10 sats \ 2 replies \ @nullcount 28 Aug 2023 \ parent \ on: Are current lightning nodes killing new small nodes? bitcoin
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.
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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