Did Bitcoin just prove it can't scale?

What is being missed by your analysis is that the value in a blockchain comes more from the network than the tech. There are thousands upon thousands of blockchains of no value. You could fork bitcoin or some other chain right now and start it on your laptop. Doesn't mean anything - the network is the value.

So taking this into account, when the shackles of Bitcoin's simplicity and limitations become unbearable, the network will evolve through protocol upgrades or through a contentious fork where the hash power and development resources will move to. In either case your coins and value are retained.

I was under the impression that attack would not work because as long as the majority of nodes are "honest" there would be no way for an attacking node to outpace the chain. Each node votes with their cpu so the combined compute/speed of honest nodes would always outpace the introduction of a corrupt block. Since the the most recent "confirmed block" is a hash of the previous successful block it just continues.

However I admit much of my assumptions are just from reading the original paper so i'm probably over-simplifying. I guess it would make sense they need some history but not sure why they would need all of it since the previous blocks are confirmed?

I think he referred to SegWit, which increases the block size a bit under special conditions. That's the thing about bitcoin scaling: instead of improving scaling by increasing the block size (which will be required anyway even with Lightning), a solution that requires only changing the thousands of full nodes, they go for SegWit, which requires changing millions of wallets. Then everybody wonders why adoption isn't instant.

And Lightning, yup. I tried to use two Lightning implementations on the test net and neither worked, but they have been declared "ready!" by fans.

And Lightning deserves skepticism. Releasing software 1.0 means nothing: it requires a totally new infrastructure, with new wallets (again) which have to be online to receive money, hubs which don't exist at all today, liquidity providers willing to leave money locked in channels, (but hey, at least we didn't have to upgrade full nodes) and has completely different failure modes than the blockchain on top of the failure modes that are already there. As far as I understand it isn't even possible to receive more money than you already have with Lightning, and any part you open a channel with can block your funds for as long as the channel timeout has been set (and you don't want short/underfunded channels or you may end up paying more in transactions than you would have with a pure blockchain).

Also the opening and closing of channels means that if Lightning is actually successful the current block sizes won't be sufficient. It's at least one transaction to open the channel and another to close it, and because you want to keep a warm channel so you can buy coffee, you will want to do that whether you end up using the channel or not, but you also don't want it very long otherwise your money will be stuck if the channel goes down. So essentially you need to pay subscription fees to the blockchain for using the channels as well as well as commission to the channels for providing liquidity to you.

Maybe some super-centralized thing will come out of it and we'll all connect to the Coinbase Channel or something to do trustless centralized off-chain transactions (as opposed to trusted centralized off-chain transactions that they provide now) but even that has a host of problems when you think about it.

It's... a complicated system. It's cool and very interesting but it won't happen overnight and it's not guaranteed to actually work.

> It was the first. It was the genesis idea. But good lord, do we think it's the actual solution? What would be the odds?

If superior technology comes along, what will prevent Bitcoin from adopting this, and using its network effect to outmaneuver a competing blockchain?

A couple of months ago, the Bitcoin network adopted the SegWit protocol change, which could be considered a minor fix (no major improvements to scalability). If the Bitcoin network can agree to adopt a minor fix, why wouldn’t it be able to agree to adopt a major scalability improvement as well?

Bitcoin has no particular requirement for energy, it’s an arbitrage involving the prices of three components: 1) a bitcoin 2) a KWh of power 3) mining hardware.

As long as the value of newly minted bitcoins makes it profitable to buy mining hardware and burn off power to earn them, the amount of power used by bitcoin miners will increase.

So, way before Bitcoin miners consume all of the world’s energy, either energy prices or mining hardware prices will increase, or the bitcoin price will fall, to make mining unprofitable.