7 ms·

You are conveniently ignoring Lightning which currently power payments for an entire nation (El Salvador) and has plenty of capacity for more. Lightning scales

by lowkey 5y ago

You are conveniently ignoring Lightning which currently power payments for an entire nation (El Salvador) and has plenty of capacity for more. Lightning scales fast and cheap, offering instant final settlement powered by the largest security hashpower wall ever invented. Try that with Fiat.

vgeek 5y ago
"Blockchain is so great, it had to invent off chain transactions to be practical" isn't the best argument for real world feasibility. LN has lots of centralization with popular nodes, if you're still paying for an on chain transaction to open/close a channel, you have to start the channel with enough reserves to make it worthwhile.
- lowkey 5y ago
  Tell me you don't understand the fundamental blockchain tradeoff between scalability, decentralization, and security, without telling me you don't understand. Blockchain technology has unique advantages and constraints, like any novel technology. Bitcoin chose a set of parameters designed to ensure sufficient security budget to protect the network, while optimizing for decentralization thereby limiting transaction throughput on layer 1 as the tradeoff. Lightning and other layer-2 provide the scalability by leveraging the security of layer-1. Bitcoin layer-1 is ideal for sending large payments (say >$1000USD today): It currently costs ~$1USD to post a transaction on the Bitcoin layer-1 blockchain. For that I can send an arbitrary amount with no upper limit of value, enjoy payment finality in about 6 blocks (~1hr) and I never have to pay any more to store the value associated with my Bitcoin address. Security for the life of the network is included in my $1 transaction fee. Bitcoin layer-2 (Lightning) is ideal for small payments (<$1000USD today): It currently costs a small fraction of a penny to send funds across the Lightning network with near instant finality (seconds) and very good anonymity. The two technologies complement one another to provide an example to the world of what a sound-money system could mean if it was truly decentralized and immune from manipulation by centralized actors (central banks, governments, etc). Prove me wrong. Is there another form of money that: - is virtually guaranteed to be immune to manipulation by central actors? - allows you to transmit any amount of value to anyone (censorship resistance) anywhere in the world within about an hour for about $1USD and know with confidence that the payment will go through with finality? - allows you to send smaller amounts for fractions of a penny in seconds to anyone anywhere?
  - vgeek 5y ago
    Solutions to non problems that introduce larger problems are inherently bad solutions. Point 1) there are more bad actors wash trading, manipulating markets and pump & dump scams involved in crypto than any other markets. (Even ignoring Tether, the common DAO exploits involving $xx,xxx,xxx+ of losses) Point 2/3 are the same. There isn't an easy, well known way to do this for no fee to any country. WU is expensive and PayPal will block your account. Egold tried to solve this in the past, until fraud caused it to shutter. There are niche Fintech startups that likely address this for sub 0.5% fees, without the learning curve and exposure to currency exchange volatility. Gas and BTC fees show that they weren't really built with this consideration in mind, they just added hacky pseudo-solutions at a later date. I'm lost as to the "anonymous" part, since I had to do all types of AML/KYC stuff when I've opened accounts with popular exchanges, so there is likely an element of discoverability.
    - lowkey 5y ago
      Point 1) I don't believe you are describing Bitcoin, maybe altcoins, NFTs, DAOs but not Bitcoin. - wash trading: tell me who, how, and why is doing wash trading on Bitcoin? I would argue the only entities capable of moving markets with wash trading are major centralized exchanges, not whales. The Bitcoin market is too large to be meaningfully manipulated by whales via wash trading. If exchanges are wash trading, please cite evidence. I'm not saying it doesn't happen in other cryptocurrencies, just that it doesn't happen with Bitcoin. - manipulating market: again not sure what your claim is here related to Bitcoin? Who manipulates the Bitcoin market? How do they manipulate it? For what purpose? - pump & dump scams: again, what does this have to do with Bitcoin? Agree there is a lot of pump-n-dump activity in low-cap altcoins, just like there are pump-n-dumps in low-cap OTC stocks. For pump-n-dumps to work the market cap needs to be small enough for manipulators to manipulate. Who is capable of manipulating the $1 Trillion dollar Bitcoin market? Point 2/3) I may be misunderstanding what you mean (please correct me). If you are saying that digital payments and remittances are not a solved problem even with Bitcoin, well today I can send Bitcoin or Bitcoin over Lightning to anyone anywhere for less than an ATM fee. I could also send stablecoins instead or convert Bitcoin to Stablecoins and back without KYC using a self-custody wallet. Please help me understand what you mean by Point 2/3. Did I understand you comment correctly? Disclosure: I work for a startup (www.liquality.io) that has built tech into a self-custody wallet that allows you to swap any crypto to any other without KYC or added fees. We have several competitors so this space is rea
bob1029 5y ago
> Try that with Fiat. You're going to have to be more specific. Real money is a big place. LMAX does more transactions per second than all of BTC does in a week. In many cases, instant final settlement is a liability, not a feature. Being able to reverse and compensate bad transactions is part of what provides confidence in the system we have today. If all credit card transactions were immediate, final and non-negotiable, I suspect it would have a chilling effect on consumer behavior.
- lowkey 5y ago
  To be clear, the problem Bitcoin was designed to solve was not improving transaction throughput at scale. The problem Bitcoin aims to solve is all the trust involved in the fiat system we currently call money. The current system requires us to trust that politicians and central bankers won't give in to the temptation to debase the currency by money printing out of thin air. As a result this exposes them to spend more public funds without the traditional constraint of having to raise taxes on the populace. In short, Bitcoin was designed to offer an alternative monetary system to those who understand that the current fiat-based system is a scam and has been since the governments all moved off the gold standard. You may argue that this assumption is incorrect, but it is clear to me that Satoshi was solving the problem of trust in the creation of money. Satoshi found a way to create digital value by minting a form of scarce digital money that does not rely on any government to give it value and makes it virtually impossible for any centralized actor to cheat the system and print more Bitcoin out of thin air. Satoshi's vision was about honest money not high transaction throughput. As for payment finality, I believe there is room in the market for multiple options and offering more options to the market is almost always good. I agree that credit card transactions have their place in society and offer real and compelling benefits for consumers, but they are a nightmare in many ways for merchants. As a merchant, you cannot really rely on credit card payment receipts to be final for ~6 months if you must be certain there will be zero chargebacks. Try managing cashflow of a business if you have to be sure you will keep all the money you received via credit cards in the past 6 months. For merchants who wish to have an option to receive payments with clear unambiguous and immutable fast final settlement of funds with no risk of chargebacks, there really is no alternative to Bitcoin in my opinion. tl;dr Bitcoin offers the world an option to use honest money that cannot be manipulated. Can LMAX do that?

by lowkey 5y ago

vgeek 5y ago

"Blockchain is so great, it had to invent off chain transactions to be practical" isn't the best argument for real world feasibility. LN has lots of centralization with popular nodes, if you're still paying for an on chain transaction to open/close a channel, you have to start the channel with enough reserves to make it worthwhile.

lowkey 5y ago
Tell me you don't understand the fundamental blockchain tradeoff between scalability, decentralization, and security, without telling me you don't understand. Blockchain technology has unique advantages and constraints, like any novel technology. Bitcoin chose a set of parameters designed to ensure sufficient security budget to protect the network, while optimizing for decentralization thereby limiting transaction throughput on layer 1 as the tradeoff. Lightning and other layer-2 provide the scalability by leveraging the security of layer-1. Bitcoin layer-1 is ideal for sending large payments (say >$1000USD today): It currently costs ~$1USD to post a transaction on the Bitcoin layer-1 blockchain. For that I can send an arbitrary amount with no upper limit of value, enjoy payment finality in about 6 blocks (~1hr) and I never have to pay any more to store the value associated with my Bitcoin address. Security for the life of the network is included in my $1 transaction fee. Bitcoin layer-2 (Lightning) is ideal for small payments (<$1000USD today): It currently costs a small fraction of a penny to send funds across the Lightning network with near instant finality (seconds) and very good anonymity. The two technologies complement one another to provide an example to the world of what a sound-money system could mean if it was truly decentralized and immune from manipulation by centralized actors (central banks, governments, etc). Prove me wrong. Is there another form of money that: - is virtually guaranteed to be immune to manipulation by central actors? - allows you to transmit any amount of value to anyone (censorship resistance) anywhere in the world within about an hour for about $1USD and know with confidence that the payment will go through with finality? - allows you to send smaller amounts for fractions of a penny in seconds to anyone anywhere?
- vgeek 5y ago
  Solutions to non problems that introduce larger problems are inherently bad solutions. Point 1) there are more bad actors wash trading, manipulating markets and pump & dump scams involved in crypto than any other markets. (Even ignoring Tether, the common DAO exploits involving $xx,xxx,xxx+ of losses) Point 2/3 are the same. There isn't an easy, well known way to do this for no fee to any country. WU is expensive and PayPal will block your account. Egold tried to solve this in the past, until fraud caused it to shutter. There are niche Fintech startups that likely address this for sub 0.5% fees, without the learning curve and exposure to currency exchange volatility. Gas and BTC fees show that they weren't really built with this consideration in mind, they just added hacky pseudo-solutions at a later date. I'm lost as to the "anonymous" part, since I had to do all types of AML/KYC stuff when I've opened accounts with popular exchanges, so there is likely an element of discoverability.
  - lowkey 5y ago
    Point 1) I don't believe you are describing Bitcoin, maybe altcoins, NFTs, DAOs but not Bitcoin. - wash trading: tell me who, how, and why is doing wash trading on Bitcoin? I would argue the only entities capable of moving markets with wash trading are major centralized exchanges, not whales. The Bitcoin market is too large to be meaningfully manipulated by whales via wash trading. If exchanges are wash trading, please cite evidence. I'm not saying it doesn't happen in other cryptocurrencies, just that it doesn't happen with Bitcoin. - manipulating market: again not sure what your claim is here related to Bitcoin? Who manipulates the Bitcoin market? How do they manipulate it? For what purpose? - pump & dump scams: again, what does this have to do with Bitcoin? Agree there is a lot of pump-n-dump activity in low-cap altcoins, just like there are pump-n-dumps in low-cap OTC stocks. For pump-n-dumps to work the market cap needs to be small enough for manipulators to manipulate. Who is capable of manipulating the $1 Trillion dollar Bitcoin market? Point 2/3) I may be misunderstanding what you mean (please correct me). If you are saying that digital payments and remittances are not a solved problem even with Bitcoin, well today I can send Bitcoin or Bitcoin over Lightning to anyone anywhere for less than an ATM fee. I could also send stablecoins instead or convert Bitcoin to Stablecoins and back without KYC using a self-custody wallet. Please help me understand what you mean by Point 2/3. Did I understand you comment correctly? Disclosure: I work for a startup (www.liquality.io) that has built tech into a self-custody wallet that allows you to swap any crypto to any other without KYC or added fees. We have several competitors so this space is rea

bob1029 5y ago

> Try that with Fiat. You're going to have to be more specific. Real money is a big place. LMAX does more transactions per second than all of BTC does in a week. In many cases, instant final settlement is a liability, not a feature. Being able to reverse and compensate bad transactions is part of what provides confidence in the system we have today. If all credit card transactions were immediate, final and non-negotiable, I suspect it would have a chilling effect on consumer behavior.

lowkey 5y ago
To be clear, the problem Bitcoin was designed to solve was not improving transaction throughput at scale. The problem Bitcoin aims to solve is all the trust involved in the fiat system we currently call money. The current system requires us to trust that politicians and central bankers won't give in to the temptation to debase the currency by money printing out of thin air. As a result this exposes them to spend more public funds without the traditional constraint of having to raise taxes on the populace. In short, Bitcoin was designed to offer an alternative monetary system to those who understand that the current fiat-based system is a scam and has been since the governments all moved off the gold standard. You may argue that this assumption is incorrect, but it is clear to me that Satoshi was solving the problem of trust in the creation of money. Satoshi found a way to create digital value by minting a form of scarce digital money that does not rely on any government to give it value and makes it virtually impossible for any centralized actor to cheat the system and print more Bitcoin out of thin air. Satoshi's vision was about honest money not high transaction throughput. As for payment finality, I believe there is room in the market for multiple options and offering more options to the market is almost always good. I agree that credit card transactions have their place in society and offer real and compelling benefits for consumers, but they are a nightmare in many ways for merchants. As a merchant, you cannot really rely on credit card payment receipts to be final for ~6 months if you must be certain there will be zero chargebacks. Try managing cashflow of a business if you have to be sure you will keep all the money you received via credit cards in the past 6 months. For merchants who wish to have an option to receive payments with clear unambiguous and immutable fast final settlement of funds with no risk of chargebacks, there really is no alternative to Bitcoin in my opinion. tl;dr Bitcoin offers the world an option to use honest money that cannot be manipulated. Can LMAX do that?