Bitcoin advocate, investor and CEO of Memorydealers.com, Roger Ver, stated that he believes scaling bitcoin quickly is worth the potential downsides, even if it means the world’s most popular cryptocurrency morphs into “Paypal 2.0.”
“If scaling bitcoin quickly means there is a risk of [Bitcoin] becoming Paypal 2.0, I think that risk is worth taking because we will always be able to make a Bitcoin 3.0 that [. . .] has the properties that we want. But I think we only have one really good shot at having bitcoin become the default platform for people to transact on across the world. We need to make sure we scale fast enough to allow these new people come onto Bitcoin, even if it means risking some decentralization or risking it becoming, like I said, Paypal 2.0”
Roger Ver is not saying that he thinks bitcoin will become Paypal 2.0, or that he would like to see that outcome. Ver is simply stating that there is a risk of that happening if the digital currency scales too quickly. He is saying that is a risk worth taking because while digital currencies like Bitcoin are easy to recreate, the opportunity for them to reach mainstream adoption is far more rare.
“We can still make our own version of Bitcoin and all the Crypto-anarchists can still use that, it is just means we lost out for the world as a whole using that platform as its default currency. But I think we have a decent shot of getting the world as a whole using bitcoin and it having the properties we want, if we scale quickly enough [. . .] even if it means taking some risks along the way.”
The comments came on the Crypto Show, hosted by Danny Somthin and Chris Neandrathal, it is the only terrestrial radio show in the nation that covers cryptocurrency. It airs on 90.1 in Austin, TX on Wednesday and Sunday nights and is rebroadcast around the world in a form of a podcast on the Let’s Talk Bitcoin network.
Ver, Cody Willson and the shows hosts were discussing bitcoin, the Consensus Conference and the increase of the blocksize. Ver has long been a proponent of Bitcoin but seems frustrated with the lack of concrete action by the developers, saying that he doesn’t think “the [Core developers] even seem interested in scaling quickly enough to become that platform for the world.”
For the uneducated: Bitcoin’s blockchain groups transactions into “blocks.” These blocks are limited to 1MB in size and are ideally confirmed every 10 minutes (though actual blocktime varies). As bitcoin has become more popular, the network has had to deal with more transactions and blocks have been filling up. This has resulted in increased fees and longer than normal confirmation times.
Wladimir van der Laan, the lead developer of Bitcoin Core, stated that he wanted to wait for consensus within the community to be formed. That resulted in a major split between him and the his predecessor, Gavin Andressen. Laan and the Core developers have since put out a development road map that does include a blocksize increase in the next update, but Ver would like to see quicker action on that front.
“They have a bunch of really cool ideas for these layer two technologies, but the problem is that none of them are ready yet and none of them are going to be ready for a while. People want to use bitcoin today, and really cool services are getting priced out of bitcoin today because of the transaction fees that are about a nickle at the moment.”
The fear behind increasing the size of theblocks too much is that it would significantly increase the size of the blockchain which is a already over 65GBs. More storage space and bandwidth would be required for participants wanting to run a full node. That would potentially decrease network participation, increasing centralization. That potential increased centralization is what inspired Ver to make the Paypal comparison.
But Ver, who would like to see bitcoin rival traditional currencies as a payment method, thinks the time is right to scale bitcoin. Otherwise, he thinks it may be regulated to niche online markets.
It is true that if Bitcoin became too centralized, developers could simply fork the code from before that happened and have their own, as Roger Ver calls it “Bitcoin 3.0” that crypto-Anarchist could use.
That does seem to ignore the network effect, which is the most common argument bitcoin proponents use when discussing why Bitcoin won’t be replaced by an altcoin anytime soon. The network affect doesn’t refer solely to the actual number of computers with the Bitcoin blockchain, downloaded and actively being updated. Instead, it is a reference to the total sum of miners, users, merchants and other services that make up the global payment network that is bitcoin. As that network grows, it reaches more participants who widen the overall appeal, which helps it reach even more participants who do the same thing, causing it to grow exponentially.
If bitcoin becomes too centralized, any new anarchist-friendly cryptocurrency will have to overcome that network effect if it wants to challenge Bitcoin (not to mention fiat currencies) as a global payment mechanism. It seems Roger Ver prefers a world where the mainstream world uses one Cryptocurrency while crypto-anarchists like himself use another, to a world where the majority continue to use fiat. That said, Ver clearly feels that the potential benefits of mass bitcoin adoption outweigh the potential downsides of centralization.
Roger Ver also mentioned that some upcomming services on Bitcoin.com, which Ver owns, have to be built on the Ethereum Blockchain, because Bitcoin’s scaling issues are preventing it from being a viable option.
“It is breaking my heart but I might have to start launching some things based on Ethereum for things on Bitcoin.com. Services that I wanted to launch on Bitcoin aren’t possible now because of the artificial suppression of the blocksize. So maybe I will be launching some things on Ethereum [. . .] It kind of saddens me that I have to do things on an altcoin rather than Bitcoin for projects hosted on Bitcoin.com”
That may be part of the reason why he feels so strongly about increasing the bitcoin blocksize, even if it risks turning bitcoin into something Roger Ver wouldn’t support.