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71 sats \ 9 replies \ @fiatbad 10h \ parent \ on: Bitcoin has a Brand Problem bitcoin
Lots of things are scams. Fedimint is a protocol. It can be used to scam, but it's not inherently a scam.
If setup properly, it can be 1000x less of a scam than local banks are today. It can be done in a manner that brings the risk to users down to nearly zero. Better than most fiat systems we have today.
Sure, it's not base-layer Bitcoin level of security. But for fuck's sake, if you people aren't going to allow SOME centralization in the L2's and L3's, then I guess Roger Ver was right and it's time to start talking about scaling the block-size. Something's gotta give.
edit: (I consider Fedimint an L3 and LN an L2.). We're talking about scaling to the people who would never run their own nodes, even if their lives depend on it. We're talking about making Bitcoin a MoE without all the control and centralization the fiat system has today. It's not going to be perfect or pretty. You're going to have to allow some room for "rug-pulls", even if the risk is low. It's still 1000x better than what 99% of people have today and you're actively working against it.
Even if we had 'bigger blocks' would people use them?
Would 'cheaper transactions' incentive 'more transacting'?
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No, I don't think it's the price to transact that is the issue.
I think it's more about the EASE to transact.
Using Bitcoin on the base chain was a new skill that millions of people have learned to do. It works offline, just send to the recipient's address.
Lightning is 1000x harder to use. You have to be online. You have to open/close channels. You have to consider inbound and outbound liquidity. Then, you have to figure out how to connect your phone to your node so you can spend anywhere you go. Sure, LN works great when I'm at home using my node. But using it self-custodially, away from my house only works half the time. Sure, it's improved A LOT since 2020, but it's still unusable.
I have set up a few local merchants on their own, self custodial LN nodes. I have ended up being the manager and maintainer of them. I realized that it's way too difficult for the average store owner. It's not going to work in a self-custodial way.
From now on, I've just been recommending new merchants use a custodial solution like CashApp to take LN payments. It's just 1000x easier. Exactly what the Creature-from-Jekyll-Island wants us to do. And, apparently, exactly what Bitcoiners like @justin_shocknet want. Pushing people to custodial solutions, even though Fedimint is a great middle ground that improves on custodial LN, even though it's not perfect.
Layer 2's and 3's need to be as easy to use as the base layer. Otherwise, I believe, they will never work. Visa/Venmo/Fiat will continue to dominate. Especially sense Bitcoiners themselves seem too lazy to fight back very hard against fiat. It's just too convenient, I guess.
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Lightning is not easy for Merchants. And frankly... I think they should be using custodial solutions to start, unless they are really really committed.
As far as self custody and Lightning goes...
I was able to use Lightning across continents from my own node (LND) and I am not a heavy command-line user. Granted there wasn't anyone else paying in Bitcoin in Lugano (not many people) but at least it worked.
I have set up a self-contained 'zeus' node on a phone too and it's as easy as... zapping the Lightning channel the LSP is setting up for you.
Then you have a channel you've 'rented' and you can send sats to it. Few if any on-chain fees and you can swap out into cold storage whenever you want. What's the issue with this?
In my opinion it's not a technical challenge, but an educational one. Just my opinion.
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You're moving the goal posts. You contrasted it to centralized custodial lightning, that's what it is.
The scam is it pretends to be otherwise.
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centralized custodial lightning, that's what it is.
No it's not. It can potentially be far more decentralized and secure than custodial lighting.
Custodial LN == Single Sig
Fedimint == Multi-Sig with potentially hundreds of key holders
Both can be rug pulled. But Custodial LN makes it really super easy to rug-pull.
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Wrong, that's a hoax.
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I think I see your point there, and you make some good ones.
Couldn't there be an extremely public ceremony at the setup of a city's mint whereby hundreds of third parties are present to validate the creation and distribution of the keys?
Just like our previous conversation, I feel like you're talking about Federations which exist today, where I'm trying to discuss hypothetical future federations which are setup "properly".
I also admit these will never be as good as cold-storage, self custody. That should be a given. We're discussing a Layer 3, so I shouldn't have to act like BTC level of security is desirable or necessary.
So, can't you have a hypothetical discussion about how a Federated Mint could be setup in a manner that I call "proper"? I'm not sure it's possible... but I am sure you aren't even trying.
Perhaps what I should be asking is: Can you not consider a hypothetical scenario whereby a Federated Mint is setup in such a way that offers FAR more security to the lowest economical person on the planet, than the current system today does? If the hurdle to beat is the current fiat banking system, how can you not see that Fedimints can easily beat such a low bar??
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You're all over the place so I'm not sure what you're actually asking.
Fedimints are fake, period. Lightning is 2:2 thus cannot be federated. Fact not opinion.
Many custodians are multisig with various stakeholders, yes they have their uses.
I literally build infrastructure for custodians, my only point is that Federation is a term used by scammers.
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For what it's worth... I don't see the purpose of fediments yet. I use Lightning all the time and the cheapness and throughput of Lightning transactions, to include opening channels, isn't that complicated.
Why switch to a different 'model', fediments, when there's really no need to?