Hi
But to me using Lightning does not stop people using bitcoin it enables more users to use Bitcoin and avoid potentially the pitfalls of small UTXO.

That sounds like cool idea and it definitely could be done. I also thought about a mining pool that randomly include some small UTXO to help people consolidate them in a lottery type service.

Maybe, my goal with this discussion is to at least have a debate / awareness. It would suck if someone gets locked out of their bitcoin because of the dust horizon, especially because most wallets will hide this from you.

AFAIK there is nothing that prevent a miner to include 0 fee transactions. Its just that regular users cannot do it because most nodes will not relay them for anti spam purpose.

This is unsure, I mean I wish it would be true but I think block space could become really scarce as more people push transactions and some would be willing to pay way higher than now just to get included.

To me what will happens is most of the transactions will be offloaded to layer 2 solutions like lightning or sidechain that relies on the strong base layer. Thus reducing the need for blockspace.

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

Yes I agree its small but its potential is enormous. The discovery of the printing press had a fairly limited impact initially but after a few decades it very quickly spiraled into a massive industry and we went from very expensive hand written books to cheaply mass produced one in a century.

We are still early but the genie is out of the bottle

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.

China tried several times and ban every or so years and nothing really changes. I do not think Europe a freer society will achieve anything more and there are probably now a lot of business and maybe even countries like Switzerland and Norway who tries to attract investment into crypto venture and mining projects.

People who benefited from Bitcoin will also fight this and I could see maybe even energy companies going on board since mining are so nice customers. Its really sad that Germany with its failed energy revolution is trying to bully the rest of Europe into taking stupid policies that have already proven to be disastrous with the biggest achievement being the highest energy prices and an increased coal consumption.

And because Bitcoin is not tied to a particular location you could easily see a massive exodus like what happened in China to more open countries.

For me it already replaced it. I lived for a few years in a developing country where the local fiat money was for the day to day stuff but anything serious like big contract and stuff where done in USD.

Now I see bitcoin and my local fiat currency as the same. My small day to day expanses, groceries, etc are in my local fiat currency but when I think long term I think in BTC or sats.

I could see this becoming more and more common as we move along. I could also see a country backing their fiat by bitcoin. Although it would still allow the printing to go on it would be akin to a "bretton wood agreement" but with bitcoin. It would allow for banknotes, offline transactions etc and because its much easier to transfer bitcoin, it would be easy for people to go back to btc if the printing start to go brrrrrrr and to use the underlying BTC as a way to keep everything in check.

In the end I think its pointless to debate. If you do not understand why bitcoin is important, then any watt for the network however green it is, however small it is, it will be too much.

That is a very lovely way to say it. Amazing argument I'm gonna use it  

My usual argument is: We build a lot of empty houses / building just to store value, this speculation on houses partially is responsible to make them expansive for regular people. Building houses also waste a lot of energy, terrain and resource. We also waste time because we all need to be investor, we cannot just keep the money we are forced to gamble in the stock market etc.

Bitcoin energy consumption compared to that is a bargain.

I would not worry much about quantum computer. Yeah sure they can potentially break SHA256 and public / private key crypto, however most of the modern web relies also on those technology.

Eg: when you login on your bank account you will do a key exchange with the bank website. If we can "trivially" break asymmetric encryption there are a lot of things that will be broken, not just bitcoin. Encrypted communications, online bank, e-commerce... It would be a massive crash / chaos around the world. Most of $$$ in the world is already transferred digitally and relies on the same encryption to secure the transfer of data.

What will happen is largely speculative but most likely we could do what other industries would do. If SHA256 can be solved faster, the network will simply adjust the difficulty, if pub/priv crypto and or hashing is is broken we could slowly enable and upgrade the protocol to quantum resistant cryptography. Due to the threat I expect the majority of node would agree to upgrade. Very similar to how early in the network with the buffer overflow exploit. There was a direct economic incentive for everyone to upgrade their node.

They appear to have reverted their decision (source: https://blog.trezor.io/a-decision-on-aopp-789540c2930b) I edited the first post to reflect this. I think its a welcome decision, you should not make surveillance easier.

 I wish it was only for Switzerland, but sadly it looks like there other countries such has the Netherlands, Singapore and many more are thinking implement it. You can be sure if it is "accepted" as the norm it will be done by many more countries.

From their own website: https://www.21analytics.ch/travel-rule-regulations/

Already set:

* Canada
* Germany
* Gibraltar
* Singapore
* Switzerland

Planned soon:
* Japan
* Lichtenstein
* New Zealand
* South Korea
* UK

I'm not a specialist but I see two things

Yes of course sadly it can be generalized. I could see in the future if you withdraw or used your coin to an address you do not own or that is not KYC that you get blacklisted and or your exchange account would be frozen.

Also it looks like the State (does not matter the country) want to micromanage and know it all even for trivial amount of money like 1000$ in this case or the 600$ mandatory reporting to IRS in the US. People do not realize but what they are doing now can be totally fine and legal and from one day to the other becoming illegal. This could put you on the wrong side of the fence even if you personally did not change.

Snowden in his book had a good point. Law are not supposed to make the state efficient. It should be as inefficient as possible. For instance requiring a warrant ensure you can't just go randomly inside someone's home, but you need reasonable proof of suspicion of wrong doing. We are moving to a society were you are no longer innocent until proven otherwise but you have to actively KYC, etc to prove you are not a criminal. This is backward and is seriously harming human freedom.

You can also imagine be prevented to get out of a country just because you have some money in bitcoin since you could escape and go potentially anywhere.

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.

This, people see PoW as flawed because it "waste" computational power to solve the SHA256 puzzle but they miss the point. This energy is not wasted it is used to secure the network and makes it easily auditable. Eg: you know roughly how many watts of energy you need for a round of SHA256 which can be easily extrapolated to the network. This gives an ability to easily audit and verify nothing was tempered with.

There are something similar to what you described which is boinc distributed computer. You use your GPU for computation and get rewarded in "points" replace those points by token and you have something similar. However right now those point are worthless because they are just a way of ranking and you have no way to easily audit (by non mining node).
* How do you verify the work was done?
* In boinc it is centralized which means effectively you could print money

We need also to put things in perspective. This energy debate is skewed from the get go, we should not only compare it to the current banking system but overall as a way to store wealth.

Eg: One of the most popular ways to store wealth is the housing market.

Currently we build a lot of real estate not because we need places to live but because we need to store wealth since the currency you get paid is getting devalued over time.

For some reason this is considered acceptable (you produce houses, buildings, etc) but its an extremely inefficient way to store wealth, it cannot be easily transferred its not really divisible. This also create wealth inequality because it increase the price of homes and make it impossible for most middle income families to be homeowner.

And for sure, building, destroying forest and creating giant sometimes empty cities create massive health hazard and destroy the environment. Compared to that, bitcoin mining seems suddenly very efficient way to store your wealth.

Hi, thank you for your answer.

I was thinking something along the line of what was suggested here. Sadly using an escrow kind of defeat the idea of not having to trust anyone. I could also sign any invoice received and publish on mainchain the hash when closing the channel.

Maybe I could offer mainchain donations and lightning donation. For a big amount you can do it on mainchain, for low amounts you probably do not need that level of trust and so you can do it on lightning.

But this also open the question: If I as a client pay on lightning and the merchant pretend to not have received the money, could I use a proof that I paid / sent the amount required without using trusted third party?

Thank you for your answers

My main interest is to accept donation for a goal on my website and I would like to be transparent to the public. With the main chain anyone can easily check how much was received / sent and know if we reached the goal.

Adding support for lightning would help a lot since it would enable people to send micro transaction however there would be as I understand no ways to know exactly how much was received and they would have to trust that I publish the correct numbers.

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.