85 sats \ 6 replies \ @Murch 1 Apr \ parent \ on: What if there were not enough BTC for us Bitcoiners? bitcoin_beginners
I'm not sure I follow. On-chain you cannot express smaller amounts than sats. How is that "almost infinitely divisible"?
I'm assuming there's still some Bitcoin being put towards LN or something else and the "problem" is just that Bitcoin has a much higher fiat exchange rate than it currently does.
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Oh, you mean we get another three decimals via lightning being denominated by millisats?
HTLCs are only worth to be enforced above a few hundred sats, below that they're essentially credit until folded into the balance, because adding an output to the closing transaction costs more than the amount in the HTLC. So, it can work, but only as long as everyone plays nice. Divisibility is not a problem that completely gets solved by lightning.
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That's true and no doubt you're better versed on the technical aspects than I am. However, there's no reason I'm aware of that some other layer 2 technology couldn't be more divisible.
Also, a question: Is it inherently more expensive to add an output to the closing transaction or is that just because the current purchasing power of bitcoin is so low?
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Spending an HTLC output incurs over 400 weight units of transaction data. With the feerates lately being usually in the double digit [s/vB], it would cost you at least 1,000 sats to enforce an HTLC on-chain. So very small payments are not actually added to commitment transactions and this generally applies to any layer-2 technology that is enforced by users’ ability to unilaterally exit. Bitcoin transaction fees are paid in bitcoin and scale with the weight of a transaction, so the issue is independent of the exchange rate.
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Thanks for the explanation.
Doesn't that just mean that if Bitcoin becomes radically more expensive, such that people are using these new decimal places, a bunch of activity will be restricted to layer-2? On-chain settlements would only be approximate, in a sense.