My take on this:
USE IT OR LOSE IT
This is why circular economy matters. This is why using Bitcoin as a medium of exchange is imperative, if you want it to actually function as money.
If you see Bitcoin as Gold 2.0, this is fine.
If you see Bitcoin as the separation of Money and State, it's not.
Your thoughts? I'd be especially interested in your experience if you're offering products and/or services for Bitcoin, especially if you offer both BTC and fiat payments. What % of your customers pay in Bitcoin? Out of those who pay in Bitcoin, what % pays via LN? Have you had many technical issues with LN?
Reminds me of folks sunsetting onchain payments over the years.
Given Relai is a straight-to-self-custody exchange, onchain fees are low and everyone deep down is a historical determinist, and lightning infra/wallets are relatively complicated, it makes a lot of sense to remove lightning.
I'm sure they'll add it back when onchain fees rise again.
Yeah it does make some sense given that they are an exchange and not just selling some other product or service for Bitcoin.
But what I find kind of worrying, and why I brought up the whole medium of exchange issue, is the fact that (according to Relai), only 5% of their customers ever tried Lightning. I'm making a bit of a stretch here, but to me, that seems to indicate that only 5% see Bitcoin as a medium of exchange. Of course, this is tied to the fact that not many businesses accept BTC for payments, but nevertheless... this sounds quite bleak.
I think that's probably about right. I asked ChatGPT about this and it pointed me to a few surveys conducted in past years showing that only about 2% of Bitcoin owners actually use it to pay for goods and services.
Is it bleak? I guess. There just isn't much of a reason to use bitcoin as a MOE right now. Like, most of my usage of it is just purely ideological, not out of convenience. (Other than SN, of course. Micropayments is currently the best use case for bitcoin-lightning as MOE)
Bitcoin is clearly superior to fiat as a SOV, everyone can see that. But is it superior as a MOE? I think that depends on more situational factors, like the reliability of your country's payments services, or the need for privacy and censorship resistance. So probably in advanced countries, Bitcoin is not yet superior as a MOE.
I think it's far superior as a MoE: low fees, cut out the card processors & banks, no chargeback risk, have immediate self-custody of funds. In addition, I don't have to worry about FX rates or exchange fees when I go from country A (where I pay in Bitcoin) to country B (where I pay in Bitcoin) or even simply use online services of a company in another jurisdiction. But yeah, you're right, necessity is the driver of any new technology. And for the end user, the fees, the chargeback risks, the custody issue... these are either obfuscated or just too trivial to care about.
I think you're right. It is superior, but only if both sides (merchants and consumers) adopt at the same time.
This reminds me of a classic "coordination failure" from game theory, in which two parties fail to reach a mutually beneficial arrangement, because it's only beneficial if they both move together, and if one side moves on their own they'll be worse off. Without some way to coordinate the joint movement, they won't be willing to move unilaterally.
Example is electric cars and charging stations. They both need to be adopted together. No one will want to buy electric cars unless they know there will be plentiful charging stations; no one will want to build charging stations unless they know there will be a lot of electric cars. Some kind of coordination needs to be done, like subsidies, to get both sides to move forward together.
But, you are missing the fact that btc is not the only game in town as MoE. I would urge you guys venture out of the bitcoin bubble and try for example solana's stable coins for payments. no channels, just a wallet and instant settlement. I know, i know, shitcoins. For payments, they are much better though and if you talk to crypto payment gateways, the Relai's 5% usage is actually spot on. Bitcoin is only used as payments in a very small fish bowl.
I never tried their wallet but I wonder if it required opening channels and how much pain they put their customers through to use lightning.
Lightning has many UX complications that don't apply to onchain given that bitcoin's network does most of the heavy lifting wrt state management and finality. Until lightning's UX improvements are farther along, it's not worth the tradeoffs - even for MoE bitcoiners - to use lightning unless onchain fees rise substantially.
Lots of folks use onchain bitcoin for MoE still.
I like Lightning as a concept. However, I hate what Alby has done with it in terms of the hub and channels. It could be easily fixed if they would just leave an open channel alone with something like a six month time limit. Instead, they force close in two weeks. All the extra complication being added is not going to help adoption--nor is adding layers of "extra expense" with random time limit imposition. Same thing is true here at stacker, in the sense that adding a wallet for receiving and sending is now more of a headache--not to mention the cowboy credits which both exist and do not at once.
I understand your frustration but I don’t think @Alby is closing your channels, but your channel partners.
Alby moved the architecture to the hub where you have to have the channel partners.
Alby was custodial before. Why don't you continue to use a custodial wallet?
Because I wanted to have my own keys, but that's where I am heading since Alby has become annoying.
What issues with Alby have you been having? I'm not having any issues.
It knocked my channel within about an hour of me checking up on it. It had been a little while since I had turned it on, and I got an email about alby not being able to reach the hub, so I figured I needed to follow up. Too late. Blam. Channel gone.
I think this is a hoax, they didn't actually have Lightning but rather some Blockstream trustodial thing with big fees... makes no sense to use those with chain fees below 1 sat byte for almost any stacking amount (they're a stacking app, no?).
This has nothing to do with circular economics or lack of, as a stacking app it's an inherently different user profile.
It's a nice to have, not an imperative, this drama is old hat.
They used the Breez SDK
Yea the blockstream wrapper one
Quoting from what I replied to @k00b:
Quoting from my original post:
I don't think Bitcoin can truly win if it can't be used for everyday payments, or more importantly, if it can't be used to circumvent the legacy financial system. In that case, it will remain a part of the permissioned system, not become the foundation for a new, permissionless one.
Again, if you think a store of value is all that Bitcoin is and could be, this is not a problem. Personally, I think it can be much more than that.
It can be, that's not in question... That's different than it being imperative people actually care to use it. All that matters is people demand Bitcoin in some fashion because they account in it.
Relay had shitty integration with breeze and it was not obvious what’s going on, it was frustrating and funds could stuck , happened to me twice. But they could potentially have a good on chain / lightning wallet. Instead they have implemented mandatory kyc, so I think it’s also contributed to low usage.
Shame on them, maybe their UX was not great and that's why their customers did not use it? Who knows...
This is a great question for our ~AGORA weekly business series #1195017
Thanks for the tip, I put the question up there as well :)
Is that not a classical example of high time preference and fiat mentality?
Fees may be low now but what is in ten years?
You have to be prepared and not optimized for the short term.
Bitcoin has failed if it is "only Gold 2.0", because then the exchanges like Relai will be the choke points.
Lightning privacy is asymmetrical. It is great when you want to pay somewhere anonymously. It sucks when you are a receiver. You doxx your whole node. Relai is mostly used for DCA into cold storage, so makes sense that lightning is not popular.
I always prefer to pay with lightning for things with no KYC.
'using Bitcoin as a medium of exchange is imperative, if you want it to actually function as money.'
Spaces Protocol is advancing Bitcoin as a MOE.
Demonstrates how River is the best exchange
Not available in Europe, unfortunately
I thought Relai is an exchange, not a retailer.
When I buy, I usually buy in bulk amounts, and want it nowhere but my cold wallet.
My bitcoin spending volume, of course, is much smaller, and I can just swap in using any of the numerous services to keep a few months worth of spending budget there. But that is not where I want the funds to be from my exchange.
So based on my usage pattern, I do not see much point of the exchange supporting lightning, I need more retailers to support lightning.
Should have included that in the original post :) Our usage patterns are certainly quite different then. Personally, I don't have disposable income to put into cold storage BTC at the moment. So whenever I buy (usually on Kraken), I buy to more or less immediately pay for things, so I withdraw from the exchange straight to my LN wallet. Which is kind of why I made the stretch that:
If you are not holding some satoshis for retirement, then what is the point of buying bitcoins at the first place? To pay for things, fiat is enough.
How long did they have LN up.and running for? 1 year? 2?
Disappointing to see this low time preference move. I guess they can do what they like, but give it some time for people to onboard.
Sad to see but they are reacting to what customers are doing. I think it’s a must from a business standpoint plus fees are dead. But shock net is right they used the breez SDK and it shows that development kit still has some issues. Even with trustodial model the customers still didn’t like it.
(Disclaimer I own shares in Relai)
That explains it. I thought they were using the misty breeze architecture.
I wish...
It all makes sense until onchain fees make their comeback
The Lightning Network is key to Bitcoin's viability as a medium of exchange. Without it, transaction fees and confirmation times make it impractical for everyday purchases. I'm interested in seeing more development focused on improving the user experience and scalability of LN