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1803 sats \ 10 replies \ @TonyGiorgio 6 Jan \ on: Rethinking Lightning bitcoin

covenant(s) .. add a way, so you can have a bitcoin address that limits where and how the coins in it can be spent

I've never fully understood how this concept scales bitcoin utxo ownership. How does limiting where someone can spend their UTXO allow multiple people to share the same UTXO? Eventually you're just saying "this UTXO has to be spent to 10 other addresses eventually" and letting the individual parties decide when they access their coins? I've seen it as a way to pitch delayed custody from a fee savings perspective, but that's assuming fees come down to benefit the user.

215 sats \ 9 replies \ @benthecarman OP 6 Jan

I've never fully understood how this concept scales bitcoin utxo ownership. How does limiting where someone can spend their UTXO allow multiple people to share the same UTXO? Eventually you're just saying "this UTXO has to be spent to 10 other addresses eventually" and letting the individual parties decide when they access their coins? I've seen it as a way to pitch delayed custody from a fee savings perspective, but that's assuming fees come down to benefit the user.

Because that next address doesn't always have to be to an individual, it can be to another covenant adding or subtracting someone from the group.

657 sats \ 0 replies \ @bitgould 6 Jan

I see it this way too. Scale would come from each transfer of sats from one utxo to another being a batch of multiple peoples' intents all at once.

1020 sats \ 7 replies \ @TonyGiorgio 6 Jan

If I can't afford a UTXO, why would I pay the on chain fees to keep transferring it from covenant to covenant? Or rather is that just what happens when one out of 10 get out of the covenant and the other 9 go to a different covenant?

669 sats \ 6 replies \ @benthecarman OP 6 Jan

You wouldn't do for every state transition, you would only do it when entering or exiting the utxo pool. Similiar to lightning, you don't open channels for every payment.

717 sats \ 3 replies \ @anon 7 Jan

UTXO pool's aren't magic. You still need to keep liquidity available to exit the UTXO pool if necessary. And because huge numbers of people will be locked up in one UTXO when pools fail fees will spike causing people to lose money. All these covenant proposals are expensive, requiring large transactions to get stuff done. A bunch bigger than Lightning.

557 sats \ 2 replies \ @benthecarman OP 7 Jan

obviously its not perfect, but we need someway to scale utxo ownership, 1-to-1 payment channels won't scale bitcoin non-custodially

263 sats \ 1 reply \ @anon 7 Jan

UTXO pools will probably make the problems we've seen in Lightning a lot worse because they'll allow fees to go up even further. If you can't get out of your UTXO does it matter whether or not you own it?

10 sats \ 0 replies \ @benthecarman OP 7 Jan

they'll allow fees to go up even further

fees are going up with or without soft forks.

If you can't get out of your UTXO does it matter whether or not you own it?

we need to at least try, otherwise you definitely won't own it

343 sats \ 0 replies \ @TonyGiorgio 6 Jan

Where is the state then?

10 sats \ 0 replies \ @fiatjaf 7 Jan

Have you really thought about this? What you're suggesting is impossible.

Maybe refer to actual ideas like Ark so we can point out how they do and don't work.