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It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of

by TekMol 4y ago

It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments. Any theories, why they don't do that?

danrocks 4y ago
Because the vast majority of crypto users only see it as a speculative vehicle and do not care about decentralized payments, I would guess.
- TekMol 4y ago
  But giving the tens of millions of Coinbase users a way to do cheap and fast microtransactions could change that. "Oh, you also have a lightning app? Cool, I'll send you the money this way."
  - yao420 4y ago
    I used to work at Coinbase. The thing is no one is actually using it for transactions of any type. The vast majority of users buy a token and let it sit until they can make a profit. The volume of transactions to other accounts was in the single percentage points.
  - deleted 4y ago
    [deleted]
  - tqi 4y ago
    I think for most folks, this is akin to paying for everyday expenses with fractions of your stock portfolio.
  - deleted 4y ago
    [deleted]
nextstep 4y ago
Because the lightning network is garbage?
- TekMol 4y ago
  The protocol itself? Why do you think so?
  - TimJRobinson 4y ago
    1. All payments have to be routed across channels of arbitrary size across an arbitrary network. It's a small travelling salesman problem that only gets worse as the network increases in size. 2. It requires a transaction to L1 to open/close a channel. If 1B+ people used it the Bitcoin network itself couldn't cope with that. At 7tps it can handle a max of 220M transactions per year. 3. You need enough liquidity in all channels to your destination to send a payment. This is fine for micro transactions but it can't handle $1k+ transactions well at all. 4. You have to re-balance channels or they stop working. 5. You need some sort of watchtower / guardian node to prevent the other person from being able to steal your funds. ZK-Rollups completely obsolete the lightning network. If Bitcoin did a hard fork to make them possible every single person would migrate to them. Lightning is not a long term solution, it's mostly a meme to throw back at people who say Bitcoin doesn't scale.
  - null0pointer 4y ago
    One thing I don’t like about the protocol is that LN nodes must stay online or risk having the other parties of their channels steal their funds. I know there are watchtower services to help guard against this but needing to trust a 3rd party to make sure you don’t lose your money goes against trustlessness, a core principle of cryptocurrencies. This is the reason I abandoned the idea of running my own LN node. I didn’t want to risk losing money in the case of an extended outage of my node.
- danrocks 4y ago
  How do? Asking genuinely since I don’t use anything crypto.
- 4y ago
britneybitch 4y ago
Coinbase is technologically kind of a joke. Their matching engine is crap. They haven't even adopted bech32. They just do the bare minimum to keep things working for 99% of users, and for the unlucky 1% they follow the same customer support strategy as Google (aka automated emails but no actual humans). Unfortunately Coinbase is YC and they do a lot of marketing, so people who are just getting started tend to think they're a frontrunner. If you want an exchange that keeps up with the ecosystem you should use someone else. Kraken qualifies: https://blog.kraken.com/post/13502/kraken-now-supports-instant-lightning-network-btc-transactions/ https://blog.kraken.com/post/13502/kraken-now-supports-insta...
- drexlspivey 4y ago
  > They haven't even adopted bech32 What? They’ve been supporting segwit addresses for years
  - janandonly 4y ago
    You can do a Segwit transaction with an “old” Pay-to-Script-Hash (P2SH) transaction. That is an address that starts with "3". You only get the transaction size discount with “native” segwit transactions that are BECH32. https://www.ledger.com/academy/difference-between-segwit-and-native-segwit https://www.ledger.com/academy/difference-between-segwit-and...
    - drexlspivey 4y ago
      I know and they support both for a while now. Why would they not support it if it saves fees?
      - nlitened 4y ago
        I believe, for compatibility reasons
  - britneybitch 4y ago
    Afaik they support the backwards-compatible parts, but nothing new. I'm talking specifically about "Receive to P2WPKH/P2WSH" in this chart: https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges
wolongong942 4y ago
LN can be used privately if you send to your own wallet, and Coinbase likes to track what people do after their coins leave Coinbase. Brian said they can't list privacy friendly coins like XMR due to regulations. LN is also unreliable to this day and i frequently get routing issues about 15% of the time using the most popular custodial LN wallets and sending to popular LN payment gateways. I'm guessing it would be even worse if i was transacting with small shops or self-hosted LN users. This would be a massive customer support burden.
- null0pointer 4y ago
  > Brian said they can't list privacy friendly coins like XMR due to regulations. I know he’s said this but it’s 100% bullshit since Kraken is able to list XMR just fine.
rabite 4y ago
There's been a lot of longstanding potential extra vectors for abuse in the LN protocol and it is not ready for operation at the specific junction where it is most vulnerable to abuses, which is financial exchanges. Exchanges might choose to opt for reasonable security, which is a confirmed on-blockchain transaction. LN is definitely good for something where there's an in-person exchange of goods so at least potential abuse would leave someone at a physical location with surveillance footage, or where there is a subscription service that can be turned off if the payment turns out to be fraudulent. LN has a higher likelihood of assurance of funds delivery in a timely manner than a credit card -- but that there are entities developed that will insure traditional credit transactions.

by TekMol 4y ago

danrocks 4y ago

Because the vast majority of crypto users only see it as a speculative vehicle and do not care about decentralized payments, I would guess.

TekMol 4y ago
But giving the tens of millions of Coinbase users a way to do cheap and fast microtransactions could change that. "Oh, you also have a lightning app? Cool, I'll send you the money this way."
- yao420 4y ago
  I used to work at Coinbase. The thing is no one is actually using it for transactions of any type. The vast majority of users buy a token and let it sit until they can make a profit. The volume of transactions to other accounts was in the single percentage points.
- deleted 4y ago
  [deleted]
- tqi 4y ago
  I think for most folks, this is akin to paying for everyday expenses with fractions of your stock portfolio.
- deleted 4y ago
  [deleted]

nextstep 4y ago

Because the lightning network is garbage?

TekMol 4y ago
The protocol itself? Why do you think so?
- TimJRobinson 4y ago
  1. All payments have to be routed across channels of arbitrary size across an arbitrary network. It's a small travelling salesman problem that only gets worse as the network increases in size. 2. It requires a transaction to L1 to open/close a channel. If 1B+ people used it the Bitcoin network itself couldn't cope with that. At 7tps it can handle a max of 220M transactions per year. 3. You need enough liquidity in all channels to your destination to send a payment. This is fine for micro transactions but it can't handle $1k+ transactions well at all. 4. You have to re-balance channels or they stop working. 5. You need some sort of watchtower / guardian node to prevent the other person from being able to steal your funds. ZK-Rollups completely obsolete the lightning network. If Bitcoin did a hard fork to make them possible every single person would migrate to them. Lightning is not a long term solution, it's mostly a meme to throw back at people who say Bitcoin doesn't scale.
- null0pointer 4y ago
  One thing I don’t like about the protocol is that LN nodes must stay online or risk having the other parties of their channels steal their funds. I know there are watchtower services to help guard against this but needing to trust a 3rd party to make sure you don’t lose your money goes against trustlessness, a core principle of cryptocurrencies. This is the reason I abandoned the idea of running my own LN node. I didn’t want to risk losing money in the case of an extended outage of my node.
danrocks 4y ago
How do? Asking genuinely since I don’t use anything crypto.
4y ago

britneybitch 4y ago

Coinbase is technologically kind of a joke. Their matching engine is crap. They haven't even adopted bech32. They just do the bare minimum to keep things working for 99% of users, and for the unlucky 1% they follow the same customer support strategy as Google (aka automated emails but no actual humans). Unfortunately Coinbase is YC and they do a lot of marketing, so people who are just getting started tend to think they're a frontrunner. If you want an exchange that keeps up with the ecosystem you should use someone else. Kraken qualifies: https://blog.kraken.com/post/13502/kraken-now-supports-instant-lightning-network-btc-transactions/ https://blog.kraken.com/post/13502/kraken-now-supports-insta...

drexlspivey 4y ago
> They haven't even adopted bech32 What? They’ve been supporting segwit addresses for years
- janandonly 4y ago
  You can do a Segwit transaction with an “old” Pay-to-Script-Hash (P2SH) transaction. That is an address that starts with "3". You only get the transaction size discount with “native” segwit transactions that are BECH32. https://www.ledger.com/academy/difference-between-segwit-and-native-segwit https://www.ledger.com/academy/difference-between-segwit-and...
  - drexlspivey 4y ago
    I know and they support both for a while now. Why would they not support it if it saves fees?
    - nlitened 4y ago
      I believe, for compatibility reasons
- britneybitch 4y ago
  Afaik they support the backwards-compatible parts, but nothing new. I'm talking specifically about "Receive to P2WPKH/P2WSH" in this chart: https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges

wolongong942 4y ago

LN can be used privately if you send to your own wallet, and Coinbase likes to track what people do after their coins leave Coinbase. Brian said they can't list privacy friendly coins like XMR due to regulations. LN is also unreliable to this day and i frequently get routing issues about 15% of the time using the most popular custodial LN wallets and sending to popular LN payment gateways. I'm guessing it would be even worse if i was transacting with small shops or self-hosted LN users. This would be a massive customer support burden.

null0pointer 4y ago
> Brian said they can't list privacy friendly coins like XMR due to regulations. I know he’s said this but it’s 100% bullshit since Kraken is able to list XMR just fine.

rabite 4y ago

There's been a lot of longstanding potential extra vectors for abuse in the LN protocol and it is not ready for operation at the specific junction where it is most vulnerable to abuses, which is financial exchanges. Exchanges might choose to opt for reasonable security, which is a confirmed on-blockchain transaction. LN is definitely good for something where there's an in-person exchange of goods so at least potential abuse would leave someone at a physical location with surveillance footage, or where there is a subscription service that can be turned off if the payment turns out to be fraudulent. LN has a higher likelihood of assurance of funds delivery in a timely manner than a credit card -- but that there are entities developed that will insure traditional credit transactions.