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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.
mostly to prove to myself that it could work for anyone.
This was really important to me too
it's getting billions of people doing self-custody. what we use today works for some people, but definitely doesn't scale to all.
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.
wallets that are free, making payments that cost somewhere between lightning and visa
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
Most people just don't get self-custody.
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.
People in the 'west' don't really understand the importance of payments
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
ten times as many transactions will get fees well off the floor. ten more times will get them uncomfortably high.
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.
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.
I can barely get my hairdresser to take it... and that's only because she gets $$$ & I have known her several years.
without them it gets pushed into regulated paper, and held in increasingly tighter boxes until people stop using it and it loses value
I feel we are already on our way 'there'. Sometimes I wonder if Bitcoin is just the 'blackberry'... to some other 'iphone' seriously
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
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