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The Lightning Network: Turning Bitcoin into Money

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Re: The Lightning Network: Turning Bitcoin into Money

#351

Post by ALittleLight »

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,…

Money's killer app is that it can be exchanged for goods and services and is a standardized unit of exchange. Bitcoin can do that too, albeit slower, less secure against the risks most users face, and less throughput, but the problem Bitcoin has is that anything it can do fiat can do better. Or, if that's not quite true, the things that separate Bitcoin from fiat are trivial or make Bitcoin worse.

Bitcoin is basically a kind of musical chairs for money. People buy in and try to get out and maybe they make money and maybe they lose money. People will play this game, clearly, but that doesn't mean Bitcoin is the future of money anymore than casino chips are the future of money.

Re: The Lightning Network: Turning Bitcoin into Money

#352

Post by arcticbull »

shudza wrote: post #342
arcticbull wrote: post #323

Earlier quoted context omitted.

Obviously there's a world of difference between a Ponzi scheme like UST and USDC. However, that doesn't change my point - which is that a proper, tokenized dollar - or even USD CBDC would solve everything you're trying to solve but better. So let's start advocating for that. It's not privilege to call out that you have a bad solution and that better solutions exist.

A year ago you were one of the guys saying printing money won't cause inflation, didn't you?

I stand by that. The broad-based increase in costs is due to a supply crunch (war in Ukraine, lockdowns in China, disrupted supply chains) and a labor shortage. The cost of energy is up 42% year over year and of course that trickles down into all other categories. [1]

I think the pandemic relief was a contributor but not a major contributor. One that would have been irrelevant had Russia not invaded Ukraine.

Higher interest rates don't increase supply (6% APR doesn't get any new oil out of the ground) they destroy demand. By second order effects, they decrease the money supply and hence prices. But that's not exactly an ideal strategy as we'll soon see. The 2/10 curve has been inverted for a few weeks now.

This is a weak attempt at ad hominem.

After all, isn't oil up over 100% in BTC terms in the past year? Surely y'all didn't print a whole ton of BTC did you? Since you didn't how do you account for that spread? And the lack of evenness in cost increases - shouldn't monetary inflation have even, broad-based price increases? Why is energy up 10X more than other things? Used cars?

[1] https://www.bls.gov/cpi/

Re: The Lightning Network: Turning Bitcoin into Money

#353

Post by [deleted] »

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.…

[deleted]

Re: The Lightning Network: Turning Bitcoin into Money

#354

Post by woojoo666 »

lxgr wrote: post #267
kevinak wrote: post #260

Earlier quoted context omitted.

The parent here is exaggerating. It's not free, just very very very cheap. Nodes with channels can set fees and get paid when they a transaction is routed through them. There is work being done on non-custodial escrow services for LN. Here's one: https://lightningescrow.io

What prevents a node connecting many consumer wallets from raising rates for "out-of-network" wallets, especially smaller ones, or independent nodes? Think of any network: Economic forces usually drive it towards centralization if not outright monopolization, especially if interfacing with end users (e.g. banks, electricity providers, ISPs, messengers...) unless there are (effective) laws in place prohibiting it. > T…

Not sure what you mean by your question. Payers choose the channel they want to send the payment over. If somebody sets a large fee, the payers will simply choose a different channel.

Re: The Lightning Network: Turning Bitcoin into Money

#355

Post by mrorbitman »

joshstrange wrote: post #198
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…

I pay for 5 podcasts, I do it via Patreon, Memberful, and a custom (stripe-based) solution. I'm not really sure what problem needs to be solved in this space. I pay for 2 podcasts that I haven't listened to in months, I do it because I pay to support these creators. I don't need/want my listen history to directly correlate to sending money to hosts I like (nor do they, they'd much rather have the constant stream inst…

all those websites take their cut. and visa takes their cut. and still the podcaster can't "cash out" immediately, depending on settlement times and policies of the corporations. Essentially, the middlemen have the creators by the balls, lightning solves that.

Re: The Lightning Network: Turning Bitcoin into Money

#356

Post by lxgr »

woojoo666 wrote: post #354
lxgr wrote: post #267

Earlier quoted context omitted.

What prevents a node connecting many consumer wallets from raising rates for "out-of-network" wallets, especially smaller ones, or independent nodes? Think of any network: Economic forces usually drive it towards centralization if not outright monopolization, especially if interfacing with end users (e.g. banks, electricity providers, ISPs, messengers...) unless there are (effective) laws in place prohibiting it. > T…

Not sure what you mean by your question. Payers choose the channel they want to send the payment over. If somebody sets a large fee, the payers will simply choose a different channel.

By that logic, if customers would see how large interchange fees can be, they would choose different payment methods than the most expensive credit cards.

The opposite is the case: Merchants almost always prefer not losing the purchase over a few bips saved on interchange and cardholders continue using their high-fee cards because issuers pay them kickbacks from that interchange in the form of rewards.

The exact same thing could happen with a dominant Lightning wallet provider (supporting channels only to their own nodes in exchange for a better user experience, incentives etc.) and merchants accepting Lightning.

Monopolization almost seems impossible to prevent at a technical level in networks due to the network effect (quadratic utility) and customers being relatively slow to change providers and easy to sway with one-time incentives. Credit cards have just had a few decades of a headstart over Lightning in that regard.

Re: The Lightning Network: Turning Bitcoin into Money

#357

Post by lxgr »

simonmales wrote: post #333
lxgr wrote: post #215

Earlier quoted context omitted.

What's the incentive for anybody to open a lightning channel, providing connetivity etc. without compensation? And even if all of this was indeed done for free (sustainably, not as a loss leader): Dispute resolution and fraud costs money. Free leaves zero margin for either, and I wouldn't use a payment service not providing both.

Peers don't need to have channels open to each other to exchange satoshis. As long you have some channels open and I have some channels open, the network will route my payment to you. As sender, I am responsible for any potential routing fees. You as the payee are not. If we were to transact with each other often, it could be worth opening a dedicated channel to enhance privacy and avoid routing fees.

> As long you have some channels open and I have some channels open, the network will route my payment to you.

Just like the internet. And just like on the internet, extortion by incumbents along that route can happen, and likely will once there is an encumbent Lightning wallet provider that is too large to ignore for merchants. (All assuming Lightning or something like it is successful in the first place, of course.)

> As sender, I am responsible for any potential routing fees. You as the payee are not.

In a typical online payment scenario, the customer is the sender. Of course large wallets could strike deals with merchants to let them cover fees for their users to make this less apparent...

> If we were to transact with each other often, it could be worth opening a dedicated channel to enhance privacy and avoid routing fees.

Sure – just like you could open a tab at your favorite bar, or you could get a store credit card at your favorite retailer.

Re: The Lightning Network: Turning Bitcoin into Money

#358

Post by mullingitover »

v4dok wrote: post #318
mullingitover wrote: post #311

Earlier quoted context omitted.

> No user has ever said "WOW I need Google search engine in my life right now" I sure did, and I wasn't alone. I remember thinking the existing search engines were trash long before google came around. The market was starving for a search engine that was user-focused and not 200% bought and paid for by marketers.

Wait, did you describe what Google is currently?

Yep, the launch of Google Plus is pretty much the historic marker where Google turned into everything they originally criticized.

Re: The Lightning Network: Turning Bitcoin into Money

#359

Post by simonmales »

lxgr wrote: post #357
simonmales wrote: post #333

Earlier quoted context omitted.

Peers don't need to have channels open to each other to exchange satoshis. As long you have some channels open and I have some channels open, the network will route my payment to you. As sender, I am responsible for any potential routing fees. You as the payee are not. If we were to transact with each other often, it could be worth opening a dedicated channel to enhance privacy and avoid routing fees.

> As long you have some channels open and I have some channels open, the network will route my payment to you. Just like the internet. And just like on the internet, extortion by incumbents along that route can happen, and likely will once there is an encumbent Lightning wallet provider that is too large to ignore for merchants. (All assuming Lightning or something like it is successful in the first place, of course.…

> Just like the internet. And just like on the internet, extortion by incumbents along that route can happen, and likely will once there is an encumbent Lightning wallet provider that is too large to ignore for merchants. (All assuming Lightning or something like it is successful in the first place, of course.)

This is plausible. Lightning Wallets are harder to run in a self custodial way rather than classic Bitcoin on-chain transaction.

> In a typical online payment scenario, the customer is the sender. Of course large wallets could strike deals with merchants to let them cover fees for their users to make this less apparent...

Wallet providers could turn in payment processors as well for merchants.

> Sure – just like you could open a tab at your favorite bar, or you could get a store credit card at your favorite retailer.

Not familiar with this concept, I know that it exists. Though the cost of establishing that system is mountains more than establishing a channel to your favourite bar. But it is a micro optimisation.

Re: The Lightning Network: Turning Bitcoin into Money

#360

Post by eldenwrong »

CharlesW wrote: post #325
lrvick wrote: post #321

Earlier quoted context omitted.

I suppose you want cash and art banned too? Those are even better money laundering tools than Bitcoin.

> Those are even better money laundering tools than Bitcoin. How are cash and art better for money laundering than Bitcoin?

Cash is untraceable....? Although Bitcoin will reach that point as well
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