I have a few questions / shower though regarding what I call stranded UTXO and the dust horizon problem

Currently fees on the bitcoin network are relatively low and you can almost always get away with 1sat/vB as long as you are patient, but this might not be always the case. With increasing adoption and the reduction of the block reward we might come to a point were fees would increase dramatically since many users would be competing with a relatively scarce block space.

This would make the mining fee potentially skyrocket and in turn certain UTXO might not be worth spending since they would cost more in fees than there value. This could potentially make them "unspendable" forever rendering them defacto worthless.

Currently this is already the case with what we call dust. Small left over in wallet that cannot be spent without costing you more. The current value is at around 250 satoshi, anything lower is already "stranded". This is what I call the Bitcoin Dust Horizon, a potentially ever expending value at which moving an UTXO cost more than the value it represents.

This could have some interesting consequences:

• Some lightning channel could become permanently open since closing them would be impossible due to high fees
• Scarcity of bitcoin would increase since it would effectively remove UTXO from the market
• Certain people could loose portion of their hard stacked BTC.
• This is even more insidious since you might have in your wallet 2 btc, but behind the scene it might be 565652 small UTXO, thus rendering portions of your stack worthless.
• Things like opendime would be partially immune in the sense you can still exchange it but redeeming it would be pointless
• People who DCA a few $ and withdraw often to their cold storage could be particularly affected by this

Of course predicting the future is hard, but I’m curious to know if its something you consider when you store coin for long term and if anything has been wrote about this topic

[First]

This is a bit philosophical but the more I understand about Bitcoin the more I think we should see it as a black swan. A black swan as defined on Wikipedia is an unexpected event that has profound impact on society.

The key points

• First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.
• Second, it carries an extreme 'impact'.
• Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

First it was thought to be impossible to have a way to transfer value without trusting a third party. There was numerous attempt that each paved the way to Bitcoin but they all missed something. We had B-gold, smart contract, proof of work, etc but they could not achieve a fully trustless system and they all remained theoretical or failed.

On Halloween eve 2008 in the wake of the financial crisis in an obscure internet forum a previously unknown person published a white paper called "Bitcoin: A Peer-to-Peer Electronic Cash System". Although it was meet with skepticism initially a group of enthusiast would start the network that would later store securely wealth that is now worth several billions of dollars.

Second, it has a tremendous impact, For the first time in history human could store their wealth without relying on trusting banks in a decentralized manner that cannot easily be stopped. The network that started initially as the magic internet money now can threaten well established currencies and erode the power of some of the most powerful entities in the world. Just like religion was separated from the state we could see something similar with a separation between the state and the money.

This invention is the equivalent of the printing press in middle age, it changed the rules of the game. Weirdly because of our inherent selfish nature this technology then trick you into becoming a religious zealot and trying to stack and hold more Bitcoin, start projects around it and ultimately making its network effect stronger. Whoever came up with this idea had a deep understanding of human nature and what kind of incentives were needed to make a project like this successful.

Third, We can rationalize this invention, some might even call it trivial, just a bunch of technologies put together although you cannot deny its profound impact on the world.

A lot of black swan events presented as example in economic books or online are in my opinion trivial or not really ground breaking. For instance we know a big pandemic is possible and periodically it happens, or even the financial crisis of 2008 was not a surprised, those things happen in cycle and will continue.

Just like the invention of the printing press, the discovery of antibiotics, the creation of the atomic bomb, Bitcoin will have a profound impact on our World due to its disruptive nature.

EDIT: They appear to have reverted it  (source: https://blog.trezor.io/a-decision-on-aopp-789540c2930b). I leave the original text bellow:


Apparently certain countries such as The Netherlands implemented a new rule/requirement. You cannot withdraw your coin from an exchange to an address they do not KYC.

If you want to self custody, you must prove you "own" an address before you can send anything. After the fucking OFAC compliant blocks we now have AML compliant transactions.

The protocol is called AOPP (short for Address Ownership Proof Protocol) and you can find all the details on their official website here: https://aopp.group/

If you look at the company behind this protocol 21analytics.ch they have some screenshots featuring their product. This combined with something like chainalysis can have devastating consequences for privacy. What is even more surprising is we have not only trezor implementing this bullshit but also sparrow and bluewallet....

Source: https://www.coindesk.com/tech/2022/01/27/trezor-adopts-swiss-travel-rule-protocol-for-private-crypto-wallets/

Some clarification / edit:
Yes for now its only for a few countries such as the Netherlands , Switzerland, Singapore, etc. But lets not be fooled, this will become normalized and more and more common.

Hello, I have a question that crossed my mind already a few times. I tried to search the answer but I did not end up with anything conclusive, so here we go

On the bitcoin mainchain proving ownership of a certain amount of BTC is an easy operation since all the data is publicly available.
This can be incredibly useful for exchanges and various bitcoin related business since they can publish publicly auditable data amount of much they have in their cold storage.

My question is: I know the lightning network works differently, but would there be a way to "prove" I own a certain amount or even revealing the balance? If so what would be the process? Sure I could publish somewhere the balance but then again you would need to trust me to publish the right number.