How do businesses like Kraken deal with the "burden" of operating a LN node, e.g. paying on-chain fees, unexpected force-closes, off-chain fee configuration, implementation bugs, ...?
Bitcoin businesses already have to pay on-chain fees
With chain fees being so low, the difference between a coop close and a force close is just the tied up capacity, which is a very small amount of value for a large business.
Just speaking for myself, I think using the one reasonable routing fee for all your channels makes the most sense. Actively managing which peers you open channels with seems more impactful than actively managing the routing fee rates.
Opening a GitHub issue, or ideally contributing a fix!
Putting more capacity towards peers that "prove" themselves great routers, closing channels that are "unproductive".
Running experiments with peer selection, especially using betweenness centrality measures.
Hardware resource usage is negligible, personally I had a node with hundreds of channel on a retail i5 laptop. Any mid-range server could probably do thousands of channels.
Private channels can be expensive for a routing node to have, I think they're really best for full-fledged LSPs who are charging the end-user wallet for the private channel.
IMO a day offline is too long, close the channel.
I think it would make sense to have both a clearnet and a tor node.
Not your keys, not your bitcoin. Using a custodial Lightning node with a small amount of value is low risk, but don't use it as your long term savings solution.
I'm no longer at Kraken, but in general I see the litmus test of a good peer as how much the channel routes when routing fees are reasonable (hundreds of ppm).
Correct me if I'm off, but this answer makes it sound like you came to recognize the utility of a belief in god rather than became convinced through evidence that there actually is one.
In other words, do you believe that even if there actually is no god, the belief itself is simply a useful delusion to subject yourself to? A fantasy that you choose to engage in (faith) that helps a person manage the extreme difficulty of life.
That's a good point, I tried to be concise in my answer but I was indeed convinced both by the utility of belief and by logical + empirical evidence. The clearest evidence to me was introspective observation of the existence of my own soul, its relationships, and its reactions.
Although I think that standard of evidence can equally support any of the thousands of varieties of religious beliefs that currently exist throughout the world.
To each their own. Freedom of religious expression and consequently from religious laws that are not your own is a critical part of what makes America great.
The clearest evidence to me was introspective observation of the existence of my own soul, its relationships, and its reactions.
This is a statement that someone of literally any religious or spiritual belief can make. Because it can be used to support any belief, it makes it a worthless piece of 'evidence' for anyone who exists outside your own head.
I believe that’s an illogical statement. You’ve obviously put your faith in bitcoin and trust it’s systems. Why would you put your faith and trust in it? I believe bitcoin is the most moral and ethical monetary system there has ever been created which is completely in line with God’s word and the Bible.
The code can be independently verified. The BTC blockchain can be audited all the way back to the genesis block. That's the whole point of it: any individual can verify, not trust.
There's nothing verifiable in the Bible, or any other religious scripture.
I've seen data suggest that the capital gains tax issue is a major problem, so getting a de minimis exemption in every jurisdiction would be the next big step.
But I also think there is no "next big step", in the sense that we're at the "1 to N" stage of adoption, lots of small iterative steps.
Lots of bitcoin and mining topics I'm excited to dig into:
Proof of work versus proof of stake
Transaction fee predictions
Block subsidy purpose
Long term security
Hashprice history
Supply audit follow-up
Data-usage audit
SegWit and Taproot adoption
Reorgs
Output value, spending amount
Velocity of outputs
Mempool competition
RBF and CPFP usage
Softforks
Tracking "blocks needed to close all open Lightning channels"
Thanks for all of your work to drive bitcoin and lightning adoption, share your work and insight on podcasts and writings, and take time for an AMA.
Throughout your time at Kraken, what were the biggest challenges of adopting Lightning and driving its success? Is there anything you would do differently if you had to do everything again?
Great question. I learned that it's really important to thoroughly specify and align on the exact role and resources you'll have before joining a company. Don't just meet with the hiring manager and a peer, also meet with the major stakeholders you'll be working with to make sure they're all exactly on the same page with regards to mission and culture.
I'd love to use node launcher because I do everything on desktop and I am used to getting the best of the best experience on desktop. Not so in Lightning - the community focused on small systems in server-style like e.g. raspberry pis.
Proof of work versus proof of stake
Transaction fee predictions
Block subsidy purpose
Long term security
Hashprice history
Supply audit follow-up
Data-usage audit
SegWit and Taproot adoption
Reorgs
Output value, spending amount
Velocity of outputs
Mempool competition
RBF and CPFP usage
Softforks
Tracking "blocks needed to close all open Lightning channels"
I had been an advisor for Riot for the past 3 years, they approached me at a conference in NYC after I spoke about what bitcoin maximalism is. I've been impressed by their urgency in execution and laser focus on bitcoin mining!
I am curious how you think the business model for exchanges evolves over time? If any of the fees and trading models for altcoins that have historically funded many new operations go away with time, what do you see as the main profit drivers for offering bitcoin and lightning services?
I think it's generically true of any business that long term profits get compressed due to competition and technological innovation, so all companies are constantly having to refresh and reinvent themselves.
Thanks, I'm curious if you have any predictions for how this plays out or evolves? Especially if altcoins (and their fees) trend away in favor of Bitcoin/LN?
Before bitcoin I was a gold bug (though I only owned a couple of silver coins because I was a broke college student). When I heard about bitcoin's 21 million supply cap at the end of 2012, a light bulb went off and I started going down the rabbit hole, reading and writing about bitcoin: https://nakamotoinstitute.org/authors/pierre-rochard/
Hi Pierre, thanks for doing this AMA! In the early days of the Austin scene, what lessons did you learn around bitcoin adoption in your community? if any…
If you were looking to learn more about a particular area of Bitcoin/Lightning in order to build a business, which area would you focus most of your attention on?
Transaction fees are often seen by bitcoiners as important for finality ("security"), replacing the block subsidy, or censorship resistance. But in my view empirically they've been most important for congestion control and incentivizing Lightning development.
Most bitcoiners are proponents of "protocol ossification", whereas I look at protocol changes with many questions in mind:
a. Is it a softfork?
b. How many lines of code or how much engineering complexity is it adding to implementations?
c. What is the impact on node operator cost?
d. What is the end-user value of the change?
e. What other changes is this competing with in priority?
Here's Pierre, coming straight from Riot
His rigs are heavy, ain't on a diet
ASICs are roaring, no peace and quiet
If you don't mine, well maybe you should try it
I found the bitcoinissaving twitter account more engaging when you were the agent, in Daniel Kahneman terms, behind the account. What made you change it?