The current state of Bitcoin scaling discussions.
Discussion
Right this is not the Way
the zeal to host your own self-sovereign lightning node and manage channel liquidity wasn't enough to convince entry-level plebs to lose their sats on experimental technology. The vast majority of plebs are overwhelmed in their experience with lightning and justifiably feel "safer" in a custodians hands, rather than trusting their incompetence with the destiny of their sats.
If adoption outpaces scaling, isnāt this inevitable?
I don't even name mention "permissionless" to newcomers anymore. It's just too unstable IMHO.
Iām confused, does custodians include lightning because thatās exactly what lightning channel participants are, right?
Are we talking about scaling on the chain only?
A custodian takes control of your money and issues you a claim to it. Lightning is a collaboration but the custody of funds stays with the channel creator until settlement. While this is a claim(for the channel participant) it is the most secure way to secure a digital asset for future reclamation. Lightning is custodial not to a party but to a ruleset (just like layer one bitcoin).
I liked the idea of gathering up all the bitcoin and then evenly distributing them into different UTXO sizes in opendimes and handing them back out to people š¤
Necessarily you need custodians for layer 3 scaling (credit) unless there is some feasible ruleset where credit principle can be reclaimed from the recipient in some sovereign way. Layer 2 can scale entirely sovereign such as in the case of Lightning. It just takes work or a benevolent company to FOSS streamline nodes, software, and guides start to finish.
channel management still has a L1 footprint, so even if someone made running your own lightning stuff "really easy" there is a limit to how many sovereign users it can scale to. I would prefer a UTXO sharing type of solution instead of a payment channel solution. something where I can truly own coins on L2 without personally having to migrate them from L1. but that most likely would require a covenants opcode to work well.
The Layer 1 footprint is negligible and will continue to be. The layer 2 channels would essentially be your way to receive and spend bitcoin. Eventually you have your asset on your lightning node, on-chain wallet. You'll have your savings channel, your spending/payroll channel, and any others you'd care to open. You open those ONCE to your transactional node (for balancing). Those, using taproot can be spliced when your wealth grows. We are talking about 3-5 transactions over your life most likely. The only entities that will have a bidding war on chain will be corporate commerce channels. All the plebs will have their channels established for years at that point. Covenants are FUD on layer 2.
is this a subtle jab at ecash mints?
It could be seen as such, though IMO an ecash mint beats a normal custodian due to its improved privacy characteristics.
Crazy how quickly things come full circle. Not surprised and a little surprised at the same time.
Lightning-accelerated Drive Chain-powered Chaumian mints run by distributed computing systems with sharded databases and multikey is the future.
Still betting on Microstrategy to announce a bitcoin custodian service for banks.