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The Lightning Network: Turning Bitcoin into Money

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Re: The Lightning Network: Turning Bitcoin into Money

#371

Post by imtringued »

olalonde wrote: post #331
kkielhofner wrote: post #327

Earlier quoted context omitted.

I use these examples in layers (I have a networking background so my mind more or less thinks in OSI layers). For actual products bitcoin (and blockchains like Ethereum with EVM) are the fundamental enabling layer. I like to think of them somewhat akin to TCP/IP or even HTTP. Where are the higher layer applications and use cases built on blockchain with instant and obvious utility to the average person walking down t…

I agree that the Internet's utility is more obvious than Bitcoin. Bitcoin has little or even negative value to authoritarians. Even in more liberal countries, financial sovereignty and privacy are not generally viewed as important. But to me, this is just more reason to believe that the pace of adoption will be slow and gradual.

Bitcoin has very high value for authoritarians. If you can enforce the currency you can enforce wealth inequality and entrenchment of incumbents.

Re: The Lightning Network: Turning Bitcoin into Money

#372

Post by imtringued »

eldenwrong wrote: post #290
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…

Yeah sending value through the internet without an intermediary that can't be stopped, confiscated or censored is whatever Maybe the problem is that you lack an understanding of what money should be and what problems banking and fiat have?

>Maybe the problem is that you lack an understanding of what money should be and what problems banking and fiat have?

I don't believe people are capable of grasping the nature of money. Money is supposed to be a medium of exchange yet everyone wants to turn it into a forced store of value with no consent, that is basically the equivalent of slavery.

Re: The Lightning Network: Turning Bitcoin into Money

#373

Post by olalonde »

imtringued wrote: post #370
olalonde wrote: post #317

Earlier quoted context omitted.

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…

> But you still have distributed authorities, the owners of Bitcoin.

What does that mean? That's not how Bitcoin works. There are no distributed authorities. Even miners don't have authority over Bitcoin, other than deciding the order in which transactions get confirmed.

> 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.

Even if this was true in a world where Bitcoin is the dominant currency[0], it is not true in the world we live in today. In the world, we live today, governments, corporations, and wealthy individuals are all heavily invested in fiat[1]. I wasn't making the argument that Bitcoin is morally desirable because it disrupts the status quo. I was making the argument that because Bitcoin disrupts the status quo, it will get significant push-back from the powerful entities which have an interest in preserving the status quo.

[0] Apple alone has 200$ billion in fiat, just to give an example.

[1] It's not as if fiat monetary inflation goes directly into the hands of the poor. There's a lot of evidence that the opposite happens and that it actually increases wealth inequality: https://wtfhappenedin1971.com/

Re: The Lightning Network: Turning Bitcoin into Money

#374

Post by olalonde »

imtringued wrote: post #371
olalonde wrote: post #331

Earlier quoted context omitted.

I agree that the Internet's utility is more obvious than Bitcoin. Bitcoin has little or even negative value to authoritarians. Even in more liberal countries, financial sovereignty and privacy are not generally viewed as important. But to me, this is just more reason to believe that the pace of adoption will be slow and gradual.

Bitcoin has very high value for authoritarians. If you can enforce the currency you can enforce wealth inequality and entrenchment of incumbents.

> Bitcoin has very high value for authoritarians.

Then why have almost all authoritarian governments banned Bitcoin?

> If you can enforce the currency you can enforce wealth inequality and entrenchment of incumbents.

That's the whole point. No one can control Bitcoin which is why it's not appealing to authoritarians. Authoritarians don't like things they can't have authority over.

Re: The Lightning Network: Turning Bitcoin into Money

#375

Post by imtringued »

Empact wrote: post #164
bendtheblock wrote: post #152

Earlier quoted context omitted.

but what's the benefit of these? - decentralised: why is this good? - trustless: I trust the companies I use, it works - censure resistance: OK, fringe case for most - pseudonymous: why do I want anyone to be able to see my transaction history?

> The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy…

>The root problem with conventional currency is all the trust that's required to make it work.

Surely this is a joke? Most currencies enjoy a high degree of trust until they collapse due to structural reasons that have nothing to do with trust whatsoever.

The euro zone and the dollar show that there is practically no shortage of trust whatsoever.

Seriously, this dude is supposed to liberate us from the evils of money?

How did it come to this? The root problem with currency is the zero lower bound of interest and liquidity preference which both combined result in permanently positive interest rates. When you refuse to pay interest, the economy stagnates and it can result in mass unemployment. This has nothing to do with trust. The Bitcoin economy is plagued with mass unemployment. The insanity of unemployment is a consequence of the insanity of non neutral money. Alternatively, you can pay interest, however this means you must perpetually borrow more money, e.g. Keynesian fiscal stimulus, notice that the insanity originates in money itself, not in the political response, the political response must be at least as insane as the money system, no less and it collapses. Now, there is a third way, QE aka not bothering to ask people whether they want to lend their money out, however, due to liquidity preference, the additionally created money will stagnate somewhere, meaning you can't ever stop QE. Again, in this case the insanity is a structural property of the currency, the monetary intervention has to be as insane as the money system and no less.

The apparent untrustworthiness of politicians is the result of the insanity of money, not the other way around. If money worked properly, you wouldn't need politicians to mess with it, you wouldn't even consider trust to be the problem because the amount needed would be so miniscule as to never matter in the grand scheme of things.

It is really strange to me, that people notice a constant problem with money and yet they still come up with the same conclusion "you're holding it wrong", what if it is impossible to hold it properly? What if permanent money is irreparably broken and forces its own debasement and all the other problems?

Re: The Lightning Network: Turning Bitcoin into Money

#376

Post by imtringued »

olalonde wrote: post #135
TradingPlaces wrote: post #68

“We can make the blockchain actually work for payments if we take payments off the blockchain.” Sounds about right.

I assume the implication is that doing off-chain transactions defeats the purpose of Bitcoin? It does not. Did you know that fiat doesn't even have a blockchain to withdraw to when you want to exit or switch payment network/provider?[0] Did you know that with fiat, the money supply can be changed arbitrarily? Those are problems that Bitcoin still solves when you use an off-chain transaction network (at least for the…

>Did you know that with fiat, the money supply can be changed arbitrarily?

Let me tell you a little story. A boy creates wealth, the government creates money in proportion to the wealth. The alternative is to succumb to incumbents, the wealthy, the aristocracy and ask them for permission whether you are allowed to create the wealth or not.

Re: The Lightning Network: Turning Bitcoin into Money

#377

Post by eldenwrong »

imtringued wrote: post #372
eldenwrong wrote: post #290

Earlier quoted context omitted.

Yeah sending value through the internet without an intermediary that can't be stopped, confiscated or censored is whatever Maybe the problem is that you lack an understanding of what money should be and what problems banking and fiat have?

>Maybe the problem is that you lack an understanding of what money should be and what problems banking and fiat have? I don't believe people are capable of grasping the nature of money. Money is supposed to be a medium of exchange yet everyone wants to turn it into a forced store of value with no consent, that is basically the equivalent of slavery.

Money is supposed to be both. The problem is that money as a store of value is very bad for low quality consumerism

Re: The Lightning Network: Turning Bitcoin into Money

#378

Post by FabHK »

samatman wrote: post #64
FabHK wrote: post #56

Earlier quoted context omitted.

> Micropayments are coming, perhaps using blockchain Blockchain is remarkably ill-suited for micropayments.

Untrue both in general and in particular. Most blockchains are worthless and have nothing in the way of transaction fees or indeed transactions. Doge is perfect for micropayments! This was a fad on reddit back in the day. In particular, well, the title of the article says it all. If you have BTC, and you want to send a few sats and pay basically nothing, Lighting has existed for years and works just fine. Edit: I don…

The engineering requirements for successful micropayments are, in my view:

* support for millions of transactions per second

* very fast, basically instantaneous

* if a small fraction of transactions is dropped randomly, no big deal

* easy, simple, cheap on- and off-ramps

* support for anonymity

* good customer support (lost password, lost device, maybe chargebacks)

* support for local currency

* compatible with local law

* very simple API, easily integrated into browser or other devices

* energy efficient

For those requirements blockchain is a terrible solution.

But sure, you can use a helicopter to open a beer bottle, go ahead.

Re: The Lightning Network: Turning Bitcoin into Money

#379

Post by dmitriid »

olalonde wrote: post #362
dmitriid wrote: post #337

Earlier quoted context omitted.

> 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. T…

> Do you extend the same reasoning to fiat?

We are talking bout fiat? No.

> So I guess your question is, what are the advantages of BTC over a fiat currency like USD.

No. The question is: what does the trustless blockchain offer when you still have to rely on a centralised trusted entity.

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

Which immediately means that whoever got in early and got the first initial supply is at great advantage compared to anyone who got in later. For example compared to any people born 20 years from now.

> You could also build a dispute

Could. Maybe. Should. Perhaps. That's all you can ever hear from crypto proponents.

Re: The Lightning Network: Turning Bitcoin into Money

#380

Post by dmitriid »

waoush wrote: post #181
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…

(note: I didn't downvote, but have been working with blockchain and thought I would answer since you haven't gotten any yet) https://www.hyperledger.org/learn/case-studies Hyperledger is a set of open-source distributed ledger related technologies, the most well-known being Fabric, which is a framework for creating blockchain networks. The most interesting cases are S&P Global and Walmart, who use it to keep track of…

> The idea is that since data on a blockchain can't be modified on a whim without that change being observed, it protects the integrity of the data being stored.

Audit logs are not a new thing. Immutable data stores are not a new thing. This can be done in any number ways, each of them more efficient.

Moreover, it doesn't help with data entry. Yes, data cannot be modified. And still someone orders bananas and ends up with mouldy tomatoes.

> S&P Global and Walmart, who use it

I very much doubt they use it. All these "use cases" fall apart within a year or two after initial starry-eyed announcements

> Basically it is being treated as a sort of database.

Indeed. Treated like a database. When people treat Kafka as a database, those people are derided and there are entire articles on why you shouldn't treat a read-only append-only log as a database. But sure. Once it's blockchain, it's amazing and the bee's knees.

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