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In the big rally in 2017, the talk of the town was whether or not bitcoin could become a useful payments system with the aid of the Lightning Network, which has

In the big rally in 2017, the talk of the town was whether or not bitcoin could become a useful payments system with the aid of the Lightning Network, which has since completed development and has seen release. Anyone who's up on crypto know if bitcoin is actually usable for sending payments now? If a local coffee shop or something accepts bitcoin, is there any chance I can go in and pay quickly + without a massive fee using LN? Or is bitcoin still treated like a risky asset and nothing more?

bitcharmer 6y ago
Not an expert by from my understanding bitcoin doesn't offer any reasonable transaction confirmation times and as such is of limited value as a currency. Instead it's being used as a commodity.
bdcravens 6y ago
I've been involved in Bitcoin since 2011. Very few use the LN, most payments are still using the blockchain. There are lower cost options to BTC, but adoption has been slow due to the politics of crypto.
plaidfuji 6y ago
Given the timing of its rise, I’d say it’s being treated as a safe haven / hedge against dollar weakness more than anything else.
Sevii 6y ago
I don’t see Bitcoin being used directly to purchase coffees. It might be worthwhile to settle your credit card at month end via btc, but not for small payments. Bitcoin has reached product market for for money laundering and avoiding capital controls. It doesn’t really need more to hit these valuations with inflation expectations and near 0 interest rates.
chrisco255 6y ago
More BTC is transacted on the Ethereum network in the form of tokenized Bitcoin than on the Bitcoin lightning network. In fact, about 140K BTC are locked up and tokenized on ETH now: https://defipulse.com/btc https://defipulse.com/btc Personally, I am bullish on the use of crypto for decentralized finance: https://defipulse.com/ https://defipulse.com/ That is product/market fit for crypto, and this past year has proven out some of those smart contract models. See: Synthetix (derivatives), Aave (lending), Stable coins (Maker DAI), Compound (lending), Uniswap (trading), etc.
- orange_tee 6y ago
  How do the oracles work with these kinds of smart contracts? I also don't understand the use of some of these. You can borrow crypto against other crypto?! What is the use case for that?
  - whitepaint 6y ago
    > I also don't understand the use of some of these. You can borrow crypto against other crypto?! What is the use case for that? I am sure eventually you'll be able to borrow / lend / put as collateral not just other cryptos, but tokenized assets as well. That's why Ethereum is so exciting to me personally.
    - thatcat 6y ago
      Does that only work with digital assets and ip or is it extended to ownership of physical items?
      - latchkey 6y ago
        NFT's are just getting started, but it is looking extremely promising.
  - latchkey 6y ago
    Absolutely. It is the digital version of a gold dealer where you go to exchange your currency for local money. Imagine you travel to Vietnam, you can get local currency from your ATM and get a terrible rate... or you can take USD to a gold dealer and buy the local currency "on the black market". They give you a rate, take a cut, use it to hedge against their gold. Almost always a better rate than the banks. Now it is happening online for people who want to say switch between various ETH tokens. This is what DeFi is all about. $20b is locked up into this stuff already and growing. Things are moving insanely fast. If you want to dip into the more regulated version (CeFi), take a look at BlockFi or Celsius.
  - rat_melter 6y ago
cblconfederate 6y ago
it's treated like digital gold pretty much
proverbialbunny 6y ago
I'm an early adopter of bitcoin, jumping in when I saw the original Slashdot post, so I've been following it and using it for a long time. The flaws with using bitcoin as a currency today are: 1) It has a delay. When you send money it could take them literally over an hour to get that money. (Usually within 5 minutes though.) This is not ideal for a business. There are bitcoin services that smooth this over, giving them cash immediately, and automatically transferring it to USD so the company never touches a bitcoin. To the business it's basically a credit card. 2) Transfer fees. While not the end of the world in the early days, they're worse than credit cards today. Expect to pay a lot to buy a latte, almost 1.5x due to fees. The bitcoin community for a while has been strongly pushing for BCH or Bitcoin Cash. It addresses these two issues, reducing fees significantly and accelerating transfer. It's the alt currency the bitcoin community has been pushing. However, I admit I have zero experience using it to buy items.
- dmm 6y ago
  3) You have to pay capital gains tax on every transaction. The pain of calculating and reporting that is worse than the 15% + state tax.
- helen___keller 6y ago
  > 1) It has a delay > 2) Transfer fees My understanding is that the entire goal of the LN project was to alleviate these by taking individual transactions off-chain by setting up collateral upfront. Was it not successful?
  - proverbialbunny 6y ago
    https://news.bitcoin.com/lightning-network-exploits-continue-to-hinder-the-bitcoin-scaling-solution/ https://news.bitcoin.com/lightning-network-exploits-continue...
  - alwillis 6y ago
    My understanding is that the entire goal of the LN project was to alleviate these by taking individual transactions off-chain by setting up collateral upfront. Was it not successful? Check out this LN dashboard: https://1ml.com https://1ml.com It's been pretty successful but there are kinks that need to get worked out as others have mentioned in the thread.
yourabstraction 6y ago
> Or is bitcoin still treated like a risky asset and nothing more? I always find this sentiment a little funny, because I think payments are the least interesting thing about Bitcoin. Fast and easy payments will come in time with crypto, but in most developed countries the credit card system is a safer and easier consumer alternative anyway. Crypto is way more than payments, it's an entirely new financial system outside the control of existing governments and corporations. If you don't understand why this is way more important that being able to buy a coffee easily, you haven't been paying enough attention. There's only so many options for long term wealth storage, and crypto represents an entirely new class, so from a hedging perspective it makes sense for all high wealth individuals to have a small allocation. We're reaching the point where you're at a greater long term risk not holding any. As more money is stored in crypto and more trust placed in it, there will naturally be more desire from those users to be able to easily use it for consumer purchases, so give it time. But again, the most interesting stuff is what's being built out now, which is an alternative to the legacy financial system, not a Visa competitor.
- newsclues 6y ago
  “Crypto is way more than payments, it's an entirely new financial system outside the control of existing governments and corporations.” And yet, Bitcoin and other cryptocurrencies, are valued in US Dollars or other established currencies, and traded/exchanged for “real currencies” to spend as you’ve dismissed the importance of transactions. Governments can regulate crypto, and corporations will form to control them.
  - alwillis 6y ago
    And yet, Bitcoin and other cryptocurrencies, are valued in US Dollars or other established currencies… This is no different than a dollar being priced in gold terms or the pound sterling being priced in terms of silver when paper money was relatively new. A dollars were originally redeemable for $20.67 [1] and then later $35 per ounce of gold [2]. This ended when we got got off the gold standard in the 70's. As bitcoin becomes the dominant non-sovereign store of value, we’ll slowly start to reprice things in terms of satoshis (sats), the smallest denomination of bitcoin [3]. Sats are already the standard on Cash App and other apps and services that exchange fiat for BTC. It's just a matter of time before all fiat is priced in terms of sats. [1] http://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.html http://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.... [2] https://livingnewdeal.org/glossary/gold-reserve-act-1934/ https://livingnewdeal.org/glossary/gold-reserve-act-1934/ [3] https://medium.com/in-bitcoin-we-trust/talking-in-sat-rather-than-in-bitcoin-will-be-the-norm-in-the-future-3f4662adfc06 https://medium.com/in-bitcoin-we-trust/talking-in-sat-rather...
kordlessagain 6y ago
Lightning is usable for sending micropayments. Lightning and Bitcoin make a perfect pair for implementing 402s for machine learning API calls, as one "killer use case" example.
onelastjob 6y ago
Nano (nano.org) is the cryptocurrency that could actually work as a means of payment. The transactions are fully confirmed in under 1 second, there are zero transactions fees, it's scalable, and there is no mining. It achieved this by using a block lattice where each account is its own blockchain.
thorwasdfasdf 6y ago
The point of bitcoin is NOT to make payments. That's not what it's for. Bitcoin is a STORE of VALUE, like gold or Bonds. We're currently in an age of unprecedented Fiat currency devaluation the likes of which we've never seen before in such a developed country. And we're only going to see much much more of it as the younger generations have made it clear they want much more from government in the way of fiscal and stimulus than they want taxes. Hence deficit spending will continue to expand and expand. The Fed will keep printing money until inflation runs super high: 2 to 4%, they said they would be happy with! and lets not forget the CPI is undervalued by at least 1%. the monetary supply this year has expanded at a record pace, just look it up. Assets have been exploding over the last 10 years, both in the US and worldwide. What all this means is that there is an unprecedented need for a stable STORE of value. It's not about bitcoin. It's about having a store of value that's guaranteed to not be inflated and the world has a huge burning need for it. this is why bitcoin will expand from 700Billion today market cap, up to 10Trillion or 20T or more over the next 5 to 10 years. maybe not in a straight line but it will get there and even exceed it maybe. Bitcoin may be the new bonds, in about 30 years time from now. The FEDs of the world, that pump up the monetary supply have all agreed on the same game plan: It's call UP is the only way out. The only way to deleverage the economy is to inflate away all the debt. The Governments of the world are all on board with this policy. Why do you think they're all so desperate to create high inflation (3%-4%)? That's how you reduce the debt burden. 10 years of 5% inflation can reduce your debt almost in half, right along with anyone's savings. And by keeping interest rates at 0 or less, they want to make saving as painful as possible, so people will go out and spend their entire retirement savings on consumables to keep the economy going in the short run. the only way to protect yourself from this is to own: Stocks, real estate (not scalable or viable for most), and Gold. That's all there was. Until now. Now there's bitcoin, another way to diversify and not put everything into super high stocks.
- UncleMeat 6y ago
  Sentence #1 of the abstract of the OG paper. "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" "Payments" appears in literally sentence #1.
Teandw 6y ago
Technically it's always been usable; it's just the benefits don't outweigh the cons to make it worthwhile. Nothing has changed on that side of things. BTC will never be a widespread payment for things like coffee, as it makes no sense. It will always have to be pegged against a local currency (and that currency shown) so what's the point of using it to buy coffee? At present, Bitcoin still an extremely risky asset. If it stays that way, who knows.
- alwillis 6y ago
  At present, Bitcoin still an extremely risky asset. If it stays that way, who knows. The financial guys have declared that bitcoin has been de-risked now, since insurance companies, hedge funds and publicly traded companies have invested many billions of dollars for the long term. Bitcoin has a floor that it never had before.
dpc_pw 6y ago
LN situation is not perfect, but improved greatly last year. With wallets like Breeze & Phoenix initial onboarding of new users to LN is quite painless because they offer in-flight inbound channel creation (for a tiny fee). So you can install and accept payment right away. Strike mobile app allows to easily fund your LN wallets with smallish amounts of money ($1-$1000) very quickly - just plug in your debit card. I have been kicking tires paying for my coffee in LN-accepting Palo Alto coffee shop before the lockdown and it worked OK. But in other situations LN payments did have some problems (usually lack of receiving liquidity on the receiver end). Another road to Bitcoin scaling for payments is using sidechains like Liquid. I haven't tried it myself yet. But generally I agree that payments on Bitcoin are not critical right now, as it is becoming a trust-less collateral and saving device for bigger institutions for who $10 tx fees are irrelevant. It might however force smaller investors to try out sidechains/LN for casual payments.
imtringued 6y ago
That only makes sense if you want to pay capital gains on your daily purchases.

bitcharmer 6y ago

Not an expert by from my understanding bitcoin doesn't offer any reasonable transaction confirmation times and as such is of limited value as a currency. Instead it's being used as a commodity.

bdcravens 6y ago

I've been involved in Bitcoin since 2011. Very few use the LN, most payments are still using the blockchain. There are lower cost options to BTC, but adoption has been slow due to the politics of crypto.

plaidfuji 6y ago

Given the timing of its rise, I’d say it’s being treated as a safe haven / hedge against dollar weakness more than anything else.

Sevii 6y ago

I don’t see Bitcoin being used directly to purchase coffees. It might be worthwhile to settle your credit card at month end via btc, but not for small payments. Bitcoin has reached product market for for money laundering and avoiding capital controls. It doesn’t really need more to hit these valuations with inflation expectations and near 0 interest rates.

chrisco255 6y ago

More BTC is transacted on the Ethereum network in the form of tokenized Bitcoin than on the Bitcoin lightning network. In fact, about 140K BTC are locked up and tokenized on ETH now: https://defipulse.com/btc https://defipulse.com/btc Personally, I am bullish on the use of crypto for decentralized finance: https://defipulse.com/ https://defipulse.com/ That is product/market fit for crypto, and this past year has proven out some of those smart contract models. See: Synthetix (derivatives), Aave (lending), Stable coins (Maker DAI), Compound (lending), Uniswap (trading), etc.

orange_tee 6y ago
How do the oracles work with these kinds of smart contracts? I also don't understand the use of some of these. You can borrow crypto against other crypto?! What is the use case for that?
- whitepaint 6y ago
  > I also don't understand the use of some of these. You can borrow crypto against other crypto?! What is the use case for that? I am sure eventually you'll be able to borrow / lend / put as collateral not just other cryptos, but tokenized assets as well. That's why Ethereum is so exciting to me personally.
  - thatcat 6y ago
    Does that only work with digital assets and ip or is it extended to ownership of physical items?
    - latchkey 6y ago
      NFT's are just getting started, but it is looking extremely promising.
- latchkey 6y ago
  Absolutely. It is the digital version of a gold dealer where you go to exchange your currency for local money. Imagine you travel to Vietnam, you can get local currency from your ATM and get a terrible rate... or you can take USD to a gold dealer and buy the local currency "on the black market". They give you a rate, take a cut, use it to hedge against their gold. Almost always a better rate than the banks. Now it is happening online for people who want to say switch between various ETH tokens. This is what DeFi is all about. $20b is locked up into this stuff already and growing. Things are moving insanely fast. If you want to dip into the more regulated version (CeFi), take a look at BlockFi or Celsius.
- rat_melter 6y ago

cblconfederate 6y ago

it's treated like digital gold pretty much

proverbialbunny 6y ago

I'm an early adopter of bitcoin, jumping in when I saw the original Slashdot post, so I've been following it and using it for a long time. The flaws with using bitcoin as a currency today are: 1) It has a delay. When you send money it could take them literally over an hour to get that money. (Usually within 5 minutes though.) This is not ideal for a business. There are bitcoin services that smooth this over, giving them cash immediately, and automatically transferring it to USD so the company never touches a bitcoin. To the business it's basically a credit card. 2) Transfer fees. While not the end of the world in the early days, they're worse than credit cards today. Expect to pay a lot to buy a latte, almost 1.5x due to fees. The bitcoin community for a while has been strongly pushing for BCH or Bitcoin Cash. It addresses these two issues, reducing fees significantly and accelerating transfer. It's the alt currency the bitcoin community has been pushing. However, I admit I have zero experience using it to buy items.

dmm 6y ago
3) You have to pay capital gains tax on every transaction. The pain of calculating and reporting that is worse than the 15% + state tax.
helen___keller 6y ago
> 1) It has a delay > 2) Transfer fees My understanding is that the entire goal of the LN project was to alleviate these by taking individual transactions off-chain by setting up collateral upfront. Was it not successful?
- proverbialbunny 6y ago
  https://news.bitcoin.com/lightning-network-exploits-continue-to-hinder-the-bitcoin-scaling-solution/ https://news.bitcoin.com/lightning-network-exploits-continue...
- alwillis 6y ago
  My understanding is that the entire goal of the LN project was to alleviate these by taking individual transactions off-chain by setting up collateral upfront. Was it not successful? Check out this LN dashboard: https://1ml.com https://1ml.com It's been pretty successful but there are kinks that need to get worked out as others have mentioned in the thread.

yourabstraction 6y ago

> Or is bitcoin still treated like a risky asset and nothing more? I always find this sentiment a little funny, because I think payments are the least interesting thing about Bitcoin. Fast and easy payments will come in time with crypto, but in most developed countries the credit card system is a safer and easier consumer alternative anyway. Crypto is way more than payments, it's an entirely new financial system outside the control of existing governments and corporations. If you don't understand why this is way more important that being able to buy a coffee easily, you haven't been paying enough attention. There's only so many options for long term wealth storage, and crypto represents an entirely new class, so from a hedging perspective it makes sense for all high wealth individuals to have a small allocation. We're reaching the point where you're at a greater long term risk not holding any. As more money is stored in crypto and more trust placed in it, there will naturally be more desire from those users to be able to easily use it for consumer purchases, so give it time. But again, the most interesting stuff is what's being built out now, which is an alternative to the legacy financial system, not a Visa competitor.

newsclues 6y ago
“Crypto is way more than payments, it's an entirely new financial system outside the control of existing governments and corporations.” And yet, Bitcoin and other cryptocurrencies, are valued in US Dollars or other established currencies, and traded/exchanged for “real currencies” to spend as you’ve dismissed the importance of transactions. Governments can regulate crypto, and corporations will form to control them.
- alwillis 6y ago
  And yet, Bitcoin and other cryptocurrencies, are valued in US Dollars or other established currencies… This is no different than a dollar being priced in gold terms or the pound sterling being priced in terms of silver when paper money was relatively new. A dollars were originally redeemable for $20.67 [1] and then later $35 per ounce of gold [2]. This ended when we got got off the gold standard in the 70's. As bitcoin becomes the dominant non-sovereign store of value, we’ll slowly start to reprice things in terms of satoshis (sats), the smallest denomination of bitcoin [3]. Sats are already the standard on Cash App and other apps and services that exchange fiat for BTC. It's just a matter of time before all fiat is priced in terms of sats. [1] http://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.html http://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.... [2] https://livingnewdeal.org/glossary/gold-reserve-act-1934/ https://livingnewdeal.org/glossary/gold-reserve-act-1934/ [3] https://medium.com/in-bitcoin-we-trust/talking-in-sat-rather-than-in-bitcoin-will-be-the-norm-in-the-future-3f4662adfc06 https://medium.com/in-bitcoin-we-trust/talking-in-sat-rather...

kordlessagain 6y ago

Lightning is usable for sending micropayments. Lightning and Bitcoin make a perfect pair for implementing 402s for machine learning API calls, as one "killer use case" example.

onelastjob 6y ago

Nano (nano.org) is the cryptocurrency that could actually work as a means of payment. The transactions are fully confirmed in under 1 second, there are zero transactions fees, it's scalable, and there is no mining. It achieved this by using a block lattice where each account is its own blockchain.

thorwasdfasdf 6y ago

The point of bitcoin is NOT to make payments. That's not what it's for. Bitcoin is a STORE of VALUE, like gold or Bonds. We're currently in an age of unprecedented Fiat currency devaluation the likes of which we've never seen before in such a developed country. And we're only going to see much much more of it as the younger generations have made it clear they want much more from government in the way of fiscal and stimulus than they want taxes. Hence deficit spending will continue to expand and expand. The Fed will keep printing money until inflation runs super high: 2 to 4%, they said they would be happy with! and lets not forget the CPI is undervalued by at least 1%. the monetary supply this year has expanded at a record pace, just look it up. Assets have been exploding over the last 10 years, both in the US and worldwide. What all this means is that there is an unprecedented need for a stable STORE of value. It's not about bitcoin. It's about having a store of value that's guaranteed to not be inflated and the world has a huge burning need for it. this is why bitcoin will expand from 700Billion today market cap, up to 10Trillion or 20T or more over the next 5 to 10 years. maybe not in a straight line but it will get there and even exceed it maybe. Bitcoin may be the new bonds, in about 30 years time from now. The FEDs of the world, that pump up the monetary supply have all agreed on the same game plan: It's call UP is the only way out. The only way to deleverage the economy is to inflate away all the debt. The Governments of the world are all on board with this policy. Why do you think they're all so desperate to create high inflation (3%-4%)? That's how you reduce the debt burden. 10 years of 5% inflation can reduce your debt almost in half, right along with anyone's savings. And by keeping interest rates at 0 or less, they want to make saving as painful as possible, so people will go out and spend their entire retirement savings on consumables to keep the economy going in the short run. the only way to protect yourself from this is to own: Stocks, real estate (not scalable or viable for most), and Gold. That's all there was. Until now. Now there's bitcoin, another way to diversify and not put everything into super high stocks.

UncleMeat 6y ago
Sentence #1 of the abstract of the OG paper. "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" "Payments" appears in literally sentence #1.

Teandw 6y ago

Technically it's always been usable; it's just the benefits don't outweigh the cons to make it worthwhile. Nothing has changed on that side of things. BTC will never be a widespread payment for things like coffee, as it makes no sense. It will always have to be pegged against a local currency (and that currency shown) so what's the point of using it to buy coffee? At present, Bitcoin still an extremely risky asset. If it stays that way, who knows.

alwillis 6y ago
At present, Bitcoin still an extremely risky asset. If it stays that way, who knows. The financial guys have declared that bitcoin has been de-risked now, since insurance companies, hedge funds and publicly traded companies have invested many billions of dollars for the long term. Bitcoin has a floor that it never had before.

dpc_pw 6y ago

LN situation is not perfect, but improved greatly last year. With wallets like Breeze & Phoenix initial onboarding of new users to LN is quite painless because they offer in-flight inbound channel creation (for a tiny fee). So you can install and accept payment right away. Strike mobile app allows to easily fund your LN wallets with smallish amounts of money ($1-$1000) very quickly - just plug in your debit card. I have been kicking tires paying for my coffee in LN-accepting Palo Alto coffee shop before the lockdown and it worked OK. But in other situations LN payments did have some problems (usually lack of receiving liquidity on the receiver end). Another road to Bitcoin scaling for payments is using sidechains like Liquid. I haven't tried it myself yet. But generally I agree that payments on Bitcoin are not critical right now, as it is becoming a trust-less collateral and saving device for bigger institutions for who $10 tx fees are irrelevant. It might however force smaller investors to try out sidechains/LN for casual payments.

imtringued 6y ago

That only makes sense if you want to pay capital gains on your daily purchases.