I've been using torrents for years but I would be willing to pay in some cases. If it meant 1) getting obscure, hard-to-find media and 2) incentivizing uploaders to seed faster so I'm not waiting days for downloads to finish, I would definitely pay something. I'm not sure how much I'd be willing to pay, but I'm be open to it.

People pay for Usenet and private torrent trackers, so it doesn't seem that crazy.

Apparently it's worth discussing because you argue that lower market supply makes it easier to manipulate prices downwards. It seemed necessary to point out the basics of how supply and demand works.


It is of practical interest because we're talking about how decreased supply (due to BTC locked in channels) will affect price.


You do need a reason since you keep saying "the demand should necessarily go down if the supply gets diminished." That makes no sense whatsoever!

Demand has been falling since the 2017 high. So what? Demand has obviously been consistently rising since 2009 too. These points are both completely irrelevant to the question of Lightning's effect on price.

Why did you bother making this thread if you planned to ignore any discussion about the Lightning Network? I was trying to have a discussion about how Lightning might affect price -- not about how demand falls in a bear market.


The discussion was not about the effect of a bear market. The discussion was about the effect of the Lightning Network.

See the thread title.


You don't get it. "All else equal" is just a simple conditional to explain that we are isolating a single variable. The purpose is so we can discuss the effects of that single variable -- the effect of diminished supply due to Lightning channels -- without worrying about the plethora of other variables in play.

If you don't isolate variables, these discussions aren't worth having at all. You should just say, "There are many factors that affect price" and leave it at that, and not bother creating threads like this.

This will be my last post here. This obviously is not a constructive discussion.

Obviously, market conditions won't be exactly the same. The point is that we are isolating one variable -- decreased supply due to Lightning.


That makes no sense at all. If demand dropped equally every time supply dropped (or vice versa), then price would never change. We've established why market supply might decrease if Lightning became popular -- it incentivizes Bitcoin holders to lock up bitcoins. You haven't provided any reason why demand needs to drop. If Lightning lives up to its hype, there should actually be increased demand.


Exactly.

But a thinner sell side also inherently makes upwards manipulation easier.


https://en.wikipedia.org/wiki/Ceteris_paribus

I don't assume increased demand. I pointed out the possibility, though.

Bitcoin might be prone to the same "centralization in vaults" problem. Even in these early days, Xapo is holding billions of dollars worth of BTC in its vaults. Imagine what will happen when we start seeing established, high volume physically settled futures markets like gold has.

There's an erroneous assumption often made that Bitcoin investors want to personally secure the coins they buy. The more established it gets as an asset class and the more valuable it becomes, the more traditional and institutional investors enter the market. These investors want institutions to provide custody services. They don't want to "be their own banks."

That's not all else equal. LN might facilitate lower supply, but there's no reason to assume there is a corresponding decrease in demand. You're calling it a "thinner market" but it's only the sell side that's thinner. In fact, LN might create additional demand -- it provides new utility and creates incentive to open LN channels (routing fees).

All else equal, it would remove coins from the market. That should amplify the effects of increased demand, which should push price upwards. It's the same as the altcoin markets: People buy BTC to buy altcoins, and bitcoin holders also send their BTC to altcoin exchanges instead of selling for fiat.

There's no reason this would make it easier for whales to push price downwards.

I suppose with tokenized assets, there's always trust involved. Even if you could use a DEX to trade tokens that are built on decentralized platforms, you still have to trust that the issuer will redeem them for real assets.

We're seeing this situation with new stablecoins like PAX. Paxos is analyzing the blockchain and freezing funds when customers attempt to deposit and redeem for real dollars. This will unfortunately become commonplace in the future. The idea of tokenized assets seems great if it means you can avoid KYC by trading on P2P or DEX markets. Unfortunately, the centralized issuer model can throw a wrench into such plans.

Who cares? Are protocols never supposed to be upgraded to allow new features? Are we supposed to live with the malleability bug forever because you want us to?

Lightning adds utility to the Bitcoin network. It's a net positive. You can continue using only Bitcoin if you want. What's the harm in LN users using Bitcoin sometimes and LN other times?

History is definitely going to repeat itself. It's only a matter of time before savvy hackers overcome exchange pen testers once again. I got stung pretty hard by the Bitfinex hack and learned my lesson, but I also know that centralized exchanges aren't going anywhere. People will continue storing funds on exchanges because they want instant liquidity, real-time trading, stop-loss orders and the ability to hedge risk. If you're making money day trading or running bots and you immediately withdraw after long term trades, I think the risk of using exchanges is pretty justifiable.

Your poll doesn't make sense. "Online wallets" are not cold storage. I also don't consider hardware wallets to be cold wallets since people generally connect them to online computers.

I'm partial to encrypted .dat files copied on multiple cold storage mediums (flash drives, CDs).

I don't normally keep funds on exchanges since I've been screwed a couple times by hacks and exit scams. So, I wasn't in a position to participate. From the look of the network, not many other people did either. There were no signs of congestion on the network all day.

I've never seen a compelling argument from you as to why this is a problem. Interoperable protocols can give us unprecedented functionality. Why does it have to be unique to Bitcoin? In fact, nothing is going to be unique to Bitcoin since it's open source and permissionless. Anyone can port its features into other altcoins and protocols.

I don't think the consumer use case is as important as most people think. At this point, it doesn't make sense for people to buy cryptocurrency just to spend it -- it's extremely volatile and usage is too low to justify interest from merchants.

People should continue using cryptocurrency as they see fit -- as a speculative investment, for P2P payments, for commerce, etc. Merchant adoption will come in time but it will always lag significantly behind user adoption. They don't have a strong incentive to accept Bitcoin payments until consumers demand it.

Lightning Network stats are objective but it's difficult to grasp its full effect on price dynamics. It adds utility, but it also encourages people to run Lightning nodes so they can collect routing fees. If coins are being locked in channels -- or in some cases, bought specifically to lock in channels -- that lowers available Bitcoin supply on the market. That should definitely benefit the price.

I never thought about it, but that would a win-win for them. They can keep a percentage of the reward as a fee for staking but more importantly, they retain that investor's liquidity. When someone stakes in their own wallet and decides to send the coins to an exchange, they have many choices of where to send. If they were staking on Coinbase, they'll obviously keep their funds there for trading.

They've already got a lock on the fiat gateway market. With their new approach to altcoins, it seems like they saw how much of their customer base withdrew to Poloniex, Bittrex and Binance in the 2017 bubble and they want a piece of that market. They want to be a one-stop shop for casual investors. Staking for a fee fits the scheme well.

Is it really "toxic?" If they don't list them, someone else would. In fact, Coinbase is quite late to the game -- they only add coins that have been trading elsewhere for a long time. I think caveat emptor should reign supreme. It's not up to brokers to tell investors what they should and shouldn't buy. It's not my problem, either.

I'm excited for OpenNode. It's great to see a well-funded company built on their principles. But I also recognize that businesses will do what's best for their profits, including servicing altcoins. That's simple profit motive at work. I'm also not convinced their model isn't viable.

No. You obviously don't have any either since they would be future projections based on no historical data. Any data from the present won't account for either Lightning's nor Bitcoin's network effect.

We don't need stats to know what people will do if the incentives exist for people to use Lightning. Nearly free and instant transactions is quite a strong incentive.


That analogy is absurd, as I've told you before. Stop being so dishonest. There is no third party custody whatsoever.

You don't need five channels with different people if you have one channel open with a well-connected node/hub. You're also completely exaggerating regarding the number of on-chain transactions required. You're entire post is built on these false premises for which you have no evidence.

We don't need to be subtle: Blockchains don't scale well and transaction size can only be optimized so much. Blockchains can't give us exponentially increased throughput without serious security and performance trade-offs. I'm okay offloading much of that throughput off-chain if we can do so in a secure way, without third party trust. What's the problem with multiple interoperable protocols working together?

The problem with using SMS for 2FA is that your phone number can be fraudulently ported fairly easily. The hackers call your phone company and switch your phone number to a new SIM card under their control. It happens all the time. There have been cryptocurrency thefts from exchange accounts secured by SMS 2FA. Here's one example.

Use token-based (TOTP) authentication. Google authenticator and similar apps work offline and are always instantly available on your phone or other device. It's just as convenient as SMS but much more secure.

What did he say? I didn't realize he regularly talked about Bitcoin. I just thought he was the new Prof. Bitcorn for predicting a crash to zero. I definitely figured it would be someone more involved with the community or ecosystem...