9 ms·

“We can make the blockchain actually work for payments if we take payments off the blockchain.” Sounds about right.

by TradingPlaces 4y ago

koheripbal 4y ago
It's essentially a form of sharing, with lesser secure channels for less important transactions.
- TradingPlaces 4y ago
  You say “less important;” I say “vast majority.” How is this better than Visa or MC?
  - toolz 4y ago
    for one, the base currency in question is uncensorable. e.g. I for one find it detestable that fruits and nuts sellers in Iran suffer immensely because of US sanctions. The idea that innocent citizens are being made to suffer for their governments policy (especially in more authoritarian countries) is gross. I see it akin to punishing a child for their parents behavior.
    - _mhr_ 4y ago
      What do you mean by uncensorable? What does censorship have to do with sanctions hurting innocent economic participants?
      - toolz 4y ago
        if you sanction Iran, limiting their fruit sellers, you have to have means to track the trades in order to enforce those sanctions - lightening network is effectively untraceable at the moment (and tools built on top of bitcoin can make tracing payments provably impossible) which means the sanctions can't be easily enforced - no country is going to spend resources proving their businesses aren't doing fruit trades with sanctioned countries, so if you can't trace the money, you're going to have an incredibly hard time enforcing sanctions - which I would suggest means Iranian fruit sellers aren't going to be nearly as limited in their trade. Iran certainly isn't going to limit them and the sanctioning country (US in this example) isn't going to have the resources to audit every single import to every other country.
        ABeeSea 4y ago
        The physical fruits and nuts still have to be smuggled out of Iran and into a country supporting the sanctions for this to make sense. And the physical smuggling seems way more difficult than figuring out the payments.
        toolz 4y ago
        They don't have to be smuggled out of Iran - Iran explicitly wants to enable that trade. Who inside of Iran are they smuggling the fruits away from?
        ABeeSea 4y ago
        They have to be smuggled INTO another country. One that has applied sanctions and doesn’t want Iran’s fruits and nuts. Violating import laws especially for agricultural products is a big deal.
        toolz 4y ago
        no country _wants_ to reduce trade - they simply accept that sanctions are necessary. Reducing trade necessarily hurts both countries, and there aren't likely to be any functioning developed countries that want to act against their own interests. As such, it's not at all hard to imagine the receivers having a hard time enforcing sanctions. After all, with all the problems a country has - why would they dedicate time and resources to purposefully hurt their own?
        ABeeSea 4y ago
        If the countries wanted to accept the fruits and nuts, they wouldn’t need bitcoin for payments. They would do the usual trade processes. They have outlawed imports from Iran and bitcoin doesn’t change the fact that circumventing agricultural import laws is a massive crime.
        4y ago
    - Grim-444 4y ago
      But you're taking transactions off of the base currency, so it no longer matters what the properties of the base currency are.
      - eldenwrong 4y ago
        You settle on the main chain, which has to follow consensus rules. It does matter. We are scaling BTC like the internet, in layers..
        stonogo 4y ago
        The internet does not scale in layers. This sounds more like Bitcoin is not scalable, so we're introducing abstractions to work around its limitations.
        eldenwrong 4y ago
        Are you familiar with OSI and TCP/IP architecture? Because it definitely works in layers.
        notriddle 4y ago
        TCP has stronger consistency guarantees, and worse performance, than the underlying IP network. Doing it the other way around is usually considered an anti-pattern [1]. [1]: https://en.wikipedia.org/wiki/Abstraction_inversion https://en.wikipedia.org/wiki/Abstraction_inversion
        stonogo 4y ago
        Scaling is not a goal of the OSI model, and TCP/IP predates (and does not adhere to) the OSI model anyway. For insight into how and why this came about, I recommend Padlipsky's "The Elements of Networking Style."
        eldenwrong 4y ago
        But TCP/IP does have layers that help it to scale... https://en.m.wikipedia.org/wiki/Internet_protocol_suite https://en.m.wikipedia.org/wiki/Internet_protocol_suite
    - TradingPlaces 4y ago
      “Evading laws is the killer app of Bitcoin.” You will get no argument from me on that
      - toolz 4y ago
        It was illegal to protect jews from being enslaved and murdered not too long ago. Evading the law is exactly why it's important and it is the ethically superior position to support tools that enable people to bypass unethical laws.
        throwaway6977 4y ago
        You'd think people reading HACKER news would be less pro-establishment in their arguments.
    - preseinger 4y ago
      Humans make mistakes. Systems that intend to serve humans have to accommodate that flaw in order to be viable. Fixing mistakes means rewriting history. That means censorship. And so censorship isn't a bad thing. It's actually a core requirement for any system designed for broad usage.
      - toolz 4y ago
        Flawed logic, censorship can be a mistake just like anything else. Adding the ability to fix mistakes with censorship also adds the ability to make mistakes with censorship. Censorship, however is centralized power and therefore trades fixing small scale mistakes with the centralized power to make big mistakes. This is why western society and individual liberties have been so dominant in modern history. Authoritarian societies have fallen one after another, further evidence that it is incorrect to treat centralization as something other than a bad tradeoff.
        preseinger 4y ago
        And the ability to punish guilty people also adds the ability to punish innocent people. This doesn't mean we abandon the concept of justice.
        toolz 4y ago
        limiting peoples ability to trade isn't justice anymore than limiting their ability to speak. Sure you could conveniently stop many crimes if you could just monitor and censor everyone's ability to speak - but I think the consequences are quite obvious. There isn't a crime in the world that can't be stopped in more appropriate ways than giving an authority presence the ability to stop me or anyone else from spending resources that they own. Nowhere on the list of top crimes against humanity have there been situations where it would've been better if centralized powers had more authority.
        preseinger 4y ago
        I don't understand this at all. Authority is a fundamental and underlying requirement of essentially all aspects of civil society, including but not limited to justice. There is actually no way to define even the concept of crime without an appeal to a supervisory authority. Authority, and specifically "centralized" authority, is a necessary component of any system that can effectively serve more than a nominal quantity of human beings.
- acdha 4y ago
  That’s not any normal definition of sharing. In the most flattering portrayal this is the equivalent of store accounts where you can make periodic large deposits to reduce transaction fees. Personally it seems more like an admission that the first decade of saying Bitcoin was suitable for use as a currency was in fact just as obviously wrong as critics said.
victorvosk 4y ago
BTC and a lot of other chains are Level 1 (L1). Final settlement layers for transactions. To compare that to normal banking, your credit card is like an L5. Tons of things go on in-between your CC transactions before its actually settled even if it appears to be instant and final to the end user. Truth is crypto enthusiasts have been overly ambition in this space, insisting a single L1 chain will come along and be the solution. The average user A) Doesn't care and B) needs a higher level transaction layer that is flexible, where charges can be reversed or funds restored in the presence of theft or fraud. That stuff happens all the time in real life. There is no way to improve the blockchain as currency UX without a centralized mediator(s) for average people. People get scammed all the time despite there being dozens of safety nets in place. How is that going to work when an attacker just needs your crypto keys to steal your entire net worth?
- bearjaws 4y ago
  That just sounds like banking with extra steps.
  - olalonde 4y ago
    Spoken like someone who doesn't know the steps involved in opening a bank account (hint: many people can't), accepting online payments using a bank account (hint: hope you have deep pockets), using a bank for sending interbank/international payments (hint: might need to collect a page worth of information from your recipient. second hint: their bank might refuse to receive the payment), etc. Bonus steps: do all the above programmatically using an API (hint: you might have a billion-dollar startup in your hands). Now do all the above using Bitcoin/lightning network. You'll be done in 15 mins.
    - bytelines 4y ago
      Would lightning network approach comply with KYC laws?
      - deleted 4y ago
        [deleted]
olalonde 4y ago
I assume the implication is that doing off-chain transactions defeats the purpose of Bitcoin? It does not. Did you know that fiat doesn't even have a blockchain to withdraw to when you want to exit or switch payment network/provider?[0] Did you know that with fiat, the money supply can be changed arbitrarily? Those are problems that Bitcoin still solves when you use an off-chain transaction network (at least for the many people who believe those are problems worth solving). Also, it's worth noting that the Lightning network is hardly centralized. It's a bit more centralized than Bitcoin but we're light years away from say, Paypal. [0] The closest that comes to this is SWIFT, but it's not an open network. Even large payment systems like Paypal aren't connected to it. It's also not censorship resistant and you can't use it p2p.
- TradingPlaces 4y ago
  “Blockchain is better because non-blockchain payment systems don’t even have a blockchain."
  - olalonde 4y ago
    That's almost the opposite of what I said. My whole point was that it's possible to use non-blockchain payment systems (e.g. Lightning) to transact in Bitcoin while still reaping many of its benefits. I guess if you wanted to sarcastically quote me, you should have gone with "Bitcoin is better because fiat currencies don’t even have a blockchain." (a statement I agree with).
    - preseinger 4y ago
      How is Lightning not a blockchain system? It depends on a blockchain?
      - olalonde 4y ago
        Yes, the lightning network is built on top of Bitcoin and depends on it but the transactions happen "off-chain". I was just making a generic claim about payment processors that enable "off-chain" BTC transactions, from the decentralized ones like Lightning to the completely centralized ones like Paypal.
ftlio 4y ago
For the last 8-10 years it's been the same thing. Bitcoiners believe you can't sacrifice its finality, but can scale at a different layer. Other "blockchain" people believe something different. It is a weird line in the sand to me that something must either happen on a blockchain or not be the right solution, pretty much regardless of whether that blockchain's finality guarantees are worse if understood at all.

“We can make the blockchain actually work for payments if we take payments off the blockchain.” Sounds about right.

koheripbal 4y ago

It's essentially a form of sharing, with lesser secure channels for less important transactions.

TradingPlaces 4y ago
You say “less important;” I say “vast majority.” How is this better than Visa or MC?
- toolz 4y ago
  for one, the base currency in question is uncensorable. e.g. I for one find it detestable that fruits and nuts sellers in Iran suffer immensely because of US sanctions. The idea that innocent citizens are being made to suffer for their governments policy (especially in more authoritarian countries) is gross. I see it akin to punishing a child for their parents behavior.
  - _mhr_ 4y ago
    What do you mean by uncensorable? What does censorship have to do with sanctions hurting innocent economic participants?
    - toolz 4y ago
      if you sanction Iran, limiting their fruit sellers, you have to have means to track the trades in order to enforce those sanctions - lightening network is effectively untraceable at the moment (and tools built on top of bitcoin can make tracing payments provably impossible) which means the sanctions can't be easily enforced - no country is going to spend resources proving their businesses aren't doing fruit trades with sanctioned countries, so if you can't trace the money, you're going to have an incredibly hard time enforcing sanctions - which I would suggest means Iranian fruit sellers aren't going to be nearly as limited in their trade. Iran certainly isn't going to limit them and the sanctioning country (US in this example) isn't going to have the resources to audit every single import to every other country.
      - ABeeSea 4y ago
        The physical fruits and nuts still have to be smuggled out of Iran and into a country supporting the sanctions for this to make sense. And the physical smuggling seems way more difficult than figuring out the payments.
        toolz 4y ago
        They don't have to be smuggled out of Iran - Iran explicitly wants to enable that trade. Who inside of Iran are they smuggling the fruits away from?
        ABeeSea 4y ago
        They have to be smuggled INTO another country. One that has applied sanctions and doesn’t want Iran’s fruits and nuts. Violating import laws especially for agricultural products is a big deal.
        toolz 4y ago
        no country _wants_ to reduce trade - they simply accept that sanctions are necessary. Reducing trade necessarily hurts both countries, and there aren't likely to be any functioning developed countries that want to act against their own interests. As such, it's not at all hard to imagine the receivers having a hard time enforcing sanctions. After all, with all the problems a country has - why would they dedicate time and resources to purposefully hurt their own?
        ABeeSea 4y ago
        If the countries wanted to accept the fruits and nuts, they wouldn’t need bitcoin for payments. They would do the usual trade processes. They have outlawed imports from Iran and bitcoin doesn’t change the fact that circumventing agricultural import laws is a massive crime.
        4y ago
  - Grim-444 4y ago
    But you're taking transactions off of the base currency, so it no longer matters what the properties of the base currency are.
    - eldenwrong 4y ago
      You settle on the main chain, which has to follow consensus rules. It does matter. We are scaling BTC like the internet, in layers..
      - stonogo 4y ago
        The internet does not scale in layers. This sounds more like Bitcoin is not scalable, so we're introducing abstractions to work around its limitations.
        eldenwrong 4y ago
        Are you familiar with OSI and TCP/IP architecture? Because it definitely works in layers.
        notriddle 4y ago
        TCP has stronger consistency guarantees, and worse performance, than the underlying IP network. Doing it the other way around is usually considered an anti-pattern [1]. [1]: https://en.wikipedia.org/wiki/Abstraction_inversion https://en.wikipedia.org/wiki/Abstraction_inversion
        stonogo 4y ago
        Scaling is not a goal of the OSI model, and TCP/IP predates (and does not adhere to) the OSI model anyway. For insight into how and why this came about, I recommend Padlipsky's "The Elements of Networking Style."
        eldenwrong 4y ago
        But TCP/IP does have layers that help it to scale... https://en.m.wikipedia.org/wiki/Internet_protocol_suite https://en.m.wikipedia.org/wiki/Internet_protocol_suite
  - TradingPlaces 4y ago
    “Evading laws is the killer app of Bitcoin.” You will get no argument from me on that
    - toolz 4y ago
      It was illegal to protect jews from being enslaved and murdered not too long ago. Evading the law is exactly why it's important and it is the ethically superior position to support tools that enable people to bypass unethical laws.
      - throwaway6977 4y ago
        You'd think people reading HACKER news would be less pro-establishment in their arguments.
  - preseinger 4y ago
    Humans make mistakes. Systems that intend to serve humans have to accommodate that flaw in order to be viable. Fixing mistakes means rewriting history. That means censorship. And so censorship isn't a bad thing. It's actually a core requirement for any system designed for broad usage.
    - toolz 4y ago
      Flawed logic, censorship can be a mistake just like anything else. Adding the ability to fix mistakes with censorship also adds the ability to make mistakes with censorship. Censorship, however is centralized power and therefore trades fixing small scale mistakes with the centralized power to make big mistakes. This is why western society and individual liberties have been so dominant in modern history. Authoritarian societies have fallen one after another, further evidence that it is incorrect to treat centralization as something other than a bad tradeoff.
      - preseinger 4y ago
        And the ability to punish guilty people also adds the ability to punish innocent people. This doesn't mean we abandon the concept of justice.
        toolz 4y ago
        limiting peoples ability to trade isn't justice anymore than limiting their ability to speak. Sure you could conveniently stop many crimes if you could just monitor and censor everyone's ability to speak - but I think the consequences are quite obvious. There isn't a crime in the world that can't be stopped in more appropriate ways than giving an authority presence the ability to stop me or anyone else from spending resources that they own. Nowhere on the list of top crimes against humanity have there been situations where it would've been better if centralized powers had more authority.
        preseinger 4y ago
        I don't understand this at all. Authority is a fundamental and underlying requirement of essentially all aspects of civil society, including but not limited to justice. There is actually no way to define even the concept of crime without an appeal to a supervisory authority. Authority, and specifically "centralized" authority, is a necessary component of any system that can effectively serve more than a nominal quantity of human beings.
acdha 4y ago
That’s not any normal definition of sharing. In the most flattering portrayal this is the equivalent of store accounts where you can make periodic large deposits to reduce transaction fees. Personally it seems more like an admission that the first decade of saying Bitcoin was suitable for use as a currency was in fact just as obviously wrong as critics said.

victorvosk 4y ago

BTC and a lot of other chains are Level 1 (L1). Final settlement layers for transactions. To compare that to normal banking, your credit card is like an L5. Tons of things go on in-between your CC transactions before its actually settled even if it appears to be instant and final to the end user. Truth is crypto enthusiasts have been overly ambition in this space, insisting a single L1 chain will come along and be the solution. The average user A) Doesn't care and B) needs a higher level transaction layer that is flexible, where charges can be reversed or funds restored in the presence of theft or fraud. That stuff happens all the time in real life. There is no way to improve the blockchain as currency UX without a centralized mediator(s) for average people. People get scammed all the time despite there being dozens of safety nets in place. How is that going to work when an attacker just needs your crypto keys to steal your entire net worth?

bearjaws 4y ago
That just sounds like banking with extra steps.
- olalonde 4y ago
  Spoken like someone who doesn't know the steps involved in opening a bank account (hint: many people can't), accepting online payments using a bank account (hint: hope you have deep pockets), using a bank for sending interbank/international payments (hint: might need to collect a page worth of information from your recipient. second hint: their bank might refuse to receive the payment), etc. Bonus steps: do all the above programmatically using an API (hint: you might have a billion-dollar startup in your hands). Now do all the above using Bitcoin/lightning network. You'll be done in 15 mins.
  - bytelines 4y ago
    Would lightning network approach comply with KYC laws?
    - deleted 4y ago
      [deleted]

olalonde 4y ago

I assume the implication is that doing off-chain transactions defeats the purpose of Bitcoin? It does not. Did you know that fiat doesn't even have a blockchain to withdraw to when you want to exit or switch payment network/provider?[0] Did you know that with fiat, the money supply can be changed arbitrarily? Those are problems that Bitcoin still solves when you use an off-chain transaction network (at least for the many people who believe those are problems worth solving). Also, it's worth noting that the Lightning network is hardly centralized. It's a bit more centralized than Bitcoin but we're light years away from say, Paypal. [0] The closest that comes to this is SWIFT, but it's not an open network. Even large payment systems like Paypal aren't connected to it. It's also not censorship resistant and you can't use it p2p.

TradingPlaces 4y ago
“Blockchain is better because non-blockchain payment systems don’t even have a blockchain."
- olalonde 4y ago
  That's almost the opposite of what I said. My whole point was that it's possible to use non-blockchain payment systems (e.g. Lightning) to transact in Bitcoin while still reaping many of its benefits. I guess if you wanted to sarcastically quote me, you should have gone with "Bitcoin is better because fiat currencies don’t even have a blockchain." (a statement I agree with).
  - preseinger 4y ago
    How is Lightning not a blockchain system? It depends on a blockchain?
    - olalonde 4y ago
      Yes, the lightning network is built on top of Bitcoin and depends on it but the transactions happen "off-chain". I was just making a generic claim about payment processors that enable "off-chain" BTC transactions, from the decentralized ones like Lightning to the completely centralized ones like Paypal.

ftlio 4y ago

For the last 8-10 years it's been the same thing. Bitcoiners believe you can't sacrifice its finality, but can scale at a different layer. Other "blockchain" people believe something different. It is a weird line in the sand to me that something must either happen on a blockchain or not be the right solution, pretty much regardless of whether that blockchain's finality guarantees are worse if understood at all.