[unhashable]

Bitcoin would work similarly, but with far less trust in centralized institutions.

Today, central banks acts as a final settlement later upon which the rest of the financial system is built (banks, credit, etc). This makes it impossible for the financial system to “shut off”.

In a Bitcoin world, the main ledger would act as a final settlement layer, and local lightning networks act as the layers on top providing payments, loans, and credit. All transactions would be batched and only get settled so often (once an hour, globally, for example).

This gives you similar local-affinity that today’s financial system offers without relying on governments to award permission to engage in commerce.

[dragonwriter]

> Bitcoin would work similarly, but with far less trust in centralized institutions.

And far more trust in anonymous, unaccountable actors, largely foreign from the perspective of any given trusting party.

Those centralized actors have, in the case of major states, have well established trust and accountability systems that maintain that trust. Bitcoin not only doesn't have that, it is fundamentally premised on preventing it.

There is a certain ideological phyle to which this is appealing, but I'm not convinced that generally it hard an advantage over centralized institutions in establishing user confidence.

[sparkie]

In Bitcoin, you trust only your own node. You don't place any trust in particular third-parties - you only accept communication from a large number of randomized nodes in hope that at least one of them is honest, which is sufficient to reveal the dishonesty of all others. (ie, you have not been eclipse attacked).

You then need to have confidence that humans will always act in their own self-interest, and that you are not important enough that a sufficiently large portion of participants would act against their own interest in attempt to try and scam you.

Acting against your own interest means deliberately losing money by trying to coerce a large number of economic participants to act against their own self-interest in order to benefit you.

[duskwuff]

> In a Bitcoin world, the main ledger would act as a final settlement layer

Keeping the "main ledger" functional requires miners to have reliable communications with each other; I believe Lightning nodes need an up-to-date view of the ledger as well.

> All transactions would be batched and only get settled so often (once an hour, globally, for example).

There is no mechanism in Bitcoin which would provide this functionality. It's not clear that it'd even be possible without a major rework of the protocol.

[unhashable]

Batching by definition consolidates the throughput to fewer transactions. That's what I mean with that (unprecise) example.