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21 sats \ 1 reply \ @k00b 23 Feb \ on: Bitcoin has a Scaling Issue bitcoin
If too much bitcoin ends up being stuck inside closed custody systems, outside of the base chain, we could have a repeat of the gold standard, where promises to exchange the banks IOU for real bitcoin get broken.
This is an excellent point that I was yet to make myself. It probably wouldn't be exactly like the gold standard because gold's problems with self-custody mostly occur in very large quantities. Bitcoin has the opposite problem - problems occur with self-custody for small quantities and not large ones. Still, the effect is centralizing.
Consensus is determined by the economic majority of nodes. If not enough capital, in bitcoin terms, is held self custodially then the custodians with their own nodes may be able to alter the system against the will of the users. We need regular people to continue to run nodes and verify their transactions, if they end up needing to use a custodian it's likely they will stop running a node.
Another great point. Economic nodes will be limited to custodians if plebs can't benefit from running nodes.
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1148 sats \ 0 replies \ @George203BTC OP 24 Feb
Thank you, I'm glad to see people on here taking this stuff more seriously than on twitter.
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