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Comment by virtuexru | Hacker News Reader

From the conclusion which I thought was really interesting:

> Bitcoin is not regulated. It cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts.

> Bitcoin’s design as an economic system is revolutionary and therefore would merit an economist’s attention and scrutiny even if it had not been functional. Its apparent functionality and usefulness should further encourage economists to study this marvelous structure.

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  Bitcoin is not regulated. It cannot be regulated. There is 
  no need to regulate it because as a system it is committed 
  to the protocol as is and the transaction fees it charges 
  the users are determined by the users independently of the 
  miners’ efforts.

There's no need to regulate Bitcoin the protocol or software.

The gateways, such as the exchanges are more of an essential element in regard to regulatory and economic influence on the cryptocoin economies.

What if I were to tell you, that if bitcoin were to truly succeed, you won't NEED a gateway or exchange. You will just transact in bitcoin.

In a perfect world no true Scottsman would trade BTC directly.

Bitcoin will struggle as long as their development team struggles with fixing the 3-4 transactions per second limit. $20 fees to process a transaction in 20 minutes? Good luck.

You don’t need to touch the blockchain in order to receive a payment denominated in bitcoins. Every day millions of bitcoin-denominated transactions take place on exchanges using a centralized clearing system (you deposit BTC, transact, then withdraw BTC).

All we need is to standardize this behavior, such that each exchange doesn’t have its own closed system (essentially an SQL database with balances). Rather, we’d using an open clearing protocol, with multiple issuers in the same way we use email with multiple email providers. Each issuer/email provider is centralized, but the system as a whole is decentralized (similar to Git as well).

The simplest example of such a protocol is Stroem[1], which offers trustless micro-payments for consumers/payers, such that only merchants/payees take risks (which are proportional to how often they redeem their BTC on the blockchain). So, merchants get to choose their risk appetite: the longer they wait with redeeming, the lower the per-transaction fee, and the more often they redeem the more the security resembles on-chain transactions, with proportionally higher fees.

[1] https://www.strawpay.com/docs/stroem-payment-system.pdf

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