Colin's Replies to Frequently Asked Questions (FAQ)
Sometimes I am asked a particular question by many different people. I will put those answers here as a point of easy reference and so I don't have to re-type the answer each time.
- What do you think about Lightning Network?
I think Lightning Network may be workable for inter-bank settlement or settlement between exchanges, but I do not believe it is the best solution for regular people wanting to send funds.
It's also not ready for mainstream use (LN has been in beta for 5 years now, with no end in sight). It has too many outstanding bugs and issues.
Example
(backup link)
I think having something like LN is fine as an option to use, but trying to force people into using it (by making blocks too small and congested-- much below current technology capability) is the wrong way to go about it.
LN is underwhelming and needlessly complicated. The Bitcoin (BTC) developers seemed to forget about the constant expansion in computer power, storage space and Internet bandwidth-- not to mention the way those prices trend down over time.
The very nature of LN encourages custodial solutions since the channel fees are expensive and setting up/maintaining one's own non-custodial LN is not something most people will do (nor have the technical proficiency to do).
I think other blockchains will scale BTC for it, before LN scales for regular users in any meaningful way.
Other resources:
VIDEO: Why the LN Does Not Scale (backup link)
VIDEO: Why Blockstream Destroyed Bitcoin (backup link)
IMAGE: Follow the Money (backup link)
- What do you think about Litecoin (LTC)?
In this video segment (4:26-5:43), I explained my full thoughts on Litecoin.
- What do you think about Cardano (ADA) versus EOS?
In this article and linked videos, I explain my full thoughts on Cardano vs EOS.
- What do you think about Ripple (XRP)?
To be blunt: I don't consider XRP a cryptocurrency. My reasoning: it is regulated. It is controlled by centralized powers which can shut it down or seize user funds. Case in point: Ripple was fined $700,000 in 2015.
You cannot fine a true decentralized blockchain, such as Bitcoin, Ethereum, as they have no central point of control. To me XRP is no better than any other banking-centralized platform.
The goal of crypto is monetary sovereignty and to help people escape the abuse of fiat that existing centralized systems impose. XRP doesn't help any of these things.
Maybe XRP will help with faster, cheaper payment rails, but it does not forward mankind's freedom much (if at all), and it is not a cryptocurrency.
XRP as an investment: On a personal level, I don't invest in projects that I don't believe in fundamentally. There is a rule of thumb I go by, which is: for something to be truly innovative, it must be at least an order of magnitude better than the incumbent system it is replacing.
It is entirely possible XRP will continue to see growth as it did in 2017. It saw some huge gains. I think again this is due to the fact that it does improve upon the legacy systems in terms of speed and cost. It may become an effective SWIFT replacement. It just doesn't go beyond that, and doesn't touch upon the things that brought me into the cryptocurrency space, which is monetary sovereignty for ordinary people, and freedom from economic suppression. XRP doesn't solve those kind of problems.
Time will tell which cryptocurrencies will be the biggest gainers. If XRP gains, it will be because it is useful as a legacy system replacement, not because it betters the world.
A short term investment, perhaps. But I don't think it's wise to invest short term, and I can think of better investment choices.
