0 sats \ 3 replies \ @ek 3 Apr freebie \ parent \ on: Coinbase Selects Lightspark for Lightning bitcoin
Is illiquid cold storage fractional reserve?
That's not what I said. I said lightning makes it easier since faster and cheaper withdrawals brings them easier to the point where they have to stop withdrawals due to missing liquidity (insolvency). Imo, this is the definition of a bank run. So I didn't say lightning avoids bank runs, quite the opposite actually.
What would "avoids bank run" even mean? That they are not fractional reserve and everyone can simply withdraw everything?
If so, I think you did this in your head:
and then concluded the following
But my point is that
and that you're mixing insolvency and bankruptcy.
I think this goes back to my point above: does every liquidity issue point to fractional reserve? I don't think so. Just because one ATM runs out of money doesn't mean the bank is running a fractional reserve. They probably still do but ATMs running out of money aren't what you should be looking at.
However, "lightning makes bank runs easier" depends how many funds are in lightning vs onchain to begin with.
Maybe I don't but I think the main issue was how Coinbase integrating lightning makes them even worse than they already are such that the positive effects like more users on lightning (the existing Coinbase userbase) and demand for lightning tech can be ignored. Which I definitely don't get.
You mentioned this here:
I agree. More users on Coinbase means the scam gets bigger. But were users on Coinbase waiting for lightning? Were people not joining Coinbase because they didn't have lightning?
Imo, that's not the case. Most people joined Coinbase because of their shitcoin marketing. So I don't think they are adding lightning because the users they target want it.
Out of interest: Would you prefer Coinbase to drop bitcoin? Would that be better for bitcoin?
I guess the answer also depends on what future we want for bitcoin.
So it takes days to go to the stupid trezor and fill up the liquidity so people can withdraw?? Come on ek, a bit more of cleverness. With these actors you should think bad and time will prove you right.
Would you prefer Coinbase to drop bitcoin? Would that be better for bitcoin?
Totally! You don't know what is to live through the bankrupcy of a major exchange. When you have time, take the trouble to investigate what happened to Bitcoin when these exchanges crashed, just to investigate some examples: MtGox, FTX, Genesis, Quadriga, Blockfi, etc.
Take a bit of time to investigate MtGox, because it is going to be very similar to what is going to happen with Coinbase. The only reason it is taking so long is because Coinbase has a huge usebase and it is the number 1 exchange, and they use state of the art fractional reserve damage mitigation control (it was funded by some bankers, including BBVA, second biggest bank of Spain, so they know what they are doing).
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All these new bitcoiners (after 2019-2020) have no idea who are the real enemies.
Even if they know vaguely what happen back in the old days of Bitcoin, they don't bother to investigate more. They always that is something in the past and will not happen again.
TOTALLY wrong and the dangers are higher now than before.
Why?
Because nowadays the enemies are not attacking Bitcoin, but they are trying to embrace it with full gov compliance.
And Coinbase and LightSpark are the spearheads of full compliance.
COMPLIANCE IS WHAT WILL KILL BITCOIN
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Yep, it's the same every cicle, new clueless people come and think naively about banks, govs, and exchanges, until they learn the hard way, which is usually losing all their money or freedom.
But they must understand, like we did, that Bitcoin is here to oppose those bad players, and any other way which doesn't imply full sovereignty of their coin is a very wrong way to use Bitcoin.
Bitcoin was not invented to satisfy nations. It was invented to destroy them. It is the only economic way out of the system. These noobs should understand and interiorize this, otherwise we are doomed.
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