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The Lightning Network: Turning Bitcoin into Money

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Re: The Lightning Network: Turning Bitcoin into Money

#31

Post by once_inc »

arcticbull wrote: post #22
once_inc wrote: post #19

Earlier quoted context omitted.

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.

Please re-read my post. I specifically speak of people using money without being aware of all the specifics. Noting that the dollar is not backed by gold.

That ended in 1971 by the way, when Nixon ended the gold standard for the US dollar because the government needed money to pay for the war in Vietnam.

Re: The Lightning Network: Turning Bitcoin into Money

#32

Post by TekMol »

teekert wrote: post #5

A cool use of the Lightning network is the podcast 2.0 initative. Currently, as I listen to podcasts, I stream back satoshis (sats), value for value (I use Castamatic on iOS, fountain.fm is also an option on Android). You can also send messages with sats attached, called “boosts”. Creators can transparantly split the sats they receive over various goals (i.e. FOSS projects [opensats], or guests on shows). There are n…

How do you handle the tax implications of streaming sats?

As far as I know, every payment with Bitcoin triggers a taxable event?

Do you record a gazillion log entrys "Paid $0.0000145 for listening podcasts, Paid $0.000142 for listening podcasts ...", crunch all the numbers and then at the end of the year put that gigantic list into your tax declaration?

Re: The Lightning Network: Turning Bitcoin into Money

#34

Post by londons_explore »

TekMol wrote: post #32
teekert wrote: post #5

A cool use of the Lightning network is the podcast 2.0 initative. Currently, as I listen to podcasts, I stream back satoshis (sats), value for value (I use Castamatic on iOS, fountain.fm is also an option on Android). You can also send messages with sats attached, called “boosts”. Creators can transparantly split the sats they receive over various goals (i.e. FOSS projects [opensats], or guests on shows). There are n…

How do you handle the tax implications of streaming sats? As far as I know, every payment with Bitcoin triggers a taxable event? Do you record a gazillion log entrys "Paid $0.0000145 for listening podcasts, Paid $0.000142 for listening podcasts ...", crunch all the numbers and then at the end of the year put that gigantic list into your tax declaration?

Software can do it all for you. Not my problem that the IRS can't handle my 10 million page tax return...

Re: The Lightning Network: Turning Bitcoin into Money

#35

Post by teekert »

TekMol wrote: post #32
teekert wrote: post #5

A cool use of the Lightning network is the podcast 2.0 initative. Currently, as I listen to podcasts, I stream back satoshis (sats), value for value (I use Castamatic on iOS, fountain.fm is also an option on Android). You can also send messages with sats attached, called “boosts”. Creators can transparantly split the sats they receive over various goals (i.e. FOSS projects [opensats], or guests on shows). There are n…

How do you handle the tax implications of streaming sats? As far as I know, every payment with Bitcoin triggers a taxable event? Do you record a gazillion log entrys "Paid $0.0000145 for listening podcasts, Paid $0.000142 for listening podcasts ...", crunch all the numbers and then at the end of the year put that gigantic list into your tax declaration?

I'm not on the receiving end, but to me this seems like the law is behind reality. Micropayments are coming, perhaps using blockchain, perhaps not, probably in a number of different ways.

I guess this is a good question for the hosts of the podcasts that use these features (Like Linux Unplugged, and other shows from Jupiter Broadcasting or the No Agenda show by Adam Curry and John Dvorak.) Perhaps this is not answered yet.

In the Netherlands this only becomes relevant over a certain amount, and I think you can then just bundle all amounts. But I'm also not sure.

Re: The Lightning Network: Turning Bitcoin into Money

#36

Post by arcticbull »

once_inc wrote: post #31
arcticbull wrote: post #22

Earlier quoted context omitted.

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.

Please re-read my post. I specifically speak of people using money without being aware of all the specifics. Noting that the dollar is not backed by gold. That ended in 1971 by the way, when Nixon ended the gold standard for the US dollar because the government needed money to pay for the war in Vietnam.

Double-check what happened in 1971. FDR took the US off the gold standard in 1933. From this point forward until present, there was never again domestic convertibility of notes for gold. Nixon ended Bretton Woods (which started in 1944) - but that pertained solely to international convertibility of notes for gold in foreign exchange. It was not the gold standard. It was occasionally referred to as the 'gold exchange standard.'

It's just popular to ascribe this to Nixon because you know, Nixon bad. Watergate, etc. But not everything a bad leader does is bad - Nixon gave us the EPA too. Stopped rivers catching on fire and everything.

Money is already digital.

Re: The Lightning Network: Turning Bitcoin into Money

#37

Post by quickthrowman »

jstanley wrote: post #7
sshine wrote: post #3

Earlier quoted context omitted.

It seems really useful for people who are already making Bitcoin transactions. I'm not sure I see it function as a tool for increasing adoption, though. Anyone can send someone Bitcoin by asking them to install a wallet (or giving them a paper wallet). The story seems less simple if those were sent with Lightning. Maybe that's just a question of wallet support not being pervasive. One nice property of money is that y…

> One nice property of money is that you don't need to have read extensively about money for someone to give you money. This is true of cash, but not true of debit cards. It is actually quite rate for ordinary people to be able to accept a debit card payment, but that doesn't make debit cards not useful.

> It is actually quite rate for ordinary people to be able to accept a debit card payment, but that doesn't make debit cards not useful.

Venmo and Cashapp allow you to receive debit card payments, and there are no fees if you transfer the money to your bank account.

Re: The Lightning Network: Turning Bitcoin into Money

#38

Post by wanderingbort »

TekMol wrote: post #32
teekert wrote: post #5

A cool use of the Lightning network is the podcast 2.0 initative. Currently, as I listen to podcasts, I stream back satoshis (sats), value for value (I use Castamatic on iOS, fountain.fm is also an option on Android). You can also send messages with sats attached, called “boosts”. Creators can transparantly split the sats they receive over various goals (i.e. FOSS projects [opensats], or guests on shows). There are n…

How do you handle the tax implications of streaming sats? As far as I know, every payment with Bitcoin triggers a taxable event? Do you record a gazillion log entrys "Paid $0.0000145 for listening podcasts, Paid $0.000142 for listening podcasts ...", crunch all the numbers and then at the end of the year put that gigantic list into your tax declaration?

Not a lawyer or accountant here but I think it would be reasonable to only treat the eventual on-chain withdraw as a taxable event.

Until then, you have deposited some value in a number of lightening network nodes and have been negotiating a set of pairwise IOUs with them for later.

DeFi/staking has a similar problem and I believe waiting until gains and losses are realized will be the way it goes down.

For now, make a good faith effort to pay taxes or expect some friction later.

Re: The Lightning Network: Turning Bitcoin into Money

#39

Post by FabHK »

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.

Fees have constituted just 1% to 2% of mining revenue over the last year (the other 99% being the mining reward ("coinbase") of 6.25 BTC per block).

So, LN does not reduce the incentive for Bitcoin miners in any meaningful way, unless I'm mistaken.

Re: The Lightning Network: Turning Bitcoin into Money

#40

Post by plankers »

FabHK wrote: post #27
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.

sure, but one of the authors works for the bank
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