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xmrk ₿ ⚡️ 2y ago

People seem to think that hyperbitcoinization is near, but is bitcoin prepared for that? With 200 vB per channel opening, we get 1 vMB/200 = 5000 new channels / block, 720 000 new channels per day. More than a year to onboard just USA, and we already sacrifice on-chain JPEGs in this scenario. That would force people into custodial solutions, because transfer to self-custody would be too expensive or slow. This could even be exploited by governments: "look how expensive it is to open a channel, use a bitcoin bank" - which can do fractional reserve just like in the good old days.

Batch opening? If we go crazy with 100 channels per tx and just 1 input, we can get 28835 channels per block. More than 5x better, onboarding USA takes just 72 days - so some people have to wait 72 days for their paycheck. Still not good enough.

Channel factories to the rescue? Sure, once they are implemented...

TLDR: careful what you wish

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Discussion

59
PulsPay 2y ago

How is 5000 per block equal to 72000 per day?

Also once hyperbitcoinization is here, people would be taking their salaries via LN not on chain.

17
xmrk ₿ ⚡️ 2y ago

1. One block per 10 minutes means 6 blocks per hour, 24*6 blocks per day (on average). So 5000*6*24 = 720000 .

2. but to use directly lightning, you need to open a channel to your node, so you need to do one onchain transaction for every real, direct user of lightning. Otherwise you are not using lightning, you are using someone's service (for example walletofsatoshi's) and this someone maybe uses lightning. Custodial and easy to confiscate if the state feels threatened enough. Fedimint could be an interesting middle ground between custody and self-custody.

3. I rarely get replies, got kind of bored with nostr and did not check my account.

59
PulsPay 2y ago

I think there will be multiple ways hyperbitcoinization sets in.

1. Initially not everybody will setup nodes, most people will go for custodial solutions. Tech

savvy people might do that initially. Notechy might go for custodial.

2. People notice custodial solutions are charging huge fees(0.1-0.5%), some more people will move to their own nodes increasing competition and achieving more efficient routers.

3. Also I think hyperbitcoinization will take place in different geographies at different times giving ample time for equilibrium to be established.

4. Rounding to 500k per day, 50M nodes can be setup with enough channels in 100days. Should be more than enough.