Author: Bitcoin podcast Block Digest Lianchuang Shinobi; Translated by: Wuzhu, Golden Finance

This article is an article written by Shinobi ten years ago, discussing the fact that Bitcoin is in 2020 What's it.

The first article in this series of articles can be viewed by clicking on "How do practitioners view the BTC ecosystem in 2010 ten years later? 》

The second article can be viewed by clicking on "How practitioners view the road to BTC construction in 2010 in 2010"

The rise of Bitcoin banks (or Binks)— It is happening. Germany has approved banks to host and process Bitcoin and Bitcoin accounts for clients starting in 2020. Who will be the first one?

It's one thing people go crazy, I understand why, but ultimately I don't think it will happen, and it's a naive naive idea. First, banks exist not just to keep money and process payments for you. They offer loans. They do this for a reason, which is a useful thing for both the economy and society, which provides rewards (with risks) for liquidity providers and allows entrepreneurs to engage in careers they would otherwise not be able to fund. This alone guarantees that they will continue to exist. Loans are based on trust, and they require coordinators and personnel to manage and track them. They need a central point: the bank.

With that being said, I promise they will thrive on just custodying bitcoin and processing payments on their own private second tier. People like someone who can call for customer support, they like to have remedies when something goes wrong, they like to have experts deal with things they are not good at. That's why people have Google or Facebook accounts without running their own SMTP servers or decentralized social media nodes. Now, I absolutely think things will turn in that direction, and we have seen the beginning of this trend, but this trend will be a generational thing. It won't happen overnight, and maybe even in our lifetimes. Or things just go in that direction, shaking before they really go to extremes. Who knows. But I do know what the world is like today, and I do know why the world is like this. So this will happen, believe it.

But don't be afraid, nothing is lost. Since David Chaum proposed the original “Ecash” design in the 1980s, concentrated but private electronic cash has become possible. Extending these designs to include more complex "smart contract" analogs and perform centralized execution may not be impossible or even relatively difficult. It is also entirely possible to provide a Bitcoin-denominated account without KYC/AML intrusion or human flesh search. The barriers to these things have nothing to do with technical limitations, but with legal, regulatory and social barriers. These can be shaped and guided. Yes, it's eliminatedThese types of obstacles require great effort, but it cannot be honestly impossible.

There is even an incentive mechanism that drives people to develop in this direction: regulatory arbitrage. Given that Bitcoin is global and completely digital, any jurisdiction that relaxes financial services regulation and laws can see influx of revenue from around the world by doing so.

We are now in the spotlight of the global stage. Ignore this at your own risk.

Yes, Bitcoin technology is non-sexual. Neutral. All technologies are neutral. But if you try to say that the impact of Bitcoin on the world around you is not sexual and does not support everyone in choosing between personal freedom and totalitarianism, then you are asleep. I'm American, and that's going to be somehow America-centric, so we'll say this:

Right: The direction of Republican tendencies. I'm not saying it embodies that, it's just that it's a milestone in that direction.

Left: The direction of the Democratic tendency. Likewise, the disclaimer is the same as above.

The existence of Bitcoin itself shapes an environment conducive to right-leaning structures. These structures act in a biased manner towards those who put individual freedom above everything else. The stronger Bitcoin is, the more it can shape its surroundings to support this structure. This is reality. The more Bitcoin grows, the more inevitable the politicians start to frame it in terms of left and right wings. They do it because that's what politicians do, and there's a core of truth in this frame to reinforce it, coupled with the exaggeration, lies and exaggeration that comes with it.

This disagreement may focus mainly on two issues:

Wealth inequality: Bitcoin will become a hot topic related to this issue. Bitcoin will definitely redistribute a lot of wealth, but the degree of distribution is far from enough.

Environmentalism: The claim that Bitcoin is damaging the environment will not disappear anytime soon.

I'm very likely wrong, but I personally think these dynamics are almost a foregone conclusion. This is just the way Bitcoin is trapped in the current tug-of-war between the global spectrum. A huge tug-of-war is taking place everywhere between more localized small-scale sovereignty and less localized large-scale sovereignty handed over to large sovereign entities. Bitcoin naturally gives and encourages the former's power, and is the natural enemy of the latter. As Bitcoin continues to grow in size, it will be more closely linked to the world, which may be a general idea of ​​how it works.

This will be carried out at the level of the world, at the state level, and after a long enough time, it may even go deep into the city level. Ultimately, this will go beyond the level of international institutions debating regulation in response to Bitcoin. It will begin to enter the sphere of alliances formed between countries based on their stance on Bitcoin. Once things really escalate to that level, how things will actually develop is really an open question.

You have two options:

In the local process scopeWe will strive to move things towards small-scale local sovereignty.

Exit where you can exit the process and its results, shut up and obey its results where you cannot exit the process and its results.

Select wisely.

Big market = more liquidity = bigger participants. This has happened profoundly in the past few years. At the end of the last bull market, the first cash-settled Bitcoin futures were listed. Since then, we have seen multiple bitcoin products traded on traditional financial platforms start (and stop) trading. We now have physical settlement (delivery real BTC) futures on Bakkt, as well as options for these futures and their own cash settlement futures products. German banks have been approved to process and provide cryptocurrencies to their clients. Swiss financial institutions and institutions have maintained friendly relations with the ecosystem for many years.

These types of institutional entities and liquidity pools entering this field will fundamentally change the structure of this market. What follows are regulations, restrictions and requirements, which are what accompanies the traditional world. How much liquidity in this market is attracted by the platforms built by these players will determine how much impact traditional regulations and reactions have on the entire ecosystem within the scope of the market and pricing mechanisms. The more liquidity there is on these restricted platforms, the more indirect control there will be on the Bitcoin pricing mechanism. This indirect control of pricing mechanisms may translate into another degree of lack of indirect control of future consensus dispute outcomes. This needs to be vigilant.

In my opinion, if these large amounts of liquidity enter this market, it is easy to eventually squeeze out unreliable speculators who currently account for a large proportion of the market platform. This will make the entire market more constrained, harder to avoid bureaucracy and regulation, and may even be difficult to maintain ideal consensus on the agreement itself, if it sticks to that extreme.

This is likely to eventually lead to a tough dividing line between the black market and the transparent market in terms of the Bitcoin trading platform, and even Bitcoin itself, if things don't develop as we wish, Bitcoin upgrades will eventually be It will bring about large-scale privacy improvements. Or, if we reside in a jurisdiction that recognizes privacy rights and we are becoming lax in defending our own privacy rights, then this is changing and we have to adapt anyway.

Twitter Review. Facebook censorship. Youtube review. bias. Intervention. Even DNS and VPS reviews. This is the world we live in, involving companies that provide services on the Internet or operate internet infrastructure. This is not universal, nor is this scrutiny applied evenly to all things or activities, but it is undeniable that it is a growing trend.

This requires social attacks (although in a very thoughtful and cautious way)but also requires technical attacks. Fediverse is an experiment that creates a middle ground between protocols and services through their federated environments, where anyone can run Mastodon instances (and many things) and connect them together through federated. Bluesky is a recent initiative by Twitter’s Jack Dorsey to look at the feasibility of transforming Twitter from a private service to an open agreement, and if so, try to do so. We also have goTenna that is developing consumer products to truly decentralize data transfers. Limited bandwidth, but this is the beginning. There are also many DIY mesh networking projects.

This reminds me of this effort directly related to Bitcoin itself. goTenna has developed txTenna in partnership with Samourai Wallet. This allows someone to initially broadcast their Bitcoin transactions over a mesh network to hide their identity, delivering transactions in the local goTenna network until a node that can be pushed to the Bitcoin network over the internet is found. Venezuela also has the LochaMesh project, which was born out of the intermittent power and internet access caused by instability in the country. Their design combines communication tools with bitcoin and lightning network capabilities, and according to my last understanding, they are trying to push their DIY projects into business direction for easy access for consumers.

If I don't talk about Blockstream satellite feeds, I'll be careless. I wouldn't call it a complete "decentralization" of infrastructure, it's still very centralized, but I think it's a big change and it's stupid to ignore it. First, it is centralized. It relies entirely on satellites of centralized companies; these companies can shut them down at any time. Secondly, it is free and completely private. As a one-way broadcast of satellites, all you have to do is set it up and point the antenna to the sky and you will receive the Bitcoin blockchain. This won't leave a web fingerprint to identify you as a Bitcoin user, and one of its benefits is the free transfer of large amounts of data. So you rely on the central entity but get a lot of privacy.

In the next decade, these types of projects and different ways of designing and running infrastructure will continue to thrive on the edge of Bitcoin and the Internet. There are many ways to write these things. I think this integration can go further. Grid and radio technology alone are not enough to scale the entire network globally, but it can fill in gaps or handle the distribution of "subnetworks" that focus primarily on propagating transactions and verification blocks. Nodes can feed the receiving blocks from satellites and then propagate them through short-distance grid networks that can handle higher throughput. This synergy can even be translated into mining; with compact blocks, miners can transfer only block headers and a small piece of data to build from your memory poolActual block. If the delay trade-off is feasible, miners can try to use these types of mesh networks to hide their physical location slightly during block propagation while receiving real-time block relays from anonymous satellite feeds.

I also see the great potential for coexistence or integration between Lightning Network and Grid Network technology. Global Mesh Labs is developing the Lot49 protocol to pay for data relay fees by integrating the Lightning Network, thereby incentivizing mesh network nodes. This is a very interesting direction to develop synergy between Bitcoin and mesh network protocols, but its feasibility remains to be seen. Personally, I am very optimistic, but I am cautious in expectations. Even without this tight combination of these two things, mesh networks are very useful for Bitcoin. I think it is inevitable that localized flash networks will start to grow, and everyone is peering through mesh networks, interacting with locals only through mesh networks, and receiving feedback from blockchains to ensure security. Some bridge nodes can transfer funds into and out of these subnets as needed. Globally, these types of network structures make sense to me and seem to be patterns in which things will naturally form.

These things won't be mainstream in the next decade, but as diehards and lunatics iterate rapidly on the edge, rapid progress and development are expected.