How to scale Bitcoin (without changing a thing)

Why Bitcoin banks need to prove their solvency

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Prescience on the mailing list

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Stairway atop Diana’s Peak, St Helena

Hal’s vision

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Winding road through Glencoe, Scotland.

Scaling assurances

What should Bitcoin banks look like?

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Scaling the base layer. Rockport MA.
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Credit creation on Bitcoin

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Robust to external shocks: Bova’s bakery. Boston, MA.

What do proofs of solvency actually prove?

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<@gmaxwell> First you show how much funds you have via signmessage for actual coins on the chain. Thats easy enough.

Then you need to prove how much you should have. This is a little tricker. You could just publish EVERYONE's balances e.g. by account ID but thats undesirable for privacy and commercial reasons.

Where are the Bitcoin banks?

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Waiting for exchanges to follow up on initial proofs of reserves

Conclusion

Objections

Bitcoin Banks are inherently incompatible with Bitcoin

Why would anyone start proving reserves now, given that it’s so out of favor?

Fractional reserves at banks permanently destroy the value proposition of Bitcoin

Fractional reserves are inherently bad/evil

It’s impossible to effectively audit a Bitcoin bank

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Why are you settling for intermediation? Why not push for a world where Bitcoin is used directly by all?

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Slide from my presentation at BH2018

What if [bad thing] happens to Bitcoin? Is this generalizable?

Lending by Bitcoin banks effectively inflates the supply of BTC

Written by

Partner, Castle Island Ventures. Cofounder, Coinmetrics.io

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