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The Lightning Network: Turning Bitcoin into Money

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Re: The Lightning Network: Turning Bitcoin into Money

#361

Post by CraigRood »

freeAgent wrote: post #347
dieortin wrote: post #273

Earlier quoted context omitted.

All those have problems. A huge amount of transactions in a distributed ledger means there’s a big requirement for storage space and processing power, there’s no way around it. Lightning reduces the amount of transactions that must be in the ledger, and in consequence the storage requirements can be kept down. The BCH model of just increasing the block size indefinitely is not sustainable.

There is a way around huge storage requirements. Pruning, UTXO commitments, and things like Utreexo are all solutions for different aspects of that problem.

Still need to be able to transmit and verify the blockchain, so network capacity and CPU. You also need decent IO to maintain an index.

There are benefits to scaling on chain, but as above, its not sustainable.

Encouraging transactions that don't need to be stored on-chain forever and a day would be better batched up. You can then at least still verify your address balances.

Re: The Lightning Network: Turning Bitcoin into Money

#362

Post by olalonde »

dmitriid wrote: post #337
olalonde wrote: post #192

Earlier quoted context omitted.

What do you mean by that? I don't see why there couldn't be a centralized service offering payment dispute arbitration on top of Bitcoin (this is what I meant by building "trustful" systems being built on top of trustless foundations).

> why there couldn't be a centralized service offering payment dispute arbitration on top of Bitcoin What exactly does Bitcoin provide in this case? > this is what I meant by building "trustful" systems being built on top of trustless foundations So, a service that exists outside bitcoin, has a trust system built entirely outside bitcoin and only doing something with bitcoin because reasons... is "building trustful s…

Do you extend the same reasoning to fiat?

There are many centralized services that do dispute arbitration on top of USD. Those systems are built entirely outside of USD. PayPal for example doesn't have an account at the Federal reserve nor does it handle physical cash. They are effectively "off-chain" payment systems for USD.

So I guess your question is, what are the advantages of BTC over a fiat currency like USD. The answer is two folds:

1) BTC has an open network (the Bitcoin blockchain) allowing users to exit payment systems for the purpose of self-custody or for interconnecting with other payment systems. There's no equivalent system with fiat. Self-custody of USD literally requires transporting and storing pieces of paper. You also can't directly transfer USD from PayPal to say, CashApp.

2) BTC has a predictable money supply. Fiat currency doesn't: money supply can be arbitrarily inflated.

In addition to the above, Bitcoin enables the creation of payment systems that are more tightly built on top of it, like the Lightning network, which preserves many of the properties of Bitcoin (e.g. trustless). You could also build a dispute arbitration system where the arbiter just needs to be semi-trusted (e.g. there are schemes that can cryptographically prevent the arbiter from stealing escrowed funds, etc.).

Re: The Lightning Network: Turning Bitcoin into Money

#363

Post by preseinger »

toolz wrote: post #330
preseinger wrote: post #266

Earlier quoted context omitted.

Humans make mistakes. Systems that intend to serve humans have to accommodate that flaw in order to be viable. Fixing mistakes means rewriting history. That means censorship. And so censorship isn't a bad thing. It's actually a core requirement for any system designed for broad usage.

Flawed logic, censorship can be a mistake just like anything else. Adding the ability to fix mistakes with censorship also adds the ability to make mistakes with censorship. Censorship, however is centralized power and therefore trades fixing small scale mistakes with the centralized power to make big mistakes. This is why western society and individual liberties have been so dominant in modern history. Authoritarian…

And the ability to punish guilty people also adds the ability to punish innocent people. This doesn't mean we abandon the concept of justice.

Re: The Lightning Network: Turning Bitcoin into Money

#364

Post by imtringued »

rafaelero wrote: post #322
hnthrow1010 wrote: post #137

Earlier quoted context omitted.

It's not still early days. Bitcoin was created 13 years ago, it was useless for payments back then and it's still useless for payments now. Every direction that anyone takes it will be in the direction of some kind of pure money-making thing, usually in the form of a ponzi or pyramid scheme. This has happened over and over again for 13 years. There's simply no one else interested in building on this because everyone…

Don't you want a money that people can't fuck with by printing according to politicians will?

Honestly why would anyone care about that? I am genuinely curious to hear what reason you have to want that other than rent seeking e.g increasing personal wealth without having to create more wealth.

From what I can tell people who want a fixed supply currency basically just want to sit on it, wait for idiots who actually create wealth to do so and then take an undeserved cut. In other words they want to take the economy hostage for their own special interests and turn the rest of the population into debt slaves and finally reinstate feudalism.

Re: The Lightning Network: Turning Bitcoin into Money

#365

Post by imtringued »

smoldesu wrote: post #278
wahnfrieden wrote: post #193

Earlier quoted context omitted.

tired and copypasta-like impulsive response written in hysterics is why you're getting downvoted

It's only tired and copypasta-like because it can't be refuted. He's right. Cryptocurrency had it's shot, here's what we got out of it: 1. People trying to make a currency or interoperable token that they can directly or indirectly profit from 2. People trying to replace traditional object-relational databases or P2P networking with the Blockchain Neither of those are particularly meaningful to the average person. Th…

It was obvious the moment Freicoin died. That currency quite literally couldn't be used for speculation. It's only potential use case was as a medium of exchange and that didn't happen.

Re: The Lightning Network: Turning Bitcoin into Money

#366

Post by olalonde »

TradingPlaces wrote: post #350
olalonde wrote: post #254

Earlier quoted context omitted.

Third attempt: it's not! The Bitcoin blockchain is not suitable for day-to-day transactions like buying a Slurpee. You should use your watch and a centralized database to do "offchain" BTC transactions instead[0]. The real question is: why is BTC better than fiat (e.g. USD)? This is what I attempted to answer in my topmost comment. [0] Or better, use the lightning network. As an end user, its benefit over more centra…

I am asking why I would open an account in the first place when the current system works great for me. I am sorry you find it so frustrating that I would like to know why I should switch to using Lightning. The only answer seems to be “because blockchain,” and that explains exactly nothing. Edge cases are not mass deployment use cases

Ah, I see. I didn't mean that you could literally buy a Slurpee with BTC on your watch today. It was just a hypothetical example for how it could work in the future.

There aren't many use cases for the "average Joe" for now. It's still the early days and not many merchants support it. So if you aren't particularly interested in the technology/philosophy nor have a use case for it, there's probably no compelling reason for you to use it. Right now, it is of most utility to unbanked/underbanked people, for remittances, and p2p payments. It is also used for payments by merchants but only in some niches (e.g. online porn, gambling, cannabis industry, etc.).

Of course, it's also appealing to speculators who believe in its long-term potential. They are probably the largest class of Bitcoin holders, but Lightning doesn't really target that use case.

Re: The Lightning Network: Turning Bitcoin into Money

#367

Post by arcticbull »

alchemist1e9 wrote: post #341
arcticbull wrote: post #314

Earlier quoted context omitted.

> On June 14, 2012, the Federal Reserve Bank of New York announced that its loans to Maiden Lane LLC (ML LLC) and Maiden Lane III LLC (ML III LLC) have been fully repaid with interest. Maiden Lane II LLC repaid its obligations of $19.4 billion on February 28, 2012. Loans. Fully paid, with interest - the profits also went to Treasury. Also, they seem to have been a rounding error compared to the scale of the rest of t…

Is it possible for TARP or ML to have actually lost money on those loans if the very same distressed assets the borrowing entities held were being simultaneously bought in the open market by the same Fed using QE? Is not possible and all of it was a complicated shell game with analogies to money laundering. You have picked the wrong savior with central banks and are clearly drinking their Kool-Aid, roughly $8T of it.…

> Is not possible.

That's a good opinion that isn't really relevant to the fact that in retrospect everything worked out great. What harm specifically are you seeking to point out?

Re: The Lightning Network: Turning Bitcoin into Money

#368

Post by imtringued »

wj wrote: post #262
tzs wrote: post #123

Earlier quoted context omitted.

Tax does indeed tend to be a hard problem in these kinds of systems, but I think you (and most responses so far to your comment) are looking at it from the wrong end. It's the seller , not the buyer , that has to deal with taxes in most jurisdictions. For podcasts I'd expect the podcaster to be the seller and the listener to be the buyer. Simplest example is the EU. When you sell a digital good to someone in the EU V…

Your comment made me wish the tax code was small enough to be diagrammed on a napkin. Instead if feels like it is designed to inhibit innovation and new business.

There is this guy called Henry George that wanted this.

Re: The Lightning Network: Turning Bitcoin into Money

#369

Post by imtringued »

ftlio wrote: post #346
ALittleLight wrote: post #335

Earlier quoted context omitted.

I think this is less about growth factor and more about "killer app". The killer application of Google is that it actually finds what you are searching for really well (well, it did). That's what set Google apart from other search engines. The killer feature of crypto is...? DAOs, NFTs, smart contracts, random tokens all seem less like good features and more like transparent scams or terrible ideas that don't work. I…

What was money's killer app? Bitcoin is money from the ground up. It's going fantastically fast. As for smart contracts, these are the basis of Bitcoin. A permissionless ledger inherently requires smart contracts. Their killer app is a a distributed ledger. There are already a few different contracts that can be made on Bitcoin that allow for different custodial schemes. What people are selling as far as DAOs, NFTs,…

>What was money's killer app?

Medium of exchange or rather the division of labor. Bitcoin doesn't do it. In fact, most people who like Bitcoin want it to be a terrible medium of exchange. Everytime you hear people talk about Bitcoin on Reddit there are HODL memes, aka people openly proclaim that they don't want to use the money for anything other than speculating that it goes up in value.

Re: The Lightning Network: Turning Bitcoin into Money

#370

Post by imtringued »

olalonde wrote: post #317
kkielhofner wrote: post #289

When will the blockchain ecosystem provide something with that "WOW I need this in my life right now" factor to the average user? Google went from a research project to incorporated and usable on the internet in roughly two years with a total investment of about $2mm in 2022 money. Let's just say the pace of innovation had some serious roadblocks at the time (they literally had to build their own servers and host the…

Bitcoin is not a concrete product like Google Search or a smartphone. It's more of an idea, like free speech. The idea being money without a central authority, something that has never really existed before (digitally, at least). No one woke up one day and thought "WOW I need democracy" or "WOW I need free speech". It's abstract and doesn't gratify immediately. The average person does not even have a conception that…

>The idea being money without a central authority, something that has never really existed before (digitally, at least).

But you still have distributed authorities, the owners of Bitcoin. The idea that one should be controlled by the interests of financial capital is anthitetical to free speech, freedom and self determination.

>Also, Bitcoin threatens the status quo in a massive way. Not only private businesses like banks but also powerful entities like governments and intergovernmental organizations.

It doesn't, it entrenches the status quo. That is quite literally what deflation is, a reward for people who dominated the economy in the past.

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