What problems would there be if L1 were filled by something other than BTC tx? \ stacker news ~bitcoin

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What problems would there be if L1 were filled by something other than BTC tx?

411 sats \ 4 comments \ @teatwo 7h bitcoin

The "free market" in a 4MB blockspace is a miniature garden that only works within certain boundaries.

If it is connected to an external economy and profits and losses are calculated in total with the external market, economic rationality only in the miniature garden will not work.

Ordinals did not stop because of economic inefficiency in the miniature garden, but just because the external economy's NFT market died. What should be noted is that when the external economy (NFT market) was alive, it was minted with exorbitant fees in the miniature garden. This is because even if you pay high fees in the blockspace, you still make a profit in total with the external economy.

If oracles and scripts would evolve and more sustainable "goods" than NFTs would be mounted, the blocks might continue to be filled with those goods.

Now, here's the question. If L1 becomes a decentralized Google Drive and BTC transfers are relegated to L2, is there any problem with that?

This is what I don't really understand. My thoughts are:

L1 will be full of spam (in the sense that it's not BTC trade) and full of fees even after 2140 when block subsdy ends.
If you can get your BTC deposit through L2, you can also trade BTC in L2.
The censorship resistance and network resiliency is the matter how L2 is designed when L2 becomes the main network of BTC transactions.

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81 sats \ 0 replies \ @justin_shocknet 6h

I think your framing is backwards here... the right question imo is what problems must be present such that the chain becomes shared storage.

The only reason non-tx data gets to the chain is because it's not yet priced out, and that the nature of markets is trying all the wrong things it can afford to try before profit maximizing the right thing.

Non-monetary use-cases are experimentation in wrong things, like the ordinals example, omni before that... I can't even imagine how long an exhaustive list is. These things come in waves, try -> fail, and that's natural. With each failure there's a new cohort to profit maximize the right thing, Bitcoin as money.

As Bitcoin becomes more valuable and stupidity lifecycle reaches its inevitable conclusion, spam will be a non-issue.

The asterisk to this of course is a scenario where Bitcoin fails to reach its value potential, thereby leaving room for perpetual experiments in frivolities. What could cause that is its own question.

Another issue I see in your framing is the equivalence of L1 and L2 Bitcoin. L2 is inherently less valuable at the margins than L1 because there are inherent and unavoidable trade-offs like online-ness. Also the infrequency that L1 needs to be interacted with, because of L2's, creates a Jevon's paradox: Space on L1 becomes even more valuable, not less.

Lastly, the spam issue of the hour is coming from fake layer 2's...

Bitcoin is so unfathomably scarce that the majority of VC funding in the ecosystem is in fake Layer 2's. Your Liquids, Arks, Sparks, Mints, Spider/State/Shadowchains, Shitrea's, and so on...

Why?

Because only a very small minority of the planet will ever be able to afford to use Bitcoin independently, so they have identified a potentially massive market in trust-smuggling their usage.

This means that the latest spam threat is actually the market sniffing out a massive value appreciation in Bitcoin, and that because these are trusted systems without the scaling boundaries, the spam will actually decrease as most of them become redundant and therefore priced out.

0 sats \ 2 replies \ @DarthCoin 6h

when L2 becomes the main network of BTC transactions.

seems that you don't know how LN works. LN without onchain it doesn't work. It's useless if you cannot open/close channels.

Onchain = transactions, open/close LN channels LN = payments network Both need each others, otherwise will be a mess.

0 sats \ 1 reply \ @teatwo OP 6h

I intentionally used the vague term "L2" to avoid limiting it to LN here.

If you use a shared UTXO like ARK, you will need a deposit, but you won't have to worry about unintentional forced channel closures. Or, although it does not follow the principle of unilateral exit, if you use a custody like ecash, you won't even need a deposit to L2.

However, I agree that the point that L1 and L2 are a set and therefore problematic is very valid.

27 sats \ 0 replies \ @DarthCoin 6h

There's no other L2 than LN. All the rest are SOMETHING ELSE but not L2.