“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
That was the original vision for Bitcoin, as laid out by its enigmatic creator Satoshi Nakamoto. Over the last near-decade, it has largely fulfilled this purpose, providing a means for individuals to transact privately without a trusted third party, run on a robust proof-of-work network. The scaling struggle of the past few years, however, has called all that into question.
Bitcoin has abandoned its original purity
Over the last year or so, Bitcoin has run into serious scaling problems, resulting in high fees and slow confirmation times. This shifted its focus from a direct system for instant payments to more of a means for settlement. In order to save its use case, the majority of the Bitcoin community has agreed on a scaling solution. However, due to the nature of this solution, Bitcoin’s original means to its end is now called into question. As the whitepaper states:
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”
The challenge comes from the proposed solution to scaling troubles: lightning networks. While fascinating from a technological standpoint and not without their own applications, such off-chain scaling solutions remain just that: off-chain, leveraging true Bitcoin purely for settlement. This goes against the purely peer-to-peer nature of Bitcoin’s original vision, using third-party lightning hubs for smaller payments. If this is Bitcoin’s future (and it’s looking more and more like it will be), it has abandoned its mission, and another challenger must rise up to take its place.
Many top contenders have no interest in filling the void
Now that Bitcoin has stepped down from its original mission, we look to other coins to take its place. With the Bitcoin codebase so easily forked, and with hundreds of simple copycat coins in existence, surely many of the top ten are still committed to the cause, right? As it turns out, not so much. Ethereum, which is less dedicated to be a simple payment system anyway, has plans to move to a proof-of-stake model. Even Litecoin, the perpetual “me too” to the Bitcoin main event, has jumped one step ahead of its idol in embracing off-chain scaling, activating Segwit and pursuing lightning networks before even running into meaningful network congestion. There are many proof-of-work coins in the top ten, some try to be money, some try to scale on-chain, but that combination of all three remains rather mythical.
Only Dash is still committed to massive proof-of-work on-chain scaling
Now we come to the fluke: Dash. Of all the major digital assets out there, Dash is the only one that fulfills the whole gamut of criteria: proof-of-work, payment system, committed to scale on-chain. Dash’s name is even modeled after Satoshi’s original vision: digital cash, very reminiscent of the “A Peer-to-Peer Electronic Cash System” title of the Bitcoin whitepaper. In order to fulfill this goal, Dash’s already low fees will be regularly lowered, it will retain its capacity for instantly confirmed transactions, and its capacity will be increased to handle 4,000 transactions per second and beyond. Part of this long-term scaling roadmap includes continually increasing the block size, something that the major proof-of-work coins have been hesitant to do. All in all, while following its own destiny, Dash is currently fulfilling Bitcoin’s as well.
Bitcoin dominated the game of a peer-to-peer digital cash through on-chain scaling and proof-of-work. Now it’s ready to quit, leaving the #1 slot open for the taking. Forget who will win, who’s still even playing?
This is one of the reasons I am primarily into Dash now. There is really no need for offchain scaling whilst onchain scaling is so easily achievable. Not only does LN make Bitcoin lose its trustless aspect but it also hurts its security by reducing miner income.
LN introduces lots of other new security issues too.
Yes, I am quite a bit fearful that LN networks will do quite a bit of damage to crypto-currency before people will realize it’s not the silver bullet solution. It could do potentially allot of damage. That being said I personally have never been more positive about crypto’s future than I am now.
Lot’s of Goverments are giving crypto’s a platform via reasonable and workable regulation. Bitcoin is getting a desperately needed bump up to 3.7x more transaction (which suspect will be full in less than a year from now. But more importantly, it will make sure that people will not be turned of by using bitcoin for the time being. Which gives dash the time to get all it’s ducks in a row, aka evolution.
I personally can’t wait for this to unfold, if evolution promises to be what I expect/hope it to be, I can finally start setting up crypto wallets for everyone, that ones one. I’d probably, give (small) discounts to people that going to pay me with DASH instead of fiat 😀 :
Great article!
Timely article. Great read.
Good article.