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1377 sats \ 5 replies \ @TheBTCManual 20 Dec 2023 \ on: John Carvalho and Liquid bitcoin
For sure, points many have made already, and a few that people need to consider before getting into Liquid.
But to that, I often ask what is the solution for the average poor right now? Not saying it is better or worse, but we have to admit that none of the current solutions are great, it either custodial LN, an exchange account, or Liquid until you're rich enough or big enough to make sense to go on-chain
I don't consider liquid even a custody tool, more a consolidation layer, a temporary storage option
current solutions
Yes, its a fair point: What are the alternatives?
As a counterpoint however, you still need to pay a mining fee to peg-in to Liquid....so at that point why not just swap into LN?
A valid reason might be needing to transact in larger amounts (>.5 btc) or you are specifically transacting with Liquid Federation members.....
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100% if you're moving into Liquid or LN from on-chain you meet the same on-chain cost so do you go custodial LN (trust 1 custodian/LSP), run your own LN channels (technical overhead, and stay online) or go Liquid which gives you a similar UX as on-chain for those who aren't ready to make the leap to dealing with a new ecosystem with invoices, address formats etc.
I think the use case is to buy L-BTC directly with fiat or stablecoins to build a stack or make payments and you could move to LN with that via a swap service and vice versa
Could even use Liquid as a secondary storage option for sats to rebalance a channel
Who knows? Liquid blocks are still pretty much a ghost town but relatively it has picked so people are clearly discovering it and using it for some reason they didn;t have before
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The issue of the LN is inbound liquidity.
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I don't consider liquid even a custody tool, more a consolidation layer, a temporary storage option
I really like this analogy. That is exactly the way I mostly use liquid. DCA into it, and then peg-out a consolidated UTXO at one point in the future.
I must say that I also used it to buy a gift card 2 weeks ago because the onchain fees didn't make sense at all for the multiple small onchain UTXOs I had on hand...
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Its also a good option the other way, having large UTXOs are not great for privacy so spending into a peg in and having a bunch of transactions in liquid is a better option then trying to coinjoin all the damn time.
I think people who poopoo these tools will find out once you start using Bitcoin regularly its not so cut and dry and everyone needs to decide on what trade-off they prefer
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