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It's just on-chain layer 1 transactions that are somewhat expensive. The lightning network solves this and works great, can do thousands of transactions per sec

It's just on-chain layer 1 transactions that are somewhat expensive. The lightning network solves this and works great, can do thousands of transactions per second and has close to 0 fees. Feels like magic to use it :)

imtringued 6y ago
Visa is a competitor to the lightning network. What makes you think that people will prefer lightning over Visa?
ketamine__ 6y ago
It's magic until you realize you need to spend $15 to get off chain to buy a coffee. And then you realize you aren't ready to commit a bunch of cash to a speculative currency (or investment) so that you can buy coffee. Also, you will need to file taxes for your coffee if your bitcoin goes up after you bought it. Fun!
- kevinak 6y ago
  The idea is to never go off-chain, so no need to close your channel(s). And aren't you already committing cash if you're "in" bitcoin? The tax filing doesn't sound so bad in the long run. I'm sure someone will write some nifty tool to extract whatever payments you've done.
  - nonameiguess 6y ago
    Arguably, the tax filing sounds like the single worst part of it. Imagine if you really used Bitcoin for every purchase you make in a normal tax year. Suddenly how much you pay in taxes depends on the path integral of the exchange rate over the entire period. That's an absolute accounting nightmare. Now you have a huge incentive to batch all of your purchases at market low points to minimize tax burden and you're stuck trying to beat the market just to buy groceries. That isn't something I want to have to think about.
    - kevinak 6y ago
      Fair enough, that’s why I wrote ”in the long run”. Also, there’s always the option of moving somewhere that doesn’t have this issue. Well, unless you’re from the US and must file taxes even when you’re not even in the country, I suppose.
- flatline 6y ago
  You may have been downvoted for a snarky tone, but this is the first time I've seen it mentioned here - bitcoin is taxed as a commodity in the US, each exchange is a capital gain or loss.
  - Consultant32452 6y ago
    This is the poison pill for BTC in my opinion. I have a very small amount of BTC and this is the primary reason I don't have a larger investment, don't make more of an attempt to use it as currency, etc. The central banks/governments aren't going to give up their power so easily. They may have low-key destroyed crypto by considering them commodities. The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable. win* in this case is defined as being a 1st order currency largely unencumbered by central banking/government authority.
    - imtringued 6y ago
      >The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable. That's impossible if you spend your Bitcoin via Visa.
    - rawtxapp 6y ago
      You can just borrow against it to spend it. No tax whatsoever and you hold on to your asset.
      - lxgr 6y ago
        How do you eventually repay that loan (or at least pay interest)?
        lmm 6y ago
        Guessing: you can sync up once a year (or even once every 5 or 10 years) and pay taxes on that transaction at that day's price.
- dingus9 6y ago
  Some exchanges will let you withdraw to a lightning wallet so you never have to interact with the base blockchain layer for smaller day-to-day transactions. I would imagine most exchanges will have similar lightning withdrawal options in the future, if there's demand for it.
CyberDildonics 6y ago
That doesn't solve anything, it still has to be synced with the chain so that the balance can be useful to anyone else. The average transaction is around $20 USD and has been around this much for a while. Opening and closing second layer channels is even more expensive than an average transaction. There is no universe where 1.5KB/s in transactions makes sense. Any other cryptocurrency works better, ethereum and bitcoin cash already have more transactions than bitcoin and any other cryptocurrency works better.
- centimeter 6y ago
  It doesn't sound like you're familiar with how lightning works. It doesn't have to be "synced with the chain" except during channel opening and closing, which occur infrequently (like on the scale of weeks or months). > ethereum and bitcoin cash already have more transactions than bitcoin The eth blockchain is untenably huge (good luck running an ethereum full node), and ethereum fees are often higher than Bitcoin fees.
  - CyberDildonics 6y ago
    > The eth blockchain is untenably huge (good luck running an ethereum full node) No blockchains are anywhere close to "untenably huge". The ethereum chain is 639.43 GB. https://bitinfocharts.com/ https://bitinfocharts.com/ A $10 USD VPS could sync with that in under two hours. That is about $12 USD of hard drive space after 5 years. This is about the same as downloading the five to eight largest games on steam. > and ethereum fees are often higher than Bitcoin fees. No they aren't. They are about the same, making them both unusable for normal transactions, but it should be obvious there are no technical limitations to making larger and/or more frequent blocks since ethereum does it already. https://bitinfocharts.com/comparison/transactionfees-btc-eth.html#3m https://bitinfocharts.com/comparison/transactionfees-btc-eth... > It doesn't have to be "synced with the chain" except during channel opening and closing, which occur infrequently (like on the scale of weeks or months). Which means that no one can use that balance for weeks or months and some third party has to spot people the money in the mean time. That sounds like a credit card. Know what doesn't work like that? On chain transactions.
Tepix 6y ago
Why use an outdated planet-killing tech such as butcoin underneath your level 2 bolted on solution when you can use something modern and do it directly on-chain?
- Tepix 6y ago
  Sorry, "butcoin" was a typo...
- centimeter 6y ago
  I assume this is a bad-faith question, given how much it begs the question, but: there is no known solution to the double-spend problem that achieves the same security properties as proof-of-work without consuming energy.
  - Tepix 6y ago
    Your knowledge is outdated, see the other responses.
  - lucb1e 6y ago
    Dumb out-of-the-loop question: then what's this talk of Ethereum moving to proof of stake? Whenever someone brings up that PoW is bad, people say Ethereum; whenever someone says why PoW, someone says because PoS isn't safe.
    - polyomino 6y ago
      Short answer is it doesn't work now and is not known to be able to work. Much easier to make promises than keep them.
    - anythingdude321 6y ago
      Don't want to duck your question but: the reason this is hard to get a handle on is that it's really complicated. It's not that the premises and protocols themselves are complicated — sure, they're technically sophisticated, but they can be explained simply. The problem lies in that it is very hard to predict the economic consequences and security guarantees of the various consensus mechanisms. Frankly, if Bitcoin hadn't been working flawlessly for the past 12 years very few people would guess that it would work.

imtringued 6y ago

Visa is a competitor to the lightning network. What makes you think that people will prefer lightning over Visa?

ketamine__ 6y ago

It's magic until you realize you need to spend $15 to get off chain to buy a coffee. And then you realize you aren't ready to commit a bunch of cash to a speculative currency (or investment) so that you can buy coffee. Also, you will need to file taxes for your coffee if your bitcoin goes up after you bought it. Fun!

kevinak 6y ago
The idea is to never go off-chain, so no need to close your channel(s). And aren't you already committing cash if you're "in" bitcoin? The tax filing doesn't sound so bad in the long run. I'm sure someone will write some nifty tool to extract whatever payments you've done.
- nonameiguess 6y ago
  Arguably, the tax filing sounds like the single worst part of it. Imagine if you really used Bitcoin for every purchase you make in a normal tax year. Suddenly how much you pay in taxes depends on the path integral of the exchange rate over the entire period. That's an absolute accounting nightmare. Now you have a huge incentive to batch all of your purchases at market low points to minimize tax burden and you're stuck trying to beat the market just to buy groceries. That isn't something I want to have to think about.
  - kevinak 6y ago
    Fair enough, that’s why I wrote ”in the long run”. Also, there’s always the option of moving somewhere that doesn’t have this issue. Well, unless you’re from the US and must file taxes even when you’re not even in the country, I suppose.
flatline 6y ago
You may have been downvoted for a snarky tone, but this is the first time I've seen it mentioned here - bitcoin is taxed as a commodity in the US, each exchange is a capital gain or loss.
- Consultant32452 6y ago
  This is the poison pill for BTC in my opinion. I have a very small amount of BTC and this is the primary reason I don't have a larger investment, don't make more of an attempt to use it as currency, etc. The central banks/governments aren't going to give up their power so easily. They may have low-key destroyed crypto by considering them commodities. The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable. win* in this case is defined as being a 1st order currency largely unencumbered by central banking/government authority.
  - imtringued 6y ago
    >The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable. That's impossible if you spend your Bitcoin via Visa.
  - rawtxapp 6y ago
    You can just borrow against it to spend it. No tax whatsoever and you hold on to your asset.
    - lxgr 6y ago
      How do you eventually repay that loan (or at least pay interest)?
      - lmm 6y ago
        Guessing: you can sync up once a year (or even once every 5 or 10 years) and pay taxes on that transaction at that day's price.
dingus9 6y ago
Some exchanges will let you withdraw to a lightning wallet so you never have to interact with the base blockchain layer for smaller day-to-day transactions. I would imagine most exchanges will have similar lightning withdrawal options in the future, if there's demand for it.

CyberDildonics 6y ago

That doesn't solve anything, it still has to be synced with the chain so that the balance can be useful to anyone else. The average transaction is around $20 USD and has been around this much for a while. Opening and closing second layer channels is even more expensive than an average transaction. There is no universe where 1.5KB/s in transactions makes sense. Any other cryptocurrency works better, ethereum and bitcoin cash already have more transactions than bitcoin and any other cryptocurrency works better.

centimeter 6y ago
It doesn't sound like you're familiar with how lightning works. It doesn't have to be "synced with the chain" except during channel opening and closing, which occur infrequently (like on the scale of weeks or months). > ethereum and bitcoin cash already have more transactions than bitcoin The eth blockchain is untenably huge (good luck running an ethereum full node), and ethereum fees are often higher than Bitcoin fees.
- CyberDildonics 6y ago
  > The eth blockchain is untenably huge (good luck running an ethereum full node) No blockchains are anywhere close to "untenably huge". The ethereum chain is 639.43 GB. https://bitinfocharts.com/ https://bitinfocharts.com/ A $10 USD VPS could sync with that in under two hours. That is about $12 USD of hard drive space after 5 years. This is about the same as downloading the five to eight largest games on steam. > and ethereum fees are often higher than Bitcoin fees. No they aren't. They are about the same, making them both unusable for normal transactions, but it should be obvious there are no technical limitations to making larger and/or more frequent blocks since ethereum does it already. https://bitinfocharts.com/comparison/transactionfees-btc-eth.html#3m https://bitinfocharts.com/comparison/transactionfees-btc-eth... > It doesn't have to be "synced with the chain" except during channel opening and closing, which occur infrequently (like on the scale of weeks or months). Which means that no one can use that balance for weeks or months and some third party has to spot people the money in the mean time. That sounds like a credit card. Know what doesn't work like that? On chain transactions.

Tepix 6y ago

Why use an outdated planet-killing tech such as butcoin underneath your level 2 bolted on solution when you can use something modern and do it directly on-chain?

Tepix 6y ago
Sorry, "butcoin" was a typo...
centimeter 6y ago
I assume this is a bad-faith question, given how much it begs the question, but: there is no known solution to the double-spend problem that achieves the same security properties as proof-of-work without consuming energy.
- Tepix 6y ago
  Your knowledge is outdated, see the other responses.
- lucb1e 6y ago
  Dumb out-of-the-loop question: then what's this talk of Ethereum moving to proof of stake? Whenever someone brings up that PoW is bad, people say Ethereum; whenever someone says why PoW, someone says because PoS isn't safe.
  - polyomino 6y ago
    Short answer is it doesn't work now and is not known to be able to work. Much easier to make promises than keep them.
  - anythingdude321 6y ago
    Don't want to duck your question but: the reason this is hard to get a handle on is that it's really complicated. It's not that the premises and protocols themselves are complicated — sure, they're technically sophisticated, but they can be explained simply. The problem lies in that it is very hard to predict the economic consequences and security guarantees of the various consensus mechanisms. Frankly, if Bitcoin hadn't been working flawlessly for the past 12 years very few people would guess that it would work.