Our current financial system is also layered similarly btw. When you buy something with your credit card, it doesn't settle right away.
Is Bitcoin the best thing to use as an settlement layer?
You can use eth or any of the thousands of other crypto-currencies, Bitcoin benefits from being the most secure and also having the largest network effects due to being the earliest. When it comes to money, security is the most important thing and Bitcoin offers the most secure settlement layer.
This is the case of having a better technology doesn't matter, Bitcoin came at a very lucky time and also grew organically for many years and had arguably the fairest coin distributions (most coins nowadays are shilled very heavily by it's developers and investors). It's also the most secure and well-known.
Because of those things, it'll be very difficult if not impossible to unseat Bitcoin when it comes to store of value/currency. Bitcoin also sees development in form of lightning network. For all other use cases, I think eth covers most bases and has also developed a very large network of users and developers.
So whatever next big crypto project comes needs to be not just "better", but like at least 10x better.
Monero isn't just claiming this though. It actually delivers on its promises. It's actually private, authorities are having trouble tracing it. Criminals are already switching to Monero. Transactions are fast and the fees are low. It's mineable by ordinary CPUs, no centralized ASIC/GPU mining operations in China. Since mining is more decentralized, nobody opposes improvements to the Monero blockchain like the bitcoin and ethereum miners do.
> at least 10x better
Monero is pretty much infinitely better. If any coin is positioned to unseat bitcoin it's Monero. If there's any sanity left in this cryptocurrency market this will happen one day.
Ethereum: Market Cap: Fr 261,435,750,490 Volume: Fr 39,931,852,584
Its not like Bitcoin is standing up there alone. Sure still far stronger, but the times where its only bitcoin and the others is likely over.
If XMR usage got big enough it would very much need layer 2 even more, the developers themselves acknowledge this and are upfront about it. These very basic computing problems that have been repeated ad nauseam for a decade now do not magically go away and are actually a lot worse for monero due to ring transactions being much heavier.
Are you really going to store a 2 TB blockchain that needs days of compute to initially confirm so you can transact with your friends privately? The first layer has insane amounts of PoW security baked in at this point, it's not for general consumption anymore.
I'm sure they'll be able to solve any problem that comes up. Monero isn't plagued by miners blocking progress like bitcoin is. I believe the coin will continue to improve.
> Are you really going to store a 2 TB blockchain that needs days of compute to initially confirm so you can transact with your friends privately?
Isn't it possible to prune the blockchain on local nodes?
As well as all the rangeproofs that further bloat the chain size. Other confidential blockchain designs allow the removal of rangeproofs for all spent outputs (ie the vast majority).
