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 assuming that channels never close and of course that the blockchain doesn't do anything else at all except open channels.
Even opening a channel for everyone in Bay Area requires the better part of a full month of the entire chain capacity's.
It also has roughly speaking none of the guarantees of Bitcoin, and could really be used with any underlying asset.
The only scaling solution is MySQL, just like the Bastion of Bitcoin, El Salvador is doing. Always was.
Some interesting points. IMHO, LN is far from THE solution. But it will help merchant adoption, more than end-user though.
The fact is, most people would/will probably use custodial LN wallets, which is against some "crypto" postulates, and comes down to well known MySQL argument.
The difference is MySQL on Bitcoin vs MySQL on USD (Paypal). As we will see in the coming months, fiat itself is a lot like a MySQL.
So I would argue that there is nothing wrong with MySQL on Bitcoin, and in fact, is an upgrade on fiat.
Well 'scuse me, Mr Privileged. Countries which are not US do in fact exist, and are not using USD. Check some other CBCs YoY against USD, and tell me how much they lost on average.
So they have access to USDC. I love how people pull out the privilege card the second you suggest that a so-called currency that loses 70% of its value in a year (BTC) might not be that good for poor folks.
True privilege is being able to lose 70% of your net currency value in a single year without being on the street and advocating for it even after. For everyone else, there are better choices.
I suspect somewhere along the bull run you lost perspective.
USDC != USD. We know what happened to UST, the rest will follow. Poor folks are also buying homes, which will drop, in some places maybe 100% in the next year, but nobody doesn't seem to have a problem with that.
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.
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?
Let's look then at the Turkish Lira, which had a massive fall because of crazy monetary policy and other problems. It now stands at 0.057 USD, compared to the most typical value of 0.11 USD in 2021 - it has retained ~52% of its value. In contrast, BTC stands at 20k USD, compared to its mean value in 2021 of 47k USD - it only retained 42% of that value.
So, someone who had put all of their savings in Turkish Lira would be better off today than someone who did so in BTC (and if we're comparing to the peaks for each year, it gets even worse - they would be left with only 39% for TRY, 29% for BTC).
Are there even worse currencies than the TRY? Probably. But the vast majority are actually doing much better, and even the TRY beat BTC as a store of value.
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 it's pretty telling that critics offer specific quantifications (X people requires Y time) and proponents say "only some people need it!" - how many, exactly? How full do you anticipate blocks being with other things? How long is too long to open a channel? Currently it sounds like a Soviet phone line - better put in a request now otherwise you might be in your 80s before it gets installed.
I disagree. Custodial Lightning Bitcoin is still way better than a bank account.
- You can't open a bank account without KYC
- You can send money without asking permission
- You can receive money without asking permission
- You can send money *privately* (onion layer)
- You can send money around the globe faster
- You can always take it on-chain on L1 via a submarine swap
custodial ownership of bitcoins is a product of bitcoiners' defeatism: it only makes sense if you just want to make money and no longer care about the original values of bitcoin.
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.
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.
you can bet your bottom dollar there are some nerds in Sri Lanka who are very happy to own bitcoin right now. they'll be able to spend it as soon as the electricity comes back up.
I think we can all agree that they'd be strictly better off with a digital dollar substitute like USDC than with Bitcoin, as of course they'd be down bad with Bitcoin.
The big question there is whether or not their government allows businesses to operate outside of their control. I doubt many Turks would risk jail time by using a system which provides their government with a full transaction history, especially given the volatility - if you converted lira into Bitcoin a year ago, you’d be about even with not doing anything. If you bought 6 months ago, you’d have 50% losses.
> 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.
With Schnorr signature aggregation, you can combine an unlimited number of signatures, but Bitcoin has a maximum of 4MB witness data, so there is certainly a cap.
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 maintained by banks or money transfer companies, and won't consider the counterparty-risk as something they need to be worried about.
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.
The Fed didn't bail out anyone in 2008. Treasury did. Also, the bail-outs weren't grants, they were loans, and they have been re-paid yielding $110B in profit so far with plenty more to come. [1]
I was opposed to bail-outs in 2008 personally, but in retrospect it's very difficult to look back and say that it was anything other than an unequivocal success. Hundreds of thousands of jobs were saved and it was super profitable. With that in mind, I'd suggest a new stalking horse.
Also of note, I said the dollar was digital, not that it was centralized. The Fed doesn't have a central representation of all dollars in existence, the M numbers are estimates. The Federal Reserve System is a federated system, and money is created when loans are taken out at retail banks.
Yes they did, Maiden Lane [1], which was distinct from TARP you are referring to. I had a somewhat upfront seat at that time and the unequivocal success narrative is, in my opinion, extremely dishonest and manipulative.
We haven’t even started to talk about QE which is actually why the Fed and TARP bailouts (aka investments) ended up being profitable. There are a huge number of losers from 2008 which can’t be seen from a superficial surface view, instead it requires playing out an alternate reality where liquidations were forced, and that is a complex and difficult discussion. Paulson was a brilliant spin doctor and so successful that his fake stories of hundreds of thousands of jobs saved and ATMs that didn’t run out of money is being taken as real history, instead of the evil deceptive game it was to insure all his people continued to dominate global finance. It would take a long discussion to try and explain to you how profoundly unethical and manipulative were the actions they took and the effects those actions still have today in terms of extreme inequality, caused not by capitalism itself, but this crony capitalism.
Bitcoin was born from this reality and highly motivated by it. For a certain generation of finance technologists who had a close view of the inner workings of the system it was obviously rotten and corrupt to the core. The core being fiat.
If you are trying to pretend that by explaining M1 and M3 and the creation of money supply you claim somehow USD is “federated” and not centralized then in my opinion you don’t actually understand what you think you do.
Maybe read up on the Fed window and QE mechanisms and their balance sheet. USD is centralized with Fedwire, OCC, Treasury, Swift, BIS and all their regulatory operations, so they have very good information on most digital dollars in existence and certainly have incredible control over their creation and destruction.
Bitcoin is likely here to stay and in my personal experience most people who hate on it were once believers who bought high then sold low after one of its crashes. they now how a very bitter taste and have decided there is some fundamental flaw with it as an idea, mostly motivated by their own emotions and not logic. the other haters tend to have some deranged love of governments and see it correctly as a challenge to government power so attempt to discredit it, I feel mostly out of anxiety the government isn’t what they think it is and it scares them.
> 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 the program, but you're right that the actions weren't exclusively Treasury. However, they were primarily Treasury.
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.
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?
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 …
Even opening a channel for everyone in Bay Area requires the better part of a full month of the entire chain capacity's.
It also has roughly speaking none of the guarantees of Bitcoin, and could really be used with any underlying asset.
The only scaling solution is MySQL, just like the Bastion of Bitcoin, El Salvador is doing. Always was.
Can we move on already?