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Sometimes we are tempted to write headlines with emojis – and if we did, that would have a “laugh tears” face. Coinbase revealed that it uses an internal ledger to track ownership changes because “Coinbase’s daily transaction count exceeds the capacity of the Bitcoin blockchain.” Maybe Bitcoin’s BSV tokenization could solve the problem?
This is so beautiful. Coinbase has created an internal ledger to keep track of ownership records because bitcoin sucks. pic.twitter.com/hD4nG1J7lr
– SolidusMax (@SolidusMax) November 25, 2020
That’s right: one of the world’s most popular digital asset exchanges can’t put all of its spot transactions on the ledger “without overwhelming the blockchain.” It has the added benefits of avoiding mining fees and allowing instant settlement, Coinbase continued.
It is common for a major asset exchange (be it stocks, forex, or ordinary banks) to keep its own internal transaction ledger. But for an industry built around promises of safe and transparent ledgers, decentralization, honest and verifiable records, cheap and quick deals … it lacks vision and trust, to put it mildly.
What were those old blockchain promises about then? And does anyone in the BTC / digital asset industry still care about this? Call it irony or hypocrisy, but Coinbase’s use of a proprietary system suggests that those who make money on blockchain are not interested in actually using the technology, but only speculation and profits from the nonsensical digital jewelry trade.
The technology exists today to implement a secure, blockchain-based, open and transparent ledger that would keep clients’ assets safe. It also has the transaction capability to manage not only Coinbase’s records, but everyone else’s as well. Stock exchanges, central banks, fiat currencies, property and health records, even store loyalty points and concert tickets – all could be recorded in one ledger. That ledger keeps all the promises blockchain advocates have made to support their cause over the past decade.
That ledger is called Bitcoin. Bitcoin SV, to be precise. Bitcoin as it was originally planned and Bitcoin as it was promoted in those early years. This was what “Satoshi’s Vision” was, and today it is a reality.
BSV today has the transaction processing power and record management capability of Coinbase. Coinbase doesn’t even list BSV as an asset on its trading platform, let alone use it to manage its ownership records. But other exchanges will. Customers will see the benefits of using such exchanges, trust the extra security and transparency they offer, and leave old-fashioned platforms behind.
As Dr. Craig Wright, who originally created Bitcoin, put it: “Only Bitcoin BSV is decentralized.” Ethereum theoretically offers tokenization technology designed to manage ownership records, but its ability to scale is in doubt and its development roadmap is a mess.
Only Bitcoin BSV is decentralized. pic.twitter.com/o27wbjMom5
– $ Max0 (@ Max0SV) November 26, 2020
Coinbase is right: BTC would be a terrible tool to use
Coinbase is right, though. There is no way that the BTC blockchain could handle such a volume of transactions, and the miners’ fees would take a serious bite from its profits even if it could (so we will leave aside the problem of miners who deserve to be paid to keep safe everyone’s records).
Most of the blockchain economy and digital assets are based on trading and price speculation. That’s all the mainstream media seem to care about, and apparently most investors aren’t bothered by it. Then again, these are the same investors who happily trade their assets for zero-backed Tethers, assuming that if anything goes wrong they will be able to exchange them for fiat dollars that they can spend in the real world.
But things will go wrong. Other exchanges will be breached, customer and transaction records will be destroyed or stolen in an unscheduled event. Tether and Bitfinex have already been investigated under the New York Martin Act, which authorizes the Attorney General to investigate and prosecute securities fraud.
It may take more such events before people finally begin to understand why Bitcoin and blockchain technology were invented in the first place. If and when it does, BSV is ready to pick up the pieces. BSV is ready to pick up the pieces right now, even before these proprietary systems fail. It is up to those who have the foresight and faith in Bitcoin’s original promise to continue educating the public about what the technology is for. Because even longtime “believers” like Coinbase and its management seem to have a hard time remembering at times.
See also: Dr. Craig Wright’s main presentation at CoinGeek Live on “How One World Blockchain Powers a New Future for Computing & Cloud System
New to Bitcoin? Check out CoinGeek Bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin, as originally intended by Satoshi Nakamoto, and blockchain.
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