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210 sats \ 4 replies \ @jacob 19 Jul 2022 \ on: Fedi — first wallet of federated e-cash protocol Fedimint protocol bitcoin
Super excited to see this. It makes a ton of sense that a good majority of users won't or can't self custody their bitcoin. I personally think that having a gradient of custodial options is ultimately a good thing.
BUT
Is this a good enough solution when we should be focusing on great solutions? I don't know what those could be, but I tend to agree with what's being said here.
Trading self custody for anything at this point in bitcoins life seems risky. Sure adoption is higher than ever before, and continuing to grow, but compared to its TAM (i.e. global population), it's tiny.
Are we throwing our weight behind scaling at all costs now, instead of censorship resistance at all costs? Anything that is not self custody introduces new risks around this.
Is this a good enough solution when we should be focusing on great solutions
Fedimint is a great solution, yes. It’s not a quick dumb thing.
Trading self custody for anything at this point in bitcoins life seems risky
Self custody = lost bitcoins, destroyed lives.
I see this as a huge win. An intelligent way to manage ownership of your money without the risks that both exchanges and self-custody bring. Different set of risks, but much more manageable for regular people.
Are we throwing our weight behind scaling at all costs now, instead of censorship resistance at all costs?
Primary feature of fedimint is privacy (and thus censorship resistance).
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Self custody = lost bitcoins, destroyed lives.
Are you joking? Have you seen the number of exchanges going under in recent weeks?
If 10% of those self custodied, and 10% of those lost their coins the overall result would be far better.
Consider this: 7 transactions per second is about 220 M transactions per year. If we want to open one lightning channel for each of the 8 B humans, we'd need 36 years just for all the channel opening transactions. This is too slow.
Also having just one channel per person would lead to star topology, in other words, huge centralization. Two channels per person would lead to long chains of channels; for something resembling a useful decentralized network you need 3 channels per person. That'd be 108 years just to open all those channels.
Of course the block size could and should be raised at some point but this would also harm decentralization as it might drown some poor node operators by raising the storage costs.
Are we throwing our weight behind scaling at all costs now, instead of censorship resistance at all costs?
Um, yes. Censorship resistance at the cost of scaling is Monero's choice. But Monero is only able to onboard user number N+1 but not several billion new users.
Most people use LN either with a custodial wallet or with channel-managed wallets like Phoenix or Breeze. If for example EU government buries ACINQ (and it probably will!), Phoenix users would receive their money on-chain but won't be able to use Phoenix anymore. So there are already pain points that a government can press.
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