> small payments with my friends.
So basically you run a tab?
So basically you run a tab?
Yes, layer-2 solutions amount to basically "running a tab". So what? Channel settlements are still happening on chain, and no layer-2 project can create/alter tokens on its own. Equating scammy ICOs with serious projects and dismissing it all with "a valueless and fraudulent solution" is as simplistic and reductionist as saying that "banks and credit card companies only use funny money".
For OP's use case, "running a tab" is exactly what is needed. It is easy for them to keep their accounting, it saves them money and operational costs and it avoids third-parties that the group do not trust. It facilitates economic activity. Why do you feel the need of pissing on it?
In some sense, this is an argument in favour of bitcoin.
If you see the link from the poster I responded to, you will see that s/he is likely a Bitcoin maximalist, so the only argument they can have is in favour of Bitcoin/"the one true chain".
The link is trying to make the argument that layer-2 projects are not "real cryptocurrency" because the transfer of values are not happening on chain. This is what I was responding to.
I am in favour of innovation in the cryptocurrency space, including the creation of new currencies where necessary, but I think that solving layer-1 scaling by adding the complexity of a layer-2 network should be a last resort.
Of course, companies and individuals who make their money from running layer-2 services will disagree with me, as will holders of currencies whose value depends on the success of layer-2 solutions. For what it's worth, I don't own any amount of any cryptocurrency.
First, scaling layer-1 and implementation of layer-2 solutions is not an either/or proposition. They can be (and are) developed in parallel and one can and should complement the other. Even if ETH2 manages to increase transaction capacity by 5-6 orders (which is quite a tall order) of magnitude there is a strong likelihood that a lot of that will be taken by dapps beyond simple token transfers, and we will be back very quickly in a scenario of network congestion and (relatively) high network fees and consequently demand for payment channel networks.
Bitcoin as well, with all of its forks and different proposals has barely managed to increase its transaction capacity 10-fold with BCH. People will not wait 10-15 years to maybe get something that resembles the capacity from Lightning, so much so that the main story from most bitcoiners is that it should be seen as a store of value (not a currency).
Second,
> companies and individuals who make their money from running layer-2 services will disagree with me
Is a huuuuge ad hominem. I can tell you that there is a good number of developers (myself included, if I may say so) and companies working on this who are more driven by ideals than pure profit. The main reason that I would like to see strong layer-2 systems working (especially in ETH and with stablecoins like DAI) is that so far it is the only feasible way to have a payment network that can actually compete with credit card networks.
To put it bluntly, layer-2 is another case of "Worse is better" if we actually want to have blockchain technology as an alternative to existing financial and monetary systems. Being a purist will not help the people of Venezuela, while layer-2 projects (even custodial alternatives) could.
Long term I agree, that's why I said "a layer-2 network should be a last resort" rather than layer-2 solutions being completely useless.
> Even if ETH2 manages to increase transaction capacity by 5-6 orders (which is quite a tall order) of magnitude
Doing a quick calculation, if ETH2 manages 9,000 transactions per second, that's about 0.1 transactions per person (on Earth) per day. You're right that a reasonable definition of success requires some sort of layer-2 solution eventually, although I don't think we are anywhere near that scale ceiling yet.
> Is a huuuuge ad hominem.
Wasn't it you who accused me of being "a Bitcoin maximalist" in an attempt to discredit my position? :-)
Anyway, we'll see how much layer-2 solutions end up helping the people of Venezuela relative to layer-1 solutions:
https://decrypt.co/11370/bitcoin-cash-just-trumped-bitcoin-i...
Decentralized exchanges, games, management of NFT, all that already exist. They are just really impractical/expensive to do on the blockchain, and layer 2 solutions are starting to come already to tackle that. It makes no sense for everyone to wait for every quantum leap in TPS capacity. "Worse is better" have always won.
Unless, of course, your definition of "winning" necessarily goes through the adoption of a blockchain that can not do much else besides transferring its one specific currency. ;)
> we'll see how much layer-2 solutions end up helping the people of Venezuela relative to layer-1 solutions
If people are getting BCH to convert straight to fiat and/or buy food, is it really a fair comparison with an alternative that is creating its own economy?
Oh the thing I use it most often for is micropayments on people commenting on Reddit. If you say !lntip 100 on reddit a bot will send a lightning micropayment of 100 satoshis to someone. Pretty cool! https://www.reddit.com/user/lntipbot
Payment Channel networks are decentralized in the sense that any one can go and open up a node and participate with other nodes. The point where it gets tricky is that your node's capacity to make payments is determined by how much you have deposited in the channels that you opened and if the capacity of the all of the nodes that connect you with the node you want to reach.
As an example, say that you have a Node A where you deposited 1 BTC in a channel with B, B has a channel open with C where they deposited 0.8 BTC. If you try to send 1 BTC to C, the transfer will fail for the simple fact that there is no A -> B -> C route where all channels have at least 1BTC capacity. Interestingly enough, it would be okay to make ~0.5 BTC separate transfers except for the fact that you will pay B twice for the mediation fees.
So, the kind of centralization that happens on the Lightning network is that nodes with more funds will be the ones more likely to be used when routing transfers, therefore they will also be more likely to make more money due to collection of transfer fees. "Small" nodes will tend to have to connect with bigger "hub" nodes and only be used to send transfers, never to make money as mediators.
The interesting thing with BlueWallet is, given that it is a custodial wallet, it operates with funds pooled from all of its users so they can make larger deposits on their Lightning node. This might seem bad as too much centralization, but as a mitigation they provide their own system as open source, so you can run your own deployment of their LndHub and invite your friends to join to "your own" hub. [0]
(Source: I am working on Hub20[1], which can be easily described as "run your own Ethereum/ERC20 Venmo/Paypal" and was inspired by both lndhub and btcpayserver)
[0]: https://medium.com/bluewallet/bluewallet-brings-zero-configu...