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Lightning is not Bitcoin's second layer
0 sats \ 7 comments \ @CheezeGrater 2 Jul 2022 bitcoin
I just had this thought while listening to Layered Money by Nik Bhatia; Lightning Bitcoin is Bitcoin, it doesn't introduce counter party risk in the way bank notes and other layers of fiat money do.
Lightning is to Bitcoin what transporting gold by cargo plane is to transporting gold by donkey.
I suspect that in the future, how you transact your Bitcoin will be a technicality, mostly only important to the people writing the software that interacts with Bitcoin.
Hal Finney's idea of Bitcoin banks would constitute second layer Bitcoin: https://bitcointalk.org/index.php?topic=2500.msg34211#msg34211
Although I don't agree that Bitcoin Banks will be the only way to transact Bitcoin, I do think they are likely to have many customers in the future.
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21 sats \ 4 replies \ @notgeld 3 Jul 2022
No. Lightning is the second layer, and which is more important it allows some specific LN related tech leveraging instant settlement and scaling it further.
"Layer" is a good definition because LN rules are isolated from Bitcoins and network normally works without touching blockchain.
https://medium.com/coinmonks/liquidity-abstraction-in-lightning-network-3d7a1d76ac82
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0 sats \ 3 replies \ @CheezeGrater OP 3 Jul 2022
The point of my title really is to get people thinking about the difference between a technical layer and a financial layer. Lighting is indeed a distinct technical layer from Bitcoin, like TCP/IP to HTTP.
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0 sats \ 2 replies \ @CheezeGrater OP 3 Jul 2022
Most importantly is the fact that Lightning Bitcoin is Bitcoin and not a side chain or separate coin.
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0 sats \ 1 reply \ @notgeld 3 Jul 2022
Are they really different if we speak about Bitcoin? Wallet of Satoshis is Bitcoin bank for example and it leverages instant settlement for its business. It would be too expensive for it to operate onchain.
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0 sats \ 0 replies \ @CheezeGrater OP 3 Jul 2022
If you are referring to technical layers vs financial layers then yes there is a very important difference, even though custodial wallets have custody of your sats, they pay out in sats, and not their own token.
A Bitcoin bank like Hal Finney imagined would be issuing its own second layer tokens.
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21 sats \ 1 reply \ @premitive1 2 Jul 2022
I don't like your plane and donkey analogy. Not that I have a better one, though. I'll try to think of somerthing.
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0 sats \ 0 replies \ @CheezeGrater OP 2 Jul 2022
Yea it's just to get the point across, it doesn't capture all the other improvements besides speed.
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