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Why SegWit is not the savior of cryptocurrency - Hardware vs Software scaling
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"Once SegWit is activated everything will be better!"

Ever read something like that on Reddit or elsewhere? I do on a regular basis. A lot of people keep repeating that mantra like it's going to be the savior of cryptocurrency. But let's get back to basics and actually realize what the underlying problem is.

Right now what Bitcoin engineers desperately try to do is make a global payments network scale on low end hardware operated by unpaid volunteers out of the goodness of their hearts.

BTC developers have zero leverage to ask for better hardware and they can't stop anyone from spinning up 500 Raspberry Pi's as Bitcoin full nodes to the detriment of the network as they'd inevitably slow down block propagation due to their restricted hardware.

That's why Blockstreams only option is to mindlessly implement hack after hack in the codebase in an attempt to optimize a software that's still dependent on low performing hardware it has to endure.

The only sane approach to that problem is to scale on a hardware level.

Think about it:

Facebook and YouTube serve billions of people with thousands of TB of data every single day. Did they scale with software hacks similar to approaches like SegWit or the Lightning Network? Nope.

They scaled by adding more and stronger CPUs, more and bigger hard drives, more RAM, more bandwidth, more and better servers.

Something Blockstream is unable to and something Dash has already done. As long time community member Bitcoin_Chief likes to say: Dash is brute-forcing the scaling problem with incentivized full nodes that have to meet minimum hardware requirements to be eligible for payments (or get banned when caught cheating). That's why Dash and maybe some projects like Dash will prevail in the long run.

Unfortunately this very simple concept seems too hard to grasp for many.

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7 years ago