The fact of the matter is that Lightning is hard. The average person, hell, even the average Bitcoiner, does not want to do channel and liquidity management. It's hard and time consuming. That is why we gravitate towards custodial solutions or use both.
Discussion
Both is good right? Every individual gets decide how important their security and privacy is.
Fully agree.
I have a lightning node. Don't do anything with it. Confusing as hell.
This is extremely commonplace.
Is there hope the ability to run a lightning node and self custody will become user friendly for the average person?
With time and additional development it will get easier.
Think anything that has to be always on is just harder, most people dont have always on devices
almost as if LN is like putting a band aid over a gunshot wound
Nah, it's a working solution, it just needs to be easier for non surgeons to apply.
Trusting anyone with your sats is hard. I even look at hard wallet creators with a skeptical eye. And multi sig is way too complicated for a huge chunk of people. Then so many people got snake bit from Centralized platforms. Easy to see why many feel we are early in this game.
Trusting anyone is hard, especially with greed running rampant and theft.
So then the question becomes what can we do to make self custody the better soultion?
Even as a long time bitcoiner and sysadmin getting my LN node up and running and to a point where my payments dont fail all the time was admittedly a bit of a learning curve.
I'm glad I did it but the depressing fact is like you said most people don't even wanna touch it.
I use alby as my custodial solution, but I do not keep much in my wallet. In the near term, I am not going to set up my own LN node.
Security is always going to be inversely proportional to convenience. The need for security is proportional to social trust. In low stakes, high trust environments, low friction solutions will flourish. In high stakes, low trust environments, self-custody will be the default.
I say this all the time. But I think one of the problems is a lot of bitcoiners are in a low trust, high stakes mindset at all times, and believe everyone else should be to. This leads to a bit of confusion to how things are going to play out, in aggregate.
It’s also a confusion of product and protocol prios. Protocol should be designed for the zero trust, highest stakes sovereign individual as a first class citizen. That’s what keeps things permissionless and decentralized, ensuring free market economic incentives. Holds true at the bitcoin layer and the LN layer.
If you’re designing product for low trust, zero stakes sovereign individuals otoh, good luck 😅 small, tough market! Much better to meet high trust, low stakes, large user cohorts where they are and provide a convenient abstraction over the raw protocol.
Oops, in second paragraph should be “zero** trust, highest** stakes”, not “low trust, zero stakes”
Yeah. I think my brain auto-corrected and got the point.
Also, the mere existence of easily accessible self-custody, changes the incentive structures of custodial solutions pretty dramatically, and makes breaches of trust, existential reputational risks.
What happens to zaps when custodial Lightning services bend the knee and start doing shotgun KYC?
It's weird to me that people think the average person is going to demand anonymity from first-principles. What about the behavior of the average person leads people to think that incentives tilt so heavily in that direction?
So there will be only custodial Lightning services, full KYC/AML (average user) and then those who run their own Lightning nodes (the freaks)?
Is that how you see this ends up?
Are we unintentionally building a digital financial panopticon for the average user, but over Lightning?
Would you buy a diamond ring from an anonymous merchant, in a no-recourse economic transaction, where you and the seller did not reveal personal identifying information about each other? I think such a transaction would be extremely risky.
third parties are chargeback providers
for everything else there’s anonymous transactions
ngl, you kinda looked like a guy who didn’t take the receipt when you ordered a coffee
How does this chargeback provider function without holding provenance information on identity and reputation?
Good question, I don’t know.
When tipping your post, why should KYC be required to use custodial services? (see bottlepay history)
If your response is average people don’t care, then we’re not doing them any favors by allowing it to happen.
Business have regs to follow, and as predicted by many, these regs are changing in an unfavorable way toward Bitcoin.
If an individual running their own Lightning node gets blocked from purchasing coffees from a merchant that only accepts Lightning from a Lightning KYC/AML only provider, then not only does the spirit of Jack Mallers die, but we might as well start unplugging all the nodes because we lost the plot.
Can we just set KYC/AML laws and regulations off to the side for a second, and really just focus on the implications of an economy in which most economic transactions are mostly anonymous. I'm just trying to focus in on what the potential implications within the private sphere are here, and considering how the increased risk trade offs would actually have very undesirable economic costs, due to extremely high transactional loss rates. And then trying to understand why anyone would believe that an ethical position around privacy would prevail in the face of these negative economic incentives.
The fact you are admitting you don't have an answer in the first sentence, suggests to me that your vision of the likely future may not be as cleverly thought through as you might have first thought.
Oh, I was being nice. And trying to encourage conversation. I was not trying to assume anything about your questions or statements.
I have thought it out. Conventional commerce will continue. Maybe repetition brokers will be more distributed in the future.
Where can I read more about “extremely high transactional loss rates”? I’m only comparing the privacy issue to what a cash forward society might have looked like, before the more paper trail financial technologies were invented. What impact did having less cash transactions have on a society with regard to loss rate?
I mean, I work in an industry where I see fraudsters making off with people’s money all the time. Usually by pretending to be people who they aren’t. This results in the loss of billions of dollars from individuals, businesses and payment processors. The idea that they costs wouldn’t go up in a world where everyone presented themselves as anonymous or pseudo-anonymous to each other, strains credulity for me. And if fraud losses go up, then prices and effective transaction costs will, too.
If you pretend to be me, how would you spend my sats if I’m running my own Lightning node?
I'm not sure I'm following the point of the hypothetical?
You’re claiming anonymous or pseudo-anonymous actors bring in more fraud risk, correct? So when dealing with Lightning how would you introduce more fraud? I thought it actually might reduce the fraud you mentioned, that of when a retailer is paid with a fraudulent transaction by someone pretending to be someone else.
Relying on payment technology, rather than ID technology may actually do a better job at reducing the fraud, because you can’t pretend to be me and buy gas with my sats if I’m running my own Lightning node.
Stick with the e-commerce use case. In person payments are one thing. Obviously, cash is an anonymous system, and that works fine for in-person retail payments. But go back to the diamond ring example. How do you safely buy something like that anonymously, without extreme risk of rugpulls in the form of non-delivery of goods or services?
A bills of lading model is the best I’ve been able to come up with for this problem. Know third party carriers facilitating the anonymous transactions for a fee.
A normies default state is high trust maximum convenience. This unfortunately leads them down very bad paths during their journey to learn.
The funny thing also is that trust is given to corporations and anonymous influencers but is reduced when talking with a person face to face.
This is not malicious intent, but rather a habit born from society. It's no wonder that Bitcoiners jump to the opposite extreme, and even after they normalise, they must promote the extreme security model for newbies to be help improve the outcome of their journey.
I just don't think there's going to be a great awakening, here, where everyone's priority becomes to be as self-sovereign as possible. Back in my AnCap days, I convinced myself that people would all reach this conclusion once the contradictions of the system played out. I no longer think that. I think the modern state can exist in a state of contradictions, adapting to shocks and cultural changes, in perpetuity. It doesn't ever have to reconcile down to a self-consistent model. It just has to maintain an ability to adapt.
I think "maintaining the ability to adapt" has limits. The shocks that hit the system COULD all be small enough to stay within those adaptation limits. Or not.
Most people get caught out by hyperinflation historically. Why? Because they simply don’t pay attention.
Humans are titled very heavily towards low time preference behaviors. And I don't think you breed that out of people simply by dreaming up normative ethical systems, and selling them as moral truths.
It is for a good reason though. It’s the ability to do it otherwise will make custodial services act good. Including law makers.
Besides, little bit of lightning never hurt anyone :)
Yep. Was managing channels, rebalancing, doing the whole thing about a year ago. Then had a scare with a channel close where funds got stuck in limbo. Thought I was gonna lose a big chuck of sats until some helpful plebs on telegram got me unstuck with some CLI magic.
So yeah I’m content with my Muun and WoS now 😂
accurate. everything is trade offs
That’s definitely why I am still using WoS for lightning, I tried, but just didn’t have the time to manage it. I mainly keep my lighting holdings low and is used for zaps and/or experimenting with code.
рынок заставит сделать простое решение в 3-4 клика) на все время нужно . и терпение.
Would be cool if we could use lightning in a nodeless manner 👀
You can, but it’s through cash app, Muun, strike, etc.
If you can’t verify, you’ll have to have some trust
I think that if BTC and Lightning take over the world in their current state, Lightning will mostly be an institutional tool.
One reason I think this is what you're pointing out. The other is that if you think ordinals have made transaction fees high, buckle up, cause you ain't seen nothing yet.
The average pleb won't be able to afford an on chain transaction fee when bidding against the entire world's economy in an open auction. Period.
I personally think that banks could just run fedimint software and BTC would scale in a custodial manner to the whole world easily, and though this would obviously not be the world most Bitcoiners hope for, it is very important to remember that it would be way better than the pure fiat world we live in.
Channel factories and other future ways of sharing Lightning channels between many people without compromising your ability to hold your own keys are very important for scaling Lightning to the average pleb in a self-sovereign way.
And maybe we'll find another solution that doesn't use Lightning. Who knows?
You don’t need to do liquidity management to use lightning.
Educate yourself.
Could you drop a link or sketch out the answer because AFAIK that's not true (except for custodial wallets)
Just open channels randomly and use them. Or use an autopilot. Liquidity management helps you optimize things like success rate and fees but not necessary at all.
People just like to complain.
Well, you can use an LN wallet like Blixt, OBW, Phoenix or Breez and it will open channels for you automatically. But you won’t have to do “liquidity management”. That’s why the LSP concept exists.
If you aren't smart about it in Phoenix you pay a lot of fees, and imho it wasn't well explained in the onboarding process when I started using Phoenix recently. Also, you can't receive zaps to Phoenix or any of the others you listed.
You’re moving the goalpost.
I’m only refuting the claim that you need to do “liquidity management” to use Lightning non-custodially.
To not have onerous fees, you do
Onerous fees = nonstarter
No, it’s not. And that is an extremely stupid claim considering the cut some of the custodial wallets take.
You gotta be kidding me
Lmao again, you are moving the goalpost.
And no you’re still wrong. You can use my wallet Blixt Wallet, which is pretty clear and honest about the LSP services.
In the end LN is only needed for small purchases, pocket change and slightly bigger stuff like a meal or groceries. Everything else can wait 10min, heck some have to wait a day or two for transfers to clear, in 2023!!!
I just don’t want one big entity to grab it all. Does not matter if I do not have my own channel, as long as channel providers have healthy competition amongst themselves.
Muun is the best in my opinion..