Andreas Antonopoulos has supported an assertion made by Bitcoin investor Tuur Demeester that Bitcoin is “both digital gold and digital cash” as part of the ongoing block size debate.
Departure From All-On-Chain ‘For Good Reasons’
In a blog post Monday, Bitcoin expert Andreas Antonopoulos cited Dutch investor Tuur Demeester’s opinion on Bitcoin’s identity, saying he had “captured an important point.”
“We are not facing a choice between all-on-chain or some-off-chain,” he wrote. “We have already departed from all-on-chain and for good reasons.”
Antonopoulos continued that the current situation, which he calls “Off-chain trusted third-party custodial,” is untenable in terms of security.
Implementation of segregated witness and lightning network (LN) technology would remove the weak points in the network, specifically exchanges, yet consensus appears to be uniting against this outcome.
“Ironically, people who object to LN are vehemently against #1 but by resisting segwit are actually encouraging and feeding centralization into more counterparty-risk through centralized intermediaries. Demand is already pushing us that way,” he continued.
The lack of a trustless alternative leaves only one alternative. No segwit/No LN does not mean on-chain transactions. It means on-coinbase transactions, which is worse.
Third-Party Weak Points in Focus
Antonopoulos appeared to be referring to Coinbase exchange’s off-blockchain transactions, which occur when coins are sent from one Coinbase account to another. Such transactions are not visible on the Blockchain itself, yet makes transfers instantaneous for the users involved.
Data suggests the volume of such off-chain transactions remained fairly constant in recent times.
Coinbase continues to catch scrutiny from both the cryptocurrency world and outside, due to its ongoing legal dispute with the US tax authorities.
On Saturday, Coinbase CEO Brian Armstrong advocated the use of brokers’ 1099-B tax reporting forms for exchange customers as a form of compromise, yet acknowledged even this may not be acceptable.
Demeester: Blockchain Must ‘Embrace Modularity’
Demeester meanwhile stated that multi-layer Bitcoin ecosystem participants should ideally work together to provide a suitable secure network.
“The question whether Bitcoin ought to be digital cash or digital gold represents a false dichotomy: it can be both a secure and accessible form of money,” he wrote.
By embracing modularity, the main Bitcoin blockchain can act as a maximally secure settlement layer, while second layer payment channels serve as pipelines for fast, high liquidity transactions.
What do you think about Demeester’s and Antonopoulos’ opinions on block size? Let us know in the comments below!
Images courtesy of Shutterstock, antonopoulos.com, Coinbase, Twitter