No, the Lightning Network is a free and open payment network on top of the Bitcoin Network.
It's a so called "layer 2" network (Bitcoin network being the layer 1).
Everyone can run a Lightning Network Node on e.g. a RaspberryPi.
One opens "Channels" to other Nodes. Multiple nodes and channels build a network and can transfer Bitcoin/Satoshis for relatively little costs from A to B.
Network nodes can charge a fee for routing payments (or data more generally speaking).
There are different implementations of a Lightning Network node. LND is probably the most used one today.
But there is also C-Lightning.
Not everyone needs to open a Channel. There are custodial solutions already. You just need some Satoshis and are good to go.
Likewise, not everyone needs to create their own Visa or MasterCard.
They may have their MySQL/PostgreSQL implementation where they scale and allow for many TX/s. But they don't settle all these transactions in real time. That's also done on a different, slower layer.
Custodial solutions offer zero benefits over putting your money in a bank - and have a ton of drawbacks associated with Bitcoin people only overlook because of those benefits - and the L1 is so slow that any subset that wants to open a channel brings it to its knees.
It's not a real solution. It's something coiners distract people with whenever someone points out the obvious and glaring flaws of the L1.
[edit] To me it's pretty telling that critics offer specific quantifications (X people requires Y time) and proponents say "only some people need it!" - how many, exactly? How full do you anticipate blocks being with other things? How long is too long to open a channel? Currently it sounds like a Soviet phone line - better put in a request now otherwise you might be in your 80s before it gets installed.
I disagree. Custodial Lightning Bitcoin is still way better than a bank account.
- You can't open a bank account without KYC
- You can send money without asking permission
- You can receive money without asking permission
- You can send money *privately* (onion layer)
- You can send money around the globe faster
- You can always take it on-chain on L1 via a submarine swap
custodial ownership of bitcoins is a product of bitcoiners' defeatism: it only makes sense if you just want to make money and no longer care about the original values of bitcoin.
Again, please specify exact quantities, I did, it's the least you can do.
> But sure, you can stick to the traditional monetary system where only a select few control the rules.
No, a body accountable to Congress (the Fed) which publishes quarterly audits is responsible for the currency. They act on behalf of the American people. As opposed to an un-elected, un-accountable cluster of core contributors and mining pools who seem to operate principally to the benefit of North Korea, ransomware operators, Ponzi schemers and various other kinds of criminals - financial and otherwise.
> You are free to adopt Bitcoin. No one will force you :)
And yet, if you hold an S&P 500 ETF you're exposed to this toxic nonsense via index components. If you're a pensioner in Quebec, you're exposed to this toxic nonsense via their stake in Celsius.
You seem to have a very US centric worldview. Maybe ask some Turkish savers how they feel, or any number of endless examples worldwide where saving in their own government fiat isn’t a good idea.
you can bet your bottom dollar there are some nerds in Sri Lanka who are very happy to own bitcoin right now. they'll be able to spend it as soon as the electricity comes back up.
I think we can all agree that they'd be strictly better off with a digital dollar substitute like USDC than with Bitcoin, as of course they'd be down bad with Bitcoin.
The big question there is whether or not their government allows businesses to operate outside of their control. I doubt many Turks would risk jail time by using a system which provides their government with a full transaction history, especially given the volatility - if you converted lira into Bitcoin a year ago, you’d be about even with not doing anything. If you bought 6 months ago, you’d have 50% losses.
> As opposed to an un-elected, un-accountable cluster of core contributors and mining pools.
These people don't control bitcoin. Developers and mining pool operators have their purposes in the network (designing new features and timestamping transactions respectively), but it's the users and node operators that validate the rules of the system. A code change to inflate bitcoin by 100% will never be adopted by node operators unless nakamoto consensus is reached.
With Schnorr signature aggregation, you can combine an unlimited number of signatures, but Bitcoin has a maximum of 4MB witness data, so there is certainly a cap.
I'd like to counter that with the opinion that for most people, controlling their own keys isn't a priority. These are the people that don't even know there isn't any gold backing the dollar, or where money comes from. For these people, Bitcoin offers the option of digitally native money that is well suited for a rapidly digitizing world. They won't feel any problems holding their bitcoin in a walled garden maintained by banks or money transfer companies, and won't consider the counterparty-risk as something they need to be worried about.
Why would the dollar be backed by gold? You know that ended in 1933 right? I'd say 89 years is long enough for folks to have figured it out, but I'm always open to surprises.
Please re-read my post. I specifically speak of people using money without being aware of all the specifics. Noting that the dollar is not backed by gold.
That ended in 1971 by the way, when Nixon ended the gold standard for the US dollar because the government needed money to pay for the war in Vietnam.
Double-check what happened in 1971. FDR took the US off the gold standard in 1933. From this point forward until present, there was never again domestic convertibility of notes for gold. Nixon ended Bretton Woods (which started in 1944) - but that pertained solely to international convertibility of notes for gold in foreign exchange. It was not the gold standard. It was occasionally referred to as the 'gold exchange standard.'
It's just popular to ascribe this to Nixon because you know, Nixon bad. Watergate, etc. But not everything a bad leader does is bad - Nixon gave us the EPA too. Stopped rivers catching on fire and everything.
The Fed didn't bail out anyone in 2008. Treasury did. Also, the bail-outs weren't grants, they were loans, and they have been re-paid yielding $110B in profit so far with plenty more to come. [1]
I was opposed to bail-outs in 2008 personally, but in retrospect it's very difficult to look back and say that it was anything other than an unequivocal success. Hundreds of thousands of jobs were saved and it was super profitable. With that in mind, I'd suggest a new stalking horse.
Also of note, I said the dollar was digital, not that it was centralized. The Fed doesn't have a central representation of all dollars in existence, the M numbers are estimates. The Federal Reserve System is a federated system, and money is created when loans are taken out at retail banks.
Yes they did, Maiden Lane [1], which was distinct from TARP you are referring to. I had a somewhat upfront seat at that time and the unequivocal success narrative is, in my opinion, extremely dishonest and manipulative.
We haven’t even started to talk about QE which is actually why the Fed and TARP bailouts (aka investments) ended up being profitable. There are a huge number of losers from 2008 which can’t be seen from a superficial surface view, instead it requires playing out an alternate reality where liquidations were forced, and that is a complex and difficult discussion. Paulson was a brilliant spin doctor and so successful that his fake stories of hundreds of thousands of jobs saved and ATMs that didn’t run out of money is being taken as real history, instead of the evil deceptive game it was to insure all his people continued to dominate global finance. It would take a long discussion to try and explain to you how profoundly unethical and manipulative were the actions they took and the effects those actions still have today in terms of extreme inequality, caused not by capitalism itself, but this crony capitalism.
Bitcoin was born from this reality and highly motivated by it. For a certain generation of finance technologists who had a close view of the inner workings of the system it was obviously rotten and corrupt to the core. The core being fiat.
If you are trying to pretend that by explaining M1 and M3 and the creation of money supply you claim somehow USD is “federated” and not centralized then in my opinion you don’t actually understand what you think you do.
Maybe read up on the Fed window and QE mechanisms and their balance sheet. USD is centralized with Fedwire, OCC, Treasury, Swift, BIS and all their regulatory operations, so they have very good information on most digital dollars in existence and certainly have incredible control over their creation and destruction.
Bitcoin is likely here to stay and in my personal experience most people who hate on it were once believers who bought high then sold low after one of its crashes. they now how a very bitter taste and have decided there is some fundamental flaw with it as an idea, mostly motivated by their own emotions and not logic. the other haters tend to have some deranged love of governments and see it correctly as a challenge to government power so attempt to discredit it, I feel mostly out of anxiety the government isn’t what they think it is and it scares them.
> On June 14, 2012, the Federal Reserve Bank of New York announced that its loans to Maiden Lane LLC (ML LLC) and Maiden Lane III LLC (ML III LLC) have been fully repaid with interest. Maiden Lane II LLC repaid its obligations of $19.4 billion on February 28, 2012.
Loans. Fully paid, with interest - the profits also went to Treasury. Also, they seem to have been a rounding error compared to the scale of the rest of the program, but you're right that the actions weren't exclusively Treasury. However, they were primarily Treasury.
Is it possible for TARP or ML to have actually lost money on those loans if the very same distressed assets the borrowing entities held were being simultaneously bought in the open market by the same Fed using QE?
Is not possible and all of it was a complicated shell game with analogies to money laundering. You have picked the wrong savior with central banks and are clearly drinking their Kool-Aid, roughly $8T of it.
That's a good opinion that isn't really relevant to the fact that in retrospect everything worked out great. What harm specifically are you seeking to point out?
Maybe you are missing the point in regards to what “money” you put in your bank. Coiners can also use MySQL but they just won’t be recording entries relative to another master MySQL database of the central bank and that does seem like a decentralized system with government removed. Technologically it is an upgrade, even if eventually, yes, people will need banks for everyone to use it. But guess what they don’t need anymore …
You probably should look at different numbers than just the dollar price.
Number of nodes is rising,
number of wallets is rising, number of hash-power is rising.
Also, please look into the "Lightning Network". It's the second layer on top of Bitcoin and that's where the whole ecosystem scales (in terms of numbers of transactions per second). Cheap, scalable and fast transactions.
Nodes rise because businesses that want to build on the chains require them unless they want to a pay far too much for a wrapper API. The number of wallets is literally unbounded, and it’s impossible to know precisely how many entities are attached to those wallets. I am one person. My tens of wallets are only for one person. I make a new wallet every time I try new wallet apps. I make new wallets to try new things. “Number of wallets” and “number of nodes” is a bad metric.
I would be highly interested in finding a serious shop/commerce/ecommerc operation where Lighting Network is actually used.
I check LN every 6 months or so and situation is not looking so great.
As it was with Bitcoin itself in early 2010s the shops advertising crypto acceptance are doing it mostly for publicity/ideological reasons or actually have stopped existing.
* http://www.room77.de/ - SMTP-packets to port 25 (info[at]room77.de) may very likely get a response just as much as electrons sent to our telephoney landline-device (+49.30.31102260). Single static page.
Lightning network pulls transactions off-chain, thus relying on trusting someone (either the person you transact with or some third party acting as escrow for the funds). By adding in trust, you can mitigate the primary bottleneck caused by proof-of-work consensus methods. But if you have people you can trust to transact with, there's no point in interfacing with Bitcoin at all, just make a micro-payment network without the bitcoin connectivity, like Venmo. This is why we don't see adoption of Lightning Network, it just moves us off of Bitcoin, which lets us get most of the "benefits" for none of the costs.
That's not how lightning works. While it's true that the transactions are off-chain there is no trust element involved.
A channel between 2 entities is backed by real bitcoin and a scheme to manage the ledger based on bitcoin primitives (multisignature).
Lightning is just a series of channels + routing, so in effect it's a path of channels between you and the party you are transacting with + ledgers of those channels updating with the value that is being moved. At any point in time you can close any channel and materialize however bitcoin you have on your side.
There's also a Podcast, Newsletter and the creator is active on Twitter and responds to questions.
In short:
- packed with first-hand experience
- easy to follow
- instantly useful
- the best advice for making something with actually returns money: find and solve a "critical" problem. Learn how to look & find them.
Start small while listening to it.
Also, I've found "This is Marketing: You Can’t Be Seen Until You Learn To See" by Seth Godin to be really helpful. It changed my mind quite a bit around the topic of marketing (Ads != Marketing; love the concept of "find the Minimum Viable Audience").
I am curious; what is your opinion of his works and the man himself? I had read (a long time ago) "Fooled by Randomness" and "The Black Swan" and the thing i remember most is his definitions of Extremistan/Mediocristan (from the latter book) and our inability to understand "random chance" leading to a tendency to see patterns and devise explanations where there are none (eg. Causation vs. Correlation vs. Randomness) I find his writings thought-provoking but difficult to understand (eg. Differences between Randomness, Uncertainty, Probability and Risk) and sometimes quite nihilistic.
I chose to use the exact translation of the original article's title as the title of the HN thread since "Süddeutsche Zeitung" usually is quite a reliable and transparent resource.
"The Soul of Erlang and Elixir by Sasa Juric"
Really one of the best presentations to show what you may get out of adopting Elixir.
https://www.youtube.com/watch?v=JvBT4XBdoUE