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Comment by homakov | Hacker News Reader

Bitcoin dominance is fading this year only because it has bet on LN with fundamental inbound capacity problem. LN rejected my proposal to solve it and extend channels with credit lines: XLN https://medium.com/fairlayer/xln-extended-lightning-network-...

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It looks like you are explaining some good stuff in that blog post, but the overall arrangement and writing style of the post reduces it's impact.

Your post could be more influential if you refined it through a technical writing type process - perfecting the ordering of presenting information for the audience you hope to persuade.

This is true, but that's not the only post I had on the subject, just the earliest one. Anyway, I gave up on btc and now implementing xln on eth https://github.com/homakov/xlncontracts/blob/main/contracts/...

Bitcoin dominance always goes down in altcoin season and then comes right back up.

Meanwhile, crypto indexers beat Bitcoin maximalists. But, the evidence for indexing performance will never see the light of day . :)

Not sure what you mean by crypto indexer, you mean people who buy a basket of crypto? Sure, in the short term, they might outperform BTC, over long term 70% will die, 90+% won't recover to their ATHs. If you indexed back in 2017 into top 10 coins, only like 3 of them crossed their old prices from 2017, rest are as good as dead.

Usually you'd rebalance periodically.

Seems like stuff folks say in a bubble. 90% of it will disappear once ethereum fixes this/that.

Where did you get these numbers? I assume this is a post-hoc rationalization?

I mean you can pull up the numbers for yourself if you don't believe me, people have also done the math themselves [1][2].

1: https://preview.redd.it/c21qium7jyr61.png?width=1113&format=...

2: https://www.reddit.com/r/CryptoCurrency/comments/mmstrt/i_bo...

This is useful. Good numbers. Thank-you.

>But, the evidence for indexing performance will never see the light of day . :)

Why not? If such evidence exists why aren't you presenting it?

You'll note that my comment was downvoted. This evidence is immoral. Thus, it won't be aired.

You can go to pandaanalytics.com if you'd like, and play with their index options. See what strategies have worked well. (I weight by market cap, top-10, no stablecoins)

Your comment was downvoted, likely due to claims with no evidence but instead a story about how you're about to be silenced. You could've just posted something to support your position instead and we'd skip all the drama in this exchange.

Is this really drama? I don't actually care if I'm downvoted. People will always upvote iced cream, and downvote brocolli. It's not hard to see that, or understand why that would be the case. Mostly I find it funny.

I was a 100% bitcoiner 2014 to 2020, but after exploring defi and L2 projects in pipeline, i decided this time is different and converted to eth. That's just my opinion.

To me, it's like gold=Bitcoin, I can fully trust it and know that it will be here in 100 years from now, functioning just the same and that my wallet from today will be perfectly functional, and oil=Ethereum, it's an awesome platform that allows me to run a variety of different financial operations with different assets (including Bitcoin), but it's much more nimble, things are a lot less set in stone and I frankly have no idea what it'll look like in 100 years from now or even if it will still be the dominant defi platform.

A parallel is like, today we only have 1 thing that's gold and many banks/financial institutions that provide variety of services. All these institutions combined are worth a lot of money (the largest banks combined have roughly ~2T$ in market cap[1]), but gold market cap is like 11T$.

Just my 2 cents, I own both and hope both succeed.

1: https://www.statista.com/statistics/431751/leading-banks-usa...

But do you hold BTC or WBTC? Among people I know, actually havinf a BTC wallet is pretty rare.

The ethereum ecosystem is just so rich that there's no reason to leave it, well, maybe bsc and solana, but that's it.

Your proposal isn't trustless anymore. At that point, why not just have normal centralized bank accounts?

You wrote that article in 2018 too, what do you think about the state of the LN now, where its no longer common to get payment failures?

> Your proposal isn't trustless anymore

not black and white. I didn't say to drop collateral channels to have credit, but to use credit in addition to collateral on receiving side. Also, on ETH those credits are enforceable (as i answered below) so it is far better than a custodial balance.

> where its no longer common to get payment failures?

nothing changed, the inbound capacity flaw is fundamental. Download a wallet - you can't receive a payment - full stop. Until this is solved say goodbye to adoption. With credits on both sides the total capacity of the network skyrockets. And somebody is taking the risks anyway, either liquidity providers as in delusional LN model, or users themselves as in XLN.

> where its no longer common to get payment failures

Sorry but they're still incredibly common

Payment channels ARE credit, generally - I'm sorry this proposal was rejected. Was there a reason for the rejection?

Payment channels, in traditional sense, are fully collateralized credit. I suggested to leave collateralization ratio up to users themselves. Some could have 100% collateral, some 0%, some 50% etc.

Rejection reason: unclear, doesn't fit the narrative.

Payment channels are not at all credit. Credit means you're relying on someone to pay you back, and have a risk that they won't pay you back. Credit relies on trust. Payment channels do not rely on trust. You can always retrieve your money even if your channel partner doesn't want to give it back.

Unless you value the time your money that is locked up at zero, they are definitely credit - as GP said, fully-collateralized loans.

Interesting.

> Also, uninsured balances are enforceable onchain, which is very different from a trusted balance.

Does this mean XLN is implemented with a smart contract that withdraws the money from an address if you fail to pay? Or automatically cancels the channel if you withdraw more than what you have in the channel?

It's better explained in solidity:

https://github.com/homakov/xlncontracts/blob/main/contracts/...

it is withdrawn from a special intermediary "reserve" balance OR a Debt is created on this identity.

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