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890 sats \ 18 replies \ @justin_shocknet 22h \ on: COMMENT BOUNTY CHALLENGE BooksAndArticles
There's a new wave of Lightning FUD hitting the wires, but that's noise. What no one else is talking about is the signal.
Reality is that Lightning faces a massive incentive problem, one it inherits from Bitcoin itself.
The great wave of shitcoins in the early years highlighted this problem way back then, but it's manifesting itself in a new, potentially even more dangerous way today.
Since Bitcoin, and its only real L2 in Lightning, are emergent, truly decentralized, disintermediated and "just work" as money, the profit motive for companies looking to benefit from a growing industry skews towards "inventing" things beyond them; there must always be something "new" to re-brand non-solutions or introduce middlemen.
Enter the newest attack by fake L2s, or shitcoins 2.0 as they should be more appropriately framed. Shitcoining 1.0 has lost its novelty, as over time people realize there is one true coin. Scammers have thus adapted, and are now affinity scamming as Bitcoin projects.
Ark, Spark, Citrea, Stacks, and countless others now... with their astroturf for Covenants that would lend them some perceived legitimacy... solve nothing.
These are all means not to solve problems or enhance UX, but to smuggle trust and centralization for profit.
Lightning wallets can very easily introduce trust and centralization with the same exact trade-offs; fake L2s are no different than zero-conf channels, but this isn't sexy and won't raise a bunch of money or generate hype. Actually enhancing UX is tedious, hard work, to which I can attest, and inherently requires scarce creativity, otherwise the challenges would be solved already.
This is a perfect storm for the scammer class. Unsophisticated users that lack technical discernment, combined with hipsters always ready to jump on the current thing bandwagon, magnify the scammer astroturf. This reinforces investment theses, then more investment yields more scams, which amp up hipsters and the unsophisticated; it's a downward spiral.
Unlike Shitcoins 1.0, Shitcoins 2.0 presents a Bitcoin contagion.
Never before have so many disparate scams sought to change Bitcoin itself to pervert the incentives further.
Shitcoins 1.0 sold you a new coin... Shitcoins 2.0 want to exploit YOUR coin.
Shitcoins 1.0 sold your friends and family a new investment thesis; Shitcoins 2.0 stand on the back of your hard-fought orange-pilling.
Covenants are the force multiplier of this attack.
These apps are in chorus over how it enhances the security of their centralized apps, and given their affinity scam nature, the security of Bitcoin. In reality, it has no monetary purpose, only to enable delegation to these centralized middlemen.
If you control your Bitcoin today, you control your Bitcoin, period. Covenants offer you nothing.
Covenants scammers want you to believe, however, that you can control your Bitcoin while someone else, via their fake L2 centralized application, controls your Bitcoin.
New OP_ Codes like CTV, CAT, DRIVECHAIN, and others represent a new era where changes to Bitcoin aren't argued on the merits of Bitcoin as money, but its use as an Ethereum-like stack for centralized applications.
No, just as covenants are a push for centralized remote control, vaults are to CLAW BACK that control. This leaves 2 mutually exclusive scenarios:
- Bitcoin loses its utility as money, as merchants can no longer simply rely on confirmations to conclude a payment is settled.
- A merchant can ensure funds are not encumbered through certain output types, but then so can an attacker, rendering the vault pointless from the start.
Incentives are a bitch; we couldn't stop shitcoins... but we did grind them down over time.
The question is whether we can grind down these fake L2s and covenants scammers; fortunately, Bitcoin being hard to change buys us time.
It's imperative that if you value Bitcoin as hard money and wish to defend it as such, you present the same show of force we showed against shitcoins.
Let every investor and user know, in every comment on every blog or Twitter post, that these applications are not Bitcoin, that Covenants are an attack by the Bithereum Industrial Complex, and that whoever advocates them is either a scammer, a paid shill, or a hipster moron.
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Zigging while everyone else zags, expected more butthurt comments by now and a @DarthCoin meme or 3
will do though, might add a section
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Hey, interesting post. What would you say to a proponent of covenants who says, "But don't you want to scale self-custody to 8 billion people? Don't you care about anyone else but yourself?" Cuz I've seen this said many times, and I want to hear what your response to that is. @justin_shocknet
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ECash is trash
CLINK and Lightning.Pub are why nostr exists
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If we count exchanges including things like CashApp, it's on hundreds of millions of phones already, which makes it great for merchants that want to receive.
Realistically, there aren't many merchants receiving, even less self custodially, because the tools for doing so absolutely suck. (WIP)
Enthusiastic self custody users are likely in the low 10s of thousands.
That's scammers using emotional blackmail to adopt their shitfork
Reality is that there's two factors in scaling
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Transaction throughput: Lightning already scales transactions infinitely
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Ownership: Distribution is the real bottleneck, there's a minimum amount of Bitcoin needed to not be dust, and even at sub-sat fees today there's not enough Bitcoin for everyone to trustlessly transact (unilateral exit)... a few hundred million people at most... likely less as big accumulators like institutions continue to accumulate.
Lightning already has batch opens that reduce costs 80%, but no one uses that because cost isn't a bottleneck.
Ark batching also doesn't lower the boundary on unilateral exit.
Fake L2's literally solve nothing, Lightning for better or worse realizes the immutable physics of the chain and fake L2's are scammers trying to sell a perpetual motion machine.
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But fiat money is an essential strategic power projection tool for the nation state- and the nation state is fundamental to the wealth of nations.
Wanna buy some rare earths for your military industrial complex?
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Can you explain how a merchant would suffer from a vault claw back? That does not make sense to me. Once spent to an arbitrary address, there is no clawback mechanism anymore.
Is there an actual argument you have against ark? I can see it for their whole "arkade" stuff, but afaict that is only one implementation. In the normal case, I just think of it as congestion control, which is great!
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2 mutually exclusive scenarios
Read the second bullet
Ark
Other than it solves nothing and they lie?
Congestion control
It's literally the same centralization they FUD about LSPs
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Read the second bullet, i.e. A merchant can ensure funds are not encumbered through certain output types, but then so can an attacker, rendering the vault pointless from the start.
That does not make sense to me. In order to spend from a vault, you first have to unvault to an address that is still in your control. It is supposed to protect your savings, and is not really meant for immediate spending. A merchant has nothing to do with it.
Other than it solves nothing and they lie?
It does solve congestion control for exchange payouts. That seems clear to me?
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Really hard to tell if you're being obtuse on purpose or just a moron.
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