Breadwallet CEO Aaron Voisine: We Support Core’s Scalability Road Map, but Bitcoin Does Need a Hard Fork

Bitcoin Magazine
Breadwallet CEO Aaron Voisine: We Support Core’s Scalability Road Map, but Bitcoin Does Need a Hard Fork

Breadwallet , according to CEO and co-founder Aaron Voisine, is one of the most popular mobile bitcoin wallets that signed the scaling “ road map ” proposed by Bitcoin Core developer Gregory Maxwell.

Speaking to Bitcoin Magazine, Voisine did emphasize, however, that Bitcoin’s block-size limit will need to be increased through a hard fork as well – and sooner rather than later.

“I’m concerned that it will become increasingly difficult to make hard forks. We should find a durable solution for scalability as soon as possible,” Voisine said.

The block-size dispute, which made headlines throughout 2015, represents a trade-off between the number of transactions the Bitcoin network can handle and its decentralization .

To increase the possible number of transactions, Maxwell’s road map – which found much support among developers – effectively combines a limited block-size increase with additional optimizations. Importantly, this plan heavily relies on Bitcoin Core developer Dr. Pieter Wuille’s Segregated Witness proposal , and, as such, does not require a hard fork any time soon.

“I’m quite excited about Segregated Witness. Breadwallet will support it as soon as it’s rolled out,” Voisine told Bitcoin Magazine. ”I am, however, a little concerned that it might delay the hard fork increase, which will still be necessary. It’s important to increase the maximum block size soon for bitcoin to become a major currency, and to maintain an acceptable user experience.”

As such, Voisine agrees with a recent opinion piece by Jeff Garzik and Gavin Andresen, in which the two prominent Bitcoin Core developers call for a block-size limit increase in order to maintain Bitcoin’s current low-fee policy. Allowing blocks to fill up, Garzik and Andresen contend, would constitute a radical change to Bitcoin’s economics which, in turn, could harm Bitcoin companies and drive users away.

“The risk of not increasing the max block size is far greater than the suggested centralization risk,” Voisine said. “Some developers have a strong status-quo bias when it comes to the network rules, but are failing to consider that the network behavior will change radically as use increases and the rules don’t change with it. With billions of dollars worth of value at stake, it is imperative that we take the conservative route and maintain the existing network behavior in the face of growing network use.”

To solve Bitcoin’s scalability issue, Maxwell’s road map envisions a future where most transactions are not recorded on the blockchain at all. Rather, they are conducted on layers built on top of Bitcoin’s blockchain, which some developers predict will have most of the benefits offered by “on-chain” transactions – plus some extra.

This vision is not shared by Breadwallet, however.

“These additional layers are interesting research projects, but the Bitcoin network needs to stand on it’s own,” Voisine said. “It’s ill-advised to let Bitcoin’s future rely on other networks, who’s decentralization, security and stability haven’t been fully researched and tested, and haven’t even been implemented yet.”

Instead, Voisine believes Bitcoin’s decentralization should be safeguarded through some of the added benefits of Segregated Witness, and other protocol optimizations. In particular, the Breadwallet CEO is excited about Fraud Proofs, a method enabled by Segregated Witness which would vastly increase the security of SPV clients (or “light wallets”) such as Breadwallet.

And while SPV clients would still not be quite as secure as full nodes, Voisine believes fee policy by miners and individual nodes would ensure the Bitcoin network can’t be abused by attackers.

“There is still the tried-and-true method of inducing users to pay transaction fees, through default network relay rules, and miner transaction selection rules,” Voisine explained. “Fees can be raised using these tools if needed, which will cause users to voluntarily economize on blockchain use at the cost of centralizing small value transactions by pushing them off chain.”

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Snapcard CEO: Developing Countries Care About Bitcoin, Not Blockchain

While Wall Street seems more interested in the idea of permissioned or private blockchains these days, the point of Bitcoin in developing countries has nothing to do with the technology underpinning the decentralized payment network.

According to Snapcard Co-Founder and CEO Michael Dunworth, people in developing nations are more interested in bitcoin as a currency than those in more developed countries. While there are some niche use cases for Bitcoin in places like the United States, it seems clear that owners of credit cards with cashback programs are not going to switch to the digital currency at any point in the near future.

Michael Dunworth recently sat down with Bitcoin Magazine to discuss some of his thoughts on the Bitcoin versus blockchain debate, and he explained why Wall Street is focused on blockchain technology, while the developing world has its eyes set on bitcoin.

Some Countries Would Still Like a Decent Currency

Dunworth understands the current trend is a move away from bitcoin and toward the blockchain, but he does not see the same phenomenon in the developing world. During his conversation with Bitcoin Magazine, the Snapcard CEO said that some parts of the world still have interest in bitcoin as a currency:

“Right now, everyone is talking about the blockchain. It’s not bitcoin, it’s the blockchain. That’s very USA bubble. If you go to Brazil, Nairobi in Kenya or Argentina, they still need a decent currency. They don’t have a Chase Rewards card that gives them one-and-a-half percent back on everything they spend.”

In accordance with Dunworth’s vision, Snapcard has made Brazil one of its main areas of focus. Dunworth gave a presentation to a variety of government officials and central bankers at the Central Bank of Brazil in November, and the company has also partnered with PagPop , which is a payment processor with more than 12,000 merchants in Brazil.

Americans Won’t Choose Bitcoin Over Credit Cards

When discussing the consumer adoption of bitcoin in the United States (or lack thereof), Dunworth made the point that Americans already have options that are comparatively better than the cryptocurrency — at least when it comes to making payments. Plenty of Americans are interested in holding bitcoin as a speculative asset, but the idea of spending bitcoin is less attractive.

Dunworth explained:

“You’re going to be very hard pressed to find a decent incentive to get someone in the USA to get someone to use bitcoin and say, ‘Hey. Go spend this over your local currency. Go spend this over your Chase Rewards card.’ [And that’s] the majority of people. Over 78 percent of Americans have credit cards or something ridiculous like that — of which are tied to a loyalty program of sorts.”

Dunworth did agree that discounts could be used as an incentive to get some Americans on board with spending their bitcoin, and he pointed to Fold and Purse as two perfect examples of the types of apps that could get more people in the United States interested in the digital currency. One of the main points Dunworth attempted to get across during his conversation with Bitcoin Magazine is that there needs to be a compelling use case for someone to switch to bitcoin.

So why isn’t Wall Street interested in Bitcoin? In Dunworth’s view, it has to do with the difficulties involved with selling Americans on the idea of using the digital payment system.

“In general, the reason why they don’t talk about Bitcoin as much on Wall Street and they’re talking blockchain instead of Bitcoin — why would they talk about something that doesn’t have a use case? It’s like, ‘Oh. I can use bitcoin as a currency.’ And [consumers would say], ‘Why do I need to?’” he said.

Many Countries Don’t Need to Be Sold on Bitcoin

Dunworth said you don’t need to sell people on bitcoin in certain parts of the world. Once you explain how it works, the idea intrinsically makes sense to them because it is much better than their other currently available options for money, payments or both.

Dunworth used a hypothetical story of a Zimbabwean farmer to explain the contrast between the developed and the developing worlds when it comes to Bitcoin:

“I’ve got to sell you on [bitcoin in the United States]. You’re like, ‘Why would I use it?’ If I’m in Nairobi and the dude is wheelbarrowing Zimbabwean dollars across the border to pay for a bag of rice, I don’t have to sell him on anything. That’s the contrast. So the emerging markets are going to see bitcoin as a currency, but I don’t know if that’s going to happen in the U.S. or more developed countries.”

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