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386 sats \ 5 replies \ @k00b 17h \ on: Relai sunsets Lightning Network integration bitcoin
Reminds me of folks sunsetting onchain payments over the years.
Given Relai is a straight-to-self-custody exchange, onchain fees are low and everyone deep down is a historical determinist, and lightning infra/wallets are relatively complicated, it makes a lot of sense to remove lightning.
I'm sure they'll add it back when onchain fees rise again.
Yeah it does make some sense given that they are an exchange and not just selling some other product or service for Bitcoin.
But what I find kind of worrying, and why I brought up the whole medium of exchange issue, is the fact that (according to Relai), only 5% of their customers ever tried Lightning. I'm making a bit of a stretch here, but to me, that seems to indicate that only 5% see Bitcoin as a medium of exchange. Of course, this is tied to the fact that not many businesses accept BTC for payments, but nevertheless... this sounds quite bleak.
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I think that's probably about right. I asked ChatGPT about this and it pointed me to a few surveys conducted in past years showing that only about 2% of Bitcoin owners actually use it to pay for goods and services.
Is it bleak? I guess. There just isn't much of a reason to use bitcoin as a MOE right now. Like, most of my usage of it is just purely ideological, not out of convenience. (Other than SN, of course. Micropayments is currently the best use case for bitcoin-lightning as MOE)
Bitcoin is clearly superior to fiat as a SOV, everyone can see that. But is it superior as a MOE? I think that depends on more situational factors, like the reliability of your country's payments services, or the need for privacy and censorship resistance. So probably in advanced countries, Bitcoin is not yet superior as a MOE.
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I think it's far superior as a MoE: low fees, cut out the card processors & banks, no chargeback risk, have immediate self-custody of funds. In addition, I don't have to worry about FX rates or exchange fees when I go from country A (where I pay in Bitcoin) to country B (where I pay in Bitcoin) or even simply use online services of a company in another jurisdiction.
But yeah, you're right, necessity is the driver of any new technology. And for the end user, the fees, the chargeback risks, the custody issue... these are either obfuscated or just too trivial to care about.
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I think you're right. It is superior, but only if both sides (merchants and consumers) adopt at the same time.
This reminds me of a classic "coordination failure" from game theory, in which two parties fail to reach a mutually beneficial arrangement, because it's only beneficial if they both move together, and if one side moves on their own they'll be worse off. Without some way to coordinate the joint movement, they won't be willing to move unilaterally.
Example is electric cars and charging stations. They both need to be adopted together. No one will want to buy electric cars unless they know there will be plentiful charging stations; no one will want to build charging stations unless they know there will be a lot of electric cars. Some kind of coordination needs to be done, like subsidies, to get both sides to move forward together.
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I never tried their wallet but I wonder if it required opening channels and how much pain they put their customers through to use lightning.
Lightning has many UX complications that don't apply to onchain given that bitcoin's network does most of the heavy lifting wrt state management and finality. Until lightning's UX improvements are farther along, it's not worth the tradeoffs - even for MoE bitcoiners - to use lightning unless onchain fees rise substantially.
Lots of folks use onchain bitcoin for MoE still.
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