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it's easy to say that you don't want to lose your block rewards. that's what BIP110 is banking on. but what if the BIP100 miners have a dip in hash rate and two blocks are mined that aren't BIP100 compliant? are BIP100 miners going to work at a two block deficit, hoping that they catch up? or are they just going to "start over from here"?
this can go on forever, and the fees on those non BIP100 transactions are going to start getting real fat. what if someone puts two non BIP100 transactions that can't be mined in the same block, each with a 1BTC reward? think that line will hold?
hah
BIP110 is never "activated", because it doesn't provide anything that the other miners won't accept. the "BIP110 chain" is also the regular chain. you'll just get more re-orgs
to make payments you currently have to choose between self custody lightning (expensive to open, realistically requires a pc), and custodial lightning/ecash. not every country even has good custodians available. we need zero utxo ~ self custody to get off the ground
Most people just don't get self-custody.
this is a big part of it. but the other part is meeting people where they are. we have easy(er) self-custody on-chain, whenever fees are low. how much longer does that hold out? i'm a person who scales things, and the way you get there is by always aiming for 10x. ten times as many transactions will get fees well off the floor. ten more times will get them uncomfortably high. a further ten and only the wealthy will be able to make on-chain payments. so, we find a way for this to be okay – for the chain to be a place of settlement between custodians, and for us to not have to trust them. that's how we get to 10b wallets.
People in the 'west' don't really understand the importance of payments
this is a key realization, and it's especially difficult for square: where they operate, people don't need bitcoin. where people need bitcoin, they don't operate. but square is just one company. if we find self-custody protocols that scale, they work the same in africa as they do in central america or the us. if people don't want to use them today, that's fine, maybe they'll use them tomorrow, or maybe they'll never need them.
but we need to keep bitcoin fluid through payments. without them it gets pushed into regulated paper, and held in increasingly tighter boxes until people stop using it and it loses value
From my own node. Over TOR. From a mini-pc in my closet running LND.
Me... Non-Custodial... A heavy Qubes user.
To her... Who can barely use an iphone and probably doesn't know what a VPN is...
you have no idea how great that is though. three years in a row i demo'd increasingly realistic end-to-end architectures for square to accept lightning payments. i used nwc to bind to my tor raspi lightning node, mostly to prove to myself that it could work for anyone. businesses don't work that way, and what actually shipped is a little different. technically, it doesn't have to be.
but my time there was up. looking back i saw that the real problem isn't the merchant, it's getting billions of people doing self-custody. what we use today works for some people, but definitely doesn't scale to all. i've been thinking about this a lot for the last year – a sabbatical i didn't realize i was taking. i think we can make it work. somewhere between custodial lightning and side chains, i see custodians that you don't need to trust. technically this makes them not custodians, but if you say that out loud no one will hear the rest of what you wanted to say. so "trust minimized" custodians.
this is what creates circular economies: wallets that are free, making payments that cost somewhere between lightning and visa. we'll see if we can close the self custody loop. https://deposits.ynniv.com
it makes better arguments, but misses the inescapable fact that neither on-chain nor lightning can scale to the world. any system capable of scaling must use zero on-chain data per wallet. this prevents you from providing unilateral exit, and requires that there be some other guarantee.
in https://deposits.ynniv.com i propose "durability": wallets don't escape the layer, but they are guaranteed that, assuming the layer hasn't failed entirely, they will have access to their funds even if a "mint" dies or goes rogue. this is different than ecash, and also different than lightning.
is it still bitcoin? i think so, because it is denominated in bitcoin and doesn't allow fractional reserves. is it as durable as the base chain? no. is it better than ecash? i think so?
we'll see
call it custodial/paper bitcoin then. yes, the inception of bitcoin didn't recognize custody. this makes sense from a philosophical point but not a realistic one.
as it stands, self-custodial bitcoin is not viable. if that bothers you, you can try to do something about it.
i agree with the spirit, but your argument is simplistic. ecash is paper bitcoin, but that's still bitcoin until it isn't. this is different from eth, which is never bitcoin but can be exchanged for it
hey, the opposite of whoever's selling on coinbase advanced. whodathunk
https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve?exchange=coinbase_advanced
Cashu is an L2 that's independent of Lightning. It succeeds primarily on UX (though there seem to be some cracks there as well) and privacy (which seems quite solid). In a way this proposal is an attempt to make a less trusted, more scalable eCash while avoiding some of the pitfalls of FediMint. Though I'm not sure it's incompatible with Cashu-the-protocol either.
as much as anyone in the system has the ability to make decisions that hurt others, the expectation must be that they will be compelled to do so. a system is only resilient when deviation from the protocol is guaranteed to result in forfeiture. on the chain this means losing your block reward. for lightning it means losing your side of the channel. if a protocol cannot guarantee forfeiture it is not censorship resistant and can never be made self-custodial. this is the essence of bitcoin