(reposting with habla link)
One of the biggest unsolved Bitcoin problems is
ONBOARDING A BILLION PEOPLE
@benthecarman's great piece goes over the current state.
The conclusion in my words:
- Lighning has UX issues, but it's the best we have
- Fedimints may be a good middle-ground solution (to be tested)
- We need covenants to really solve the UTXO sharing issue
🚀🚀🚀
nostr:naddr1qqrrxdeexger2q3qu8lnhlw5usp3t9vmpz60ejpyt649z33hu82wc2hpv6m5xdqmuxhsxpqqqp65w73757p
One of the biggest unsolved Bitcoin problem is
ONBOARDING A BILLION PEOPLE
nostr:npub1u8lnhlw5usp3t9vmpz60ejpyt649z33hu82wc2hpv6m5xdqmuxhs46turz's great piece goes over the current state.
The conclusion in my words:
- Lighning has UX issues, but it's the best we have
- Fedimints may be a good middle-ground solution (to be tested)
- We need covenants to solve the UTXO sharing issue
🚀🚀🚀
nostr:naddr1qqrrxdeexger2q3qu8lnhlw5usp3t9vmpz60ejpyt649z33hu82wc2hpv6m5xdqmuxhsxpqqqp65w73757p
Why not paying out small contributions over lightning custodially with every block? Still better than holding custodially for potentially months. Only an LNURL is needed next to the btc address.
Ending the year off strong!
Over the last few months, we've been preparing our wallet for Fedimint integrations. Today marks the first release with Fedimint support ready for alpha testing!
Fedimint is software for managing federated custodian funds. It's similar to the trust model of Liquid but better privacy and without a blockchain involved. It also has first-class support for Lightning.
The way we've gone about the integration is to seamlessly smooth over the edges that exist in self-custodial Lightning. Our hybrid approach will use a configured Federation when needed. Otherwise, it uses self-custodial Lightning if it exists for the user. This helps things like channel reserves, channel minimums, high chain fees to get started, etc.
You may add a Federation alongside your existing wallet or start with one without needing to open channels or pay on-chain costs. We recommend keeping the value low since this is a very early release, and there are some known features that we still need to develop.
It should feel and act like the same Mutiny Wallet with some caveats around backups for now.
A massive shoutout to the Fedimint team for their recent v0.2 release. It's still early for them and us, so all testing and feedback is welcomed! This does rely on having a federation invite code. We suspect that, over the next few weeks and months, more mainnet federations will pop up. There is not a default one built into the wallet.
We should also have Lightning Address support in a few weeks that works through federations. Kody has already started that work, and it seems promising: https://github.com/Kodylow/hermes
Also, there's beginning work on supporting the Lightning Service Provider Specification, which will eventually allow more plug-and-play support for any LSP to power Mutiny. This will be huge for more advanced node runners as the spec matures. Huge shoutout to John Cantrell for that work.
A lot of core infrastructure has been built into this release. Let us know if there are any problems; it should be identical to previous versions if you do not configure a Fedimint or different LSP.
Expect much more to come soon. Happy new year!
Sounds almost too-good-to-be-true: Fedimint support coming to a major Lightning wallet!
nostr:note13y66pezucap8tjjf80q2mzmc387u6e3jujzk97736lmck972m8ns00s3j7
Great to see trustless payouts churning their way!
Here are some musings on trustless payouts:
nopara73 leaves Wasabi Wallet
"Our journey, though filled with remarkable achievements, was not without its challenges. From early on, we braved storms of sockpuppet and bot attacks, lies and threats of wannabe competitors, and more seriously, in recent years, even the overreaching grasp of the World Government. Both of these fronts have escalated to the point of targeting my family."
https://web.archive.org/web/20231227121456/https://nopara73.medium.com/goodbye-wasabi-c8116c88fb8c
I wish nopara73 energy for continuing advancing bitcoin privacy tech past Wasabi, and I'm very grateful to him for starting Wasabi Wallet, which is a net benefit for bitcoiners.
nostr:note1pttc4hwwccmda4sf3xr6gpz4ay6zxlqs850uhx7y89aj52338qhqaneryz
A bunch of people have been shilling [Liquid](https://liquid.net/) has a scaling solution with on-chain fees on the rise. I wanted to take the time to breakdown why this is a fool's errand and there are better ways to go about this.
Liquid is based on [Elements](https://github.com/ElementsProject/elements) which as they claim in their README is `a collection of feature experiments and extensions to the Bitcoin protocol`. Liquid is just another blockchain. It is a fork of bitcoin with a few fancy things added (Tokens, CT, covenants) and bundled together with a 1 minute block time, federated custody, and some blockstream branding.
Blockchains do _not_ scale. As we are seeing today, the bitcoin blockchain does not have enough throughput for everyone's transactions. This is for good reason, keeping the cost of running a full node low is a priority, this was one of the main reasons the blocksize wars were fought.
So why does Liquid exist? People lately have been touting it as a way to ease fee pressure but in my opinion this is a fool's errand, no different than people back in 2017 saying to use litecoin because fees on bitcoin were too high. Liquid is just a fork of bitcoin, it has the exact same scaling problems and the only reason it has smaller fees is because it is never really been used. For now, it can work as a temporary stop-gap (essentially finding arbitrage for fees), but building actual infrastructure on top of liquid will run into the _exact_ same problems as on-chain bitcoin.
The problem is that Liquid is trying to use [trust as a scaling solution](https://trustisascalingsolution.com/) but did it in a completely inefficient way. When you are trusting the 11-of-15 multisig, you don't need all the benefits that a blockchain gives you, everything is dictated by the functionaries anyways. The problem is if liquid gets any meaningful amount of users it will also end up with huge fees and we'll be back to square one because Liquid's architecture didn't actually leverage any of the trust tradeoffs it took and just inherited all the same problems of on-chain bitcoin.
There are real solutions available. Lightning is the obvious alternative but it does have it's own problems, I think a lot of people have been seeing the problems with small scale self-custodial lightning, it is extremely hard to scale. This is why I am extremely excited about [fedimint](https://fedimint.org/). Fedimint has almost the exact same trust model of Liquid (a federated multisig) but is built on a much better architecture that actually allows for scaling. Fedimints don't have a blockchain but instead operate as a chaumian ecash mint. This allows for them to do actually innovative things instead of just being bitcoin plus a couple features. There isn't a block size, instead the transaction throughput is just gated by the processing power of the guardians. Smart contracts are limited by having to do everything on-chain with bitcoin script, they are pure rust code and allows for all sorts of crazy things. And it all still interoperates with Lightning, essentially giving a Wallet of Satoshi with way less rug-pull risk, tons of new features, and is extremely private.
All this said, it is sad we aren't talking about self-custodial scaling solutions. Today the only real one is Lightning and with current fees, it isn't reasonable unless you have a few million sats. The problem is that this is just inherently a limitation with Lightning. Lightning is excellent when you have high value channels and can make payments across the network, but it does excel at "pleb nodes" where one guy puts 100k sats to try it out, this comes with too many limitations with paying on-chain fees and needing to have reserves to pay future on-chain fees. However, this is potentially solvable. Lightning has solved the problem of scaling payments, where if you have channels, one on-chain transaction can represent many actual payments. What lightning did not solve is that one utxo still represents one user, and this is the limitation we are running into today. Currently the only way we solve this is using a multisig sig (Liquid and Fedimint), but we can solve this in a self-custodial way if we activated covenants. Covenants essentially let us give fine grained control of what is going to be spent from a UTXO before the UTXO even exists. Currently, there are a few proposals (CTV, APO, TXHASH) all with varying ways to do it and different tradeoffs, but imo something like this is desperately needed if we want any chance to scale bitcoin in a self-custodial way.
I agree that a ~9x increase in transaction throughput is _not_ a scaling solution, and Liquid is not a Lightning replacement or competitor. But it does make sense to take use of the lower fees of Liquid (there can be a 1000x difference).
Today it makes sense to keep long-term holdings on chain, middle-term mid sum amounts on Liquid, and short term spending on Lightning.
I would like to see expansion of direct Liquid-to-Lightning solutions, I think these would actually be beneficial for Lightning! When on chain fees are high, many people simply will not open new channels, and will gravitate towards custodial Lightning solutions. If Liquid-backed channels were an option in wallets, that would be an additional option for fee-sensitive users. Atomic Liquid-to-LN swaps exists and are convenient, but directly Liquid-based LN solutions are not mainstream (if exist at all).
On a final note, it seems that saturation of the Liquid side-chain is far in the future. When that happens, I speculate that the federation may decide to increase the capacity. An increase by a small factor will not solve scaling, but may be beneficial for the middle-ground usage of Liquid. The point is that it is much easier and less dangerous to change the blocksize in Liquid than on the main chain.
relay test, ignore
relay test, ignore
relay test, ignore
Don't fall for those who are pro bitcoin but against freedom!
I just need to repost this, Pablo's legendary bullshit note :P
nostr:note16mz0n0c7740ednzk9dw8853jeusesyzy6fjtycvx6y9eznq2vcnqnfmh3f
With sustained high onchain fees, #LiquidNetwork will grow.
But bear in mind, that Liquid's throughput is only 9-10x higher, so on one nice day, that will be also filled up 😃
I'm sure eventually some better solutions will be developed, but it's the best we have. As I see there are several promising L2 (scaling) solutions being proposed or worked on, and there will be some that disappear, but more than one that will be popular. Lightning may become the universal interface/connection between them.
Some emerging tech we know today:
Liquid network, Fedimint, eCash
BTW, fedimints could&should target a community, but not necessary one defined by geography.
Correct. But is there any town as of today with even a single fedimint?
How to not get rekt on fees while transacting?
- find a reliable service which lets you use their established ⚡️ node for a very low fee: https://get.blink.sv
- self custody low amounts on Liquid with https://sideswap.io/downloads/ via swaps on https://bol.tz
- peg out to the main chain with a good size utxo
nostr:npub13ljnkd633c7maxatymv3y2fqq8vt3qk7j3tt0vytv90eztwgha9qmfcfhw nostr:npub1psm37hke2pmxzdzraqe3cjmqs28dv77da74pdx8mtn5a0vegtlas9q8970
Looks like others agree 😃 :
nostr:note1pyy8n7ps9dg33uuzxq4833xmu92jnctw2g6z77p2z6fkf034fjjq3j6vfh
https://primal.net/e/note1pyy8n7ps9dg33uuzxq4833xmu92jnctw2g6z77p2z6fkf034fjjq3j6vfh
Liquid isn't a long-term scaling solution on its own (that's obvious), but federations can and will be part of the solution.
Many federations (both off-chain like Fedimint and on-chain like Liquid) will scale #Bitcoin alongside Lightning, which will play a key role as the connective tissue between different protocols.
There will be no 'one size fits all' scaling solution but rather a range of complementary protocols that cater to specific use cases and markets, each addressing different challenges with a unique set of trade-offs.
In July, I wrote about this and the importance interoperability will play within second layers and think it's even more relevant today with the discussions happening over the past week. Give it a read if you like.
https://blog.blockstream.com/increasing-interoperability-between-bitcoins-second-layer-protocols/
Lightning becoming more than an important L2: it is becoming the universal connector between _other_ L2+ solutions.
One of the most important problems in Bitcoin is how to onboard a billion users.
You may have a conteo about why am I writing this now, but
One of the most important problems in Bitcoin is how to onboard a billion users.