1100 sats \ 0 replies \ @clr 18 Sep 2023 \ parent \ on: What do you believe is holding the lightning network back? bitcoin
Excellent answer; very comprehensive analysis.
Let me add some perspective. Around thirty years ago, when I was a kid, my parents had a commerce and credit card payments had to be processed manually. The process took 5 to 10 minutes for each sale and it involved the following steps:
- Check whether the credit card provided by the customer was in the blacklist. The blacklist was a booklet that was updated every 3 months or so by the banks. If it was in the blacklist, the card would have to be taken from the customer, cut in half and sent to the bank association, and they would give a reward for this.
- If the sale was over a certain amount, authorization was needed. This meant calling the bank association, telling them over the phone the credit card details, merchant details and amount to be authorized. If successful, they would provide an authorization number that had to be written down on the payment slip.
- Fill in the payment slip by hand with the authorization number, the amount and date and time. The payment slip had original and two carbon copies: original for the bank, one copy for the customer and another for the merchant.
- Put the slip on a machine with a roll that would imprint the embossed card data and merchant data onto the payment slip. If you wonder why many cards still have embossed information, this is the reason, legacy compatibility.
- Give the payment slip to the customer to sign.
- Detach the copies and the carbon sheets and give the customer his copy.
- In order to get paid, the merchant would have to put together all the payment slips into an special envelope, write the total amount and send it to the bank for processing.
Then, around 1990, the banks started providing electronic POS to small merchants (until then, it was only for large merchants and chains). It would still take >30 seconds (dialing, negotiating connection and processing the transaction itself) and transactions would fail maybe 1 out of 8 times in the beginning. If the phone line was busy with a phone call, it couldn't be used for payments. Still had to keep the paper forms as a backup for several years.
The point is that none of those inconveniences stopped merchants from accepting credit cards back then, let alone nowadays. Credit cards were accepted because customers (especially tourists) wanted it and not accepting cards meant losing sales.
I think part of the onus is on us bitcoiners to favor those merchants who accept bitcoin and stop with all this Gresham's law nonsense. If you are a bitcoiner, you probably shouldn't have fiat to spend in the first place. We have to make merchants understand that not accepting bitcoin means losing business to those who do accept it. Yes, it's too early and all that, but that's the direction we should go.
This is also an opportunity for entrepreneurial bitcoiners to provide payment processing services. Yes, most merchants won't want to deal with BTCPay, opening channels and maintaining a LN node, etc., and that's understandable.