Live with Chuck Williams!
Really enjoyed my time on Show Me the Crypto last week, thanks lads for having me! 🙏
It warms my heart to find more people interested in living on crypto.
Gives me hope for the space!
Great chat on Friday with CryptoCoronado of El Dorado. It's great to see how aligned we are on vision.
The Maya Protocol people (direct team and ecosystem) are very serious about freedom. Definitely my people! ✊
If you saw the THORChain/Maya surge but don't know much about either, this would be a good show to watch. Pedro was great and knowledgeable.
DEX or GTFO. Buy privately, never sell, spend your crypto directly.
Pete's been important in liberty and crypto's frontlines since as long as I could remember, but has largely been the "man behind the curtain."
But he knows some profound things, so I'm looking forward to catching up. Tune in, I think this'll be a sleeper hit.
Pete's been important in liberty and crypto's frontlines since as long as I could remember, but has largely been the "man behind the curtain."
But he knows some profound things, so I'm looking forward to catching up. Tune in, I think this'll be a sleeper hit.
Pete's been important in liberty and crypto's frontlines since as long as I could remember, but has largely been the "man behind the curtain."
But he knows some profound things, so I'm looking forward to catching up. Tune in, I think this'll be a sleeper hit.
I was honored to be on The Jist for a second time talking about some trends in crypto payments.
Spicy headline which leaves out a ton of nuance, but it's not entirely far from the truth! 😁
Layer-two scaling is dead! ☠️
It became fashionable to make excuses to not scale on L1 after the Bitcoin block size wars. Bitcoin went with Lightning, Ethereum went with countless L2s. All in the name of keeping L1 decentralized.
But in the end, we didn't scale ON L2, we scaled L2s! The future belongs to those who build their blockchain to serve billions on the main chain.
Some nuance aside, L2s are basically completely separate blockchains. Think about it: different chain, nodes, security model, token, ecosystem, etc. The only differentiating factor is a set of pegging and bridging mechanisms that some (not all!) use to continue to pretend to use the coin.
L2 scaling is done in the name of L1 decentralization, but if users are forced to live under L2's decentralization trade-offs, the effect is the same as scaling L1. Unfortunately, the more "true" the L2, the worse the UX. Take a look at Lightning. ⚡️ All Lightning Network funds are in two-way payment channels (as opposed to one big bridging pool). How much you can send is severely restricted before you have to make a new L1 payment. Either you have to use L1 a whole lot to use L2, or L2 just works awful! 😵💫
We can see the results. Despite a massive marketing push and being Bitcoin's only way forward, Lightning adoption has stalled out. Devs are quitting, and there's less money in Lightning than in a second-page CoinMarketCap coin. 🤦♂️
Instead, Bitcoin's "real" L2, Litecoin, has shown strong growth, despite much less marketing and little development to speak of outside of MimbleWimble (which has absolutely minuscule adoption). This is ultimately how things are going: competing L1s, unrestricted by bridging/pegging constraints, will fight it out until some gain dominance. It's even easier today with the advent of THORChain and the Maya Protocol, which make it trivial to swap an asset for another one. This essentially makes every single coin a potential Bitcoin or Ethereum "L2"!
Notice, however, that almost no one would use Litecoin if Bitcoin just worked. No one would care for Arbitrum, Solana, etc. if Ethereum scaled. 📈 While we do have a multi-coin future, most chains won't survive as an alternative if the preferred chain scales to meet user demand.
It's very telling that Justin Bons, former Solana mega-critic, has significantly changed his tune in recent months. He sees the "scale L1 or die" writing on the wall! ✍️
Now that's not to say that there's no use for L2s. Some specialized use cases exist where the trade-offs are massively different from L1. That's fine. But you should be able to use the base network for its intended purposes without juggling chains. If L1 can't do certain things, accept that the crypto can't do those things. Scale massively on-chain, or fail!
Sources:
https://bitcoinvisuals.com/lightning
https://bitinfocharts.com/comparison/litecoin-transactions.html#alltime
Another critical Lightning Network exploit was just discovered. It was so bad that the dev who discovered it quit Lightning altogether! 😵💫 Here's how this affects Bitcoin and changes the future of how it'll scale.
The first link in the comments has a good thread on the exploit. Basically, it allows you to steal funds by exploiting a timelock contract timeout. You can partially mitigate this, but there's no way to completely avoid the risk of an exploit!
It's starting to feel like the end of the road for the Lighting Network as Bitcoin's general-purpose scaling solution. Increasingly, it can only work well with trusted parties, closed-loop ecosystems, and (sadly) fully-custodial bank-like apps. I predict a talent flight.
Does this mean Lightning is now useless? No. It works well for closed-loop ecosystems like a social network, and for settlement between large trusted parties like exchanges. But to replace regular small payments, it probably won't last.
What does this mean for Bitcoin? Well, it put all its social and financial capital eggs in the Lightning basket. It'll be really hard to pivot to something like drivechains now. We're in an existential crisis moment for Bitcoin, whether its supporters admit it or not.
How then will Bitcoin scale? The way it always has: through other chains acting as L2s. Read the second thread on using Dash as a "checking account to Bitcoin's savings". With cross-chain DEX networks like the Maya Protocol and THORChain, it's trivial.
We're already seeing Litecoin used like this. Since 2017, Litecoin transactions have been steadily climbing, and it's taking over payment processors as an increasingly popular spending choice. Largely today, Litecoin is Bitcoin's L2.
I think we'll also see people use Bitcoin-denominated payments on other chains. We're already seeing this, with much more Bitcoin wrapped on other protocols than in the Lightning Network. People are using other chains for payments or cool DeFi stuff.
Ultimately, I think people will continue to save in Bitcoin for a while still, and use other chains for payments and other things. This will work fine for a while.... until Bitcoin's scalability ticking time bomb goes off 🧨
If you do the right thing the wrong way, eventually the wrong way of doing things leads you to doing the wrong thing.
This is why principles matter, even when it looks like they don't.
Good back-and-forth on THORChain's practical decentralization, and also on whether or not Nicole should go back to making cringe videos. I vote yes.
Watch THORChain interfaces closely over the next few months. That's where the battle is.
https://twitter.com/TheDesertLynx/status/1710273968656064644
Ten years ago I moved to New Hampshire for the Free State Project, looking for freedom, purpose, and a better life. It was the single most important decision of my life, and I've been immeasurably better off since then. Here's a quick recap of my last decade.
In 2012 I came across the Free State Project from a liberty think tank list from Atlas Network. I watched with some interest from a distance, but when a Democrat state rep specifically called out Free Staters as a threat, I knew I had to move ASAP! In 2013, I packed up everything I owned into my car and hit the road, starting the long journey from Phoenix (about 50 hours driving). No job or housing lined up. Almost hit an elk in Colorado and got blown into a cornfield in Kansas, but I made it!
Hit the ground running pretty much right away. Started a podcast as was my duty as a libertarian. 🤣 Also got a job right away teaching taekwondo, and finally got that state championship I was chasing. From there I did basically every kind of activism imaginable.
I worked for couple years for Americans for Prosperity New Hampshire promoting freedom in electoral politics at the local level (I still volunteer occasionally to this day).
I also traveled as a volunteer to promote the FSP and get more people like me to move for freedom!
I also started my own activism project Rights Brigade (on break) to try to mobilize mostly volunteer activism and run only on Bitcoin donations. Biggest thing we did was jury nullification outreach. We covered 10/11 courthouses in NH, sometimes several simultaneously!
Speaking of #Bitcoin, I also got involved in cryptocurrency. On my trip to NH I received some Bitcoin. Started only accepting payment in crypto in 2015, then closed me bank account the following year. Still at it almost 8 years later!
I've traveled the world, but New Hampshire is the only place I've really called home. Beautiful place, great quality of life, and it's only getting freer.And the thousands-strong Free State family is a ride-or-die network like none other.
Not telling you want to do with your life, but you should at least visit New Hampshire sometime. Maybe even move, who knows. All I can tell you is my story of the best decade of my life after I came here looking for freedom. I found it. Maybe you will too...
The media has no power anymore now that anyone can front-run a story, put it on Twitter, and have millions of views within hours. 👏
https://twitter.com/stoolpresidente/status/1704574353415823411