniques that can be created out of 3$ paint and canvas, including photocopies of the Mona Lisa.”





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