Bitcoin Never Needed Blockchain

Let's engage in a thought experiment.

What if Bitcoin was built on an architecture that wasn't blockchain? What it it were instead built on an architecture that could scale to handle every daily transaction on earth?

In other words, what if Bitcoin was based on an architecture like that of the Haypenny platform: able to process millions of transactions per second and tens of billions per day, all at an extremely low, virtually unnoticeable price?

My alternate history looks like this:

1. Bitcoin would, by now, be a ubiquitous payment method all over the world, accepted every single place credit cards are accepted now, and it would have largely replaced physical cash in most parts of the world as well. (Today, Bitcoin processes about 500,000 transactions per day, which is an infinitesimal fraction of the world's daily transactions).
2. Bitcoin would be almost alone in the digital currency market, as every major competitor of Bitcoin today has sought to solve Bitcoin's one major problem which is scalability. If Bitcoin was able to scale from outset, there would be no reason for many products on the market like Ether, Hedera, XRP, or even Haypenny--and thousands of others.
3. Bitcoin's market cap would be at least ten times higher than it is today, as it would be used everywhere, and have no serious competitors like it does now.
4. Bitcoin's future would still be the future, instead of the past.

Why was the blockchain architecture invented in the first place?

The Bitcoin system, designed with the blockchain architecture, was created for one reason, and one reason only: to provide a means of numerically-delineated trading (i.e. a currency) for entities that could not safely use mainstream means of transacting, such as a bank or other financial institution for fear of prosecution by their govenment.

That's it. That's why Bitcoin was invented. It was never invented to be a system used by a lot of people, and certainly never envisioned as the speculation instrument it is today.

In trying to solve it's primary problem set, the Bitcoin system made huge architectural tradeoffs in speed and scalability. Indeed, to understand Bitcoin's architecture is to understand that it's slow and expensive by design--so it's not something that can be "fixed" because it's not "broken" as far as the design is concerned.

The original blockchain architecture enabled a system that could be maintained collectively by potentially thousands of different legal entities, making the takeover of such a system very difficult to do by a central governing body such as a government. The idea was that if a government could not pinpoint a single legal entity (or small number of entities) that "owns" Bitcoin, then anybody, regardless of their legal status, could use the network without interference by any central authority. (It was also thought that Bitcoin was intended to allow fully anonymous transactions, further protecting those under risk by their government, but that quickly faded away as Bitcoin's public ledger architecture allows a straightforward analysis to pierce that anonymity, and this task has been taken over by competing products like Monero).

Do consumers really want this architecture?

Most Bitcoin holders today buy their Bitcoin through a broker, an app, or some other financial institution. This is important to emphasize because all of these users are not really buying Bitcoin itself, but rather an institution's database entry that says they own a certain number of units. Hence most consumers are not exposed, in any way, to blockchain's primary design goal.

Besides the way people purchase Bitcoin and other blockchain-based digital currencies, there are other clear signs that blockchain's unique feature--and the source of it's lack of scalability--are simply not of any value to today's consumers of digital currency products:

1. Almost immediately, Bitcoin begat several "Level-2" (L2) networks, which are conventional, centralized digital currencies that are "on top of" Bitcoin. Using an L2 with Bitcoin as the "L1" is a pointless exercise since you gain no benefit from Bitcoin that way. You are completely exposed to every risk of the L2 system, making the next layer meaningless.
2. Most major popular blockchain-based cryptocurrencies besides Bitcoin today use a centralized model called "proof-of-stake", which fully negates blockchain's unique advantage by using identifiable centralized entities that can be identified by governing bodies--making these products no different than any other convention financial product.
3. Major cryptocurrencies like Bitcoin and others are moving to using Exchange Traded Funds (ETFs), which are bought and sold just like stocks are--in other words, using a fully conventional and centralized model.

All of this and... consumers don't care. Bitcoin and other cryptocurrencies are currently valued in the trillions of dollars, even though most of this valuation comes from consumers who are not exposed to any of Bitcoin's (and blockchain's) unique--and performance-destroying--feature.

Digital Currencies Are The Future, But Blockchain Is Not

Almost immediately, Bitcoin took on competitors that sought to solve it's core problem: scalability.

But in solving that problem, they sacrificed--as they necessarily had to sacrifice--blockchain's one unique feature of being difficult to pin down by authorities. In other words, these follow-on products created "centralized blockchain" in order to gain more performance.

But "centralized blockchain" might as well be alcohol-free moonshine: it's a complete waste of time and energy to use an architecture that has one unique feature and then counteract that feature.

Of course this was done as a homage to "church of blockchain": Bitcoin's cyberpunk underground roots as a government-evading trading system was important to gain credibility for the products that followed it.

But today, the "church of blockchain" is faltering, and consumers are voting with their feet using conventional, centralized means to tap in to the digital currency future. They just want something that works, and they don't care about evading their government and most probably don't even want to if they could.

Digital Currency Without Blockchain

The Haypenny transaction platform is a digital currency system that is not based on blockchain, and is instead based on a unique, patent-pending system that is the fastest, most scalable means of numerically-delineated value transfer ever devised.

Haypenny's model is the simplest means ever invented to transfer value between two entities: there is no concept of an account holder (like a wallet), no key pairs, and not even a concept of a transaction itself. Haypenny's model is "just a block": your Block has a balance, and you can split your block into two in order to give part of it away, and combine somebody else's block into your own. That's it. That's the whole model. Like any digital currency, your ownership of a block is by virtue of your possessing it, and the block itself is it's own secret.

Because of it's simplicity, the Haypenny approach is the fastest theoretical means of creating a digital currency. It is possible, in other words, for another system to be as fast as Haypenny someday in the future, but no scalable and secure system will ever be faster because it is simply not possible.

The Haypenny model strips the notion of a currency down to it's absolute required essence.

Today, many blockchain-based digital currencies like XPR (Ripple), HBAR (Hedera), and others are gaining massive attention because their defacto centralized architectures are so much better and faster and cheaper than Bitcoin.

But these products are simply midway points in the obvious evolution of the market: away from blockchain entirely.

It's time to drop the "blockchain religion": consumers have long-since abandoned it. And the only way digital currency is going to replace convention means of payments is for it to be faster and cheaper, and that simply cannot be done with blockchain.