🏦 [Analysis] How to scale Bitcoin (without changing a thing) - Nic Carter

The Bitcoin ($BTC) scaling debate is the oldest in the industry. In fact, it was raised a mere five hours after Satoshi sent out his whitepaper by cypherpunk James A. Donald: "If hundreds of millions of people are doing transactions, that is a lot of bandwidth — each must know all, or a substantial part thereof." Hal Finney addressed the scaling issue in 2010, arguing for the creation of Bitcoin banks as a secondary scaling option. If Bitcoin is a settling network, which its clunky chain and fee market are ever-pushing it towards, then new scaling options must be created. Lightning and sidechains offer one complementary vision of scaling, but do not offer the custodial and credit services banks do. While many Bitcoiners deride credit creation through fractional reserve banking, its a fair assumption that, given transparency, fractional reserve banking can work in the new Bitcoin economy. Transparency only comes through Proof of Solvency, which is the sum of reserves and liabilities. Multiple methods exist for calculating reserves and liabilities like UTXOs, cash flows, and Merkle trees. Still, most reserves do not proove solvency. In light of QuadrigaCX and new powerhouses like Bakkt and SquareCrypto, incumbants are best to watch their backs.