Why more bitcoin (wbtc) on ethereum than lightning network?

[Ray Z]

Can anyone help me out here, is this considered failure of lightning?

[1715567183]

1715567183

[1715567183]

1715567183

[pooya87]

there is no bitcoin on any other networks namely ethereum network. however, we can't stop people from using the bitcoin name in their scam projects that can create as many coins/tokens as they wish to. for example if i wanted to i could create a shitcoin with the name pooya-bitcoin (pbtc) that has 100 trillion coins which i can call "bitcoin". but that doesn't make it bitcoin, it would be another shitcoin.

[Upgrade00]

is this considered failure of lightning?

Lightening network is a payment channel and its success is not to be based off a shit alt-coin built on another platform.
Also the lightning network has been growing immensely this year, both in the number of companies using its channels as well as in the amount of Bitcoin on it.
All new improvements usually take time to get adopted, just as we're seeing with LN and segwit.

[TofuDefi]

You can't compare WBTC and LN directly since they have different usage.

If we force to compare them from perspective of creating micro-transaction, WBTC is considered "failure" because
1. WBTC (on Ethereum network) have higher transaction fee compared with LN relay fee
2. Unlike LN, WBTC (on Ethereum network) transaction isn't instant
2. You need to mint or trade BTC for WBTC, while on LN, you just need to open a new LN channel

The main reason why WBTC exists is not about low fees. It's about DeFi and smart contracts.

[gmaxwell]

No one actually knows how much Bitcoin is used with lightning-- people can report on public channels but not all channels are public so all we know is a lower bound (I suppose we could get a massive upperbound from the total amount of P2WSH outputs but that wouldn't be useful). Transactional usage also at least potentially has high velocity so a lot of economic activity can happen with comparatively smaller amounts of funds involved.

WBTC isn't used for transacting (well some of it could be but that isn't the primary use)--  most of it used in "defi" schemes, many of which are likely to turn out into phenomenal money losing ripoffs by design (not to mention losses from buggy code...).

When you hear defi you should think of-- at best the most complicated wallstreet financial engineering people mock, except with nearly zero effort to even appear to be legitimate-- and at worse just outright ponzi schemes under a pretty name.  At least wbtc is on the better side of ways people are representing Bitcoin for these scams...  some of the other tokenized bitcoins are constructed in ways that essentially guarantee total loss for the participants in the long run.

Lets just hope that the eventual failure of these schemes doesn't turn into massive contagion that creates a prolonged market disruption.

So really lots of bitcoin being used w/ wbtc is no more surprising than lots of bitcoin being deposited at a gambling site or a bucket shop.

But if people were using it to transact-- that would be fine too.  Part of Bitcoin's value is that there are many different ways to use it.

[TofuDefi]

When you hear defi you should think of-- at best the most complicated wallstreet financial engineering people mock, except with nearly zero effort to even appear to be legitimate-- and at worse just outright ponzi schemes under a pretty name.  At least wbtc is on the better side of ways people are representing Bitcoin for these scams...  some of the other tokenized bitcoins are constructed in ways that essentially guarantee total loss for the participants in the long run.

Lets just hope that the eventual failure of these schemes doesn't turn into massive contagion that creates a prolonged market disruption.

So really lots of bitcoin being used w/ wbtc is no more surprising than lots of bitcoin being deposited at a gambling site or a bucket shop.

But if people were using it to transact-- that would be fine too.  Part of Bitcoin's value is that there are many different ways to use it.

Whilst remaining respectful of your position, please allow me to disagree. DeFi solutions like Uniswap and many others are completely legit and a lot of people use them every day.

[HeRetiK]

People should be more careful with considering WBTC the same as BTC. Sure, it's more transparent and easier auditable token than USDT for example, but it's still a centrally issued token. An IOU.

(and ironically some people considered BTC in lightning channels IOUs, which unlike WBTC, they are not)

Also does anyone else find it funny that WETH exists? I mean I get its necessity but still...