Same notion.


It would be totally ridiculous to have to set up a LN channel for a single payment, because setting up a LN channel will at least involve ONE on-chain payment.  So this is nothing else but an on-chain transaction.

I'm not talking about privacy.  With bitcoin being a transparent ledger, there is no privacy with on-chain transactions.  LN and banking is more private than on-chain bitcoin.  Use monero or something like that if you need privacy in crypto.  Don't use bitcoin.  So this is not the issue.  The point with banking is that banks impose rules, impose fees, impose restrictions, impose reporting, impose a lot of things.  If you are OK with all these things, FIAT BANKS are better than "guy on the internet" banks.  There's nothing that LN can offer, that normal fiat banks can't offer.

Crypto, with all its burden, has an edge over fiat in those cases where fiat cannot be used.  But this edge is entirely lost with a LN banking layer.  The fiat banking layer works better than the LN banking layer ever can.


If your transaction on the "amateur LN network" needs, say, 20 hops to get to destination, that would mean that ON AVERAGE, every amateur LN channel needs to process at least 20 transactions in order even to BREAK EVEN with on chain transactions.  That means that ON AVERAGE, every amateur LN channel needs to have locked in at least 20 times the average amount of a transaction.  

If, on average, a LN transaction is, say, $50,- and every amateur node has, say, 8 links to its neighbours, and it takes 20 hops to get to destination, that means that I need to lock in $8000,- on my node, to break even: in that case, a LN transaction will be just as expensive as an on chain transaction.  If I need to offer 10 times smaller fees, I need to lock in $80 000,- and hope I'll not have too many spurious settlements or I'm losing money on fees.


Nope.  Settlement transactions are extremely urgent, because they have to be locked in before they expire.  And they lock in my havings.
The chain will be full of settlement transactions, because that's the scaling idea.  

Remember, if on average a LN transaction needs 20 hops, every channel needs to process at least 20 transactions before settlement in order to have a lower rate of settlement transactions on chain than if the transactions were simply executed on chain directly.

You can get your channels much longer open if you have BIG amounts and a lot of traffic in both ways.  Again, this gives a HUGE economy of scale for big hubs.

What fool is going to lock in his bitcoins into channels if he doesn't have mountains of them, with almost no hope to get something out of it, and with a high risk of it costing him money, and not having his coins available when he needs them ?

We're focussing on DASH, but ETH took an even bigger chunk. 

If your statement is that one doesn't yet know all ways, beyond "writing all transactions in a single block chain", to make a crypto currency, *you are perfectly right*.  This "writing all transactions in a single big block chain" was a first idea, introduced by Satoshi, on which most alt coins today are based too, and THIS kind of crypto currency, CLEARLY HAS SCALING PROBLEMS.

I think that Moore's law is a good indication of future technological growth at best.  In order for such a crypto currency to be able to swiftly deal with most daily transactions in the world, we need about 5 orders of magnitude.  Because VISA and Mastercard are NOT handling all the transactions in the world either, and are 4 orders of magnitude higher in transactions per second.  But there are a lot of other payments, coffee is typically done with cash. 

5 orders of magnitude with Moore's law requires about 25-30 years.  So, 30 years from now, block chains where we write all transactions like with bitcoin, are going to be able to deal with all transactions world wide.  Over 30 years, most of the currently existing crypto currencies will have run in fundamental problems, and be entirely centralized.

But it will not take 30 years to discover smarter ways to do crypto payments without having this burden.  There ARE schemes in development which can do the essential function of crypto in much leaner ways.

I actually start to think: the opposite is true.

I said it was going to go sky high.  I don't touch it with a stick, but it is going to the moon and beyond. 

That said, I'm really wondering *where the money comes from*.  It can't really come from bitcoin, because bitcoin is rising.  Are these new greater fools flowing in at unprecedented rate ?  Is "big money" entering crypto after the ETF failure ?   Not only DASH (which has low liquidity), but also ETH: there have been billions pumped into crypto the last weeks.  Where do they come from ?

No, Google bank is here.

Using LN has only a meaning if you send many transactions through the same channel.  If you do this P2P, then this is just the old "micropayments".  LN only has a meaning if you get further away than one hop.  If you are not immensely rich in BTC, you cannot keep open a lot of channels with enough coins to a lot of peers, without having to settle after a few transactions.  If off-chain transactions are orders of magnitude more frequent than on-chain transactions (with high fees), your channels should, on average, transmit that number of transactions before settling, otherwise you will lose out.  Your settling fees per channel will be divided by the number of transactions you can get through a channel to give you the cost per transaction to you.  You see the huge economies of scale here.  The bigger the hubs are, the better fees they can offer, the better they can guarantee that they will be able to transact.  Also, the better the connections are between the hubs your transaction will use, the better it works.  In fact, ONE CENTRAL BIG HUB with all people connected to it would be the optimal LN.


Because opening a channel is locking in your coins until settlement, which means paying a (big) fee on-chain, and transmitting a transaction can induce a settlement on another channel (and its inherent fee risk).  You can also not use the same coins on different channels.

If you, as a small fish, set up, say, 8 channels to 8 other nodes, you can only lock in at most 1/8 of your bitcoin holdings into each of the channels, which will settle each time your unknown other node settles, and which will settle each time the sum of transactions you treated go beyond 1/8 of your holdings.

You are perfectly right.

The problem with "off chain" transactions is that this is nothing else but BANKING, that is, trust centralized entities with your IOU of bitcoin.   Now I know that with the LN, it seems that you still have control.  To a certain degree, yes.  But in order for you to be able to use the LN, you have to set up a payment channel to your local "big LN hub".  Indeed, to hope to be able to transact a few times a year through the LN, you have to have a reliable and well connected LN partner.  Otherwise, the channel will (have to) be settled on the chain before you even get to do a transaction, with useless fees to be paid.  Also, for your LN node to be able to reach your counter party, you need to have a well-connected hub ; which means, that that hub has to "freeze" a lot of BTC in a lot of channels to other "professional" hubs until it gets at destiny.  Each transaction implying a potential settlement and fee cost, using the LN with, say, 20 jumps to destiny will involve paying sufficient fees to the intermediate hubs as "insurance fee" so that the use of the channels and the risk of settlement (and on chain fee cost, time lost and so on) is compensated.

In fact, I don't even see how the LN could "kick off" except by a very rich guy in bitcoin, setting up several of his OWN hubs setting up channels between them.  Possessing several LN hubs by a big entity has a large scale advantage: there will not be many settlements on chain, as the hubs belong to one and the same entity.  

As such, you will probably get A FEW world-wide banking networks that take on the LN traffic "inside" and only have channels between them if "sender" and "receiver" are on different banking networks.  You having set up your small LN channel to one bank, you have to settle on chain to go elsewhere.  In order to even be able to connect, those bankers may ask you for a collateral, so that in case of settlement on your side, they keep your collateral.  They may use that collateral to ask for a subscription fee to keep open the channel.  

This is simply normal banking.



I think that "big blockers" simply don't want *artificial* limits to on chain transactions, and let the technology limits and costs do their market work.  That said, in my opinion, bitcoin is, once and for all, a 1MB limited block crypto, in the same way that there won't be more than 21 million bitcoins.

This is simply the problem of single block chain currencies.  They weren't designed that way.

One surely hopes so.  Otherwise it has nothing to do in crypto.

I think you didn't understand a word of what I have been writing.   In other words: outside of crypto, in a trusted setting, of course DASH is a scam.  But in crypto, scamming one another is the basis axiom, because that's what trustlessness implies.  Trustlessness means that all other agents out there are not to be trusted (scammers).  Now, trustlessness implies not only that one should try to scam one another for consensus to be able to emerge, but on top of that, is an essentially silly exercise, because true trustlessness involves such a burden that you get nowhere.  As such, DASH is the perfect compromise: it scams people (and is hence perfectly all right in crypto: that's the goal) by NOT being a true crypto and by not being truly based upon trustlessness, while it makes you think so and hence, doesn't suffer the burden of true trustlessness.  That's simply brilliant.

When talking about scaling problems, small constant factors don't matter.   The transaction block chain concept is simply not scalable to very high currency usages.  The idea that all agents have to be aware of all transactions everywhere of all the past, is simply not scalable.  However, it can be useful for niche applications.  Monero is on the niche application of private payments that cannot be done with fiat.  I see this niche actually as the only useful one of crypto in its current state.

One should think of other crypto payment systems than everybody keeping the whole list of every single transaction that occured somewhere.  That is simply a crazy idea.  I'm working myself on a scheme that doesn't need that.  One has to go back to the drawing board and try to remember what is essential in a currency: no double spends and right to spend.  Of course, keeping a fucking list of all transactions done by everyone is a very crude way to establish this.    The most naive one is bitcoins: keeping the explicit transactions readable.  That gives away so much privacy information, that it is a night mare.  Monero is smarter, and obfuscates this.  Monero solves other problems that bitcoin has: block size adaption, tail emission (stabilizing against fee instabilities), regular hard forking, ....

Monero is really highly improved bitcoin.

But it still suffers from the basic problem that the right to spend needs that everyone has the (cryptographically obfuscated) list of all transactions of all of history.  It is, like most crypto coins, still a "transaction ledger" that everyone has to have.  So it cannot scale.  It can scale better than silly bitcoin with hard limits, because it will be limited by resources and not by hard limits.  But not all Germans can buy their coffee in the morning with Monero, no more than they can do it with bitcoin.  With bitcoin, they will NEVER be able to do so ; with Monero, technology is not ready yet.

The other problem with monero is that it is a proof of work coin.  As long as its block reward remains low enough, it will remain distributed.  But from the moment that its block reward becomes sufficiently high to go to asics, it will be centralized.  Unavoidable.  But proof of stake is not a solution either.  I think I have a solution, but one has to sacrifice to a certain extend "trustlessness" to obtain "decentralization permanence".  

My idea is that from the purely technological view, monero, at this moment, is one of the best technologies one can have if one sticks to "transaction ledgers".  I think that DASH is about the best technology that is out there if one sticks to "naive bitcoin crypto", but is way, way behind monero's tech.

As to ZCASH.  ZCASH is clunky because it is a copy of bitcoin, but it has something brilliant to it: ZK proofs.  It is a pity that this brilliant crypto tech is implanted on a clunky coin in a clumsy way.  ZK proofs are even better in principle than monero's tech, if only it were correctly applied.

But none of them can become a genuine currency outside of a niche application.  Because they all suffer from the "single block chain containing the world's transactions to be shared by everybody" in one way or another.

How do you know this ?

The question to be answered is: do YOU hold the secret key of those coins (and you alone) ?  Then the coins are yours.  Does someone else own the keys and you just tell them to move them ?  Then THEY own them.

There is a big misunderstanding of "coins on an exchange".  When you have "coins on an exchange", you don't have coins any more.  The exchange has your coins.  The only thing you have, is a PROMISE (an IOU, I Owe You) on the exchange's web site to give you back coins.  That promise is worth as much as your belief in their honesty. 

If I lend you $1000,-, and you write me a paper that you OWE ME $1000,-, then YOU have the dollars, and I have the paper.  My paper is worth $1000,- in as much as one believes your promise. 

I fully agree with you.  Single block chain (transaction-ledger) based crypto is not scalable.  If, say, all Germans pay their coffee every morning with bitcoin, that would mean, about 80 million transactions in a few hours.  It would mean the need to grow the chain by about 20 GB every morning.  At bitcoin's pace (10 minute blocks) that would mean 200 MB blocks.  And this, just to have the Germans drink their morning coffee.  If they also pay for their bread, we double.  Simply not feasible in the next two decades.  Add the Chinese and you see the problem.

When you use middle men, I don't see in what way they would be different from current banking.  I would rather trust current banks (even though I'm politically an anarchist) who have tens of years of experience, rather than "a guy on the internet".  There's no reason "a guy on the internet" will be more honest, professional and to be trusted, than a local bank office.

Not only to the price, but also to everything else.  DASH is Evan's fiat currency, mimicking as a crypto currency.  As most of the burden of a crypto currency (decentralized, trustless, etc...) is actually just as useless as most of the burden of using a tank to drive the kids to school, DASH has all the advantages of a centralised system that true crypto doesn't have.  

Most people don't use crypto for its crypto properties, but just trade on centralized exchanges in any case.  So for most people, the crypto thing is fancy, but of no use, and is cumbersome without benefit.  This is the advantage that DASH has.  DASH will never face "block size wars" like bitcoin.  Evan will decide.  DASH will fork when needed, and will not risk the ETH/ETC drama.  Evan will decide.  But be sure that Evan will keep DASH "honest".  He has a huge stake in it.  So DASH is lean, mean private fiat cash, mimicking as a decentralized crypto currency.  No true crypto can compete with that.

The only other similar thing was ethereum, also a centralized Foundation thing mimicking as a crypto.  No wonder these are the two high market cap contenders.

Nah, the value of bitcoin as of today mainly resides in the expectation to find one day a fool that will buy it from you at higher price.  Most bitcoins are hodled.  If the value of bitcoin today were residing in its capacity to treat transactions, it should be around $50 right now !  Many transactions take ages to get confirmed....

I agree with you that if the expectation was that no transactions will EVER be possible, of course, that would mean indeed that what you are holding, is valueless.  But that is actually MORE the case if you expect inflating fees than expecting a bug to be corrected.

Sending your transaction in an open ledger to be seen by the whole world and graved in stone for ever, is not exactly what I would call "anonymous"  

Bitcoin's somewhat naive ledger tech is way, way, way worse concerning privacy than fiat.  With fiat, only your bank knows, and justice, if they ask.  With bitcoin, everyone knows.  And block chain analysis WILL tie your address to your identity.  The information is propagated on the chain, and more and more of it is available.

What is funny in this whole discussion, is the idea that one "becomes rich with bitcoin".  How does one become rich with bitcoin ?  By selling it to a greater fool.  If bitcoin were a CURRENCY, it would be simply an intermediate asset that helped a trade.  But if bitcoin is a speculative greater-fool asset, then you can become rich with it.

How ?

1) by being an early adopter.  That means, by having been a geek at the right moment with the right information.  If these people become the new elite, that's just replacing an elite with another one (Winkelvoss brothers ?).

2) by trading with inside information (when you can manipulate markets).  You can only win in a market for sure, if you have information others don't.  The poor guy doesn't.  If he starts trading bitcoin, he will just pump his money into those that have information.

So bitcoin as a vehicle to become rich through seigniorage (early adopters), or inside information (market manipulators) is just going to make a new elite, partially the old elite btw, and a few new bourgeois, who know how to play best the greater-fool game.

It is not going to relieve poverty problems in Africa, for instance.  

Can you explain the logical link between software crashing, and coins being worthless ?
If they had an exploit that could send unwarranted transactions, THAT would be fun.  But just crashing the node, what does that do ?  If the operating system on which the node runs, crashes, or the computer has a power failure, are coins worthless too ?