Just like the title says... I paid my hairdresser (we are both female) via Square and Lightning recently...
And I don't know how I feel about it.
My setup? Non-custodial Lightning running LND over TOR connected to my home-server.
Hers? The 'square app' on her phone that's it.
I have been her customer for several years, she's around my age and she knows nothing about Bitcoin. She finished cutting my hair, she always does a great job she was the last one in the shop working and I had seen the 'Square' logo on her storefront so I asked her...
"Do you take Bitcoin?"
"Do I take what?" She says.
"Well you can have the client pay in Bitcoin and you receive Dollars, I pay in Bitcoin and you get Dollars just normal" I said. "Let's try"
We looked and there was no Bitcoin option in the Square app she was holding... check, money-order, credit-card 'other' etc but no Bitcoin.
She has cut my hair several years so I said "is it in settings?" We looked in the "settings" page under her Account on the app (only possible because of our relationship for several years)...
There it was under "additional payment options" -> "activate Bitcoin" in "Account Settings." We tapped on it...
The Square webpage opened up where she had to reenter her information and she did.
"Do you ABC XYZ want to enable Bitcoin payments?"
Yes she tapped (I helped her know where to tap... but I 100% let her do it).
"Do you want to receive Bitcoin or USD?"
She obviously wanted to accept USD so we tapped on that (I really emphasized to her that NOTHING 'changes' for her she still gets paid in Dollars 100% she doesn't have to 'do' anything different).
Then it said 'return to Square [the app]'? So we tapped on that...
The original payment in-app popped-up she said "I don't know how this works..."
"Don't worry it will give me a QR code..." I said.
The tip selection screen popped up I selected a tip % then payment method "Bitcoin" was NOW available.
A QR code appeared and I paid it.
- From my own node. Over TOR. From a mini-pc in my closet running LND.
- Me... Non-Custodial... A heavy Qubes user.
- To her... Who can barely use an iphone and probably doesn't know what a VPN is...
Is this our dream? Is this what the cypherpunks intended?
The payment was mostly private for me at least (multiple channel hops). For her... I mean she has a custodial Lightning account... there is no "privacy?!"
Was the payment 'censorship resistant'? I mean Square 'accepted' the payment on her behalf through a custodial app. She, assuming she was curious about Bitcoin in the future probably wouldn't custody Bitcoin herself anyway because Square would "do it for her"....
She would have to WANT Bitcoin to begin with and without many hours of study and contemplation why that is... why would she?
Assuming that Bitcoin is "widely adopted" as a means of payment and Medium of Exchange the Square experience - as remarkable as it is - is a custodial experience only possible after YEARS of Lightning development, research, investment into UI and frankly YEARS of my own curiosity and education as to what BITCOIN is and how to use it well.
It's funny because I mentioned to a family member that I 'paid in Bitcoin' to get my haircut... and what did he say?
"Oh Bitcoin OK no big deal so what..."
Little does he know the years of work, education, and development required to actually make something like that possible in the real world. In other words to pay for a haircut with "normies" from your own computer at home in a way that's instant, proof of work... open-source and doesn't have to rely on fiat at all.
To be perfectly honest it's incredible... I opened those Lightning channels myself using Linux on Qubes, I KNEW the fee-rate I paid, I KNOW my channel liquidity, and I HAD to re-balance those channels myself after a few payments with other NERDS... hell I PICKED those channels and opened them based on my own budget and their connectedness...
But on the other hand...
With sudo-privacy (no pun intended) semi-censorship resistance and suburban America so far removed from war-torn Africa, the 3rd world and where Bitcoin is REALLY needed for people to save...
What is even the point?
I proved to one individual that "Bitcoin works" but all that I really proved is that after years of development, a huge investment in Lightning apps and infrastructure, I can pay a custodial account on a phone and get my haircut.
Is THIS our future? Our DREAM? Is this the cypherpunk vision?
It reminds me of school in some way... you design the airplane, put in countless hours of work, study for hundreds of hours and then the Flight Test?
Take off, fly straight and level, come back and land.
"Nothing fancy" people said... while I'm like amazed.
But then again I'm a nerd.
Are we on the right track?
I think you really nail it with this: many people aren't aware of any reason they should want bitcoin.
Maybe this means that all the work on Bitcoin -- the refinement, the fortifying of the experience, smoothing out its many many rough edges -- maybe that is something that the nerds are doing just because they are nerds who really want to pay for their haircut over tor with the node running in their shoe closet. And it's okay if most of the people don't want to have anything to do with it.
I'm starting to think about it like I do running my node: I'm not here for altruism. I'm here because I want to know that the bitcoin you send me is real. Can we be bitcoiners just for ourselves? I'm not sure if that's a good attitude, but it feels more honest (more cypherpunk?) than preaching the good orange news.
"And it's okay if most of the people don't want to have anything to do with it."
I'm not sure how to process this honestly...
Bitcoin isn't especially good at privacy (in the best of cases) and it isn't especially fast (although Lightning certainly helps).
Bitcoin is good at... 'not changing' and 'being transparent' in the need for decentralization and transparency and sound money. But if 'mass adoption' means lots of custodians and fin-tech apps run by public companies... where is the censorship resistance? What is the point?
Will the State suddenly forget about Capital Gains for millions of tiny purchases by millions of people? Especially since it's mostly custodial anyway?
If they do... then Bitcoin becomes a de-facto 'currency' and I don't see government accepting that. If they don't... expect clampdown on things like Square?
Will the same state be able to enforce that for millions of tiny purchases by millions of people?
I hope common sense prevails over trying to prosecute a large chunk of their population, making them change that categorization eventually.
What do you think the right track would be, for that use case?
Lightning conceals your balance as a sender especially with 4+ hops... and it looked like the payment used Blinded Paths to reach Square.
But my 'counterparty' was custodial, and the fact I was 'there' was hardly private anyway she had never had someone ask about Bitcoin before.
Did she learn about Bitcoin? No... maybe she saw it in action. But all it tells me is that 99% of people if Bitcoin became an MoE would only know Lightning and might not know that "on-chain" even existed.
"On-chain" would become like the "sewers" underneath the city that no-one really even knows exist... except for the sewer-workers and rat-specialists basically us.
"Mass-adoption" of Bitcoin as a MoE might not be what the stackers think it is.
(Edit)
It also stands to reason imo that Bitcoin's adoption as a 'widespread' MoE and the government's treatment of Bitcoin as a 'speculative commodity' requiring the payment of Capital Gains... would eventually cause a major conflict.
I think mass adoption as a SoV will also not be like most imagined. It can be hard to see reality when you have a pre-conceived version of it that's so well-developed.
If people don't self-custody it... where is the sovereignty? If they don't make the transaction sort-of-kind-of themselves... where is the censorship resistance?
And so if they don't have sovereignty, and they don't have censorship resistance and they don't know what a node is or care how many Bitcoin exist and they can't verify that with their own node...
Why wouldn't an American just buy the "gold etf" they can buy that in their brokerage and 'custody' that as much as the Bitcoin ETF. Buy it sell it when it goes up etc etc...
If you can't send it to who you want... and 'own it' then just buy the 'gold etf' and that's exactly what people have been doing.
you have no idea how great that is though. three years in a row i demo'd increasingly realistic end-to-end architectures for square to accept lightning payments. i used nwc to bind to my tor raspi lightning node, mostly to prove to myself that it could work for anyone. businesses don't work that way, and what actually shipped is a little different. technically, it doesn't have to be.
but my time there was up. looking back i saw that the real problem isn't the merchant, it's getting billions of people doing self-custody. what we use today works for some people, but definitely doesn't scale to all. i've been thinking about this a lot for the last year – a sabbatical i didn't realize i was taking. i think we can make it work. somewhere between custodial lightning and side chains, i see custodians that you don't need to trust. technically this makes them not custodians, but if you say that out loud no one will hear the rest of what you wanted to say. so "trust minimized" custodians.
this is what creates circular economies: wallets that are free, making payments that cost somewhere between lightning and visa. we'll see if we can close the self custody loop. https://deposits.ynniv.com
Most people in the developed world... don't really care about 'payments' they care about savings.
Unless they are making payments in a way that is super-private or to people they aren't supposed to pay and I don't mean terrorists obviously more like Proton mail in the 2010s when they got cancelled...
Most people just don't get self-custody.
This was really important to me too
Technically that's our problem... but honestly blocks are so empty we don't have enough self custody imo it's not a scaling problem.
People in the 'west' don't really understand the importance of payments... they have visa and Apple Pay. They understand "savings" sort of and for that all they need is [the] gold [ETF] so normies don't buy bitcoin at all
this is a big part of it. but the other part is meeting people where they are. we have easy(er) self-custody on-chain, whenever fees are low. how much longer does that hold out? i'm a person who scales things, and the way you get there is by always aiming for 10x. ten times as many transactions will get fees well off the floor. ten more times will get them uncomfortably high. a further ten and only the wealthy will be able to make on-chain payments. so, we find a way for this to be okay – for the chain to be a place of settlement between custodians, and for us to not have to trust them. that's how we get to 10b wallets.
this is a key realization, and it's especially difficult for square: where they operate, people don't need bitcoin. where people need bitcoin, they don't operate. but square is just one company. if we find self-custody protocols that scale, they work the same in africa as they do in central america or the us. if people don't want to use them today, that's fine, maybe they'll use them tomorrow, or maybe they'll never need them.
but we need to keep bitcoin fluid through payments. without them it gets pushed into regulated paper, and held in increasingly tighter boxes until people stop using it and it loses value
With a median fee of 13 cents... at 1 sat/vb the total fees are around 1200$. Meaning that the subsidy is around 285,300$ with no fees.
If we needed ALL fees to replace that subsidy... then 285,300/1200 ~ 238.
So 238 x 13 cents is 31$ per median transaction fee. Assuming it's almost 2x to open a lightning channel, with NO subsidy and the same miner revenue opening a Lightning channel would be ~50$.
Would people pay that? If they understood the value of Bitcoin yes. In its current level of understanding? No. In fact fees are near record lows.
I can barely get my hairdresser to take it... and that's only because she gets $$$ & I have known her several years.
I feel we are already on our way 'there'. Sometimes I wonder if Bitcoin is just the 'blackberry'... to some other 'iphone' seriously
to make payments you currently have to choose between self custody lightning (expensive to open, realistically requires a pc), and custodial lightning/ecash. not every country even has good custodians available. we need zero utxo ~ self custody to get off the ground
Fees are like 15 cents. If someone cannot afford a Lightning channel at these rates... either miner incentives collapse (sort of happening) or it's not going to get any cheaper.
In my experience self-custody lightning can be pretty good on a phone-embedded
No. But I see it as an important intermediary step.
It answers a common question from people new to bitcoin: "Can I even use it to buy anything?"
Whether or not they eventually go down the route of claiming their freedom to transact is up to the individual. But at least they're on the right track to start that journey if they choose to.
This is my problem with the current state...
If all I'm doing is sending sats... which are immediately converted to Dollars for the merchant what's the point? I might as well be spending the "gold ETF" in my brokerage because that way it's being 'sold to someone else' (ie square) and the 'merchant' could just get Dollars in its place.
What would be the difference between that and Bitcoin (if the merchant gets Dollars?)
But if it's a merchant and I spend Bitcoin privately... then no one would know about it, not even a 'brokerage'... because I had the Bitcoin to begin with.
If I don't have a reasonable ability to send it to anyone at any time, or reasonable ability to spend it to anyone, it's not Bitcoin. So it might as well be the "gold ETF" that I "sell" when I buy a haircut or purchase something from a merchant...
In which case there is no point for Bitcoin to exist.
All of this leads me to approach Bitcoin from first principles -
One laptop
One Linux distro (pick one) and
One full synced install of Bitcoin Core (pick your mempool policy).
Create a private key then have addresses and send/receive etc...
THAT'S Bitcoin the farther we stray from that I think the more we lose sight of the basic value proposition
As I said before: It answers the valid question from newbies of what they can buy with bitcoin other than yet more bitcoin paraphernalia. "You can pay for a haircut" is likely worth a lot more to most than the usual "you can zap someone on some social media."
A step in the right direction isn't wasted simply because they didn't arrive at (what you think should be) their destination yet.
I understand what you're saying and I hope so
You paid a local hairdresser from your own non custodial Lightning node routed over Tor with carefully managed liquidity and channel selection. There is deep technical skill and intentionality behind that action. That alone is worth appreciating and it is a reminder of how much invisible work goes into making new systems functional for everyday use.
On the other hand the recipient did not experience anything revolutionary. For her it was just another payment in dollars received with little understanding or curiosity about the underlying system. That is the paradox of mainstream adoption. As the technology matures we will see more people benefit from it without ever interacting with its complexities. This is good in terms of accessibility but it dilutes the radical essence that early adopters and builders care about.
If the goal is to push toward a world of genuine decentralization censorship resistance and user sovereignty then what you did is a step but not the destination. The infrastructure is in place for someone like your hairdresser to opt in if she wants but without the motivation and the education most will choose the path of minimal friction even if it is custodial. The cypherpunk vision was never just about payment rails it was about empowering individuals to take control. That requires cultural change as much as technical achievement
Pretty sure this whole thing is an LLM... but it's actually really insightful.
That 'radical essence' isn't worth anything if people don't use it for censorship resistance... and at least to an extent for transactions. Otherwise it's just a ticker and tech stock that etf buyers don't really 'own' that even the 'believers' don't actually use and that's a shame.