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>Bitcoin is moving towards the lightning network which changes things quite a bit, in particular potentially adding some centralization and giving some nodes ad

>Bitcoin is moving towards the lightning network which changes things quite a bit, in particular potentially adding some centralization and giving some nodes advantages over others (well connected nodes with large open channels will have an advantage over a newcomer without connections for instance). The centralization narrative involving LN is somewhat mischaracterized IMHO. Given that source-routing puts control of payments into the the payer, you can choose to mitigate the custodial risk of a single hop holding up your funds in their payment channel a number of ways. For instance, there is no reason one payment from person A to person B needs to involve only one route. Intelligent wallet software, on the order of tens of milliseconds, could break up one payment of $10 into 100 different routes across numerous payment channels. In addition to giving you custodial risk mitigation, its also beneficial for privacy as well.

simias 9y ago
I think the average human being values convenience and low fees much more than privacy (otherwise Facebook and credit cards wouldn't be quite as popular). That means that I expect that wallets and stores that offer the smallest fee will be the ones people use most. A well connected node will be cheaper to transact with by virtue of not having to open a new channel. That gives well connected "bank" nodes a lot of power because they can decide who they connect with (you could imagine paying a "bank" node to connect with you to enable cheaper transactions for your customers) and as a user you have an incentive to host your coins in one of these bank nodes so that it remains easily and cheaply available for purchases. Meanwhile a small indie shop (or some guy selling socks on ebay) won't have any channel so transacting with them will end up more expensive than buying from a popular store. Basically you've reinvented Visa without the insurance, regulations and customer protection. At least that's how it looks like to me. I guess we'll know soon enough which one of us is right. Maybe the truth is somewhere in between.
- bunderbunder 9y ago
  > I think the average human being values convenience and low fees much more than privacy I think it ends up being more nuanced than that, with plenty of gradations of all of those factors. If it means, "Literally nobody can know whether I prefer pads or tampons, and where I get them, not even the person I buy pads or tampons from", then I'm going to lean toward paying cash at some random drug store. A brick and mortar because getting things shipped to me requires giving them identifying information, and cash because it has literally zero fees and leaves no paper trail. If I have to buy something online, then I already have to give them my name and address so I can get it shipped to me. At that point I may not care if my bank and the credit card processing agency also have a record of the transaction, because the info's already out there. At that point it's just a question of whether there are privacy laws that prevent parties from selling too much information or not - either way, I'm guessing 1 and 3 parties will ultimately fall in roughly the same equivalence class, on the privacy front. Personally, I don't see a middle path where blockchain is preferable to either of those options. If I want complete privacy, then I don't want that transaction appearing on the blockchain, either. If I don't, well, might as well get some consumer protection.
  - TheSpiceIsLife 9y ago
    In reality, the average person is going to buy pads or tampons in a way that is most convenient to them. Only the subset of privacy concerned consumers who don't want anyone to know whether they prefer pads or tampons will go out of their way to visit a random drug store.

simias 9y ago

I think the average human being values convenience and low fees much more than privacy (otherwise Facebook and credit cards wouldn't be quite as popular). That means that I expect that wallets and stores that offer the smallest fee will be the ones people use most. A well connected node will be cheaper to transact with by virtue of not having to open a new channel. That gives well connected "bank" nodes a lot of power because they can decide who they connect with (you could imagine paying a "bank" node to connect with you to enable cheaper transactions for your customers) and as a user you have an incentive to host your coins in one of these bank nodes so that it remains easily and cheaply available for purchases. Meanwhile a small indie shop (or some guy selling socks on ebay) won't have any channel so transacting with them will end up more expensive than buying from a popular store. Basically you've reinvented Visa without the insurance, regulations and customer protection. At least that's how it looks like to me. I guess we'll know soon enough which one of us is right. Maybe the truth is somewhere in between.

bunderbunder 9y ago
> I think the average human being values convenience and low fees much more than privacy I think it ends up being more nuanced than that, with plenty of gradations of all of those factors. If it means, "Literally nobody can know whether I prefer pads or tampons, and where I get them, not even the person I buy pads or tampons from", then I'm going to lean toward paying cash at some random drug store. A brick and mortar because getting things shipped to me requires giving them identifying information, and cash because it has literally zero fees and leaves no paper trail. If I have to buy something online, then I already have to give them my name and address so I can get it shipped to me. At that point I may not care if my bank and the credit card processing agency also have a record of the transaction, because the info's already out there. At that point it's just a question of whether there are privacy laws that prevent parties from selling too much information or not - either way, I'm guessing 1 and 3 parties will ultimately fall in roughly the same equivalence class, on the privacy front. Personally, I don't see a middle path where blockchain is preferable to either of those options. If I want complete privacy, then I don't want that transaction appearing on the blockchain, either. If I don't, well, might as well get some consumer protection.
- TheSpiceIsLife 9y ago
  In reality, the average person is going to buy pads or tampons in a way that is most convenient to them. Only the subset of privacy concerned consumers who don't want anyone to know whether they prefer pads or tampons will go out of their way to visit a random drug store.