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101 sats \ 1 reply \ @HYPERBITCOINZATION 25 Dec 2022 \ on: Proposal: create Private LSP (Liquidity Service Providers) for businesses bitcoin
Thanks for the write up, @DarthCoin! You’ve inspired me to share my experience interacting with businesses around Bitcoin.
Over the past few months, I've spoken with businesses in Southeast Asia accepting Bitcoin or interested in accepting Bitcoin as payment—bars, restaurants, motorcycle rentals, money transfer operators, precious metal sellers, and import/export businesses. Two of them had self-sovereign BTCPay Server setups, but the rest of them were using solutions like opennode, or just had fully custodial solutions.
The way I see it, the problem around accepting Bitcoin as payment boils down to knowledge and perception. The more knowledge the business owner had around Bitcoin, the more likely they were to accept Bitcoin as payment and adopt a self-custodial solution. The less knowledge they had, the more likely they were to simply rely on some custodial solution to handle all of their funds (or be wary around accepting or using Bitcoin at all).
However, the one unifying thread all of these businesses had was that none of them were comfortable with anything remotely technical (and I mean the most general definition of technical). Asking these people if they were open to learning more around lightning and "simple" operating procedures (like using the command line, doing anything on linux, learning about lightning processes like opening/closing channels, etc) to run a node felt like asking a third grader if they were open to learning about how to construct a homomorphism from S3 to D3. Only the most adventurous wouldn't shy away from the challenge; most don't even understand what the question entails. They're all consumed with the day-to-day grind that comes with running a business, and trying to get them to learn outside of that will really take a lot of hand-holding.
That being said, the future is bright for Bitcoiners and these businesses! The fact that so many businesses are interested in accepting Bitcoin, or are already finding solutions that enable them to do so is immensely bullish. Bitcoiners who already are familiar with operating a node can jump on this opportunity and provide that opsec education and hand-holding service for a fee! You provide merchants with the technology, and the right amount of knowledge to securely operate that technology. And then you get out of the picture (until they call you back if they need your help).
I spoke with Jos and Martin from Znip who are doing just that in the Netherlands—working full-time on onboarding businesses to self-sovereign Bitcoin and Lightning setups through Bitcoin and Lightning security education, and setting up nodes for businesses. And they’re making good money doing that! Each business pays them a one-time fee of a few hundred euros (or more, not entirely sure of the pricing structure) to get them set up with everything, and to teach the business owners or their employees about basic Bitcoin opsec. And then they’re on their own, left with a self-sovereign setup secured under the laws of cryptography and some basic Bitcoin opsec knowledge so they don't fumble their bags. It reminds me of freelancers building and deploying websites for businesses. As the trend for Bitcoin adoption continues, so will this market opportunity.
I feel like until the UX around running a lightning node truly becomes akin to how Umbrel advertised (a one-click node that just works, which is what we're get towards at Birkeland with our automation software), knowledgeable and industrious Bitcoiners can perform this intellectual arbitrage and help businesses onboard to Bitcoin. It takes the headache of learning new tech away from the businesses themselves, solves their problem of wanting to safely accept Bitcoin and Lightning payments, and it enables more Bitcoiners to turn their passion for Bitcoin into a full-blown business!
The more knowledge the business owner had around Bitcoin, the more likely they were to accept Bitcoin as payment and adopt a self-custodial solution. The less knowledge they had, the more likely they were to simply rely on some custodial solution to handle all of their funds (or be wary around accepting or using Bitcoin at all).
Well said. It is like that indeed.
I am not against a simple custodial solution, in the beginning of acceptance. In this way the merchant can see how it works, see how much volume could have, train well his personnel using BTC/LN etc.
Once is ready to do the step forward to a more sovereign solution, even the same payment processor provider could offer another solution, just providing the liquidity to his new own node.
The biggest problem is the liquidity management and understand how it works.
A custodial solution as "frontdesk" sometimes is even better, as I described in this guide, because you can always move the funds at end of the day to your own wallets. mand in this way you are not exposing your final destination of your income to all the public.
But, yes, education is the key and is a long process.
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