330 sats \ 6 replies \ @ZezzebbulTheMysterious 24 Jan \ on: Is Liquid Bitcoin real Bitcoin? bitcoin
L-BTC is Bitcoin, so is LN sats, so is cashu ecash, so are custodial LN sats, so are sats in a fedimint. All have different security models. All still Bitcoin.
This isn’t a position of a maxi to deny use cases for sats.
It is a position of technical ignorance. Many bitcoiners are not technically minded, and easily fall of propaganda and talking points. It’s sats. Not ether, not sol, not a stable. It’s Bitcoin damn it!
A sat is a sat, no matter of it is sleeping in a utxo, locked behind multisig, part of a federation, or in other newer encodings.
Stop being technically ignorant
Bingo
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No, of course not.
I would call it Bitcoin backed dollars.
The issue is the 1:1 nature.
L-BTC doesn’t back Bitcoin, or vía versa. LN sats don’t back Bitcoin. They ARE Bitcoin.
If they started printing banknotes denominated in Bitcoin, those notes would be “Bitcoin”. Yes the public would demand proof the physical notes are backed by utxos. Trivial to do this with cryptographic singnatures.
I see no issue or inconsistency with my position.
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Thanks for the reply. I'm still learning about liquid and my opinion is my no means set in stone.
So is there no way for an entity or group of entities to stop a transaction from taking place in Liquid? What happens with catastrophic network failure? Does a HTLC expire which reverts the L-btc funds to an on-chain utxo controlled by the owner of the L-btc?
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Liquid is a nakamoto-software fork of Bitcoin/bitcoin-qt that uses a special zero knowledge proof version of the main cryptography library: https://github.com/BlockstreamResearch/secp256k1-zkp
This library enables confidential transactions (using a similar confidential transaction structure that monero used in 2015. Blockstream is experimenting with newer zkps like Bulletproofs++ https://blog.blockstream.com/bulletproofs-a-step-towards-fully-anonymous-transactions-with-multiple-asset-types/). It does not behave like LN with HTLC's, although it has expressive enough transactions that you could run LN on Liquid. There is work being done here at the moment, and maybe we will be LN L-BTC for ultracheap and more performant LN txs.
One way to think of it is a place to trial newer cryptosystems within Bitcoin ecosystem without putting the main chain at risk. it is a Bitcoin sidechain, a layer 2 chain.
The blocks are generated at a rate of 1 per minute, and "Liquid’s federated model requires blocks to be signed by at least two-thirds of all block signers". The block time variance is also much much smaller than Bitcoin. It is highly reliable.
Otherwise it behaves just like Bitcoin Core. To move your Bitcoin coin from liquid to mainnet, you issue a Pegout tx.
They are incentivized to confirm your transaction through fees, just like in mainnet.
Yes, there is a risk that the Federation blocks your peg-in or out.
This is much more difficult given the constituents of the Federation, their philosophy and operation within Liquid. Its a different security model, but it has its advantages. I trust the Liquid federation to have the best intentions for Bitcoin over Udi and his merry band of vandals and rogue miners.
The biggest valid maxi critisism I can accept is that it allows issuing of Confidential Assets (shitcoins?). But i think there is lots of room for experimentation of various assets to increase Bitcoin and satoshi standard adoption. Confidential Assets is something that only exists in liquid and that SCRT cosmos sidechain.
Would you not rather this be done with Bitcoin technologies, rather than cosmos?
Compare and contrast this with "Optimism, Arbitrium, Base" sidechains or "ETH L2" in which ETH is locked in contracts on ETH mainnet, and 1:1 ETH is issued on the sidechain.
To contrast with "Bitcoin only exists in Bitcoin Core" "maxi" position -- the ETH maximalist still believes that Optimism ETH or Base ETH is ETH! And they are correct (at least about taxonomies and what is ETH)!
Ok so maybe we think of this as a derivative of Bitcoin -- contrast with 'Liquid Staked Derivatives' -- its somewhere between a onchain utxo and a 'staked derivative'. I think its easier to consider it all different flavors of Bitcoin.
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THANKS for the detail. I'm not opposed to its existence and use. It can even, and appropriately, use "BTC" in the name "L-BTC". Pegged one-to-one, I can see the validity of calling it a sidechain rather than a shitcoin. And development of such kind within the Bitcoin ecosystem is better (for Bitcoin) than it being built elsewhere.
But I still see that a government can mandate (or a situation may dictate) members of this federation to behave in a certain way. And even if the transactions are private, the fact is that it seems possible for transactions to get locked and for users to be "stuck" in the chain without being able to peg-out. With On-chain, you can run your own node and miner if you wish, and no one can stop a transaction from being included in a block.
As others have said, it has its uses. I don't see myself using it, but I'm open to learning more.
Also, I think with many of these technologies (even more so with chaumian mints), we may get blindsided by legal or regulatory issues. Bitcoin being the only real commodity (I have no idea how Eth is being considered to have that status), issuances of rights-to contracts ("money") and such are not the same as those for securities-- so much of the ado in the crypto space is a red herring in regards to how Bitcoin will be regulated.
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