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Bitcoin dominance is fading this year only because it has bet on LN with fundamental inbound capacity problem. LN rejected my proposal to solve it and extend ch

Bitcoin dominance is fading this year only because it has bet on LN with fundamental inbound capacity problem. LN rejected my proposal to solve it and extend channels with credit lines: XLN https://medium.com/fairlayer/xln-extended-lightning-network-80fa7acf80f3 https://medium.com/fairlayer/xln-extended-lightning-network-...

Qworg 5y ago
Payment channels ARE credit, generally - I'm sorry this proposal was rejected. Was there a reason for the rejection?
- homakov 5y ago
  Payment channels, in traditional sense, are fully collateralized credit. I suggested to leave collateralization ratio up to users themselves. Some could have 100% collateral, some 0%, some 50% etc. Rejection reason: unclear, doesn't fit the narrative.
- billytetrud 5y ago
  Payment channels are not at all credit. Credit means you're relying on someone to pay you back, and have a risk that they won't pay you back. Credit relies on trust. Payment channels do not rely on trust. You can always retrieve your money even if your channel partner doesn't want to give it back.
  - Qworg 5y ago
    Unless you value the time your money that is locked up at zero, they are definitely credit - as GP said, fully-collateralized loans.
rawtxapp 5y ago
Bitcoin dominance always goes down in altcoin season and then comes right back up.
- brighton36 5y ago
  Meanwhile, crypto indexers beat Bitcoin maximalists. But, the evidence for indexing performance will never see the light of day . :)
  - rawtxapp 5y ago
    Not sure what you mean by crypto indexer, you mean people who buy a basket of crypto? Sure, in the short term, they might outperform BTC, over long term 70% will die, 90+% won't recover to their ATHs. If you indexed back in 2017 into top 10 coins, only like 3 of them crossed their old prices from 2017, rest are as good as dead.
    - wmf 5y ago
      Usually you'd rebalance periodically.
      - thegreatpeter 5y ago
        Seems like stuff folks say in a bubble. 90% of it will disappear once ethereum fixes this/that.
    - brighton36 5y ago
      Where did you get these numbers? I assume this is a post-hoc rationalization?
      - rawtxapp 5y ago
        I mean you can pull up the numbers for yourself if you don't believe me, people have also done the math themselves [1][2]. 1: https://preview.redd.it/c21qium7jyr61.png?width=1113&format=png&auto=webp&s=8c01b316aeac5f7e07b13b0dbd4313a8ea916571 https://preview.redd.it/c21qium7jyr61.png?width=1113&format=... 2: https://www.reddit.com/r/CryptoCurrency/comments/mmstrt/i_bought_1k_of_the_top_10_cryptos_on_january_1st/ https://www.reddit.com/r/CryptoCurrency/comments/mmstrt/i_bo...
londons_explore 5y ago
It looks like you are explaining some good stuff in that blog post, but the overall arrangement and writing style of the post reduces it's impact. Your post could be more influential if you refined it through a technical writing type process - perfecting the ordering of presenting information for the audience you hope to persuade.
- homakov 5y ago
  This is true, but that's not the only post I had on the subject, just the earliest one. Anyway, I gave up on btc and now implementing xln on eth https://github.com/homakov/xlncontracts/blob/main/contracts/xln.sol https://github.com/homakov/xlncontracts/blob/main/contracts/...
crazypython 5y ago
Interesting. > Also, uninsured balances are enforceable onchain, which is very different from a trusted balance. Does this mean XLN is implemented with a smart contract that withdraws the money from an address if you fail to pay? Or automatically cancels the channel if you withdraw more than what you have in the channel?
- homakov 5y ago
  It's better explained in solidity: https://github.com/homakov/xlncontracts/blob/main/contracts/xln.sol#L350 https://github.com/homakov/xlncontracts/blob/main/contracts/... it is withdrawn from a special intermediary "reserve" balance OR a Debt is created on this identity.
billytetrud 5y ago
Your proposal isn't trustless anymore. At that point, why not just have normal centralized bank accounts? You wrote that article in 2018 too, what do you think about the state of the LN now, where its no longer common to get payment failures?
- homakov 5y ago
  > Your proposal isn't trustless anymore not black and white. I didn't say to drop collateral channels to have credit, but to use credit in addition to collateral on receiving side. Also, on ETH those credits are enforceable (as i answered below) so it is far better than a custodial balance. > where its no longer common to get payment failures? nothing changed, the inbound capacity flaw is fundamental. Download a wallet - you can't receive a payment - full stop. Until this is solved say goodbye to adoption. With credits on both sides the total capacity of the network skyrockets. And somebody is taking the risks anyway, either liquidity providers as in delusional LN model, or users themselves as in XLN.
- hanniabu 5y ago
  > where its no longer common to get payment failures Sorry but they're still incredibly common

Qworg 5y ago

Payment channels ARE credit, generally - I'm sorry this proposal was rejected. Was there a reason for the rejection?

homakov 5y ago
Payment channels, in traditional sense, are fully collateralized credit. I suggested to leave collateralization ratio up to users themselves. Some could have 100% collateral, some 0%, some 50% etc. Rejection reason: unclear, doesn't fit the narrative.
billytetrud 5y ago
Payment channels are not at all credit. Credit means you're relying on someone to pay you back, and have a risk that they won't pay you back. Credit relies on trust. Payment channels do not rely on trust. You can always retrieve your money even if your channel partner doesn't want to give it back.
- Qworg 5y ago
  Unless you value the time your money that is locked up at zero, they are definitely credit - as GP said, fully-collateralized loans.

rawtxapp 5y ago

Bitcoin dominance always goes down in altcoin season and then comes right back up.

brighton36 5y ago
Meanwhile, crypto indexers beat Bitcoin maximalists. But, the evidence for indexing performance will never see the light of day . :)
- rawtxapp 5y ago
  Not sure what you mean by crypto indexer, you mean people who buy a basket of crypto? Sure, in the short term, they might outperform BTC, over long term 70% will die, 90+% won't recover to their ATHs. If you indexed back in 2017 into top 10 coins, only like 3 of them crossed their old prices from 2017, rest are as good as dead.
  - wmf 5y ago
    Usually you'd rebalance periodically.
    - thegreatpeter 5y ago
      Seems like stuff folks say in a bubble. 90% of it will disappear once ethereum fixes this/that.
  - brighton36 5y ago
    Where did you get these numbers? I assume this is a post-hoc rationalization?
    - rawtxapp 5y ago
      I mean you can pull up the numbers for yourself if you don't believe me, people have also done the math themselves [1][2]. 1: https://preview.redd.it/c21qium7jyr61.png?width=1113&format=png&auto=webp&s=8c01b316aeac5f7e07b13b0dbd4313a8ea916571 https://preview.redd.it/c21qium7jyr61.png?width=1113&format=... 2: https://www.reddit.com/r/CryptoCurrency/comments/mmstrt/i_bought_1k_of_the_top_10_cryptos_on_january_1st/ https://www.reddit.com/r/CryptoCurrency/comments/mmstrt/i_bo...

londons_explore 5y ago

It looks like you are explaining some good stuff in that blog post, but the overall arrangement and writing style of the post reduces it's impact. Your post could be more influential if you refined it through a technical writing type process - perfecting the ordering of presenting information for the audience you hope to persuade.

homakov 5y ago
This is true, but that's not the only post I had on the subject, just the earliest one. Anyway, I gave up on btc and now implementing xln on eth https://github.com/homakov/xlncontracts/blob/main/contracts/xln.sol https://github.com/homakov/xlncontracts/blob/main/contracts/...

crazypython 5y ago

Interesting. > Also, uninsured balances are enforceable onchain, which is very different from a trusted balance. Does this mean XLN is implemented with a smart contract that withdraws the money from an address if you fail to pay? Or automatically cancels the channel if you withdraw more than what you have in the channel?

homakov 5y ago
It's better explained in solidity: https://github.com/homakov/xlncontracts/blob/main/contracts/xln.sol#L350 https://github.com/homakov/xlncontracts/blob/main/contracts/... it is withdrawn from a special intermediary "reserve" balance OR a Debt is created on this identity.

billytetrud 5y ago

Your proposal isn't trustless anymore. At that point, why not just have normal centralized bank accounts? You wrote that article in 2018 too, what do you think about the state of the LN now, where its no longer common to get payment failures?

homakov 5y ago
> Your proposal isn't trustless anymore not black and white. I didn't say to drop collateral channels to have credit, but to use credit in addition to collateral on receiving side. Also, on ETH those credits are enforceable (as i answered below) so it is far better than a custodial balance. > where its no longer common to get payment failures? nothing changed, the inbound capacity flaw is fundamental. Download a wallet - you can't receive a payment - full stop. Until this is solved say goodbye to adoption. With credits on both sides the total capacity of the network skyrockets. And somebody is taking the risks anyway, either liquidity providers as in delusional LN model, or users themselves as in XLN.
hanniabu 5y ago
> where its no longer common to get payment failures Sorry but they're still incredibly common