In this talk, Andreas looks at scaling as an ongoing process. Using the example of the Internet which has "failed to scale, gracefully for 25 years", Andreas discusses the scaling debate and looks at how bitcoin will scale over the next several years.
Transcript
[AUDIENCE] Hello. I would like to continue from Carlos' question, the very first one. When he asked if you were ever in doubt sometimes... I am becoming a believer, but I am pretty new to Bitcoin.
When I am reading the articles about big corporate companies and banks investing a million dollars... into research around "blockchain technology," [I ask] why they should adopt a cryptocurrency... when 60-65% of [the supply] is already out there, where early adopters have plenty of it? What would make them stick with Bitcoin and not to make their own currencies?
[ANDREAS] Nothing. Banks cannot adopt bitcoin. Bitcoin is the poison pill of global finance. Bitcoin is the pill you cannot swallow.
It is global, borderless, peer-to-peer, and not controlled by a bank. It is censorship-resistant. The [current] financial system will not allow any of that. Therefore they can't [adopt] it.
As banks, they are institutionally trapped in a regulatory system... that they built around them to prevent competition, and now they are prisoners in their own castle. They cannot just leave and go outside of regulation, which has prevented competition for fifty years and is now their prison. They will not [use] bitcoin, until they must when everyone else is using it.
Maybe, maybe not. They will build [blockchains]. They will say, "We heard about this very interesting open-source, decentralized, peer-to-peer, borderless, censorship resistant currency, and we would like to create a currency just like it!" "Only not open, borderless, peer-to-peer, decentralized, or censorship-resistant." "We want it to be controlled by us." [Laughter] The problem is, the blockchain is an inefficient way... of settling global transactions [compared to centralized systems], because we want the benefits of freedom.
Financial freedom and censorship-proof, open global access. Empowerment for all. If you don't want those [characteristics], and I can guarantee you that [most of] the banks don't, then why pay the inefficiency price for a blockchain that won't give you anything? It will no longer be immutable or unforgeable if [a couple of banks] are just signing [transactions].
But it is a giant honeypot for Anonymous. It will be so much fun when they breaking into bank blockchains, when they take over the signing keys from the central bank of a fancy blockchain-based digital currency... and hold [the funds hostage under] the most amazing ransomware [campaign] ever. "We have your country!" [Laughter] "We will begin issuing or not issuing currency with your keys now." Or they must change [the keys] in a very disruptive operation.
".. Unless your queen dresses in a hot dog suit and dances in the garden of the palace on YouTube." "You have two hours." [Laughter] Blockchains without proof-of-work are not as secure. I have this free advice for the banks: purchase and install Microsoft SQL, the datacenter edition... so that it is scalable.
[Laughter] Make one field a hash pointer to the previous field, and another field [for] signatures as proof-of-authority. That is not a blockchain, but it will be a hell of a lot more efficient and does everything you want, which is signing instead of mining, and chains of transactions with hashes. It will be a thousand times faster. So, let them do "blockchain." We are building the internet of money; they are building the Microsoft FrontPage of money, the Outlook of money, the intranet of money.
What is the intranet? It is the place which is not secure, where you can't run any of the cool applications, and all you can do is read stale content approved by your IT department six months ago... about the latest human resource policies. That is what they are building as a currency.