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1 sat \ 3 replies \ @justin_shocknet 5 Jan \ parent \ on: deleted by author bitcoin
Liquid is itself a shitcoin
Lets not throw around the term shitcoin for Bitcoin related technologies.
What is the difference between a consensus compatible Liquid BTC on liquid sidechain vs sats stored in a Lightning Channel?
Both represent as frozen capital on mainnet until settlement (peg-out or channel close). How is a channel that much different than a federated peg-in addr?
Liquid records all transactions for all eternity, but it does it in such a way that masks balances. Liquid is more likely to adopt more experimental technologies for scaling.
Bitcoin needs to look at other scaling technologies for compacting tx data such as MimbleWimble -- This has been live on Litecoin without incident since May 2022.
It would do the field well to understand progress in other Nakamoto clients.
Shitcoins can be a petri dish of innovation. While protocol conservatism has worked out well for Bitcoin, we should not regress as technology improves.
Lightning does not record transactions beyond the peers involved in routing the transaction. Both have advantages and trade offs, but they are all sats.
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The peg is fictional in that it's still completely trusted. It's not Bitcoin, it's a derivative.
Lightning is literally still on-chain Bitcoin.
21M NGU is what matters, while some may be nice-to-haves, Bitcoin doesn't need any shitcoinery to scale.
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You primary concern is the semi-trusted nature of the PoS federation. I don't think this makes it a shitcoin. Lightning Sats are also derivatives, as well as being on chain sats.
I agree that trust is the differentiator, but I would argue that we utilize trusted custodial third parties right now -- SN or Wos for example.
Liquid is more decentralized, as most LN capital is concentrated in custodial nodes.
In addition, Liquid has a different risk model than LN. On-chain Liquid sats cannot be moved by the network, federation, etc. Supports Cold keys.
I really am arguing it has a place. It is way too reductive to claim Liquid Bitcoin is a shitcoin, this is a non-nuanced position.
L-BTC does not increase the supply of bitcoin, only the velocity. 21M NGU stands.
Blockstream is further experimenting with transaction encodings that promote privacy: https://blog.blockstream.com/bulletproofs-a-step-towards-fully-anonymous-transactions-with-multiple-asset-types/
I see having a test bed for economical experimentation with sats like Liquid is a good thing.
You could make the argument that Liquid promotes people minting shitcoins -- yes, it has built into the protocol the ability to issue Liquid Assets, which could be shitcoins.
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