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We are assuming with current technology to scale to the total world population.

For everyone to have a lightning channel it would take decades to open all the channels in the network.

Lightning is not scalable unless you give up custody.

Cashu is custodial.

We don't have that protocol yet, so in the current state of things we have to assume that one day we will need custodial in one form or another, in which case my favorite protocol is Liquid and Lightning over Liquid.

ShiShi21m 9mo ago

You have to compare apples to apples.

Bitcoin adoption to the whole world population will also take decades.

Development is never stagnant, so lightning can scale over that same time frame according to you - with solutions coming to fruition.

Cashu is not custodial in the laymen sense, it's not good to mislabel things within this conversation.

& again, just because all the solutions don't exist yet - doesn't mean we should waive the white flag & say custodial options will win out - that's just probabilistically untrue - I'll take the field.

But...

Since on-chain scaling is the issue at hand, please tell me - what's the daily TX count that makes it not possible for it to scale any further?

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Discussion

Cyph3rp9nk 9mo ago

This conversation has ceased to make sense, Merry Christmas.

ShiShi21m 9mo ago

Yeah I thought you'd tap out.

Here's some information on how Bitcoin transactions are weighted within a block.

https://learnmeabitcoin.com/technical/transaction/size/

Upgrades to Bitcoin have seen TX weights go down - allowing TX counts to go up.

I see further developments in this area taking hold as necessary - which today it is not.

Today Bitcoin blocks have space & layers around Bitcoin are improving & catalyzing.

Patrick 9mo ago

If we're talking Bitcoin terms then Cashu is very much custodial. The mint is the custodian of all sats and can refuse to back them at any time. You might be self-custodial with your Cashu tokens but the underlying value is held by the mint.

That being said I agree that we'll continue to see improvements to base layer that allow TX to scale to the global level. There's so many proposals that can bring advancements to Bitcoin for this that will eventually make it to base that I have no worries we'll be good.

ShiShi21m 9mo ago

So you use the same word to compare Wallet of Satoshi or coinbase custodial vs cashu mints that could technically be created by anyone?

Patrick 9mo ago

Yeah because it's the same risk if it's a pleb or Coinbase. Both can make a mistake or intentionally rug you and all the sats be gone.

ShiShi21m 9mo ago

I disagree that it's the same obviously,

Can't you run your own mint?

Patrick 9mo ago

You can but why would you unless you plan to have others accept the tokens minted for something. If you give your tokens to someone else in exchange for any value now you're their custodian and we're back to the custodial nature.

Patrick 9mo ago

Tbh I actually disagree with my argument here. I don't believe ecash is custodial; I believe it's a shitcoin akin to the dollar being backed by BTC. The issuer can determine how much they back the token or make any rules for how they'll give out Bitcoin against it. There's also nothing that ties your original deposit to the ecash you receive. It has no tie to Bitcoin anymore than something like liquid.

I actually made this argument in an unsent opinion letter to the Kentucky Department of Financial Institutions when we were planning to launch a Fedimint. I believe that when someone gives you money that they're actually performing an economic transaction of buying a totally different asset. The asset has no ties to Bitcoin and as long as the mint doesn't make claims to be backing or custodying then they shouldn't be regulated as such.

I don't think this is necessary a bad thing as long as it's an understood element. I think there's a lot of value to mints in our current base layer situation. The tech could still allow scaling for a wide range of new functions that aren't possible/feasible on base BTC. That being said I look forward to more advancement that doesn't necessitate us living in an ecash world.

ShiShi21m 9mo ago

Okay now we're on the same page.

Further on the topic of custodianship differences;

Can't I redeem my cashu tokens with another mint?

It seems like also being able to choose a mint or run your own mint is a major key difference between classical custodianship in Bitcoin land.

ShiShi21m 9mo ago

Peep this disclaimer,

Patrick 9mo ago

You can't redeem on another mint directly. You have to redeem on the first mint and then it forwards a lightning payment to the next mint that then issues them to you on it. If the first mint rugs you then your mint/next mint wouldn't credit you. This disclaimer is excellent as far as trust goes though.

ShiShi21m 9mo ago

Yes that part is clear to me, but you can swap mints if you feel like it - I think this is a major difference to traditional custodial options and why I prefer if we don't conflate the word with invariably different things.

1. A custodial exchange/wallet when you're banked by a single entity.

2. A protocol that has custody tradeoffs that can be chosen based on voluntary market forces.

Patrick 9mo ago

Both Cashu mints and custodial exchange wallets are backed/banked by a single entity. I can slightly see the point of part two though because the protocol could be easier to swap from due to the mint not having as much information to limit redemption. They could still limit redemption by other methods like where the withdrawal is set to go. Similarly you can usually move via lightning based on very similar voluntary market forces if you realize the custodian isn't reliable.