Stranded sats redux: sats abandoned on SN? \ stacker news ~meta

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Stranded sats redux: sats abandoned on SN?

2450 sats \ 21 comments \ @elvismercury 5 Dec 2023 meta

No, not this kind of stranded sats, rather, a LN newb question. (I got inspired to ask my dumb questions in public after listening to @siggy47 podcast with @kr last night.)

Is there any notion of an inactivity timeout, or liveness limit, for sats in a SN wallet? For instance, if someone got 10k sats in their SN wallet, and never withdrew them to anywhere, and never showed up again, would the sats just sit there forever? Or is there a timeout of some kind that puts them back in a pool?

Is it correct to say that whatever the answer is, this is basically a SN policy decision, not a LN protocol issue? Because in this case, SN is acting as a custodial wallet, right?

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365 sats \ 4 replies \ @antic 5 Dec 2023 freebie

This is an interesting question because it raises the awareness that lightning-based web platforms are (practically speaking) custodial banks behind the scenes. By depositing sats into stacker.news or into any service, you are giving them your sats and trusting that they will uphold your funds for withdrawal later.

There will be a natural fall off of active users who have active balances (people die, move on, forget, and leave balances behind). Ultimately, this creates an opportunity for unethical custodians to implement arbitrary rules for stealing these funds from end users (by assuming they will not claim them).

Additionally, end users may never know if custodians are doing this until a run on the bank occurs since there will be a base layer of liquidity that the platform can probabilistically rely on being present—this is how banks justify fractional reserves.

We are lucky to have the team on stacker.news. Hopefully they remain uncorrupted. But it's a good idea, as with any custodian, to never leave too much of a balance in your live account at any time.

128 sats \ 2 replies \ @elvismercury OP 5 Dec 2023 freebie

I view the sats I've accrued on SN as funds to devote to the betterment of SN. I haven't withdrawn any for any other purpose. I have total faith in the ethics of the management, but I also expect that if these were funds I was using to live my life, the standard would change, so your takeaway would probably be useful to many.

My only divergence with you would be related to the existential terror I described in a previous comment, of not letting sats disappear into the void. I think if I were in charge, I would say something like: "If your sats haven't moved in ten years after your most recent activity, we sweep them into the SN reward pool." That way if someone dies, they're not lost to the world.

Sort of a water belongs to the tribe thing.

252 sats \ 0 replies \ @birdeye21 5 Dec 2023

We grow the SN circular economy ✊

Good ideas, hadn't thought about how custodial websites like these handle this sort of thing

228 sats \ 0 replies \ @antic 5 Dec 2023

As a user, I would agree with those terms. It's the correct ethos--and suggesting that people understand how to manage their balance (not use this service like a wallet) and setting up the expectation up front would be ethical IMHO.

0 sats \ 0 replies \ @fanis 6 Dec 2023

It's not unethical if it's agreed upon from the start. Take AcceptLN's inactivity fees for example. Not all web services want to become a de facto custodian, because it carries costs and legal risks. Encouraging users to withdraw to self-custody is, I'd argue, actually ethical.

632 sats \ 3 replies \ @k00b 5 Dec 2023

Is there any notion of an inactivity timeout, or liveness limit, for sats in a SN wallet?

No. As far as I'm concerned that money is yours.

Is it correct to say that whatever the answer is, this is basically a SN policy decision, not a LN protocol issue? Because in this case, SN is acting as a custodial wallet, right?

Yes and yes.

1 sat \ 1 reply \ @elysia 5 Dec 2023

I think that is the correct policy. Consider it part of the SN protocol.

"Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone." - Satoshi 2010-06-21 17:48:26 UTC

From the horses mouth: https://bitcointalk.org/index.php?topic=198.msg1647#msg1647

82 sats \ 0 replies \ @k00b 5 Dec 2023

the horse

https://m.stacker.news/6815

1 sat \ 0 replies \ @WeAreAllSatoshi 5 Dec 2023

No. As far as I'm concerned that money is yours.

IMO this is definitely the right call. It's the same as someone losing their private keys. Sats live in the abandoned account forever

256 sats \ 11 replies \ @Undisciplined 5 Dec 2023

Are there any issues with just leaving them there?

364 sats \ 10 replies \ @elvismercury OP 5 Dec 2023

Sounds like not, from a technical perspective.

The reason this occurred to me is related to the original stranded sats post (linked in the intro): it makes me fundamentally uneasy to imagine sats slowly draining out of the world.

Upon reflection just now, this might be related to why I got into btc in the first place: when you hear about the dynamics of fiat, you start to see these as foundational forces in the universe: bc fiat can inflate, and bc the incentives exist for it to inflate, it will inflate. That is inexorable. What is finite is the ability to be judicious about it. And the inexorable overcomes the finite, the only question is how long it takes.

Similarly, if there is an inexorable force that btc become lost, either literally lost, lost to dust, lost to accident, lost to forgetfulness and abandonment, that is an inexorable force. Resistance to this entropy is finite. The ratchet only goes one way. And so the supply will trend toward zero, the only question is how long it'll take.

It produces something akin to existential terror.

10.6k sats \ 1 reply \ @antic 5 Dec 2023

I share the feels... but, I have a more optimistic view of it. Even though it's not easy to do, I think by the time this amount of loss in the system is realized and has a problematic impact, we will implement one of the many options to create more decimals. Some lightning implementations even already allow .001 sats. Being able to add infinite decimals is what will ultimately make bitcoin infinitely usable in the face of permanent loss and reduction of the integer supply.

In the case of stacker.news funds--this is different than the kind of loss you get from lost on-chain fund keys as the lighting channels that are ultimately holding the user funds are still alive and functioning (meaning the liquidity is still able to move back and forth on the lightning network and continue to function and serve new users). It might actually improve lightning for people to go dormant and store more funds on the network as it creates a base layer of liquidity that can be used as an infinitely toggle-able pressure valve (so long as the keepers of the platform properly maintain their channels).

0 sats \ 0 replies \ @elvismercury OP 5 Dec 2023

I hadn't thought of that -- the LN version gives a way out in terms of network utility, so long as the sites are operating ethically, as you described. That's a great insight. It's like our loved ones are with us after death!

10.1k sats \ 7 replies \ @Undisciplined 5 Dec 2023

Rest easy. It doesn't matter that the usable quantity of Bitcoin will always be shrinking.

It might be asymptotic; i.e the losses are shrinking fast enough that the money supply will never fall below a certain level.
The amount of money doesn't matter for economic activity; Mises demonstrated this like a hundred years ago. As long as prices can fluctuate and the money is divisible enough, any amount will be sufficient to facilitate economic transactions.
There's no limit, as far as I know, to how many decimal places can be added to the bitcoin monetary unit.

407 sats \ 4 replies \ @elvismercury OP 5 Dec 2023

You and @antic have done more to balm my wounded soul than has happened in a long time. Thanks :)

Wow @siggy47, you were really onto something with asking dumb questions in public!

357 sats \ 2 replies \ @Undisciplined 5 Dec 2023

To the point about asking dumb questions in public, I actually consider this one of my superpowers as an academic. Most of my colleagues seem to live in dread terror of appearing to not know something and the result is not learning a lot of new stuff or correcting their misconceptions.

Even when I've changed research fields, I feel like I surpass the baseline knowledge of most of the established experts pretty quickly, because I just ask every dumbass question that pops into my head (within reason).

492 sats \ 0 replies \ @siggy47 5 Dec 2023

Very true. It's the not always easy ability to let your guard down and ignore your own insecurities. What invariably happens to me in a bitcoin setting is this: I'm not a coder and will ask what I know is a dumb, basic technical question, and suddenly two experts will begin arguing between themselves about the answer. That always soothes my fragile ego.

264 sats \ 0 replies \ @elvismercury OP 5 Dec 2023

It's a good ethos. I do the same thing IRL and have enjoyed similar benefits. Surprising extra benefit: other people love it when you do this and they gravitate toward you, presumably as some kind of authenticity signal.

Massively under-valued social skill, as long as you really mean it.

242 sats \ 0 replies \ @siggy47 5 Dec 2023

Dumb questions come naturally to me.

264 sats \ 1 reply \ @elvismercury OP 5 Dec 2023 freebie

Although I should add: the Mises assertion is not entirely convincing to me.

I am convinced that any amount of divisible money could encode any amount of economic activity if it were properly distributed. I think that, in practice, the diffusion of money after a large enough deflationary jolt could prompt a wholesale replacement of that money in favor of another candidate money. I've mentioned this issue before from the perspective of the other direction (unequal distribution.)

My soul is not balmed on this point, but you can't have everything.

228 sats \ 0 replies \ @Undisciplined 5 Dec 2023

It sounds like you've received Mises' insight second or third-hand then. There are of course many caveats to it, but the argument was exactly along the lines of your statement.