If you don't buy bitcoin right now you're a sucker, look at all these people making money. Oh yeah, it also has some business justifications that totally make sense, trust us, this isn't vaporware... look, see, all these people are using it to buy drugs! /s
"Let’s say you want to make a $100 payment to a merchant. Using your credit card would cost the merchant $3, which is then passed along to you via hidden costs. "
You also get 1-3 credit card points, which for you is extra money that you wouldn't get if you were to pay for this with Bitcoin or, for that matter, cash.
Also if the merchant screws you and sends you the wrong or a broken item, you can dispute the charge and real humans from American Express or Chase will spend their valuable time to help you resolve the dispute.
And, of course, if someone makes an outright fraudulent transaction with your card then the CC company will return your funds no questions asked. With bitcoin, your funds are lost for ever whether it was a mistake or a fraud.
These services are necessary (to build trust or for regulation reasons). If that was not the case we'd have seen a lot more real world adoption of crypto by now.
But I think consumers understand that getting a Bitcoin-based payment network off the ground is far more important than any of those features you list /s.
I dunno, I'm skeptical that if merchants actually saved more money now they'd pass along those benefits to consumers. Maybe if we were at the beginning of the adoption of cards, but with those costs baked in I'd bet it'd just be pocketed as profit.
I noticed that abroad too that no one batted an eye at using a credit card for tiny transactions worth ~$2, but in the US an independent merchant would either have a $10 minimum or charge a ¢50 fee or both.
If crypto was the default we would all be amazed at this improved system of having fraud insurance, rewards for spending, customer service, and fast transactions.
Lightning, the technology discussed in the article, solves this problem.
> As with most layer-2 solutions, Lightning seeks to increase transaction throughput and lower costs while retaining sufficient decentralization by moving activity to a second network. Once BTC is on the Lightning network, it can be transacted instantly typically at fractions of a penny.
> Rather than expensively sending each transaction over the Bitcoin blockchain, users deposit BTC into the Lightning Network and then transact inexpensively through payment channels. As with most networks, the more people and companies that join, the more useful it becomes.
A company could offer these on top of the lightning network. The article's point is that an oligopoly of payment processors is collectively costing consumers billion. It is sad so many HN users would rather see cryptocurrency fail than see disruption of this space
Even with all cryptocurrencies prices roller coaster and continuous scams they are 100x times better still than traditional banks - less paperwork, everything automated as much as possible, often even faster. No COBOL and online clients from 1990.
How is it better? I can't buy anything that I actually want with cryptocurrency. There's no paperwork for my traditional bank accounts and everything is already automated and fast. The programming language they use on the back end is utterly irrelevant to customers, we never see it. Nothing wrong with COBOL anyway, it still works fine.
I can buy a pizza with my credit card or send $5 to my friend using his email address. It's all automated, instant, and can be done using third party clients thanks to open banking.
What bank do you use which requires paperwork or interacting with COBOL? The only transactions I have which take longer than seconds are the wire transfers for things like buying my house where the extra delay to confirm the transaction is both not a problem and desirable given the sums involved.
Do you mind expanding why as an end-user paying in cryptocurrencies is easier than signing up for a credit card and paying with that?
To sign up for a credit card (in USA), I just provide my personal information to some banking website and they mail me the credit card in a week or so that I can start to use.
It gets more complicated once you start using it for services outside the country, international transfers, or you decide to work overseas, or just retire overseas.
> ... Arcane Research estimated that in Q1 22, Lightning facilitated $20–30M in monthly payments. That’s a 4x YoY increase, but a far cry from the $866B Visa facilitates each month.
It's worth noting the scorn and hate once thrown on this idea as a scaling method for Bitcoin back in 2014-2018. Part of the problem was that the protocol needed to be upgraded for certain things to work well. Part of the problem was that the underlying concept, although simple, is very technically deep. (Many people still don't realize that Bitcoin does "smart contracts" and always has). Part of the problem was that the "obvious" solution from the perspective of beginners -just make bigger blocks - seemed so natural while Lightning seemed so alien.
Did they ever figure out their scaling issues? Every time I ask about the basics of how routing is supposed to work, shills send me to 100-page incomprehensible documents instead of giving a clear answer.
Particular questions I have
1) how does a node know the connectivity of the (whole or most of) network? What about a brand new node?
2) do nodes just constantly announce themselves?
3) does it still rely on hub-and-spokes model? (aka centralized)
Lightning Network is just a centralized company acting as a middleman, occasionally (if ever) committing changes to the blockchain right?
If that is the case, then theoretically Visa and Paypal are already lightning networks, just without the periodic bitcoin commits.
If so, wouldn't that mean that if Visa and Paypal are banned from letting country X citizens send funds to someone in country Y, wouldn't the gov of X just block whatever new lightning network companies pop up? Isn't it the same thing?
Either I don't understand, or Crypto finance is just a new way of doing the same thing but confusing enough to make politicians get bored reading about it, allowing them to avoid regulation
>The Lightning Network is a second layer added to Bitcoin’s (BTC) blockchain that allows off-chain transactions, i.e. transactions between parties not on the blockchain network.
Can you help me understand how this will be different than Visa/Paypal with occasional commits to the chain?
You don't need a third-party, you can run your own node. It's a state channel. Visa could participate as a liquidity provider to help route payments but it's totally peer to peer.
Technically, Lightning Network is fascinating and quite ingenious. Practically, the blogpost above was written in 2016, so more than 6 years ago, and LN - in my impression - hasn't really taken off yet... I wonder if it's due to its complexity, plus the potential need for watchtower services when using a node that isn't always online.
It just seems to me like it allows you to open a secure high speed channel with someone you expect to transact with frequently. That's interesting but most people transact with different people constantly - so unless I want to have an open channel that closes nightly/weekly/monthly with every store I shop at, wouldn't I use a centralized service?
How would that be different than opening an account with Paypal, and everyone you transact with also having a Paypal account, and you all using Paypal to send money between each other, and occasionally Paypal sending money to your real bank account?
EDIT:
I suppose I could just have a channel with every party I transact with that closes monthly (like a credit card), but the lack of reversals mean I would like a centralized service to be able to buffer my money from other parties, like my current credit card offers
Hmm so I have a channel with Target, Target has a channel with my neighbor, and my neighbor has a channel with my cousin.
You're saying I could send money to my cousin and Target and my neighbor would take some sort of cut if they agree to process the transaction?
How do they prevent double spend? What if I have that network, and also a channel with Walmart, and I send all my money to Walmart at the same time I send it all to my cousin, and they give me a sofa
In <some_time_period>'s time when everyone closes the channels, my cousin will have my money, Walmart won't have my money, and I have a sofa.
Am I understanding this correctly?
EDIT:
Oh, I see, my coins get locked in the process, so I couldn’t have a separate channel with all of my coins with Walmart. They would have to have a channel with Target, and I assume a good chunk of people in the mesh would have to validate every transaction to prevent double spend.
So it’s not totally broken, it just scales poorly as the size of the mesh network grows?
To service the needs of an entity like target which may have a channel with everyone at the same time, I still think a centralized company will emerge to take on the processing with an intermediate hot wallet, instead of a lightning mesh.
You sure started out pretty confident. I’m very interested in the intense emotional reactions to crypto currency technology, either immediately dismissive or extreme passion not based on facts.
What you described is a channel inside the network of nodes. What's great in lightning network is that you can route paths / a flow inside the network made of those channels that you just described trustlessly (not trusting the intermediate nodes either) using some simple but ingeniously designed smart contracts.
No, the Lightning Network is a free and open payment network on top of the Bitcoin Network.
It's a so called "layer 2" network (Bitcoin network being the layer 1).
Everyone can run a Lightning Network Node on e.g. a RaspberryPi.
One opens "Channels" to other Nodes. Multiple nodes and channels build a network and can transfer Bitcoin/Satoshis for relatively little costs from A to B.
Network nodes can charge a fee for routing payments (or data more generally speaking).
There are different implementations of a Lightning Network node. LND is probably the most used one today.
But there is also C-Lightning.
Every time someone comes in and tries to solve these problems cryptocurrencies have they end up recreating standard banks and payment processors, only without all the federally mandated consumer protections built into actual banks and financial institutions.
People are just hell-bent on re-learning 200 years of banking history firsthand.
Yes, but you are good as long as you stay in the Bitcoin and use lighting for day to day transactions. One you withdraw your Bitcoin from LN, it can not be banned.
Can LN truly scale to support feature parity with Visa/AMEX? By feature parity I mean not only tx/s but also
- Always readily available for places that support it (I never have to wait to open a channel, I never have to "pre-deposit" funds anywhere)
- Fraud protection by default (I can have illegal transactions unwound)
And can that be done at a price point that's significantly cheaper than existing players?
I'm sick of hearing about what crypto "could" do. I used BTC to pay for a few lunches back when transaction fees were in the cents rather than hundreds (?) of dollars or worse, and it was pretty neat, but it's clear today that the crypto ecosystem has largely become a paradise for grifters, scammers, fraudsters, and straight-up criminals, and (more generally) just another way for the rich and sophisticated to get richer at the expense of the poor and unsophisticated. Using it as a payment processor for amounts < tens of thousands of dollars seems grossly wasteful at best^[1], and using it as a wealth store for any length of time is impractical due to the volatility.
Bitcoin turned heads and got adoption because it was a proof of concept that proved the concept. Nobody would have given a shit if it was just a whitepaper without a deployed implementation that worked, and nobody should give a shit about crypto claims now until they are made material in a form whose harms don't outweigh its benefits.
In short, crypto needs to grow up. But I'm afraid most of the people throwing their weight behind it today prefer it in its current state.
^[1] Yes, "gas" (barf) fees are down today. No, I don't consider that representative of the current crypto ecosystem in a "healthy" state. See also: GPU prices.
Really? Do you think the US "unbanked" don't fall into this category, for example? Hell, these days US women who want abortions could fall into this category.
There are a LOT of people excluded, or effectively excluded from the banking system either through outright exclusion, their location, or the fees. All of them would benefit.
Transferring money across countries without the government seizing or controlling it. Can you list what non-cryptocurrency technology provides a better solution for that? There are several countries with permanent or temporary restrictions (I think Russia and Ukraine are recent examples).
Changing that is very much a non-goal. Just ask Treasury.
Countries on the up-and-up are welcome to use Wise. [1] The ones that aren't are broadly cut off from the global financial networks for very good reasons. Either way, if you disagree with those reasons you're free to lobby for changes - but the ability to exclude them is overwhelmingly a good thing.
This is not relevant, since the comment I replied to said any use case. I just picked one that’s a need for certain people in certain places. It’s not a non-goal for them, and what governments want or push for may not be as good as you believe.
I mean look, it's not really even good for that. You have a public ledger of all your illegal transactions that you then share directly with law enforcement for them to feed into their automatic crime detection engines. Why bother with pro forma warrants? Just email your transactions directly to the FBI and have them make sure you didn't do anything wrong, I always say.
Dr Nicholas Weaver from UC Berkeley referred to such transactions as prosecution futures. I agree. After all, you're not even defending against current deanonymization tooling, you're defending against all future such tooling. Pepperidge Farm remembers Tornado Cash.
[edit] If I were in an authoritarian state capable of oppressing me, the last thing I'd do is use Bitcoin lol.
Never mind seizing, how about without 10 organisations, including 2 governments, taxing it. With bitcoin or other crypto you can get it down to 2 organisations, which is a big improvement already.
If the government decides they want to seize or control it, they can also decide to simply imprison you for attempting to flout these restrictions via cryptocurrency. While that isn't currently happening much (that we know about), it's inevitable this will become a more likely threat as more people attempt to use it for that purpose.
And yes, I am aware that there exist cryptocurrencies that attempt (with varying degrees of success) to prevent the kind of analysis that would make this sort of enforcement possible.
If this is the best use case shouldn’t discussion be promoting crypto designed for this like XLM or XMR, instead of whatever new Ethereum-based project that is most likely a Ponzi scheme?
And facilitating "illegal" transactions is a right thing to do when the government is legalizing bad stuff. Shared a lot of examples here https://news.ycombinator.com/item?id=32406095
False. Show me a better solution for asserting and verifying proof of ownership for digital media. NFT does it far better than DRM.
Also, x-border international money transfer.
I’m scratching my head after reading this. Bitcoin doesn’t have “gas fees”. That’s an Ethereum thing (the term and the fee being very high). I’ve read online that Bitcoin transaction fees are in cents. Perhaps someone more knowledgeable can confirm how it is nowadays.
Bitcoin transaction fees can get high on a busy day if you pay to get your transaction faster consideration. Paying the standard amount will usually work, but it can sometimes take hours for the transfer to complete, which is suboptimal if you’re trying to pay for something that only guarantees the price in Bitcoin for a certain period of time. That is been my personal experience anyway.
I prefer to call them "transaction fees" myself. I believe that's what "gas" refers to; people apparently call it "gas" these days so I have adopted that terminology so that everybody knows what I'm talking about. IIUC Bitcoin, Ethereum, and other PoW-based crypto "coins" all require transaction fees to function, so that's what I'm referring to, regardless of what people associated with any particular "coin" choose to call them.
> "most of the people throwing their weight behind it today prefer it in its current state."
Based on what? The lightning network is new and growing. And that's just one legitimate project out of dozens in active development (not just Bitcoin). Yes, there are scams. Only scams? No.
Lightning isn't disrupting anything. It'll take 75 years, the better part of a trillion dollars of power and all the remaining block reward (assuming 100% saturation of block space) to simply open channels for everyone on the planet. It would take months just to open a channel for the folks in the Bay Area. Once you do, it has quadratic routing complexity meaning it wouldn't even work in the first place. Move along, nothing to see here.
The lightning network described in this post explicitly solves both the speed and cost problems with Bitcoin transactions. This still leaves the scam/grifter problem in the ecosystem, but your dismissal is ignorant of the major content of the article. I encourage you to read it and then update your comment. I’m not a crypto enthusiast, just someone who prefers higher quality discussion on HN.
I have been hearing about Lightning as a solution for Bitcoin's scaling issues for _years_. Far from being "ignorant of the major content of the article", I think my comment in fact echoes the article's admission of exactly the same problems I described. Reproduced here:
> Developer tooling still needs to be built out to enable more user friendly applications. With most still treating BTC as an investment, we’re yet to see broad demand to use it for payments (use of Lightning rails for fiat payments remains a compelling opportunity). Despite progress from infrastructure companies, Lightning is still cumbersome for new users and merchants. Additionally, onboarding low income users in developing countries remains a major challenge to fulfilling the promise of Lightning remittances.
And, somewhat humorously and very tellingly, Coinbase itself calls out its own lack of support for Lightning:
> This article should not be construed as an indication that Coinbase has imminent plans to add support for Lightning. Rather, a few employees at the company simply found its potential compelling enough to research, write, and share.
---
If you "prefer high quality discussion on HN", I "encourage" you to address the substance of my comment, which I will not be updating. Where is Lightning? How can I use it to pay for things I need today? Why are we still talking about solutions to these eminently obvious scaling problems in largely theoretical terms after a decade-plus during which the crypto ecosystem might have focused on solving them, but instead largely went in the opposite direction, toward a model of consumers as marks rather than as first-class users?
As an aside, from a personal (i.e. me) usability perspective, the volatility issue is a way bigger deal than the criminality issue. Even if Lightning works out, if I can't reliably store value in BTC, then it can only really serve as a fiat pipe whose endpoints will doubtless be controlled by fintech rent-seekers analogous to today's monolithic payment processors. It's possible, even likely, that they will be the same rent-seekers.
And all of this is not even touching on the energy usage issue. I've been hearing about alternatives to proof-of-work for years (seems to be a theme here); where are they? Are they even realistic, or are they just a fig leaf for an inconvenient truth about crypto's efficiency? Because if I have a choice between rent-seeking payment processors and rent-seeking payment processors with a vast and ever-growing environmental footprint, I'm going to choose the former.
I said it before, and I will say it again: the crypto ecosystem needs to grow up. If they can be better, and have the will to be better, they need to be better.
The other key point the sales people tend to leave out is pricing. The average person and especially business won’t care about cryptocurrency unless it’s a better deal. Historically the pitch has been “pay higher fees, wait longer, take on all of the fraud risks yourself”. Lightning addresses transaction speed, and might partially address cost but conversion into real money is still a big factor, especially given Bitcoin’s volatility, and it doesn’t help with fraud much at all.
It’s unclear when that starts to look like a good deal to anyone who isn’t a speculator trying to drum up demand for their random numbers. If I’m a small business owner, my rent, wages, supplies, taxes, etc. all need local currency and there are statistically no potential customers who don’t buy from me now but will if I accept Bitcoin. The prospect of avoiding credit card fees is appealing but only if it’s actually cheaper – Square Cash exists and is way more widespread but that’s a marginal incremental improvement, not something transformative, and if someone did start seriously chipping away the most likely outcome is that Visa would take a point off of their rate and nothing else would change.
Now, companies like Western Union and PayPal are certainly exploitative so I’d like to see them face a serious threat but again it seems like the most likely outcome is that they lower rates slightly if a cryptocurrency alternative starts taking any real fraction of their business. Maybe they’re staid dinosaurs and can’t react in time - good riddance! - but knocking a couple points off of the cost of a service most people don’t use isn’t going to transform the global economy or even support the current costs of the Bitcoin network.
I know Crypto is scam-city, but the Lightning Network on top of Bitcoin is the "real deal". There are some brilliant people working on it like Linux guru Rusty Russell and Olaoluwa Osuntokun, who have come up with some amazing work in the last few years. The crypto space is 99.9% BS scams, but this isn't one of them.
-- "Visa and Mastercard are the world’s dominant payment processing networks. By collecting 2–3% transaction fees everytime someone swipes a debit or credit card, they pulled in $24B in 2021"
"There were 343 million Visa credit cards in circulation in the U.S. and 798 million Visa credit cards in circulation outside of the U.S. at the end of September 2020"
"By the second quarter of 2021, there were about 742 million Visa debit cards in circulation in the United States and over 1.8 billion cards worldwide"
"There were 249 million Mastercard credit cards in the U.S. and 725 million cards in the rest of the world at the end of March 2021"
"There were over 1.46 billion MasterCard debit cards in circulation worldwide by the end of the fourth quarter of 2021"
The 24B looks staggering - however in my opinion when you put it in the context of ubiquity - it doesn't seem so insane - given they integrate with banks - provide support - enable payments in countries travelers don't bank - etc - is the lightning network really going to provide that much more bang for buck? Not trying to be a credit card company apologist here - however I'm grateful when I can use my chase debt card in Istanbul -- (sources: statista & creditcards.com) --
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[ 3.1 ms ] story [ 196 ms ] threadYou also get 1-3 credit card points, which for you is extra money that you wouldn't get if you were to pay for this with Bitcoin or, for that matter, cash.
Also if the merchant screws you and sends you the wrong or a broken item, you can dispute the charge and real humans from American Express or Chase will spend their valuable time to help you resolve the dispute.
And, of course, if someone makes an outright fraudulent transaction with your card then the CC company will return your funds no questions asked. With bitcoin, your funds are lost for ever whether it was a mistake or a fraud.
These services are necessary (to build trust or for regulation reasons). If that was not the case we'd have seen a lot more real world adoption of crypto by now.
Americans at getting screwed with their "reward" cards.
> As with most layer-2 solutions, Lightning seeks to increase transaction throughput and lower costs while retaining sufficient decentralization by moving activity to a second network. Once BTC is on the Lightning network, it can be transacted instantly typically at fractions of a penny.
> Rather than expensively sending each transaction over the Bitcoin blockchain, users deposit BTC into the Lightning Network and then transact inexpensively through payment channels. As with most networks, the more people and companies that join, the more useful it becomes.
I have completely different experience with many different banks in Asia and Africa.
To sign up for a credit card (in USA), I just provide my personal information to some banking website and they mail me the credit card in a week or so that I can start to use.
It's worth noting the scorn and hate once thrown on this idea as a scaling method for Bitcoin back in 2014-2018. Part of the problem was that the protocol needed to be upgraded for certain things to work well. Part of the problem was that the underlying concept, although simple, is very technically deep. (Many people still don't realize that Bitcoin does "smart contracts" and always has). Part of the problem was that the "obvious" solution from the perspective of beginners -just make bigger blocks - seemed so natural while Lightning seemed so alien.
Edit: why is this post now flagged?
In practice the bytecode in the protocol isn't used except for a handful of cookie cutter template transaction types?
https://en.bitcoin.it/wiki/Script
Particular questions I have
1) how does a node know the connectivity of the (whole or most of) network? What about a brand new node?
2) do nodes just constantly announce themselves?
3) does it still rely on hub-and-spokes model? (aka centralized)
If that is the case, then theoretically Visa and Paypal are already lightning networks, just without the periodic bitcoin commits.
If so, wouldn't that mean that if Visa and Paypal are banned from letting country X citizens send funds to someone in country Y, wouldn't the gov of X just block whatever new lightning network companies pop up? Isn't it the same thing?
Either I don't understand, or Crypto finance is just a new way of doing the same thing but confusing enough to make politicians get bored reading about it, allowing them to avoid regulation
Reading here: https://cointelegraph.com/bitcoin-for-beginners/what-is-the-...
I still get that impression:
>The Lightning Network is a second layer added to Bitcoin’s (BTC) blockchain that allows off-chain transactions, i.e. transactions between parties not on the blockchain network.
Can you help me understand how this will be different than Visa/Paypal with occasional commits to the chain?
https://en.wikipedia.org/wiki/Lightning_Network#Implementati...
Technically, Lightning Network is fascinating and quite ingenious. Practically, the blogpost above was written in 2016, so more than 6 years ago, and LN - in my impression - hasn't really taken off yet... I wonder if it's due to its complexity, plus the potential need for watchtower services when using a node that isn't always online.
How would that be different than opening an account with Paypal, and everyone you transact with also having a Paypal account, and you all using Paypal to send money between each other, and occasionally Paypal sending money to your real bank account?
EDIT:
I suppose I could just have a channel with every party I transact with that closes monthly (like a credit card), but the lack of reversals mean I would like a centralized service to be able to buffer my money from other parties, like my current credit card offers
You're saying I could send money to my cousin and Target and my neighbor would take some sort of cut if they agree to process the transaction?
How do they prevent double spend? What if I have that network, and also a channel with Walmart, and I send all my money to Walmart at the same time I send it all to my cousin, and they give me a sofa
In <some_time_period>'s time when everyone closes the channels, my cousin will have my money, Walmart won't have my money, and I have a sofa.
Am I understanding this correctly?
EDIT: Oh, I see, my coins get locked in the process, so I couldn’t have a separate channel with all of my coins with Walmart. They would have to have a channel with Target, and I assume a good chunk of people in the mesh would have to validate every transaction to prevent double spend. So it’s not totally broken, it just scales poorly as the size of the mesh network grows?
To service the needs of an entity like target which may have a channel with everyone at the same time, I still think a centralized company will emerge to take on the processing with an intermediate hot wallet, instead of a lightning mesh.
But thanks for helping me understand lightning!
It's a so called "layer 2" network (Bitcoin network being the layer 1).
Everyone can run a Lightning Network Node on e.g. a RaspberryPi.
One opens "Channels" to other Nodes. Multiple nodes and channels build a network and can transfer Bitcoin/Satoshis for relatively little costs from A to B.
Network nodes can charge a fee for routing payments (or data more generally speaking).
There are different implementations of a Lightning Network node. LND is probably the most used one today. But there is also C-Lightning.
If there is a transaction, someone wants to be a middleman. If there is a flow, someone wants to be a middleman. . it seems universal.
People are just hell-bent on re-learning 200 years of banking history firsthand.
Maybe just the last 109 years https://en.wikipedia.org/wiki/Federal_Reserve_Act
Or just the last 79 years https://en.wikipedia.org/wiki/Gold_Reserve_Act
Or just the last 51 years https://en.wikipedia.org/wiki/Nixon_shock
Or just the last 15 years https://en.wikipedia.org/wiki/Quantitative_easing#United_Sta...
Or just the last 2 years https://fred.stlouisfed.org/series/M2SL
Or just the last 1 year https://www.washingtontimes.com/news/2021/oct/19/democrats-s...
Or just the last 6 months https://www.businessinsider.com/trudeau-canada-freeze-bank-a... https://www.whitehouse.gov/briefing-room/presidential-action...
Or just the last week https://www.forbes.com/sites/robertwood/2022/08/11/irs-to-ad...
Maybe BTC isn't the answer, but there are some real downsides to "standard banks and payment processors."
Can LN truly scale to support feature parity with Visa/AMEX? By feature parity I mean not only tx/s but also
- Always readily available for places that support it (I never have to wait to open a channel, I never have to "pre-deposit" funds anywhere) - Fraud protection by default (I can have illegal transactions unwound)
And can that be done at a price point that's significantly cheaper than existing players?
Cryptobros aren't interested in those "features".
I don't think I've ever seen the word "could" do more heavy-lifting than in this headline.
The submitted headline is also not the source headline ("Is the Bitcoin Lightning Network for real?"
> "$150B is comprised of fee revenue for credit card and international remittances for both commercial and consumer sectors"
This assumption that the lightning network would distrupt the credit card industry without any form of fraud/dispute handling is laughable.
Bitcoin turned heads and got adoption because it was a proof of concept that proved the concept. Nobody would have given a shit if it was just a whitepaper without a deployed implementation that worked, and nobody should give a shit about crypto claims now until they are made material in a form whose harms don't outweigh its benefits.
In short, crypto needs to grow up. But I'm afraid most of the people throwing their weight behind it today prefer it in its current state.
^[1] Yes, "gas" (barf) fees are down today. No, I don't consider that representative of the current crypto ecosystem in a "healthy" state. See also: GPU prices.
There are a LOT of people excluded, or effectively excluded from the banking system either through outright exclusion, their location, or the fees. All of them would benefit.
So...everyone?
Countries on the up-and-up are welcome to use Wise. [1] The ones that aren't are broadly cut off from the global financial networks for very good reasons. Either way, if you disagree with those reasons you're free to lobby for changes - but the ability to exclude them is overwhelmingly a good thing.
[1] https://wise.com/
I mean look, it's not really even good for that. You have a public ledger of all your illegal transactions that you then share directly with law enforcement for them to feed into their automatic crime detection engines. Why bother with pro forma warrants? Just email your transactions directly to the FBI and have them make sure you didn't do anything wrong, I always say.
Dr Nicholas Weaver from UC Berkeley referred to such transactions as prosecution futures. I agree. After all, you're not even defending against current deanonymization tooling, you're defending against all future such tooling. Pepperidge Farm remembers Tornado Cash.
[edit] If I were in an authoritarian state capable of oppressing me, the last thing I'd do is use Bitcoin lol.
And yes, I am aware that there exist cryptocurrencies that attempt (with varying degrees of success) to prevent the kind of analysis that would make this sort of enforcement possible.
Based on what? The lightning network is new and growing. And that's just one legitimate project out of dozens in active development (not just Bitcoin). Yes, there are scams. Only scams? No.
> Developer tooling still needs to be built out to enable more user friendly applications. With most still treating BTC as an investment, we’re yet to see broad demand to use it for payments (use of Lightning rails for fiat payments remains a compelling opportunity). Despite progress from infrastructure companies, Lightning is still cumbersome for new users and merchants. Additionally, onboarding low income users in developing countries remains a major challenge to fulfilling the promise of Lightning remittances.
And, somewhat humorously and very tellingly, Coinbase itself calls out its own lack of support for Lightning:
> This article should not be construed as an indication that Coinbase has imminent plans to add support for Lightning. Rather, a few employees at the company simply found its potential compelling enough to research, write, and share.
---
If you "prefer high quality discussion on HN", I "encourage" you to address the substance of my comment, which I will not be updating. Where is Lightning? How can I use it to pay for things I need today? Why are we still talking about solutions to these eminently obvious scaling problems in largely theoretical terms after a decade-plus during which the crypto ecosystem might have focused on solving them, but instead largely went in the opposite direction, toward a model of consumers as marks rather than as first-class users?
As an aside, from a personal (i.e. me) usability perspective, the volatility issue is a way bigger deal than the criminality issue. Even if Lightning works out, if I can't reliably store value in BTC, then it can only really serve as a fiat pipe whose endpoints will doubtless be controlled by fintech rent-seekers analogous to today's monolithic payment processors. It's possible, even likely, that they will be the same rent-seekers.
And all of this is not even touching on the energy usage issue. I've been hearing about alternatives to proof-of-work for years (seems to be a theme here); where are they? Are they even realistic, or are they just a fig leaf for an inconvenient truth about crypto's efficiency? Because if I have a choice between rent-seeking payment processors and rent-seeking payment processors with a vast and ever-growing environmental footprint, I'm going to choose the former.
I said it before, and I will say it again: the crypto ecosystem needs to grow up. If they can be better, and have the will to be better, they need to be better.
It’s unclear when that starts to look like a good deal to anyone who isn’t a speculator trying to drum up demand for their random numbers. If I’m a small business owner, my rent, wages, supplies, taxes, etc. all need local currency and there are statistically no potential customers who don’t buy from me now but will if I accept Bitcoin. The prospect of avoiding credit card fees is appealing but only if it’s actually cheaper – Square Cash exists and is way more widespread but that’s a marginal incremental improvement, not something transformative, and if someone did start seriously chipping away the most likely outcome is that Visa would take a point off of their rate and nothing else would change.
Now, companies like Western Union and PayPal are certainly exploitative so I’d like to see them face a serious threat but again it seems like the most likely outcome is that they lower rates slightly if a cryptocurrency alternative starts taking any real fraction of their business. Maybe they’re staid dinosaurs and can’t react in time - good riddance! - but knocking a couple points off of the cost of a service most people don’t use isn’t going to transform the global economy or even support the current costs of the Bitcoin network.
"There were 343 million Visa credit cards in circulation in the U.S. and 798 million Visa credit cards in circulation outside of the U.S. at the end of September 2020"
"By the second quarter of 2021, there were about 742 million Visa debit cards in circulation in the United States and over 1.8 billion cards worldwide"
"There were 249 million Mastercard credit cards in the U.S. and 725 million cards in the rest of the world at the end of March 2021"
"There were over 1.46 billion MasterCard debit cards in circulation worldwide by the end of the fourth quarter of 2021"
The 24B looks staggering - however in my opinion when you put it in the context of ubiquity - it doesn't seem so insane - given they integrate with banks - provide support - enable payments in countries travelers don't bank - etc - is the lightning network really going to provide that much more bang for buck? Not trying to be a credit card company apologist here - however I'm grateful when I can use my chase debt card in Istanbul -- (sources: statista & creditcards.com) --
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