People are starting to give up on Bitcoin's Lightning Network. It's too clunky, complicated, and difficult to use to work for regular people. 😵💫 But if it doesn't work for regular people, what does it work for? Great question!
First, before maxis cry FUD, just do a cursory look around Twitter. Ignore people who don't care about Bitcoin. Prominent maxis are acknowledging the truth that, from the end-user perspective, it's difficult to use, even many years post-inception.
What about Lightning's structure makes it clunky? 🤔
-Channel maintenance
-Liquidity management
-Always-on connectivity
-Finding routes
Contrast this with on-chain, where you connect to a node (or run your own) and are all ready to go. Only companies will manage Lightning.
So then what is Lightning good for?
-High bi-directional (not one-way) volume
-Low per-transfer fees
-Instant transfers
Entities that do a ton of back-and-forth transfers with a small number of partners can afford to run and manage a node, and it can make sense to. Who might some of these entities be?
-Exchanges
-Custodial payment processors
-Social media networks offering tipping
-Games
-Payroll companies offering real-time streaming salary (settle anytime you need)
Lots of use cases that don't involve the end user buying coffee! ☕️
But wait, wasn't Lightning supposed to be for buying coffee? 🤨If it doesn't work well for p2p payments, where does that leave Bitcoin?! First, Lightning can take enough transactions off-chain so more people can do on-chain payments. Not enough, but it's a start. ltimately, either a general-purpose L2 solution like the drivechains Paul Sztorc is proposing would be needed at scale. I personally thing we need a block size increase, even to make Lightning work better. Doesn't have to be big blocks, just bigger. Double every halving.
NOTE!!! This only applies to Bitcoin. Lots of other coins have pursued on-chain scaling strategies, and can handle lots of layer-one payments cheaply. I use Dash the most, but Bitcoin Cash, Litecoin, even Monero work. I'm purely speaking to the people who ONLY want Bitcoin.
Yet the spam/bot problem is real. IMHO the only way past this is a crypto-based pay-per-post model.
Why do Bitcoin and other cryptocurrencies act more like religions than tech projects? Because anyone can buy into the religion, and actually make money from growing it. Here's why most cryptocurrencies' incentives promote cult-like behavior.
DISCLAIMER!!! I am NOT advocating for crypto to play this role, the opposite actually! I want the tech to be used dispassionately by billions around the world to live better and freer lives. I'm merely making sense of this bizarre social phenomenon.
Crypto is both open to anyone to participate, and has a token at its root that you can buy, whose value fluctuates. This means anyone can buy in and become a member (no gatekeeping), and, more importantly, when other people buy in and join, it profits current members! This is different than a company. Yes, some have cult-like followings, but they have end-user products with utility outside of "membership". Imagine if Starbucks sold company stock instead of coffee. 🤯 Everyone would be trying to recruit new members into the cult!
Cults tend to be different too.The people at the top make all the money from new members. Whereas with crypto, every new "believer" who buys in increases the value for everyone else!
Incentives matter. Everyone follows what makes them money. To make money DIRECTLY off of Bitcoin, you need to either run mining machines, or hope the coin goes up. Most coins with similar incentive structures have similar outcomes. The more ways you can make money in any given crypto's structure (getting more real users, providing liquidity, etc.), the less cult-like the behavior is exhibited. But the opposite is also true: coins with fewer ways to earn have a stronger buy-in cult! 🤑
Of course, you could make money off of any crypto by building a business around it. This is the only sustainable path long-term. But it's so much easier to just buy, shill on social media, and hope to get rich. The easiest path wins out until no one's buying anymore!
No I'm not there right now, I just don't tend to post location pics in real time.
https://twitter.com/TheDesertLynx/status/1700569826031251457
Bitrefill is coming out with a new crypto card for European users. Obviously KYC, but for those who don't care as much, it's a great way to switch to all crypto that you control.
Which are the best crypto companies that are most instrumental to actual adoption of crypto as money? Bitrefill and Spritz come to mind immediately. Anyone else? 🤔
Everyone hoping to live on the Bitcoin standard doesn't remember how the gold standard turned out: custodians, fractional reserve, and eventually dissolution.
Our only hope at sound money is decentralized payments. Digital cash or GTFO ⚡️💵
For months I've been obsessed with figuring out how to do NFC payments (tap-and-pay) while only owning a de-Googled phone running GrapheneOS. Dead end after dead end.
Today I finally got a breakthrough! 😀
You know it was a good chat with Nate when it runs over two hours! 🤯Really good build-up to the eventual governance vs. ungovernance showdown we'll be sure to have at some point.
Sure I guess that's a good answer.
So just use fiat?
The world you grew up in is never coming back.
You've got to realize just how good that is.
Crypto isn't political. It does enable radical human freedom, which as it turns out people are pretty damn political about. 😅
This individual almost assuredly uses very many different financial and data networks on a regular basis. The crypto world is turning out the same way, and anyone who actually uses crypto knows this.
Yet is a crypto founder and doesn't know? Embarrassing! 🫢
https://twitter.com/ColinLeMahieu/status/1690803851010396160
Really loved last week's podcast with Ryan on Zcon4. Definitely give it a listen if you missed the conference.
Yesterday I used six different cryptos. This isn't rare for me. Cross-chain is the way of the future, whether you're ready for it or not.
Far too few people have seen this video and think it's hard to live on crypto. Let's change that. Share this everywhere! 📢
Remember when libertarians got into crypto to #EndTheFed, then kinda just got distracted and stopped trying to use it? 😒