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🤷 What if a lot of people really want to use bitcoin permission-less?
248 sats \ 25 comments \ @hynek 18 Jan 2023 bitcoin
What are our visions for the mass use of bitcoin? I assume that
  • prospectively, we don't want to make the blocks bigger, so as not to centralise the nodes
  • the normal user won't even be able to use the on-chain because of the costs.
  • everything will happen on the lightning network
  • it will be impossible for most people to have their own custody... (since on-chain transactions are required) → people will have to rely on some companies or mints. The result is that one cannot use bitcoin permission-less.
Do you know of any suggestions that would address this problem? Or do you not consider it a problem?
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255 sats \ 2 replies \ @sime 18 Jan 2023
Better UX with joining transactions is a optimisation that can save transaction fees and block space.
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10 sats \ 0 replies \ @phaedrus 20 Jan 2023
I really think that's the way to market and sell coin join: cheaper transactions... (letting privacy to be just a nice trojan horse)
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0 sats \ 0 replies \ @hynek OP 18 Jan 2023
Good point
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15 sats \ 8 replies \ @sime 18 Jan 2023
Doesn't Phoenix Wallet meet this requirement. The funds are self custody.
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0 sats \ 7 replies \ @hynek OP 18 Jan 2023
It's just UX improvement.. Nice but doesn't solve the issue..
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0 sats \ 6 replies \ @nerd2ninja 18 Jan 2023
Why doesn't it solve the issue?
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0 sats \ 5 replies \ @hynek OP 18 Jan 2023
Partially it does. Phoenix Wallet opens channel for you.. But if we assume that on-chain capacity is quite limited? It will be still very costly..
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0 sats \ 4 replies \ @nerd2ninja 18 Jan 2023
A 1 time cost to have an open channel. How expensive are you expecting on-chain to be?
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0 sats \ 3 replies \ @hynek OP 18 Jan 2023
It's not one time only.. you will need to increase or close that channel later.. Nobody has constant value across whole life :-) If we want to onboard basically everyone.. it's seems currently impossible without increasing the space in blocks.. So the costs would be prohibitive. But maybe there is some other idea how to approach that. And that is purpose of this discussion to find it :-)
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26 sats \ 6 replies \ @cointastical 18 Jan 2023
the normal user won't even be able to use the on-chain because of the costs.
it will be impossible for most people to have their own custody.
I pay $84 per year to my bank because I (usually) don't keep a $1,500 average balance and thus incur monthly fees.
I don't expect even the fee for opening an LN channel to rise to even 10% of that, at least not in the next half decade. Plus there are improvements coming to make the fees for channel open/close even lower.
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25 sats \ 5 replies \ @hynek OP 18 Jan 2023
So the idea is to use on-chain for everyone, right?
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0 sats \ 4 replies \ @cointastical 18 Jan 2023
No.
Many people use a custodian for their funds. In the bitcoin ecosystem, that will also be the case -- even with numerous methods for self-custody that are easy to use, safe and inexpensive.
One of my LN wallets that I use is custodial -- Wallet of Satoshi (WoS). I don't keep much on WoS (or any wallet on my phone). I am comfortable with using WoS for retail and/or other light-duty payments.
Lightning uses payment channels. So if you want to to use Lightning and you want to be self-custody, then you need a channel on-chain. That's the design. Does that scale to a billion plus active users? No, Lightning alone with everyone using their own on-chain channels does not scale to a billion plus active users.
Lightning is not the only layer 2 technology though. I can't predict what the space will look like a dozen years out, or even a couple years out even. But I can say many of the brightest people on earth are figuring out how to self-custody your bitcoin on a layer two.
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25 sats \ 3 replies \ @hynek OP 18 Jan 2023
Ok, so basically we don't have any vision for that.
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0 sats \ 2 replies \ @cointastical 18 Jan 2023
The vision is
BITCOIN WILL EVENTUALLY BE A SETTLEMENT-ONLY LAYER
Layer Twos will be where scaling will need to occur.
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25 sats \ 1 reply \ @hynek OP 18 Jan 2023
Sure.. but my question is how to do it permission-less way?
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272 sats \ 0 replies \ @pillar 18 Jan 2023
prospectively, we don't want to make the blocks bigger, so as not to centralise the nodes.
I don't know who is "we". I would simply say that everyone is free to fork Bitcoin to whatever block size they think is best, and anyone is free to use the fork they prefer. Nevertheless, the majority of people seem to like the current blocksize, that's true.
the normal user won't even be able to use the on-chain because of the costs.
That's a strong statement. How can be sure of that? Keep in mind that, as lightning and other solutions increase their adoption, more and more pressure is taken off the main chain.
Imagining an hyperbitcoinized economy, I could open a few channels worth 3 or 4 times my monthly salary, and use them for months and years to perform most of my financial transactions.
everything will happen on the lightning network
I would change that to a less absolutist "an important percentage of transactions will settle on the lightning network".
it will be impossible for most people to have their own custody... (since on-chain transactions are required) → people will have to rely on some companies or mints. The result is that one cannot use bitcoin permission-less.
This already falls apart with the previous comments. Nevertheless, you are probably right in that many people will rely on companies of mints. But that isn't necessarily bad.
Let's make an analogy with banks since we are more familiar with them. Banks fuck you up because they can. They can because it's an oligopoly (you have no where to run to). It's an oligopoly because new players can't get in because of regulation and corruption. It's a walled garden.
The walled garden is the root of the problem: it prevents free-market competition from taking place. You see, in a world where opening a bank was as easy as opening a lemonade stall, there would be plenty of competition. As the market matured, there would be plenty of great entities with an outstanding track record. You would have plenty of options with low risks of being rug-pulled or screwed over in various ways.
Take this bank to lightning custodians: it's an open garden, not a closed one. You are going to see more and more and more entities joining the market. You will have plenty of players like Bluewallet/Wallet of Satoshi/Alby/Pouch/etc. from where to choose. You will be able to split your sats across several of them, and if one of them ever does anything stupid, you will have somewhere to run to.
So, you posed:
people will have to rely on some companies or mints.
I argue back: they will have a wonderful market to choose from.
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10 sats \ 0 replies \ @sime 18 Jan 2023
MimbleWimble sidechain for Litecoin is meant to be awfully small due to the limited amount of data store.
Also +1 for privacy.
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0 sats \ 1 reply \ @hynek OP 19 Jan 2023
Thanks for your comments 🙇 My current understanding is that there is no universal recommendation.
As the simplest non-custodial solution seems to me Phoenix Wallet, but
  • It’s more expensive and less predictable in behaviour then having own node (or using custodial solution).
Other known approaches that could in combination work are:
  • Cross-input signature aggregation
  • Channel factories
  • other sidechains (like Liquid)
  • Fedimint
  • Mimble Wimble
  • combination with custodial solutions
  • block increase
  • please add more if you have some..
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0 sats \ 0 replies \ @hynek OP 19 Jan 2023
And this actually bring me to a weird idea.. 🤔 Receive the payment to a node other than mine, but it would be encrypted somehow so that the owner of the node can't spend it without my permission. Then I wouldn't need a channel. I can't get the funds without cooperation, but at least he can't rob me
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0 sats \ 0 replies \ @om 18 Jan 2023
If billions of people will rush to use bitcoin and use it permissionlessly, a lot of new nodes will appear so the blocks could be made bigger. But realistically, 90% of people will settle for mints, Liquid, custodial wallets just as they settle for exchanges now.
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0 sats \ 0 replies \ @nerd2ninja 18 Jan 2023
You have blixt wallet too if you wanted to be more hardcore about it and mutiny.
I think part of the problem though is that you don't consider a 2 of two multi-sig with on-chain arbitration to be self custody and its not making sense to me as to why not
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