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970 sats \ 3 replies \ @justin_shocknet 14 Sep \ on: Reflections about Lightning wallets shutdown lightning
ooh I have some insights on this topic...
Quite the opposite in the context of the US, which is often cited as the big scary regulator and the market where most funding and users come from... and where other wallets left App Stores...
Just a few months ago, basically every regulation for the last 40 years was voided: https://www.scotusblog.com/2024/06/supreme-court-strikes-down-chevron-curtailing-power-of-federal-agencies/
The 3 wallets you mention said nothing of regs and actually offered up other rationale.
The only reg related activities were Phoenix and WoS pulling from the app store, both pre-Chevron, and both were cases of speculative compliance... not pro-active. Literally the weak men create hard times meme.
Love this team, they were my Wolf pack-mates and some of the most talented builders in Bitcoin. I think their product was a unique case, being an extremely difficult to build technical solution for a problem that's mostly philosophical, not real-world compelling.
With venture capital dried up I think their decision to pivot now is better than later, I can't imagine how'd they'd get funding for additional runway to pursue it, short of an acquisition by a big exchange looking to hedge their operations.
Another talented team despite my critiques of their architecture choices and ex-CEO. Bad architecture combined with dried up venture capital and no obvious monetization paths made pivoting now a prescient move IMO.
Their announcement cited an illness as a key factor, prayers up that turns around.
The illness combined with some of the same factors above (dry vc's and no monetization path) probably left them little choice.
"a business landscape where currently custodial LN", I think this is where a lot of LN projects get themselves on the road of bad architecture choices. Did people really think payments weren't going to be mostly a business tool? Like, who do you make payments to? Businesses, duh.
IMO this is kind of blaming users for their poor architecture choices, it's only centralizing towards custody because that's how it's been distributed.
Voltage recently announced shutdown of their LSP too, not citing regs, but as a misallocation of capital. We had Voltage LSP wired into Lightning.Pub, and it was by far the cheapest option for small channels.. I was obvious to me that it wasn't sustainable because they had to be losing money on those channels, sure enough it was only live for a few weeks before they announced.
I'd chock this up mostly to dry vc's and no monetization yet again.
Zeus is a commercial effort (Olympus LSP) with FOSS components (distribution) that charges sane amounts for its LSP service. Evan has also been clear he won't engage in speculative compliance, that Zeus and Olympus are compliant today.
Yes, unfortunately though I think being an LSP is a bad business. It's extremely capital inefficient.
It's also bad for the network to have them so centralized.
The Lightning.Pub solution to the centralization and monetization problems, if you can't see them yet, will be more clear in time. Time is the key factor, all the bad architectures around us are a result of high-time-preference... It's still possible that one will visit our cathedral, but at least it will be standing if they decide to.
The 3 wallets you mention said nothing of regs and actually offered up other rationale.
I know, I used them as an example of reflection and my observations.
The Lightning.Pub solution to the centralization and monetization problems, if you can't see them yet, will be more clear in time. Time is the key factor, all the bad architectures around us are a result of high-time-preference... It's still possible that one will visit our cathedral, but at least it will be standing if they decide to.
True.
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It's also bad for the network to have them so centralized.
Therefore my main objective is to encourage users to use medium and small Nodes, having less centralization.
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Bingo, and that's part of the reason I take such offense to the scaling argument... we can literally have a billion lightning nodes = a billion LSP's, but the scaling people want to gaslight people away from nodes.
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