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The problem with "stable channels" explained by Rusty Russel
496 sats \ 3 comments \ @DarthCoin 30 Oct lightning
My problem with "stable channels" is not technical, but entirely around incentives.
"A banker is someone who lends you an umbrella when it's sunny and asks for it back when it starts raining".
People want downside protection. But you cannot keep enough reserves to give it to them in Bitcoin, you need some other asset like USD, which is much harder to audit.
So in practice you offer some limit on downside protection, hopefully well-documented! But no limit on upside protection. Of course if you hit the downside limit your (broke) customers leave, so your business model is likely "hope Bitcoin goes up".
This can be extremely profitable, of course. But high-risk ventures with this kind of "heads I win tails you lose" property rarely attract the most ethical of players :(
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100 sats \ 0 replies \ @BTCLNAT 30 Oct
The search for downside protection, in my opinion, is presented by the persistence of fiduciary, investor and stock market player thinking that still persists, even in some who have been in the burrow for some time. It is very common, from what I have seen, among non-coiners traders, that they always ask the same question: WHAT HAPPENS IF THE PRICE FALLS?
I understand that until it is recognized that the price of Bitcoin against fiat is due to the devaluation of fiat currencies, and that these are devalued more every day. That on the other hand the price in the market is quite manipulated by those who create "the fear of the fall" and make people sell their coins for them to buy them. Until then people will not understand that the value of Bitcoin is not in the price in the market, when they understand that, then they will stop using "the stable ones" whatever this is
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0 sats \ 0 replies \ @BlokchainB 30 Oct
Yeah I always thought using perpetual futures to peg the price of sats to a value of $1 USD felt like a foolish bargain. The stability can be blown up by a whale if they are on the hunt. Rusty makes good point.
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0 sats \ 0 replies \ @OT 30 Oct
I'm sure there must be a reason why there isn't just a static large reserve of something like 500k sats. Why do they need to be dynamic? A static reserve would also show exactly how many sats in your channel
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