πŸ”΅ Bitcoin is Returning to the TRAP of the Fractional Reserve Banking System

YouTube link: https://youtu.be/JaTefdDmH8g




Transcript of Dan Larimer clip:




That "divisibility" characteristic is a function of "What's the smallest transaction that you can do, with a 1% fee or less?"




And it doesn't matter that you can divide Bitcoin into 8 decimal places if the smallest Bitcoin transaction you can do with a 1% fee is hundreds of dollars, and Ethereum when the average transaction cost is $20.




These types of things mean that unless you're transacting in BIG quantities, it's not divisible. In fact, gold coins are more divisible than Ethereum and Bitcoin in that you can get 1/10th of an ounce of goldβ€” about $200 worthβ€” and that's something you can actually transact with, without any transaction fees. You can't transact efficiently in $200 worth of Bitcoin or Ethereum.




So, as Bitcoin and Ethereum grow it's going to go the same direction gold went. It's all going to flow into the banks, whether it's an exchange or some other middle layer, and the banks are going to issue IOUs for the Bitcoin, and you're going to transfer it all around and the average person is not going to own Bitcoin or Ethereum. They're going to have claims on Bitcoin and Ethereum denominated assets in exchanges.




And then you start getting fractional reserve, and then eventually the "reserve" disappears and then Bitcoin just becomes a unit of account that's printed to infinity, because the People don't realize that Bitcoinβ€” like the dollar used to be an amount of goldβ€” that Bitcoin used to be one of these 21 million assets.




And I see that's the direction it's going to go. And it's going to go in that direction because the base layer is not scalable enough to allow the People to transact in it *directly*.




------




The Bitcoin "Lightning Network" was first proposed by Joseph Poon and Thaddeus Dryja in 2015 and has been under development since that time.




● Whitepaper:


http://lightning.network/lightning-network-paper.pdf




(page 55 has reference to 133MB blocks for global usage)




-------




Clip of Dan Larimer used with permission of Zack Gall from Everything EOS.




● Watch the full interview here:


https://www.youtube.com/watch?v=F2o7ah0csUE




● Everything EOS YouTube Channel: https://www.youtube.com/channel/UCJGfaRx0EzL0u_Wj_nz_CiQ




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Disclaimer: This video is not financial or investment advice. Do not buy, sell or trade cryptocurrency, or make any financial decisions based on the content of this video. I am merely sharing what I have done and what I would do in various situations as an educational tool only.




#bitcoin #btc #ethereum #scaling #crypto #cryptocurrency #news #blockchain #tokens #coins #price




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⚑ ColinTalksCrypto.com ⚑




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COMMENT

30

preview not available Dotun Awosika
25 Mar

The cost of the transaction right now has actually run against one of the core purposes of decentralization; third parties as we know are actually never in the good interest of decentralization which takes us to the place where we started. I hope ETH blockchain correct this same crazy high transaction cost through ETH 2.0

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