We've been transitioning SN away from being a custodian for a couple months now. As is our fashion, we've done what needs to certainly be done first while maintaining what SN is. And, by improving and understanding those done-firsts, we've widened our cone of what needs to certainly be done. Before too long, SN will be not-custodians.
The plan:
- allow any popular, API-enabled, external source of bitcoin (an attachable bitcoin wallet, ABW) that can generate an invoice and/or pay an invoice to "attach" to an account
- allow stackers to send money directly to one another for their contributions, using these attached wallets, without needing to trust SN
Should stackers not have an external source of bitcoin for sending, they'll send "fee credits." Should stackers not have an external source of bitcoin for receiving, they'll receive "fee credits." "fee credits" can be paid to SN for anything SN ordinarily gets paid sats for, like posts, comments, or territory fees, but are not money and cannot be withdrawn. Stackers can also send each other "fee credits" but a "fee credit" never becomes a sat. (To the upside, we can store an unlimited number of "fee credits" for stackers.)
"fee credits" are needed because many people lack a popular, API-enabled, external source of bitcoin (ABW), and as not-custodians, SN won't store sats. If you have an ABW, you'll transact in bitcoin with other stackers who have an ABW, and when SN pays you you'll receive bitcoin. If you have an ABW and transact with stackers who lack an ABW, they're receive "fee credits." Stackers without an ABW will be paid by SN in "fee credits."
The below table shows all the transaction pairs. The sender's wallet type are the labels to the left, and the recipient's wallet type are the labels in the first row. The inner cells show what is received by the recipient.
| senders->recipients | fee credit wallet | external wallet | sn company |
|---|---|---|---|
| fee credit wallet | fee credit | fee credit | fee credit |
| external wallet | fee credit | sats | sats |
| sn company | fee credit | sats | n/a |
For example, if someone with what's called an "external wallet" in this table zaps a recipient without an "external wallet" for receiving, the recipient receives "fee credit."
The goal here is for SN to be easy to use, private, and beyond reproach. We need bitcoin for SN to be what we intend it to be, but we don't want the moral and legal liability of holding and transferring bitcoin IOUs or KYCing and geofencing people. For bitcoin to fundamentally change internet applications, I believe the applications themselves must be not-custodians. Forgetting internet applications, I believe that for bitcoin to succeed it must have many, varied, and great wallet solutions. Wallets will only get better through us using and supporting them.
Bitcoin is tethered to reality using a mathematic asymmetry, an asymmetry so significant the work required to mine and secure bitcoin can't be forged. Yet, once mined, verifying, sending, and storing this work is relatively trivial. It is through this tether that Bitcoin gains the benefits of the internet, globally settling units of this work quickly, while producing work that's as unforgeable as the screen you're reading this on. SN wants to be real in a similar sense, for its territories to inherit the borderlessness of the internet while the value being exchanged is unforgeable. SN needs bitcoin.
Anyway, those are our motivations and wallet plans. We will produce a not-custodial end-to-end zap beta sometime soon, then we will introduce fee credits for stackers that lack ABWs. When we transition to fee credits, the sats in your wallet will still be available as sats for withdrawal or for purchase of fee credits. The only change will be that you won't be able to put more sats in your SN wallet or zap those sats on SN (unless they are used to purchase fee credits). Every time someone receives a fee credit they will be reminded it could've been real money. We hope this plan, being consistent with the right thing to do, is also a fun way to create more self-sufficient stackers.
If you have questions, send 'em!
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