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Due to the recent mempool flooding I've been doing quite some reading and calculating and was interested to hear the opinions of smarter minds on this:

How are we going to scale in the future?

I believe #Lightning is the way forward and I believe using LN for daily activities like the coffee shop and zapping on #Nostr works perfectly. The problem I see is: Even with LN it's not possible for everybody to participate because the on-chain capabilities currently don't allow it unless we fully rely on custodial means and not even then could we meet demand.

My question to smarter minds therefor is:

What scaling options other than blocksize increase exist or are being worked on? Where can I read/learn more? I know that for the demand currently BTC works as it's supposed to and the mempool spamming just proved the system works (e.g. moving bitcoin from the hands of the spammers to miners and back to the hodlers via exchanges) but I was wondering how we're going to deal with it in the future.

Please spare me the "bcash is the real bitcoin" or "CSW was right" because I think neither of them are viable options rn because we just centralise in other parts of the ecosystem (and CSW is a massive fraud).

IMO if we don't scale to the point where we can all transact on LN but still cold store and hold our own keys something went wrong...

So... what are our options?

#bitcoin #plebchain #scaling

Crizzo 2y ago

Custodial lightning will probably play a huge part in getting the masses onboarded. Most people do not care about self custody and are fine with trusting a third party. I think many people will only use Bitcoin on layer 2 for most of their lives. It will eventually be too expensive for the average person to do much on layer 1.

I know Bitcoiners will probably cringe at this, but I think we will have a lot of trusted institutions that take care of much of the back end of running lightning and dealing with layer 1. I'm talking in the distant future here btw. As long as they are not able to change the protocol then it should keep them honest, and they will hopefully be structured so that they can't just run off with people's money.

In the more near term I think self custody is still important to protect yourself while these institutions build themselves out and establish trust. We already have some promising ones with Strike and CashApp. I bet MicroStrategy is going to be a big player too.

As the Bitcoin network grows the existing players and new players will rise to meet the demand. More BTC will be locked up in lightning channels and the network will grow more robust. Then there will also be layers built on top of LN like Fedimint and Cashu.

It's mind boggling how this thing is progressing. Most people are completely clueless to how much progress is being made.

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Discussion

YODA travels 2y ago

I believe the same thing: Most people won't and won't want to self custody. The problem is: Even with most people using solely LN, the on-chain capacity isn't there to support just LN (opening/closing of channels, rebalancing etc) for everybody. Let alone self-custody in cold storage...

Crizzo 2y ago

I think you're making a lot of assumptions about what LN is capable of, and what it requires in layer 1 blockspace to do it. It will get more efficient over time, and if it does start to reach capacity there will be new solutions thought of to deal with it.

Or maybe there will be a more valuable use of blockspace than opening and closing channels and LN will die. Either way the market will figure it out, I wouldn't worry about it.

YODA travels 2y ago

I’m not questioning the capabilities of lightning itself. From my calculations I’m questioning the on chain capabilities to sustain lightning and was hoping to learn how we could fix the on and off ramps to and from LN.

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Crizzo 2y ago

I see what you're saying. I think eventually people will be getting on lightning and never need to get off. If you have all your sats on the lightning network in a way that you trust and meets your needs, then you'll never really need layer 1. When more people are using lightning they will be able to onboard other people who have never used Bitcoin into lightning as well. There will be lightning channels that persist for years and facilitate billions of transactions. Those lightning channels will have only needed one on chain transaction to be created, so I think 260m is probably enough.

YODA travels 2y ago

Yeah, I also believe that’s what’s going to happen for most people. Unfortunately that would mean we’ll have to leave the “not your keys, not your coins” aspect of it though. Most will be, but many will not… so I’m hoping there’s a way we can have both.