112 sats \ 5 replies \ @nullcount 28 Aug 2023 \ on: Are current lightning nodes killing new small nodes? bitcoin
Only banks and fortune 500 companies will run LN nodes if this thing catches on. Its impossible for every human to have their own UTXO. So UTXOs are going to price themselves out of reach of everyone except the largest players.
The little guy is destined to pay outrageous fees for sovereignty, there will be tech improvements along the way but this principal of scale isn't going anywhere.
Secretly, every bitcoiner "in the know" fantasizes about becoming the next cantillioniaire/banking class they can't wait to earn rent off their digital real estate.
@nullcount this is a bleak picture you are painting. I don't see no Light in that picture. Lol. And no Lightning either.
If the current lightning nodes are just the big banks of tomorrow then we are screwed again. And again. And again.
Looks like the plebs with no sats currently will need to bend over in two years time and take the orange pill from behind...
That is not sounding right... but you might be right.
I hope this doesn't happen.
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Infrastructure providers in BTC love their KYC. Over 50% of hashrate is already mining in KYC'd pools. Expect LN liquidity to go KYC even faster.
In a few years, getting a channel to a node is gonna require signing an SLA with KYC of the node operator.
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That is gonna kill lightning man!! The moment there is centralization in the network, all those centralized lightning nodes will get a letter in their box from Uncle Sam telling them that their internet connection is gonna be shut down. That they now fall under a kind of broker of financial payment processor and they need to report to their central banks and we are fucked.
It needs to keep decentralized. But I'm already seeing it as a starter that this thing is not completely decentralized. And that nodes grow and then they become a target for Uncle Sam and the fiat system.
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It probably won't "kill lightning". It just means that the kinds of markets that require confidentiality, trustlessness, etc.
will just use something else. A network of KYC'd banking partners is highly efficient at processing your rent, grocery, tax and bill payments. It's even pretty good at large B2B trades and settlements. This centralized future of LN is just not the ideal for someone who by definition wants to avoid centralized networks of KYC'd banks. Perhaps because the trades they need to do aren't approved by their soverign state.
Sovereign states tend to make their own money. And this is true too of sovereign individuals. So there will likely always be a non-BTC trading pair which is well suited for non-state approved transactions.
I just think BTC could be a stronger currency if it was possible to make these transactions without worrying about how the state might react to your trade. And i believe its still early enough for BTC or some layer to achieve this property of "free market money".
I do take issue with people who call BTC "freedom money" or "f*** you money". If you spend BTC "the wrong way" you get to live the rest of your days in a cage. Clearly, its not freedom money yet.
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Your last point is so true. It's sometimes painful to watch how bitcoiners fantasize about "1 million dollar coins" (for instance Peter McCormack in several recent podcast episodes, feeling so pleased with himself).
I worry about this adoption issue, but hope that there will be innovations that remedy it (enough), and that we have enough time to build them. For instance, communities sharing one single UTXO, with virtual UTXOs or ecash in the frontend. You could move your coins onchain as a community, but not as a single person.
It would be best if Bitcoin adoption continues to slowly increase this decade, allowing us to build such solutions. The alternative is that Bitcoin adoption remains limited, e.g. to "black market" money like G. Zucco would say. If Bitcoin cannot offer sovereign-enough-solutions for every user, I guess it fails. But full sovereignty for every human seems like a pipe dream.
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