| HN Mirror

That could very well be the thing, and there's certain value in that, however IMHO that value is limited because:

1) the market value of a settlement system handling is much, much lower than that of a retail payment system with a comparable value (not number) of transactions. If the "payment of the future" is a side-chain that uses bitcoin as the settlement layer, then that side-chain will be the value creator and get almost all benefit of that value, not bitcoin. Offering payment services to consumers and businesses is a huge value proposition; offering settlement services to institutions or technological payment networks is a lot of value as well but there's less market lock-in and network effect so that's going to be much more commoditized and more vulnerable to competition with established channels.

A consumer is only going to use a few payment methods for convenience reasons; a sophisticated institution (no matter if it's a bank or simply a large corporation selling stuff) or a realistic payment network is easily going to use all possible ways to settle their debts with institution B and is going to route every transaction among the cheapest route possible for that deal. Currently bitcoin is order of magnitude too expensive compared to other real time gross settlement systems (e.g. Target2 starts with ~dollar per transaction and becomes cheaper with more volume), so only transactions that require censorship resistance would be settled through bitcoin and all others would not. Even if we're not talking about institutions but a purely technological solution, using bitcoin as the settlement layer is something that can and will be switched to a different layer if that's more attractive.

2) The properties of bitcoin (irrevocability, pseudonymity, censorship resistance) are benefits to many consumer use-cases and markets, but not particularly relevant to large-volume settlement systems. Anyone who has thousands or millions of payments to aggregate and route through a gross settlement system would generally prefer revocability (partners of payment networks explicitly designed revocability in the protocols they designed, because they wanted this feature); they don't care about pseudonymity because they're large enough that they can't hide, and they don't care about technological censorship resistance because they anyway can't advertise/sell their services if they violate that censorship - they're too large to hide, and they'd be visited by angry men with guns if they tried that. Settlement layer has an entirely different target audience than consumer payments, and that audience has entirely different needs - ones that Bitcoin doesn't fulfill particularly well.

I.e. bitcoin can be used to, for example, smuggle capital out of China avoiding capital controls, and there's value in that use-case; but if it's used as a settlement layer for a service or process smuggling capital out of China, then that wouldn't drive up/maintain the price of Bitcoin nearly as much, and having a censorship-resistant settlement layer doesn't enable you to offer censorship-resistant payments unless all your other money flow is also censorship-resistant.