I like to think my finger rests on the pulse of bitcoin, its culture, innovations, these things I can feel. My feeling in 2021 was that the LN turned a corner, and this was correct I think; now it feels like an absolute explosion rapidly approaches, datelined perhaps for later this year, maybe early next year. I've over the last 6 months left bitcoin layer 1. My Coldcard still protects keys down there for my main UTXO stack, and I auto-dispatch DCA coin for saving of course, but I really don't fuck with L1 much anymore.
My LN channels haven't closed in forever. I wonder if they ever will.
After operating and noding around LN for long enough, drivechiains, sidechains, and spacechains seem passé, like pre-covid shit. Talk of an op_vault soft-fork seems redundant now that we have miniscript, sovereign vetos, and a PSBTv2 coming sometime, which imo, few realize is the future of all smart contracting. Many of the DeFi things that crypto aspires to do can be done so much better with Lightning, but with a real service, a real product, or securities, not a fucking vaporware token pushed by a CEX and their dying business model.
L2 has given me a better appreciation for the slow, safe, methodical pace that L1 has chosen, staying the course, letting technology inflate around it, letting bitcoin's value get abstracted with smart software pattern design. Many of the proposed forks of the past seem questionable now—Taproot and SegWit I don't count amongst them. In the moment, people arguing about Ordinal Theory and angry about blocks getting filled with inscriptions are missing a much bigger picture. Talking about StratumV2 adoption amongst miners seems more worthwhile, developing an eagerness to run nodes like many of the Theorists have done seems like something bitcoiners not running nodes should copy, preferably Taproot, because its updates are critical and purpose-built for the LN to take its next giant steps.
All the passion of well-intentioned bitcoiners needs to move to L2 and the mining space. L1 really doesn't need anything. It's L2 where we begin disintegrating the discrete payment networks of Visa, ACH, PayPal, Western Union, etc, offering a superior technology and experience to CBDCs, and get a jumpstart on reputation-identity which is the next wave via 0auth, slashtags, DiDs, Holepunch, and endpoint functionalities. The world's currencies will try bifurcating in a mostly East/West arrangement, basically think of a default where they try to start the same game over again from 0. We won't let them, not successfully, because our network will be open, permisionless, instant, neutral, global, and enforce rules. Along its rails, wires, and waves will travel the hardest money known to mankind. We don't get there without a robust L1 adjacent though—the Lightning Network. Here's a post I wrote on the obliteration CBDC's face if you're interested: #134290
I'm a lightning maximalist. I'm a lightning man.
Anyway, some favorites from the LN:
-Running LN channels, nodes, and contracts remotely with ZeusLN -Quickly swapping BTC in and out of L1/L2 with Robotsats without running a node -Derivative trading with LNmarkets -ThunderSats lol -LnURL for stupid easy LN addresses -BTCPayserver -Stacker News -Nostr
Do any of you feel the same way? We finna explode? Wen? What are your favorite LN applications?
I agree. I have been loving zeus, and plan to sponsor them with 1mil sats in Q2.
At this point it feels imperative to use L2.
IMO, the more integrated L2 is into our lives, the more others can experience, hear about it, and it normalizes the network effect into real life.
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I use Fountain (just installed today and loving it), Tweetoshi, Alby and of course Nostr, where LN is not supported natively, but it's written all over it.
We still have a long way to go with LN adoption, but the critical mass has been exceeded and it's inevitable. We'll get there before we even know it. Apart from payments, I think another killer feature of LN is going to be the login functionality, replacing the traditional login/password model.
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The login functionality is part of general web move towards 0auth (zero authentication) and we see it quite a bit with email now. I love it and don't think there's really any reason to fill out forms and store passwords anymore.
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I am with you on LN, I think it the network is what is going to hold the entire scaling process together, how I think of it now is the BTC to LN works now but we don't know how things work if we have a billion people wanting to use a bearer asset and not promises with 3rd parties
If we have that kind of volume the chain is toast and even if LN onboards most of the daily transactions its still going to be hard to keep liquidity routing back and fourth when needed if on-chain settlement is slow, maybe channel factories help a little but I still see things like drivechains and even Liquid taking on some of that strain to create LN channels
People will naturally flow to where they can open and close the cheapest channels
Then when I look at things like Fedi and eCash, LN is the glue that makes that custodial model works.
To me, LN is bigger than routing between nodes but routing between different consensus mechanisms and makes the whole scaling thing viable
Maybe my idea changes as we learn more but for now, hella bullish on what I see coming out of LN
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I share the general sense that LN is going to continue it's steady (even rapid) growth in adoption and extention. I am not as seemingly eager to abandon L1 so to speak, but it may come to that regardless.
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Not a singular application but a concept.
I find being able to hear/read of a new project, send a few sats in, test and try it out, and then withdraw sats,
Doing that in a matter of minutes and with almost no user friction is amazing.
One could not even type in Credit Card Number and KYC info before one can complete a full circle with LN
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I use SN and LN Markets most, so far, but I am new.
I think you may be right. I am always concerned, because I am the early adopter in my circles and my experience says the best tech does not always win. Many people seem to want to be led. We are on the way though. I am more excited and enthusiastic about money and finance than I have been in ages. And I got a degree in finance in 2004.
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I don't think we're close to a network effect yet, the s-curve is steep. But we're gonna get there.
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I love Lightning, I just did a batch open to 4 new nodes yesterday, and I also opened channels to a couple of fellow noderunners I found in Nostr. I love the lightning integration there with "zapping". At the moment only available in the Damus testflight version and a few other clients, but I believe when Damus with zapping hits the official App store, lightning payments are going to explode. Think Twitter but with an additional "Like" button with a lightning icon that sends a predetermined (in your settings) amount. It's really fast an effiecient.
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The lightning man is as fast as flash so he uses lightning-fast apps, I will suggest you try zapread and heyapollo
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Yes, LN builds are coming out everyday, many dev are transitioning to this Bitcoin L2 over others. The adoptions was slow since inceptions but have pick up this pass year and will propel further as more use-case applications are build. Many LN apps are out there but the few I use and like are
  • Fountain
  • Alby
  • Zebedee
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I’m still learning and getting used to it but the speed and ease at which it operates is really nice and pairs nicely with the traditional on chain transactions.
I’m planning to operate a node once my Bitcoin node fully syncs, so I’m looking forward to learning more about it!
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I'm more or less with you.
I don't really think "DeFi" has a future on lightning, but I don't have a great argument because it's kinda over my head. It seems clear to me that lightning is a payment network by design, so I end wondering why it would be a place for DeFi.
It might be that I just have huge blind spot around DeFi. Like what is it? Essentially leveraged trading?
If you're trading real assets like securities, it's inherently permissioned. So you don't need lightning nor a blockchain. If you're extending credit, you're trusting the issuer, so again, why lightning or bitcoin?
But I def agree that the future of lightning seems very bright at the moment. How can you compete with it in terms of web based micropayments or cross border payments. It's a slam dunk
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The DeFi (decentralized finance) I mention isn't going to be built directly on the blockchain or the LN overlay network per se, although projects like the incoming TARO will probably bring such things.
I'm thinking that the LN can simply be piped directly into any business, from the lemonade stand to the lithium miner, anywhere in the world, without any permission required, without seizures, limits, or credit checks. And we live in a rapidly digitizing world, with 2B websites and more goods and services added to the Internet daily. And many of those goods and services themselves are becoming digital. This is why I dumped my gold years ago, after realizing I can't put gold into my Chrome web browser, and if they got rid of physical cash, then bitcoin becomes a necessity for freedom. So in this way, commerce becomes more decentralized, and globally connected, and it should arbitrage the global economy to be much more efficient with a velocity of money that is extreme.
One thing missing has been reputation. And if this gets fixed (Slashtags, etc, are good candidates, which are decentralized free-floating tags that granular data can be appended to, they use key pairs like bitcoin, but without a blockchain, and can only be viewed/verified by the people with the public key) all systems are go. Gets easier to fund a pornstar's latest video, or send money to an insurance pool for an APY, lend my channel to a retailer in Egypt on a busy holiday, use a discreet log contract to borrow money from a dude in Brazil to take advantage of a sudden change in the weather, hire reputable coding talent in India for a project, or be the pawnshop for a gamer's expensive skins in Counterstrike Go.
I'm just saying, we are the bank, albeit a distributed version, and can do all the things their prestige has heretofore granted them, but with more speed, faster settlement, and lower cost. That's I guess the DeFi I was talking about. No tokens. But real goods and services. Arbitraging the global economy to freedom.
All this many years away, and bitcoin will have a flattened confidence curve by then, meaning it'll be less volatile than most local currencies, if those are still around, and credit markets will rapidly build around it.
I'm super excited about Lightning! I enjoy the faster experience with purchasing and tipping in LN is super convenient. LN-URLs, Lightning Addresses and Lightning Auth is making it even more enticing for people already into Bitcoin to take another step. BUT I have a hard enough time convincing non-technical people and even technical people who never researched Bitcoin that L1 is a usable piece of technology and not just an investment opportunity. Getting past how scary self custody sounds and how sending/receiving works is a challenge.. going into L2 and diving into non-custodial lightning wallets and having to consider inbound/outbound liquidity of your channels is still too much for the average person to deal with, I think. In my humble opinion, L2's adoption is still completely dependent on L1's adoption. Maybe I'm not not close enough to it, but I don't see any easy route for a non-bitcoiner to get into Lightning.. it is still two (big) steps for the average user to get here.
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This is largely speculative piece but yes, probably since 2021 LN network effect has some influence on Bitcoin capitalization.
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I've been using LN more and more since the second half of 2022, and today it's my main sats staking way. However I fear that bringing fiat into it (with things like Toro) will attract regulation when the network is still in a vulnerable state. Just my two stats.
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We are. -Alvar
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Great write up! Love it. Big believer in LN. Living in El Salvador.
Wanting to dive into the apps a lot more. Looking forward to having more time to be in deeper like your writings.
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