Nostr Web Client

Layer 2s require trust of the layer 1 actor. You trust the guy opening the channel that he isn’t going to block your transaction or steal fees. This is what Watchtower does retrospectively, if I understand it correctly. Also, layer 2s don’t support the network/miners. BTC has to be transacted on the layer 1 to maintain security. I I think lightening is great, I enjoy using it as much as the next guy, but I don’t know that it will tolerate scaling for a number of reasons, several I’ve listed above.

Ferris Bueller 11mo ago

Maybe liquid instead of lighting becomes more popular for the average person that should help prevent this first issue? the liquid federation has control so its not trustless, but there are lots of safeguards already in place to prevent a rug pull scenario that are cryptographically sounds, redundent, ect. because members are businesses, exchanges, asset managers, ect they have a reputation to protect, rather than just a peer to peer lighting transaction. to your other point, I 100% agree we need to have transactions on the base layer. security reasons for sure, and just to incentivice miners to continue to hash even when the block subsity shrinks and eventually disappears. I'm not to worried about this for a few reasons: consider how many bitcoin transactions happen now with such low adoption. what happens when bitcoin is the global means of exchange? demand will be so much higher. and even still, extrapolate how many people will be on earth in 50+ years and they are all using btc.

maybe its just wishful thinking, but I think we are just so fucking early here that there will be so many more solutions to all of these current and future problems. if you were looking at the creation of TCP/IP back in the 70s, could you really understand then that it would evolve into the internet, AI, ect?

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Discussion

WildBill 11mo ago

I guess for me, the first principles are trustless, secure, decentralized, and scalable money. Are we settling and justifying layer-2s/paper on gold?

And to your last point, I agree that all technology advances. All technology evolves. We are seeing the adoption of cryptocurrency broadly, but do we think a fair-launched, POW, layer-1 with a block speed of 10 min is all technology will give us going forward? I’m not saying in this post it is, I’m just asking questions. Every technology in the world has been improved upon over time. And we’ve already said stable coins are going to be used vs p2p layer 1s.

Ferris Bueller 11mo ago

to your first point, I just don't think this is a fair comparison because the layer 1 is so radically different (btc vs gold). if I build 2 of the same house: one on concrete and one ontop of sand, its not fair to say the houses are the same.

As for the technological advances question, we have already seen soft forks with the taproot upgrade for example so it has the ability to change if consensus can be reached. this is obviously very difficult to do though, but this is good because it defends against unintended consequenses (inscriptions for example) and in general, you just don't want your money to change. it should be the same and boring AF to provide stability.

the stable coins idea I think is just a separate issue. i see it as a phase that just will prelong the lifespan of the dollar. just like when gold backed money, then oil, and now maybe stable coins ensuring demand for US T bills. it will die eventually because its just a house of cards build on trust. once the trust breaks, its over.