Cowboy Credits - Quick Summary (my attempt) \ stacker news ~meta

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Cowboy Credits - Quick Summary (my attempt)

The problem it solves

The problem that CCs solve is that the government doesn't like it when people can send each other money on your platform and then withdraw it freely. The government is ok if your platform uses some tokens that are only used on the platform and can't be withdrawn. A good example is online game communities that use different tokens/in-game coins heavily.

How it works

If the person creating the post and the person zapping them both have connected their own lightning wallet (in their SN settings), then the transfer happens directly between them using regular sats.
If one of the people doesn't have a connected wallet, then the transfer happens in CCs (it will turn sats to CCs if needed).
CCs can only be spent on Stacker News for the usual stuff like zapping or posting fees, etc.
You can't (easily) exchange CCs for sats. By design.
When you use CCs for anything on SN, then 30% of the zap amount and 100% of everything else goes to the rewards bucket and the rewards bucket is once a day split between active users AS SATS. This guarantees that CCs don't accumulate on Stacker News.

Why

This provides an intuitive and smooth experience for newcomers to Stacker News. At the same time this helps to gradually onboard and shift the newcomers to noncustodial lightning. And finally since this solution matches the solution of various online games, it gives precedent defense.

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77 sats \ 0 replies \ @JesseJames 5h

Good explanation. Thanks

128 sats \ 2 replies \ @charonnakamoto 8h

This is one of the best explanations of Cowboy Credits I have read. As a new user of SN, I am now finally at peace with the concept of Cowboy Credits after reading this explanation. Thank you for this. Q: If it is indeed the case that users are zapping sats from their wallet to the recipient's wallet, then how will opening a Lightning channel with Stacker News help to reduce the fees on the receiving sats?

0 sats \ 1 reply \ @nout OP 47m

@DarthCoin mentioned below that the payment is proxied by SN. I don't know the technical details, but that's a good question.

It's possible that I said it incorrectly in my description.

0 sats \ 0 replies \ @DarthCoin 44m

It's ok, you just missed that detailed part that happen behind the scenes.

77 sats \ 5 replies \ @DarthCoin 6h

If the person creating the post and the person zapping them both have connected their own lightning wallet (in their SN settings), then the transfer happens directly between them using regular sats.

A bit misleading here... SN is the "interceptor", the proxy in that transfer, using something like lnproxy.com and is taking a cut. So IMHO is still money transmitting bullshit, but they just hide it. Is not a real p2p, is more like p2sn2p

0 sats \ 4 replies \ @nout OP 44m

Yea, you may be right. I don't know/understand the details. Maybe @k00b and @ek can point us to how it works in the "connected-wallet to connected-wallet" zap situation?

0 sats \ 2 replies \ @k00b 37m

It's noncustodial and works like every lightning routing node works. So if SN is a money transmitter for doing this, so is every routing node on the lightning network.

re: works like every lightning routing node works

We pay the receiver with OUR own money and only after the receiver has OUR money can we claim the sender's money. We don't take custody of the sender's money to give to the receiver which is how money transmission has been more formally defined in prior cases.

Basically, we are involved in the "direct" transfer but it's noncustodial.

0 sats \ 1 reply \ @DarthCoin 23m

So if SN is a money transmitter for doing this, so is every routing node on the lightning network.

So what is wrong with being a money transmitter? I don't understand why all this hassle just because some users are keeping a bunch of sats in a SN account. Lower the account limit and done, keep it simple. Nobody cares about "money transmitting" bullshit.

0 sats \ 0 replies \ @k00b 12m

All the old on-chain bitcoin tipping services were sent cease and desist letters, or something like it, for money transmission because they were custodial. That's why custodial/noncustodial makes a difference - no noncustodial service has been charged with unlicensed money transmission to date.

0 sats \ 0 replies \ @DarthCoin 43m

without that "proxy" SN cannot take the cut. I think k00b explained that part in one of the old pinned posts.

77 sats \ 0 replies \ @supratic 8h

In case you, stacker, lurker or newcomer, didn't connect a wallet yet, here are some guides I've been writing to invite you to do so:

Not enough? Learn more #835262

Isn't mandatory, you can alternatively keep playing with SN Cowboys Credits (CCs) it's fun too...

30 sats \ 1 reply \ @SatsMate 13h

Did the government knock on SN door, or is this a proactive measure? I do think it is better safe than sorry..

30 sats \ 0 replies \ @k00b 13h

Proactive. Better for bitcoin and stackers and SN itself in the long run imo.

30 sats \ 0 replies \ @mattgavin 15h

good summary doggie

126 sats \ 3 replies \ @sasasuina 14h

As long as people understand that cowboy credit is not a conspiracy by Stacker News, much of the user anger will subside. Cowboy credit is not designed to take away users' bitcoin or to increase Stacker News' profits. It was introduced to address the legal risks Stacker News faces.

For active users, cowboy credit isn’t much of an issue. They engage frequently on Stacker News and have plenty of opportunities to spend their cowboy credits. Additionally, active users are more likely to earn rewards, which gives them a way to eventually convert cowboy credits back into bitcoin to some extent.

For new users and less active users, the situation is more challenging. They find it harder to earn rewards, and cowboy credit cannot be converted into bitcoin—it only has one use: spending. So, it’s understandable if they feel dissatisfied. Moreover, these users may have less knowledge about Stacker News and bitcoin/lightning, making it harder for them to address any issues they encounter.

For these new and less active users, perhaps their situation will only improve as they gain a deeper understanding of Stacker News and bitcoin/lightning. Stacker News might also consider making some product-level improvements to help address these concerns. I trust that the Stacker News management team has more insights on how to tackle this.

77 sats \ 2 replies \ @SimpleStacker 14h

I do think it will affect the new user experience.

Part of the fun of Stacker News is the feeling that you are accumulating bitcoin, even if it's a very small amount and sitting in a wallet they don't own. That feeling is still there.

So I wonder how this will change things for new users.

132 sats \ 0 replies \ @nout OP 14h

The thing is if you are active on Stacker News you are actually getting real sats daily through the rewards, so that works out ok.

30 sats \ 0 replies \ @sasasuina 13h

After all, they’re new users—there’s a greater chance they don’t know how to set up a wallet or how to solve issues when they arise. This can lead to dissatisfaction. Before cowboy credit, these problems didn’t exist. Previously, new users could interact on Stacker News and earn bitcoin right after signing up. They only needed to think about setting up a wallet when they wanted to withdraw. The challenges were more spread out, which was more user-friendly for newcomers. Now, users are faced with all these issues right from the start.

Another concern is that new users have fewer opportunities to convert cowboy credit into bitcoin. For them, cowboy credit can only be spent. To some extent, this might give them the impression that cowboy credit feels like a "less valuable currency."