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The Lightning Network: Turning Bitcoin into Money

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Re: The Lightning Network: Turning Bitcoin into Money

#21

Post by arcticbull »

lumannnn wrote: post #20
arcticbull wrote: post #16

Earlier quoted context omitted.

Custodial solutions offer zero benefits over putting your money in a bank - and have a ton of drawbacks associated with Bitcoin people only overlook because of those benefits - and the L1 is so slow that any subset that wants to open a channel brings it to its knees. It's not a real solution. It's something coiners distract people with whenever someone points out the obvious and glaring flaws of the L1. [edit] To me…

Look into Taproot. Once adoption and implementation spreads, you'll realize you can open multiple channels with one on-chain transaction. This is an evolving space and scaling happens already. But sure, you can stick to the traditional monetary system where only a select few control the rules. You are free to adopt Bitcoin. No one will force you :)

Again, please specify exact quantities, I did, it's the least you can do.

> But sure, you can stick to the traditional monetary system where only a select few control the rules.

No, a body accountable to Congress (the Fed) which publishes quarterly audits is responsible for the currency. They act on behalf of the American people. As opposed to an un-elected, un-accountable cluster of core contributors and mining pools who seem to operate principally to the benefit of North Korea, ransomware operators, Ponzi schemers and various other kinds of criminals - financial and otherwise.

> You are free to adopt Bitcoin. No one will force you :)

And yet, if you hold an S&P 500 ETF you're exposed to this toxic nonsense via index components. If you're a pensioner in Quebec, you're exposed to this toxic nonsense via their stake in Celsius.

Re: The Lightning Network: Turning Bitcoin into Money

#22

Post by arcticbull »

once_inc wrote: post #19
arcticbull wrote: post #16

Earlier quoted context omitted.

Custodial solutions offer zero benefits over putting your money in a bank - and have a ton of drawbacks associated with Bitcoin people only overlook because of those benefits - and the L1 is so slow that any subset that wants to open a channel brings it to its knees. It's not a real solution. It's something coiners distract people with whenever someone points out the obvious and glaring flaws of the L1. [edit] To me…

I'd like to counter that with the opinion that for most people, controlling their own keys isn't a priority. These are the people that don't even know there isn't any gold backing the dollar, or where money comes from. For these people, Bitcoin offers the option of digitally native money that is well suited for a rapidly digitizing world. They won't feel any problems holding their bitcoin in a walled garden maintaine…

Why would the dollar be backed by gold? You know that ended in 1933 right? I'd say 89 years is long enough for folks to have figured it out, but I'm always open to surprises.

Re: The Lightning Network: Turning Bitcoin into Money

#23

Post by once_inc »

jstanley wrote: post #8
nailer wrote: post #6

Is lightning just another layer 2 scaling solution? Or am I missing something?

Isn't lightning the layer 2 scaling solution? What other promising options are there?

The Liquid network comes to mind. Basically, any sort of system that allows users to swap coins and settle back to bitcoin is a layer 2 solution.

Banks could build an SQL database, generate a single Bitcoin address, and tell everyone to deposit there and prove they owned the originating address(es). You get credited in SQLcoins, which are centrally managed by a federation of banks. Once you want to go out, they send coins to an address of your choice.

If one of these layers becomes large enough, it might win the netwerk effect war and become the defacto layer 2 because everyone is on it.

Re: The Lightning Network: Turning Bitcoin into Money

#24

Post by mhluongo »

arcticbull wrote: post #9

Lightning is a solution that does not do what it says on the tin. It requires an on-chain transaction to open a channel, which at current block size limits requires about 75 years for everyone on earth to have one, and somewhere in the trillion dollar range in fees and the entire outstanding block reward. Factor in quadratic routing complexity, and even if you did onboard everyone it wouldn't work anyways. This is as…

> The only scaling solution is MySQL, just like the Bastion of Bitcoin, El Salvador is doing. Always was.

Channel-based scaling is hard, sure. But optimistic and ZK rollups on other chains have both proven to be strong scaling alternatives.

Re: The Lightning Network: Turning Bitcoin into Money

#25

Post by tromp »

plankers wrote: post #4

from the introduction: >The development of the Lightning Network may have consequences for welfare. First, as Bitcoin becomes a more efficient payments system, users are better off. Their transactions settle more quickly and more cheaply (Zimmerman (2020)). Second, since fewer transactions need to be recorded on the blockchain, less memory and energy are needed to run a Bitcoin node. This saving lowers the cost of ma…

> by reducing fees, the LN reduces the incentive for Bitcoin miners to use large amounts of computing power

That's great for the environment, but in the long term of vanishing block subsidies, not so great for Bitcoin's security, as the costs of 51% or censorship attacks also decrease.

Re: The Lightning Network: Turning Bitcoin into Money

#26

Post by alchemist1e9 »

arcticbull wrote: post #16
lumannnn wrote: post #15

Earlier quoted context omitted.

Not everyone needs to open a Channel. There are custodial solutions already. You just need some Satoshis and are good to go. Likewise, not everyone needs to create their own Visa or MasterCard. They may have their MySQL/PostgreSQL implementation where they scale and allow for many TX/s. But they don't settle all these transactions in real time. That's also done on a different, slower layer.

Custodial solutions offer zero benefits over putting your money in a bank - and have a ton of drawbacks associated with Bitcoin people only overlook because of those benefits - and the L1 is so slow that any subset that wants to open a channel brings it to its knees. It's not a real solution. It's something coiners distract people with whenever someone points out the obvious and glaring flaws of the L1. [edit] To me…

Maybe you are missing the point in regards to what “money” you put in your bank. Coiners can also use MySQL but they just won’t be recording entries relative to another master MySQL database of the central bank and that does seem like a decentralized system with government removed. Technologically it is an upgrade, even if eventually, yes, people will need banks for everyone to use it. But guess what they don’t need anymore …

Re: The Lightning Network: Turning Bitcoin into Money

#27

Post by FabHK »

plankers wrote: post #4

from the introduction: >The development of the Lightning Network may have consequences for welfare. First, as Bitcoin becomes a more efficient payments system, users are better off. Their transactions settle more quickly and more cheaply (Zimmerman (2020)). Second, since fewer transactions need to be recorded on the blockchain, less memory and energy are needed to run a Bitcoin node. This saving lowers the cost of ma…

> The views stated herein are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the Federal Reserve System.

Re: The Lightning Network: Turning Bitcoin into Money

#28

Post by alchemist1e9 »

arcticbull wrote: post #21
lumannnn wrote: post #20

Earlier quoted context omitted.

Look into Taproot. Once adoption and implementation spreads, you'll realize you can open multiple channels with one on-chain transaction. This is an evolving space and scaling happens already. But sure, you can stick to the traditional monetary system where only a select few control the rules. You are free to adopt Bitcoin. No one will force you :)

Again, please specify exact quantities, I did, it's the least you can do. > But sure, you can stick to the traditional monetary system where only a select few control the rules. No, a body accountable to Congress (the Fed) which publishes quarterly audits is responsible for the currency. They act on behalf of the American people. As opposed to an un-elected, un-accountable cluster of core contributors and mining pool…

You seem to have a very US centric worldview. Maybe ask some Turkish savers how they feel, or any number of endless examples worldwide where saving in their own government fiat isn’t a good idea.

Re: The Lightning Network: Turning Bitcoin into Money

#29

Post by once_inc »

arcticbull wrote: post #21
lumannnn wrote: post #20

Earlier quoted context omitted.

Look into Taproot. Once adoption and implementation spreads, you'll realize you can open multiple channels with one on-chain transaction. This is an evolving space and scaling happens already. But sure, you can stick to the traditional monetary system where only a select few control the rules. You are free to adopt Bitcoin. No one will force you :)

Again, please specify exact quantities, I did, it's the least you can do. > But sure, you can stick to the traditional monetary system where only a select few control the rules. No, a body accountable to Congress (the Fed) which publishes quarterly audits is responsible for the currency. They act on behalf of the American people. As opposed to an un-elected, un-accountable cluster of core contributors and mining pool…

> As opposed to an un-elected, un-accountable cluster of core contributors and mining pools.

These people don't control bitcoin. Developers and mining pool operators have their purposes in the network (designing new features and timestamping transactions respectively), but it's the users and node operators that validate the rules of the system. A code change to inflate bitcoin by 100% will never be adopted by node operators unless nakamoto consensus is reached.

Re: The Lightning Network: Turning Bitcoin into Money

#30

Post by DJBunnies »

tromp wrote: post #25
plankers wrote: post #4

from the introduction: >The development of the Lightning Network may have consequences for welfare. First, as Bitcoin becomes a more efficient payments system, users are better off. Their transactions settle more quickly and more cheaply (Zimmerman (2020)). Second, since fewer transactions need to be recorded on the blockchain, less memory and energy are needed to run a Bitcoin node. This saving lowers the cost of ma…

> by reducing fees, the LN reduces the incentive for Bitcoin miners to use large amounts of computing power That's great for the environment, but in the long term of vanishing block subsidies, not so great for Bitcoin's security, as the costs of 51% or censorship attacks also decrease.

Bitcoin’s security has not changed.
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