If you want cryptocurrencies to succeed, you need to make them widespread as a form of payment. I already lament Steam and Stripe removing Bitcoin support because of the rampant speculating, let's not do more of that.
Instead, all effort is going into a building a flawed second layer that is theoretically unsound and a usability nightmare.
Fortunately for people who disagree, there are hundreds of crypto projects that think this is possible. Including straight up copies of Bitcoin like Bitcoin Cash and Bitcoin SV.
And basically every project that tries to claim different is just ignoring the problem and trying to pump their own price.
Everything in cryptocurrencies is a scam.
It's usable for sure, but that doesn't mean billions of people can (nor want) to use it now. I'm using it just fine.
> But companies and organizations routinely transfer millions and billions between normal banks
Just like companies have direct lightning channels between each other, they can send billions of they please.
Note that not all channels are public, so you won't find all in searches. I'm only saying that you shouldn't be worried about lightning liquidity if you can directly connect to your counterparty - as you can directly transact with that party without relying on any liquidity from anyone else.
There are many apps already and things are just now getting started: https://www.lapps.co/
Scaling Lightning is an unsolved problem. It relies on finding solution to problems people have tried to solve for decades with no success.
Sure, it kind of sort of works for small network sizes. It will die a fiery death the second it attempts to become popular with no known way out of the mess.
Once a channel is funded, it can stay open for as long as it needs to. I can have a payment channel open with my local coffeeshop and we can transact dozens of times; only the final bill has to be broadcast to the bitcoin blockchain.
Well connected LN nodes can be connected to hundreds of other nodes and route transactions accordingly.
In the short time LN has been available, there are over 10,000 nodes and growing; the network capacity is almost $8 million USD: https://1ml.com/statistics
Like any low-value transaction using bitcoin, like the proverbial cup of coffee, it’s not necessary to wait for even one confirmation before doing anything.
Plain vanilla lightning uses a UTXO (that’s what a bitcoin on the blockchain is, an unspent transaction) to open a channel. But you don’t have to wait 10 minutes for at least 1 confirmation before using the payment channel.
I’ve received multiple LN transactions with various LN apps and it’s always been instant.
Once the payment channel is opened, it stays open as long as it needs to. But the killer feature is being able to transact without requiring the underlying bitcoin blockchain; it’s only required once the parties decide to close the channel.
Same thing with multi hop payments.
There are many enhancements being worked on, like loop-in, loop-out and submarine swaps, which handle providing liquidity to enable transactions and the ability to make swaps between chains, like being able to “swap” between bitcoin and light coin if that was desired.
There’s also work happening to enable one on-chain UTXO to fund multiple payment channels in one go.
So tens of thousands of transactions can take place without touching the underlying blockchain.
So there’s no lag when it comes to opening or closing a payment channel.
There are no scalability issues; we’ll have more LN nodes than Bitcoin full nodes (about 55,000 worldwide) by this time next year and it’ll be fine.
That describes every single existing payment platform in the world today except Bitcoin.
> There are no scalability issues.
Except a 4tx/sec cap on opening and closing channels.
To be clear, you can send and receive bitcoin without the fees or latency of the bitcoin blockchain until you close the channel. And depending on the use case, that could be weeks or months in the future.
And even when opening or closing a payment channel, you don’t have to wait for the blockchain to confirm that transaction.
> Except a 4tx/sec cap on opening and closing channels.
No such cap exists.
Here’s a great video—“10 Myths about Bitcoin's Lightning Network debunked by a Developer”: https://www.youtube.com/watch?v=obRs-WpJ05M
I'm not sure why you are saying all efforts go into a flawed second layer?
a) Dozens of teams are working on other efforts.
b) Many do not consider lightning flawed.
I'm too young to have experienced this. But I've seen countless of clips and interviews of people claiming they would never use the internet because they can send post and use a telephone instead. "Computers are for geeks", etc.
> New use cases manifested immediately all the time. Nobody ever said “we implemented this world wide network thing, now we are looking for use cases”, there were, and are, always more use cases to choose from than resources to implement them.
It took a dotcom bubble to find the use cases we actually use today. Would you have not said the exact same thing back then about the internet?
You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.
Many people were saying this, Paul Krugman (one of the leading economists) went as far as comparing the internet to the fax machine:
"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'–which states that the number of potential connections in a network is proportional to the square of the number of participants–becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."
> You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.
I'm too young to live through it, but luckily I studied it in university :-) Many people claim to know many things about history prior to their birth. I guess I'm one of these people.
And he caught a bunch of shit for it, even at the time. You keep trying to conflate critics of Bitcoin, many of whom have technical & finance backgrounds, with the largely non-technical crowd that didn't understand the web back in the 90s.
> I'm too young to live through it, but luckily I studied it in university :-)
What's the name of this "history of the internet" course(s) you took? The most historical context I ever got consisted of maybe a few intro paragraphs on Arpanet in my networking 101 class.
People today are as illiterate about economics as they were about the Internet back in the 90s. Just look around and see how many people know what Austrian econ is.
They studied the impact on a few big media inventions (printing press, TV and the internet) on (western) culture. It seems you don't believe I had this in University? You can find some information here: https://docplayer.nl/2209094-Studiegids-2013-2014-communicat...
The subject is called "Mediageschiedenis" and you can find it on page 37. This document is unfortunately in Dutch.
I was working back then, in 2003. The view on the ground was that SV had blown its head, but the rest of the world was just getting on with it. In fact most of the tech industry didn't even notice or care.
If you want to talk about whether web-based commerce was looking feasible, well even that was healthy enough - amazon was there and people were using it more and more, though clearly it wasn't as big as it is today.
So no, there was no feeling that 'the internet' wasn't going to be such a huge thing. There was a pessimism about some aspects of web commerce.
But I guess that's not as catchy a tagline as "It's like the early internet!"
The dotcom bubble was then precisely a symptom of the Internet's runaway success: Everyone wanted to use it, massive amounts of money were being made with it, and so everyone thought they could make money with it as well. As a result, even the stupidest ideas got funding.
When the bubble burst, it caused a significant economical upset. It did not have any really noticeable effect on the Internet itself, its usage, and the availability of most of the services that were actually in use. I don't think anybody remembers a time where Internet usage "dipped" from its massive momentum since the mid-90s, because the dip was largely economic.
Bitcoin is not.
The internet wasn't actively anti-efficient, making itself less efficient the more people wanted to use it haha.
> I'm not sure why you are saying all efforts go into a flawed second layer?
Because Bitcoin is fundamentally incapable of processing more than a laughable number of transactions, barely enough for a small town let alone the world?
> a) Dozens of teams are working on other efforts.
With nothing to show for it that isn't either (a) an objective scam or (b) not true to the fundamentally unachievable objectives underpinning "Bitcoin"
> b) Many do not consider lightning flawed.
Many people are wrong.
I don't know much about LN and actually I'm quite sceptical about it. However I have tried it now couple of times with different wallets and it seems to work very fluently from user perspective. And saying this as a very old bitcoin user, so I'm used to sending bitcoin payments a lot, LN payments don't seem to differ that much from usability perspective. You scan the QR code/invoice and press send.
Then of course there's the features people actually want like dispute resolution, the ability to charge back, and so on.
Even if only a couple of thousand people could use it, as long as it is useful to them it has a niche. It might not be enough to justify insane valuations, of course, but that's another discussion entirely.
Not to mention the low-income folks are most likely to have smartphones and therefore access to online banking with Ally or Schwab, which require $0 minimum balances and refund all ATM fees. You need a phone to use BTC, which means those same people can access Ally or Schwab and be objectively better off.
This is again a social problem in need of a social solution.
Postal banking is a great way to solve the access problem where it exists, too, like is done in the UK, and was in the US until the 1970s.
Sorry, this talking point is debunked, unless there's something I'm missing here.
As to "it's not even bitcoin" you're flat wrong. Holding a valid Bitcoin transaction is definitely Bitcoin, and with Lightning you always do. This is why it can't be done without bitcoin.
And from a FOSS development perspective, bitcoin is the only project in the *cryptos" space I consider serious. I wouldn't base a project of mine on any of the other chains, and I think I've earned my graybeard enough in FOSS to make that judgement.
[Disclaimer, I work on Lightning standards and one implementation, since 2015]
It's kind of a straw man to talk about opening LN channels for 7.5 billion people, as if that's something to be concerned about today. Not every man, woman and child has a cell phone or computer right now, so that's not really a concern in 2019.
Dispute resolution is built into the protocol: it's a two-way channel; both parties have to agree that the transaction in question took place and either party can close the channel if they wish.
And because LN is under heavy development, there are all kinds of new features being developed, like watchtowers that can monitor the channel on your behalf, etc.
You don't need chargeback if you can claim your money and close the channel if thing you want to happen isn't happening, right?
Yes, other cryptocurrencies (such as Ethereum) can create LN as a layer-2 feature.
No, you can't do this with dollars; since there's no cryptocurrency representation of USD with the required blockchain and scripting/smart contracts language required for LN—at least not yet.
And if the other person disagrees? Crypto falls down at the boundary between humans and the Blockchain every time.
You have nodes running on smartphones now; as soon as you launch a LN app, the channel is opened. There are billions of smartphones out there, so the 70 years you quoted is not a thing.
You have to report gold transactions, too, after all.
Why would you spend bitcoin if you didn't have to if you believed it’s going to be a lot more valuable 5 or 10 years from now?
Famously, a guy spent 10,000 BTC to buy two pizzas during the early days; that’s over $94 million USD at today's prices.
LN will be the standard for micropayments in a year or two.
There’s a large portion of the population who have no compelling reason to use Bitcoin.
I think it depends a lot on the audience.
I think we're still a long way away from general purpose adoption however.
This! It's unfortunate that the most well known cryptocurrency failed to grasp this and refused to prioritize scaling so that it could accommodate demand.
At the end of the day, if a cryptocurrency can't be used like cash, it has nothing to offer over existing solutions.