I was going say that using Liquid differs from using another altcoin (such as Bcash and Litecoin, as in the example) due to the enforced 1-to-1 peg between Liquid and Bitcoin. But when I typed 1-to-1 peg, I cringed realizing my mistake.
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the internet is fraught with danger!
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What is pegging
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Something something stablecoin rug
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For sure, points many have made already, and a few that people need to consider before getting into Liquid.
But to that, I often ask what is the solution for the average poor right now? Not saying it is better or worse, but we have to admit that none of the current solutions are great, it either custodial LN, an exchange account, or Liquid until you're rich enough or big enough to make sense to go on-chain
I don't consider liquid even a custody tool, more a consolidation layer, a temporary storage option
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current solutions
Yes, its a fair point: What are the alternatives?
As a counterpoint however, you still need to pay a mining fee to peg-in to Liquid....so at that point why not just swap into LN?
A valid reason might be needing to transact in larger amounts (>.5 btc) or you are specifically transacting with Liquid Federation members.....
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100% if you're moving into Liquid or LN from on-chain you meet the same on-chain cost so do you go custodial LN (trust 1 custodian/LSP), run your own LN channels (technical overhead, and stay online) or go Liquid which gives you a similar UX as on-chain for those who aren't ready to make the leap to dealing with a new ecosystem with invoices, address formats etc.
I think the use case is to buy L-BTC directly with fiat or stablecoins to build a stack or make payments and you could move to LN with that via a swap service and vice versa
Could even use Liquid as a secondary storage option for sats to rebalance a channel
Who knows? Liquid blocks are still pretty much a ghost town but relatively it has picked so people are clearly discovering it and using it for some reason they didn;t have before
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The issue of the LN is inbound liquidity.
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I don't consider liquid even a custody tool, more a consolidation layer, a temporary storage option
I really like this analogy. That is exactly the way I mostly use liquid. DCA into it, and then peg-out a consolidated UTXO at one point in the future.
I must say that I also used it to buy a gift card 2 weeks ago because the onchain fees didn't make sense at all for the multiple small onchain UTXOs I had on hand...
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Its also a good option the other way, having large UTXOs are not great for privacy so spending into a peg in and having a bunch of transactions in liquid is a better option then trying to coinjoin all the damn time.
I think people who poopoo these tools will find out once you start using Bitcoin regularly its not so cut and dry and everyone needs to decide on what trade-off they prefer
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I agree on most points he makes, except it doesn't have a free floating exchange rate or some weird algorithm maintaining a peg. You also can't create more supply than there are willing temporary sellers of BTC.
Maybe it's only used as a way to keep future main chain fees in check? As soon as fees on main chain drop, Liquid loses its main benefit and people start transacting on main chain again.
But yeah, having a known federation of people in control doesn't sit well.
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If you look at it like that, you can't scale bitcoin.
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Lightning is bitcoin. Liquid is not bitcoin.
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Lightning is a bit more bitcoin then Liquid.
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Lightning is 100% Bitcoin, Liquid is 100% not. It's really easy to distinguish if you look who mines and verifies the transactions in both.
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Liquid is 100% not
well..... there is no independent supply of L-BTC, there is no "mining" in Liquid. Its not like its a chain with some free floating supply of coins (ETH, etc). L-BTC is only created when BTC is "pegged in". The supply of L-BTC is therefore auditable and can be compared 1-for-1 against the BTC peg-ins
So in order for there to be anything on Liquid chain to transact, there must be L-BTC present. So as a chain it is wholly dependent on BTC peg-ins.
In that specific aspect it is very much like LN
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Its not wrong...
Remember this thing was invented to be a settlement layer between regulated exchanges.
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So how is it going to scale Bitcoin in the long run? Is LN a fully approved solution?
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Except they don't maintain btc price
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XMR is a better sidechain than Liquid XD
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At least the value of L-BTC is pegged to bitcoin. XMR token is a shitcoin
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Yeah I would never hold XMR (have never really used it), but it has some superior properties over bitcoin such as fungibility and doesn't require permission to use like Liquid does.
Anyway there have been enough XMR flame wars on SN, hardly interested in another.
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Monero is the one shitcoins I give some respect to for its privacy features. It works for the people that want to use it, no hate from me on that front.
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This is some kind of religious purism. The creators of Liquid aren't creating a new coin or a scaling solution. Liquid is a tool that enables actions using Bitcoin as the base value. It has trust tradeoffs in order to facilitate these tools.
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It is most certainly a new coin. If their marketing department was clever enough to call it a "sidechain" that is a very different story.
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Certainly seems like a new coin, otherwise you could use BTC directly instead of needing to peg in. How is it different from any other wrapped BTC token?
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A significant difference is the Liquid network doesn't use yet another token to enrich investors. Instead it uses L-BTC natively and which cannot be printed out of thin air.
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Liquid network doesn’t use yet another token to enrich investors. Instead it uses L-BTC … <links to docs about transaction fees paid in L-BTC>
There’s no mining, only a trusted federation (aka Proof of Authority) that accepts transaction fees in the new token.
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Liquid: a custodian with built-in proof of reserves.
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When he's right he's right.
Fedimints are shitcoins too btw.
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Completely agree.
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Totally agree with him
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Twitter not available anymore :) does anyone have a screenshot?
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I think we went through this the other day.
2 bear markets & still holding 1:1
IDK I feel pretty comfortable using it for small amounts. But welcome other solutions that have better tradeoffs in the future
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Does Fedimint fix this? @benthecarman
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Liquid is useless, fedimint is not, so I guess
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"Useless" means no use. I am using Liquid. It has a use for me, for now, and it works well in the way I use it.
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It's the same picture.
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