How Bitcoin Scales w/o Forks: the Lightning, Liquid, On-Chain Triangle \ stacker news ~bitcoin

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How Bitcoin Scales w/o Forks: the Lightning, Liquid, On-Chain Triangle

19.8k sats \ 10k boost \ 87 comments \ @028559d218 1 Dec bitcoin

Here's the scenario. You are having a beer at a bar with a friend, when the topic of Bitcoin comes up. Your friend seems generally curious. You explain Bitcoin to him (or her) and they are sincerely interested - they want to learn more and get their first Sats (they don't even know what Sats are yet) say maybe 10-20$ worth.

You are going to see them again later that day, maybe the next day so there can be some follow-up. You say 'hey ok' tell you what 'you pay for the beer' (10-20$ worth) and I'll give you some Sats as compensation. They agree. Now, where do you go from here?

They only want 20$ of Sats. Now how the hell do they accept 20$ of Sats economically? Short of them getting a 'custodial' wallet, which they don't want and probably shouldn't get there is no way for them to do this really...

And they don't have the interest or time to 'sign up' for an exchange - If Bitcoin is so great why does 'an exchange' have to be involved anyway? KYC, paperwork, waiting periods WTF what a great way to turn newbies off to Bitcoin.

The on-chain fee for accepting 20$ of Bitcoin is... 50 Cents - 1$ and they don't have a Lightning channel. No Lightning channel (which requires 300,000 Sats opening to be economical) and no 'exchange account' means there is no way of accepting the Bitcoin... and even if they did accept on-chain through a mobile wallet, the spending fee would be too great to be economical to spend the UTXO anyway.

All the while their knowledge about Bitcoin is very limited... so they probably need something that just 'works' to be able to send, receive, and store a little bit (no pun intended) without things becoming too complicated.

So what do you recommend? How do they accept, non-custodially 20$ of Bitcoin on the spot while keeping things simple and straightforward?

I believe the answer is Liquid Bitcoin, in conjunction with Lightning through Non-Custodial Atomic Swaps.

By sending your friend (Bitcoin newbie) Liquid Bitcoin, non-custodially, through a liquid/lightning wallet they

Receive the 'Bitcoin' right away, in just a minute or 2
Receive the Bitcoin through a neat QR code
don't have to deal with addresses and derivation paths and
very importantly can receive the Bitcoin from your own lightning node

You send them Lightning and they receive Liquid it's that simple. Now before you say 'hey that's an Atomic swap and Boltz has supported Atomic Swaps for a while now...' https://boltz.exchange/

Yes that's correct Boltz has. But using Atomic Swaps manually is too advanced and difficult for most people... it's really primarily for enthusiasts and not for beginners. And if you overwhelm people they just turn off or get confused... ask me how I know?

But your friend can download an app on their phone: https://blitz-wallet.com/

So they download Blitz Wallet write down their 12-word seed phrase in a private place, and the next time you see them they generate the QR Code to receive 20$... you scan the QR with your Lightning App (Phoenix, Green, Zeus, Breeze, whatever) and you send them Lightning which is cheaply and immediately converted to Liquid for them to hold non-custodially, send and receive.

https://blog.boltz.exchange/p/launching-liquid-swaps-unfairly-cheap https://blog.boltz.exchange/p/dispatching-chain-swaps

Yes this could, technically, have been done through the Boltz Exchange on a webpage... but it's already complicated enough to write down and keep safe a seed phrase for most people. Blitz Wallet, on the other hand, I believe is a practical solution evolving today along with BTCPay Server and the Boltz Plugin.

https://blog.boltz.exchange/p/launching-the-boltz-btcpay-plugin

Now that the app is downloaded with the seed phrase non-custodially secured... If your friend wants to send you, or anyone else, to include a merchant or exchange the 'sats' they just received they can scan a lightning QR or liquid QR code and send directly from the Blitz mobile app... without having the technical knowledge about how Lightning or liquid works.

In the same way that 99.9% of people have no idea how 'the internet works' in the future 99% of people will have no idea how Lightning, Liquid, or On-Chain works. Bitcoin will just work for them and I believe this is a technical and UI necessity.

Then once your friend/fellow drinker's 'liquid' balance builds up to say, 300,000 sats or greater, a Lightning Channel is automatically opened for them using Blockstream Greenlight - a Lightning-Node in the cloud that only they have access to through their seed phrase. A "maximum opening fee" can also be set so that low on-chain fees will be utilized economically. When the main chain is lesser-utilized a channel will be opened (defaulting to 5000 sats max).

"Inbound Liquidity" is created for them automatically (through settings in the app) on their Lightning Channel, for example allowing for 80% outbound liquidity, 20% inbound swapping some lightning sats to liquid sats in the background of the app. This is all done automatically. Then once the Lightning Channel is opened lightning is the primary way the user sends and receives within the app... enabling exchange, merchant, and peer-to-peer sending and receiving. The user doesn't have to 'get into the weeds', it will just work seamlessly (and it does I have tried it).

In addition, Blitz can use eCash (Cashu or Fedi) in the form of an independent organization's Lightning Sats to make very small micropayments prior to a Lightning Channel being opened. I have tried this (BTC Sessions covers it well) and it does a good enough job for things like Stacker News or Nostr.

From https://blitz-wallet.com/pages/faq/

"Blitz Wallet uses Liquid-to-Lightning and Lightning-to-Liquid swaps through Boltz until a Lightning channel is open. Currently, the minimum swap amount is 1,000 satoshis, or 0.00001 Bitcoin. In many cases, this is too expensive and excludes users from making transactions. To address this, Blitz Wallet uses eCash to send and receive Lightning payments under 1,000 sats."

Boltz, utilizing the concept of the Lightning + Liquid + On-Chain Triangle... takes a novel, interesting approach to BTCPay Server as well. This will allow (currently in Beta) merchants, individuals, and organizations to accept Liquid Bitcoin, immediately convertible to Lightning without the organization having to run complicated node software.

https://blog.boltz.exchange/p/launching-the-boltz-btcpay-plugin

If, for example, an NGO or charitable group wants to accept payments in Bitcoin, anonymously from anyone at any time, on-chain fees will be prohibitive not to mention less private, relative to using Lightning or Liquid ie layered solutions. Assuming that people want to donate a few dollars worth of Bitcoin at a time (a few thousand sats) most people will want to donate over lightning using BTCPay Server... individual, whole UTXOs are inefficient. Mobile Lightning apps, convenient and available everywhere can be used to transact without touching on-chain, and the receiving organization doesn't have to understand how Lightning actually works... or necessarily all of the technical tradeoffs.

Just like people don't understand "the tradeoffs" in the way the internet is constructed or used today.

In other words, the same principles that empower the less tech-savy individual (on Blitz wallet)... can empower lightning transactions quickly and cheaply for an organization, all without the complicated node or liquidity management:

After the 'lightning payments' are swapped to Liquid (cheaply and immediately) a liquid balance is accumulated until a reasonable number of sats are available to open a Lightning Channel (using Greenlight or another Non-KYC provider).

The organization decides if they want mostly 'inbound' or 'outbound' liquidity... and through lightning-liquid swaps that "liquidity mix" is established automatically for them depending on their use-case.

From https://blog.boltz.exchange/p/guide-how-to-use-boltz-clients-autoswap

Next, setup asks us to decide if we want to specify our minimum inbound liquidity in sats or in percentage of our total channel capacity. We choose percentage and go with the default 25% threshold. This means that once our inbound liquidity hit the minimum threshold of 25% inbound liquidity (or, in nominal terms, a bit more than 750k sats of our 3 million sats channel), Boltz Client starts rebalancing our channel.
Next we set a budget, the maximum amount we want to spend on fees, applicable for a certain budget period. We are going with 50k sats over 7 days rolling. Lastly, Boltz Client informs us that the target when executing swaps is 100% inbound liquidity, which is exactly what we want as an online merchant, have all our liquidity available as inbound liquidity.

After a certain "liquid" balance is accumulated, a certain number of "liquid" Sats are swapped to 'on-chain' without exceeding a fee threshold... in a view-only wallet with the keys stored offline.

The same 'swap' can also be executed in the opposite direction... to move Liquid to Lightning for example balancing a lightning channel or other purposes.

From the Boltz Blog (a long read but very interesting): "The first decision boltzcli autoswap setup asks us to take is if we want to:

maintain inbound liquidity via reverse, e.g. if you are a merchant and need to be able to receive Lightning payments reliably,
maintain outbound liquidity via normal, e.g. if you are running a Bitcoin ATM that accepts FIAT and needs to be able to send Lightning payments reliably,
maintain both, e.g. if you are operating a Bitcoin exchange and offer Lightning deposits and withdrawals and need to be able to send and receive reliably

"Let’s now imagine we are operating an online merchant selling amazing hats for sats and need to be able to reliably receive Lightning payments. We do not have the need to send Lightning payments out. Our current channel balance is not great for this use case as we currently only can receive up to 42488 sats, which is barely the price of one hat. Our desired channel balance is basically the exact opposite - all of our channel balance on the remote side of the channel as inbound liquidity. Consequently, we are continuing with the first option “reverse” to manage our inbound liquidity.

Next up is selecting the destination wallet, which also determines if we are swapping to Liquid or to the mainchain (both are supported by Boltz Client). We want to swap to Liquid to benefit from reliably cheap network fees and avoid rebalancing costs spiraling out of control when mainchain miner fees rise."

I think there are some very important takeaways from this 'Atomic Swap' conversation:

No new technologies or soft-forks are required to swap between Liquid, Lightning, or On-Chain.
It is inevitable that on-chain fees will rise... requiring the use of 'layered money' solutions that we can implement now... not "at some point" in the future once we have a fork that may never happen.
People, whether individuals or organizations, will want instant settlement or relatively quick settlement for small transactions... and those transactions will be secure enough for their size. Sending 10 BTC is not the same as sending 10000 Sats... one is an expensive house, the other a fast-food lunch (think Chick-fil-A). Why would we expect these different transaction amounts... to be on the same 'layer' of Bitcoin? The fast-food "lunch-line" requires instant settlement... the house purchase can wait an hour (which is remarkably fast relative to legacy payment systems).
No other settlement network can provide instant, quick micropayments like Lightning can to anyone in the world while also remaining interoperable with the world's most secure Proof-Of-Work computer network. The fact that Lightning can settle to on-chain at all is remarkable... and this shouldn't be understated in my opinion.
Liquid is obviously not the "same thing" as on-chain Bitcoin... no-one is saying that. But what Liquid does provide is a temporary, settlement layer for funds to accumulate, useful for channel balancing or transacting quickly and cheaply. Liquid is cheaper and more private than on-chain... and although it necessitates compromises ("Federation" risk) there is no other way to 'onboard' a new user, non-custodially for small amounts of Bitcoin (10$) until they have enough to open a lightning channel. Even with a 'soft-fork' my understanding is that the apps, tooling, and 'operating experience' just isn't there... it would take years to develop, not to mention the time required to educated users.
On-Chain is extremely transparent. Transparency is necessary for Global Money to expose any "inflation bug" (cough cough XMR) in my opinion. And without transparency people won't trust a blockchain. However the additions of Lightning and Liquid greatly confuse chain-analysis when used intelligently. Liquid does not show transaction amounts... and Lightning transactions aren't publicly visible anyway. The greater the layer-set and anonymity-set the more private the transactions while the base-chain can remain transparent for global money purposes.
Boltz, in my opinion, in conjunction with Aqua Wallet and Blitz are offering practical scaling solutions "today" instead of relying on a soft-fork. Just recently I sent 10$ to a friend, who owned no Bitcoin and no sats, to settle a 'bar tab'. What are the other solutions or methods available today... that allow a new user access to the lightning network, non-custodially, cheaply and quickly, for daily-spend amounts of Bitcoin? Now... my friend can buy a coffee, or tip stacker news, or save a few hundred thousand Sats (allowing access to a lightning channel) all in one app. Isn't this what we want, after all for the vast majority of new users? A mobile app can never replace on-chain savings for long-term use (buried in the back yard in a treasure chest etc, chain in a steel box LOL...) but it can get Bitcoin into the hands of millions who don't have access today and in the near future not to mention many businesses and organizations.

I look forward to seeing how all this develops, and I wonder why there isn't more discussion of these kinds of apps or tradeoff-technologies.

From Boltz (https://blog.boltz.exchange/p/launching-the-boltz-btcpay-plugin):

"Boltz.exchange plugin is going to be the most impactful plugin ever released on BTCPay. Be on the lookout. [Alan of Strainly on September 8, 2024]"

I hope Alan is right and I am hopeful.

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221 sats \ 11 replies \ @ca 2 Dec

If we'll need to use Liquid for scaling, we can consider Bitcoin a failed experiment.

123 sats \ 1 reply \ @freetx 2 Dec

Well, there is no "solution" to L1 scaling. Its a fundamental constraint.

There needs to be an L2 for scaling....whether thats LN, Ark, Liquid, etc. They each have various functionality and security trade-offs.

The negative of Liquid is that it relies on a federation to provide security/transactions. However, for that con, it offers several pros, like Confidential Transactions and a more expressive OPCODE set (including OP_CAT for covenant support)

Personally I trust Liquid more than a fully custodial solution like WoS or other "hosted LN wallets".

10 sats \ 0 replies \ @028559d218 OP 2 Dec

Custodial solutions, from what I can tell, in the United States that are non-kyc are going away. Unless the next administration employs major changes, they will not be allowed to operate openly in the United States.

10 sats \ 4 replies \ @TheBTCManual 2 Dec

Operative word is need, if its a need yes we're cooked but if its an option others can use who are willing to accept the trade off for a cost saving then I think its a lesser evil than custodial services

36 sats \ 3 replies \ @denlillaapan 2 Dec

how evil do you think (well-established) custodial services are, when it's for small balances and only to have newbies get a feel for things?

I agree that custodial lightning is a little bit disingenuous (OMG look how great and fast and cheap bitcoin is! but that same magic could be done via Venmo or Revolut etc), but still good enough an approximation

36 sats \ 2 replies \ @TheBTCManual 2 Dec

I don't think they're evil, I don't think these businesses have malicious intent but the capacity to be malicious remains and the regulatory risk involved remains, for small balances sure, what's the point of having a node to receive 21 sats zaps? Your sunk cost is more than you'll ever use?

I agree with the whole disingenuous aspect of using custodial services to punt Bitcoin's network, like LN isn't cheap, you need a node, you need to understand the technical aspects, and manage operational cost of rebalancing, and staying online.

If you're a business it shouldn't be too much of an issue but for an individual, id say unless you're doing $500 worth of Bitcoin purchases per month whats the point of using non-custodial LN?

It's okay to rebalance now with on-chain because the fees are low, but if we get to a place where 100-200 sat per vbyte hangs around for a long time, rebalancing through a Liquid or RSK has to be entertained at some point, no?

Theres no ark, channel factories etc, yet, so the toolkit is there, again use if you understand the risks

10 sats \ 0 replies \ @028559d218 OP 2 Dec

the percentage of people today, buying at least 500$ of Bitcoin per month... I believe is a very small percentage. Very small.

Stacker News is a bubble no question and is not representative of the 'general population' even of a Western country... much less "the whole world". The vast majority of people still don't know much about Bitcoin, if anything at all. And Lightning is completely unheard of

10 sats \ 0 replies \ @denlillaapan 2 Dec

Yeah don't hate your pathway, it's pretty smooth and strikes a nice balance

1 sat \ 2 replies \ @DarthCoin 2 Dec

Yes. And all the morons pushing this "liquid" narrative are only making somebody else dirty work...

0 sats \ 1 reply \ @joda 2 Dec

Come on dude, they're not morons. I don't use liquid myself but what happened to "everything is good for Bitcoin?"

10 sats \ 0 replies \ @028559d218 OP 2 Dec

Just watch. When the BTCPay server 'Boltz Plugin' is released... it will be everywhere and people will be using it, sending sats converted to liquid converted to on-chain Bitcoin without them even knowing it.

Something like this is sorely needed, in my opinion, and that's why I wrote the above post.

0 sats \ 0 replies \ @028559d218 OP 2 Dec

Thank you for your opinion, you may be right or you may be wrong. I am curious what others in the community think.

Boltz, putting out real solutions for people today has put a lot of work into Liquid Swaps and really likes them for their utility.

31 sats \ 1 reply \ @joda 2 Dec

You keep talking about non-custodial and self-custody but what you have non-custodially is not Bitcoin.

The fact that you need an essay to explain all of this is telling-- It's too complicated.

I really get where you're coming from, and I have nothing against Liquid per se-- it's a decent way to get some privacy. But teaching someone Liquid before teaching them Bitcoin is very much putting the cart before the horse.

I know you want to give them some sats but Bitcoin is complex enough already. Even if it takes 10 minutes and a dollar to settle, I would much rather send on-chain to a noob. They need to understand the foundations before learning about side chains or even lightning.

0 sats \ 0 replies \ @028559d218 OP 2 Dec

My example I have in mind, is a charity in the developing world in a really broken, poor country.

The locals don't have the sats to open a lightning channel, and they can't trust the 'custodians' to give them their funds in the region where they live.

And they can't afford the on-chain fees, main-chain, just to accept enough UTXOs to open a lightning channel so they are left with 2 choices.

Either not use Bitcoin because it's not affordable... (provided they can run BTCPay server at all) or...

Run BTCPay server on a website, accept donations via lightning QR code (BTCPay) and have those donations automatically converted to Liquid (Lightning->Liquid).

Once enough Liquid UXTOs build up to a few hundred thousand sats... they're used to open a lightning channel. The liquidity is then managed automatically for them as "receivers" using Liquid

With the ultimate goal of stacking enough sats to create long-term, savings-oriented, fee-efficient Bitcoin UTXOs that they can use for important reasons.

That is the purpose of Liquid - it's not 'to use Liquid' it's just a temporary medium in struggling parts of the world.

121 sats \ 10 replies \ @iguano 2 Dec

loving this solution, thanks for sharing, something important to also add. Liquid enable private transactions, meaning that only the sender and the receiver can know the amount transacted on each transactions verifiable on the block explorer. putting this together with lightning enable a very private solution for the average joe.

121 sats \ 8 replies \ @DarthCoin 2 Dec

LN offers enough privacy if you really knows how to use it. Liquid is just a bullshit failed project that now Blockstream wanted to give it some use. Is just marketing.

0 sats \ 6 replies \ @iguano 2 Dec

100% sure you didn't read the article.

20 sats \ 5 replies \ @DarthCoin 2 Dec

I read it entirely and also I played out with the wallet. I know very well what am I talking about.

0 sats \ 4 replies \ @iguano 2 Dec

so you clearly not understood the article. read it again.

121 sats \ 3 replies \ @DarthCoin 2 Dec

No need. Is just a pathetic marketing for Liquid crap.

0 sats \ 2 replies \ @iguano 2 Dec

if you READ the article, you will see the disclaimers about liquid, so I'm 100% sure you didn't read it. is VERY WELL specified there also the goal and the purpose of using it. The people who comment without reading lose credibility.

10 sats \ 0 replies \ @028559d218 OP 2 Dec

You are right. The point is not to 'use liquid'... Liquid is just a temporary tool in order to 'stack sats' and manage lightning Liquidity among people who don't have the initial 300-500k sats to open a lightning channel (much of the world).

I posted this elsewhere... that once BTCPay has a 'Boltz Lightning-Liquid' extension available it will be everywhere. It allows people to accept 'non-custodial' lightning without having the initial lightning node.

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1 sat \ 0 replies \ @DarthCoin 2 Dec

I do not need you to offer me "credibility". Is just common sense to see that the article is pushing a crap narrative.

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0 sats \ 0 replies \ @iguano 2 Dec

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0 sats \ 0 replies \ @028559d218 OP 2 Dec

I agree completely. Is it the "perfect" solution for everyone for every amount? Maybe not but it's a useful tool that Boltz is making available today for different income-levels.

Bitcoin is supposed to be freedom money for everyone... but the current model is ossifying very very fast and 90% of the Bitcoin will wind up in the hands of the elite and the institutions (serious stackers + Blockrock and fidelity) if practical solutions aren't developed soon that work.

Bitcoiners don't want to admit this but it's true.

100 sats \ 18 replies \ @BTCLNAT 2 Dec

Well, I've been reading this post and there are things I don't quite understand. Does the person you want to educate and adopt want to have seed phrases or does he want them?

If he doesn't want them, then a custodial wallet. If he wants them but doesn't have technical knowledge, then Phoenix or Greenwallet. At least in Phoenix, with the $20 he can open a channel directly with a deposit in the Lightning Network. Greenwallet too, but I don't know how much the minimum deposit is in the Lightning Network for this wallet.

So I don't understand why you're looking for two scalability solutions, Liquid and Lightning, for the same result. It seems more complicated to swap, to change from one wallet to another. That's my humble opinion.

131 sats \ 12 replies \ @DarthCoin 2 Dec

This wallet only wants to over complicate things using useless methods. A total nightmare for a noob. I've tested this wallet and even knowing how each part is working is really confusing and adding more complexity for nothing.

They only push the narrative that Liquid will fix Bitcoin. Morons. Bitcoin and Ln works as designed, is necessary only better education.

100 sats \ 5 replies \ @BTCLNAT 2 Dec

Friend @DarthCoin, I thought that with age I was becoming stupid, because I did not understand how such complex and tangled mechanisms were needed to explain something so simple. But it seems that I was not so bad or lacking in understanding. Just as you say, Bitcoin and Lightning solve everything. Thanks once again.

10 sats \ 4 replies \ @DarthCoin 2 Dec

The thing is that all these many years testing and using almost all the apps available, I can see all the differences, pro/contra, features needed etc but also I can see very easily bullshit stuff.

Some people only want to reinvent the wheel, instead of focusing on improving what is already working.

Yes, LN is not perfect, but damn it, is just a 6 years old kid ! It have much to grow and became a strong man! We are just starting and people want to have perfect systems.

In the last pod with Lunaticoin exactly about this we were talking: in 2012-2014 we were having only some ugly 3-4 wallet apps. Now we have over 20 with all kind of features.

100 sats \ 3 replies \ @BTCLNAT 2 Dec

The thing is that there will always be those who are really smart and want the good of others and that means their well-being in return, that is very good. But there are the bandits who for their own benefit do not care about harming others.

Today I have to share in the educational project of CubaBitcoin, the Lightning Network and the use of Bitcoin in daily life. Some of the students are nocoiners and others shitcoiners. So to level things up, in a very basic course the proposal is:

Understand why we need Lightning Network, they already saw Bitcoin Onchain last week,

Airport Analogy (does it sound familiar to you?) and finally try with Wallet of Satoshi the speed of LIGHTNING. I only have 1 hour to do everything. During the week we continue to go deeper online with them.

But if we want people to learn and adopt Bitcoin as what it is, MONEY. For me Lightning and the main chain are all they need. I always question the rest.

Even one of the instructors at CubaBitcoin asked me:

How could you explain to the guys that Lightning is Bitcoin and Liquid is not? So I had to mine for knowledge. But now I see it clearer and I can try to make it clearer for others.

Once again, thanks bro.

0 sats \ 1 reply \ @028559d218 OP 2 Dec

Lightning and liquid are completely different, they are not the same. However liquid and lightning used together intelligently, allow continual, non-custodial exchange and savings of Sats even when fees are high.

In wealthy countries maybe it doesn't matter... people will pay the on-chain fees regardless once they figure out what Bitcoin is.

But in relatively poor or developing countries, the fees will pile out of control in my opinion. Liquid is then used to manage liquidity... or to accept lightning payments through BTCPay server just long enough to have enough Liquid-Sats (a few hundred dollars worth) to open a Lightning node. Lightning QR -> Liquid (BTCPay Boltz works like this as I have detailed above).

That's the purpose.

0 sats \ 0 replies \ @DarthCoin 2 Dec

No. Liquid is just a bullshit narrative. See here: #791278

0 sats \ 0 replies \ @DarthCoin 2 Dec

The idea of the airport analogy is not mine, but is a good one. Yes I wrote about it in my guides collection because is good to be used to teach noobs with it.

I wrote also another analogy with the glass of water here: #552822

How could you explain to the guys that Lightning is Bitcoin and Liquid is not?

Here #791278

0 sats \ 5 replies \ @028559d218 OP 2 Dec

I love lightning, I use it every day. Lightning is nothing short of amazing. However I can't find a single person, not one in the 'general population' how knows what it is, or has even heard of it.

Like I said Lightning is great however in order to onboard as many people as possible, non-custodially to it we need scaling solutions. Liquid is a temporary medium for managing liquidity, and running BTCPay server, accepting Lightning without having a lightning node actually set up.

33 sats \ 4 replies \ @DarthCoin 2 Dec

accepting Lightning without having a lightning node actually set up.

That's totally bullshit. Any other swap to liquid or other bullshit REQUIRE Lightning liquidity. And if you do not run it for yourself, then is custodial bullshit.

Please try to use Liquid without LN. Is totally useless.

0 sats \ 3 replies \ @028559d218 OP 2 Dec

That's not true though? The user sends Lightning to a QR Code (like on BTCPay) and the org running the BTCPay receives Liquid.

Once enough 'liquid gets stacked' to open a lightning node, one is opened automatically. That way any person, any organization can accept lightning without having a lightning node first until they get enough sats.

I have tried it, and used the Boltz exchange many times and it works well. What am I missing?

0 sats \ 2 replies \ @DarthCoin 2 Dec

What am I missing?

You are missing the point. Liquid is just a crap failed useless project. Do not try to reinvent the wheel now.

0 sats \ 1 reply \ @028559d218 OP 2 Dec

From https://river.com/learn/how-many-people-use-bitcoin/

"At approximately 32.9 million active entities, this would mean the average non-exchange, non-miner entity owns 0.46 BTC, or around $12,420. The median is significantly less, at 1.34 addresses per user and the median address holding roughly 0.005 BTC, the median entity would have roughly 0.0067 BTC, or around $180.90."

180.90 as a 'median' (if these figures are to be believed). That's... 189k Sats give or take per person at median. That's probably on the 'low end' of what's required to open a Lightning Channel?

33 sats \ 0 replies \ @DarthCoin 2 Dec

meaningless stats that doesn't prove liquid is required. Also is missing an important piece: private LN channels. Nobody knows how many there are and how much liquidity is in those private channels. Onchain stats are meaningless in bitcoin usage. Onchain addresses are used EXCLUSIVELY for opening/closing LN channels.

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0 sats \ 4 replies \ @028559d218 OP 2 Dec

Thank you for your comment.

There is no way, from what I understand, to give someone 10$ of Bitcoin and have them hold it non-custodially. It doesn't work.

On-chain is too expensive. And they can't 'have lightning' from 10 dollars. The channel opening feel isn't efficient enough at 10$... even if Phoenix allowed them to do it (and they won't anyway). Mutiny wallet if I recall correctly wanted several hundred thousand sats to open... and that's the recommendation elsewhere too.

That 'poor person' in the developing world, or any person for that matter with access to poor-quality money, either gets custodial Bitcoin (which can be taken away) at 10$. Or they can get liquid at 10$ for a short time until they figure out another solution that's on-chain.

Phoenix is great it really is but again the opening fee is too much. Maybe with 50$... or 100$ but what happens if they don't use the wallet again for a while? Or the on-chain fees are too high at that exact moment? It doesn't work that well in my opinion for new users.

Liquid is 24 cents for a transaction and the user will have a channel opened automatically... at the right time. We need to have a serious conversation about this as on-chain transactions for a billion people for every-day transactions is a fantasy it's impossible.

100 sats \ 3 replies \ @BTCLNAT 2 Dec

Unfortunately, I don't know what's going on now, I can't send pictures on SN. I currently live in one of the poorest countries in the world, I opened a channel in Phoenix with about 10 dollars, today it would be 15 dollars. Of course, you always have to take into account the mining fees.

Back then I used WoS to accumulate and then I made the transaction to Phoenix via Lightning Network. Problem solved in that case.

But oh well. We always want people to learn and adopt.

0 sats \ 2 replies \ @028559d218 OP 2 Dec

Liquid is a tool like anything else.

When people use lightning everyday, on Stacker News and Nostr, in addition to levels of lightning wallets - custodial, non-custodial, full node, the 'phoenix/LSP model' etc... In addition to full utxos to move around, things aren't so 'clear cut' and black and white.

Having a tool like liquid with atomic swaps is immensely useful in my opinion to balance security, fees, decentralization, liquidity, sovereignty etc. It's the whole package that matters.

100 sats \ 1 reply \ @DarthCoin 2 Dec

Liquid is a tool to fool clueless noobs into thinking that is useful and necessary. And Liquid is not decentralized at all. Are just a bunch of federated members.

0 sats \ 0 replies \ @028559d218 OP 2 Dec

How do we onboard the world's poor, non-custodially, to Bitcoin?

47 sats \ 3 replies \ @OT 1 Dec

I like this throughput for people that are interested in learning more about bitcoin. But for your scenario I would simply use Wallet of Satoshi. It's quick to setup and cheap. It just works.

I understand its not ideal and you want them to start off on the right foot in holding your own keys etc. I think swaps need more competition to bring the fees down. Liquid and LN swaps done in the background don't work well for small zaps. Custodial LN does and it gets noobs interested too.

69 sats \ 2 replies \ @028559d218 OP 2 Dec

I am using a Cashu mint for small amounts of sats on Blitz Wallet and it works. I have zapped Stacker News using it with just a QR code... logged in and not and it still works?

Some apps and developers cannot legally have custodial control of others peoples money even sats. No of course it's silly but in some places it's the law. Cashu and Fedi can claim non-custodial ownership... while beginners can use them and hold their own keys.

It's easy to have a few sats (like 500 or 1000, 50 cents or maybe a dollar today) and then use them on Blitz to converse on Stacker News. 1000 sats is enough to post A LOT on Stacker News and it's not a lot to use in most places in the world where people are saving in Bitcoin anyway.

Wallet of Satoshi isn't available in the United States the world's largest capital market... and unless Trump changes things i don't know if they can come back.

14 sats \ 1 reply \ @OT 2 Dec

I like cashu.me buy the problem is tge page for receiving ecash or lightning. This will confuse noobs and you'll have to spend 10 minutes explaining the difference.

Another custodial web wallet that you could use is coinos.io. It's also a little confusing as it has all the options like onchain, LN, liquid and ecash.

I don't like that Wallet of Satoshi has the best UX and user experience, but it does (for now).

0 sats \ 0 replies \ @028559d218 OP 2 Dec

There are definitely some good custodial solutions. Even an exchange's Lightning can be a good custodial solution too for some.

But the community is always looking for 'non-custodial solutions' that reduce the 'concentration risk' and work more or less out of the box. That's why I wrote the above article (out of the box with emphasis of course)

37 sats \ 1 reply \ @j7hB75 2 Dec

With Alby Hub you could add a subaccount for your friend, have them download Alby Go, link their app, and then send them the sats? Seems like a quick way to onboard a friend without fuss.

0 sats \ 0 replies \ @028559d218 OP 2 Dec

alby looks interesting and i'll have to try it sometime. however it looks like the mobile app... has to be connected to a lightning node somewhere (?) and i can't have a friend/fellow drinker depend on me. also it looks complicated - a user's first app should be one and done on their phone imo.

independent, non-custodial, low-fee access to lightning or self-custody was the focus... liquid is the 'poor-man's on-chain' and place to start (?) and its interoperable with lightning which is cool.

111 sats \ 1 reply \ @boltz 2 Dec

Nice write-up and thanks for the kind words! We are on Stacker too, so just @boltz for questions ✌️

100 sats \ 0 replies \ @028559d218 OP 2 Dec

Thank you so much, and thank you! When I read about Boltz and BTCPay it just clicked and so I decided to post about it! Keep up the great work!!!

33 sats \ 2 replies \ @Signal312 2 Dec

Is Boltz (and Aqua, for that matter) exposed to pressure from the US government in terms of being forced or pressured to shut down access to US residents (like Wallet of Satoshi and Phoenix did)?

That's happened with a lot of wallets in the past year or so.

From my understanding there's also an argument against Liquid, which goes along the line of "it's a side chain which will eventually have the same problems as bitcoin, as transaction volume picks up". I'm not sure when that will happen, but maybe by then there will be other solutions.

So far, I've been pretty satisfied with stashing in Aqua until the stash gets large enough, and then swapping to on-chain. It seems to always work.

The same can't be said for using self-custodial lightning. Maybe I'm an idiot, but I've had one problem and hassle and headache after another. And every problem requires tons of work, what with contacting developers or going to telegram groups to try to figure out how to solve it. It's absolutely not easy at all. I haven't lost sats so far, but it feels like it's come close a couple times. In my opinion, it's nowhere near close to having normal people use it - it's only for highly technical, highly motivated people who are able to spend a lot of time on it, as a project.

Maybe better self-custodial lightning tools are coming along (maybe Alby Hub?) that will make it a lot easier for people to be an "Uncle Jim". That seems far off, though. And also...how realistic is that? I personally wouldn't want to undertake a responsibility like that except for very close family.

0 sats \ 1 reply \ @028559d218 OP 2 Dec

If Boltz and Aqua (Boltz being non-custodial) are still exposed to government-shutdown risk... then no mass-market wallet is safe.

Non-custody of funds should protect these wallets... however Phoenix was non-custodial too and it shut down. My understanding is that the reason they shut down was their liquidity tool... and profitability being an LSP (lightning service provider). They earned a small commission 'helping' people open lightning channels, earning a small fee in the process while providing inexpensive 'liquidity' for inbound transactions (at a small fee of course).

They were doing this non-kyc?

That is the entire LSP model... and if they're at a shut-down risk then I don't know how any of these wallets will fare if they really got big enough at least in the United States. Bitcoin has survived because it cannot be shut down, has no single point of the failure is like digital roaches etc lol

107 sats \ 0 replies \ @Signal312 2 Dec

Maybe Boltz is safe. Looks like they're based in El Salvador.

https://bitcoinmagazine.com/business/between-bitcoin-layers-boltz-builds-trustless-transfers

26 sats \ 13 replies \ @Solomonsatoshi 2 Dec

Coinos.io online wallet is far simpler and easier for a new user.

Sure its custodial but what does that matter for a sum of $20?

Once they get used to LN and maybe want to start stacking then they might want/need to move up to a non custodial wallet.

7 sats \ 12 replies \ @028559d218 OP 2 Dec

Some custodial wallets are great, I have used them. However in my opinion the question is how to provide 'non-custodial' tools to people too. Custodial wallets in the US at least are fast becoming kyc-mandatory...

And custodial tools in other parts of the world are not trustworthy. If you're living in a developing country with hyper-inflation, is it safer to trust a 'custodial' solution with shaky governments and bare-bones institutions (tons of corruption) in your country...

Or an 11-of-15 multisig based in Western countries where you actually hold the keys that's open-source? Because some people really face that choice.

I know this sounds like a simple decision but it may not be for some stackers in some non-western parts of the world.

0 sats \ 11 replies \ @Solomonsatoshi 2 Dec

For someone just starting in Bitcoin and LN payments I suspect custodial is the place to start. Definitely move on to non custodial over time but currently the complexity of non custodial still seems likely to be a significant barrier to new users. Can you not use a coinos.io custodial LN wallet in the US?

21 sats \ 8 replies \ @030a29f333 2 Dec

I'm assuming OP is describing a scenario in which custodial solutions aren't easily available. Coinos is great, but if they go the way of requiring KYC/blocking access in certain regions, where do you turn next?

0 sats \ 7 replies \ @Solomonsatoshi 2 Dec

Sure if you cannot use it someplace then you cannot use it. IDK if you can use coinos.io in US. Can't see how anyone would stop you? Hopefully the US Chokepoint2 obstruction of Bitcoin MoE will cease under the new administration?

0 sats \ 6 replies \ @028559d218 OP 2 Dec

If I had to recommend one non-custodial tool for newcomers (at least in the United States) without looking at current 'on-chain' fees... it would be Blitz wallet and non-custodial liquid. For 30-50$ or so it has the perfect product-market fit.

Cashu/Fedi for small amounts (under 1000 sats/1$) and then liquid up to maybe 200$ max. Yes I know 200$ may be a lot for some people (it is) but if fees are 5$ on-chain and you want to onboard someone 'now' that 5$ quickly becomes 5% of the transaction cost and you have completely lost them on Bitcoin.

The goal is to get them to non-custodial lightning for social media interaction for sending and receiving. If it is for 'saving' only that is a bit different IMO... and atomic swaps lightning-liquid allow someone to 'spend' liquid everywhere lightning is accepted it is a great idea imo.

0 sats \ 5 replies \ @Solomonsatoshi 2 Dec

Trouble is non custodial is far more complex than custodial. If custodial wallets like coinos.io work in the US why not use them? It seems likely the new US administration will ease back on the Chokepoint2 obstruction that wallet providers have been getting hit with.

0 sats \ 4 replies \ @028559d218 OP 2 Dec

Re the new administration... we don't know yet. Many Bitcoiners oppose the accumulation of sats custodially. I think there is a place for custodial lightning of course but it's much healthier, especially in the long run if people hold their own keys.

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0 sats \ 1 reply \ @028559d218 OP 2 Dec

I've never used Coinos in the US (so i'm not familiar with it). But stacker news had to go 'non-custodial' with the sats otherwise pay lawyers big bucks to get a money-transmitter license. What do you think?

10 sats \ 0 replies \ @Solomonsatoshi 2 Dec

Dont know why coinos.io wallet would not function adequately for someone living in USA.

SNs is in contrast incorporated in USA so it follows that it is subject to US chokepoint2 regulations.

Hopefully such blatant Bitcoin MoE obstruction will cease with the new US administration?

343 sats \ 0 replies \ @DarthCoin 2 Dec

Liquid is not a L2... is a sidechain. Liquid was created with a specific intention. It was coming up early in the block size wars as a proposal for exchanges, to have some kind of interoperable network to move funds between them, faster and cheaper than BTC onchain, but still using BTC. I kinda agree with that use case. A federation that is moving funds privately between them.

But then LN was launched and come in force and Liquid kinda lost the use case. The block size war was also over, segwit in place and onchain mempool liberated, so even the exchanges that were excited about Liquid, they were still preferring to do it over onchain as usual.

LN got more and more grip and Liquid was slowly forgotten and became useless. Now Blockstream, want to push people into using it as it would be a "cheapest and fastest" way instead of LN, because they do not want to see it terminated (as nobody is using it). In the end they put a lot of effort and money to build it.

IMHO they should go back to the original idea to be used for private entities and not pushed to large masses of users.

Now all those onchain maxis want to use Liquid instead of preparing in time, with calm new LN channels. That's why this crazy mania with Liquid. But as usual when the onchain fees are going down, Liquid use is going to meaningless until zero.

A TLDR:

121 sats \ 10 replies \ @DarthCoin 2 Dec

The on-chain fee for accepting 20$ of Bitcoin is... 50 Cents - 1$ and they don't have a Lightning channel.

BULLSHIT, this is the fiat mentality. Over on Bitcoin we use only sats, not $. People that think "a LN channel cost x$" are those that never get the fuck out from fiat and that's they try with these over-complicated and useless methods.

I've tested Blitz wallet. IT'S A FUCKING MESS, especially for a noob. They introduced more complexity instead of making it simple.

Any wallet using submarine swaps is a fucking nightmare. Swaps out to other chains must be done in specific occasions, not as transaction! And all this narrative that is pushed of using Liquid is the dumbest idea ever.

0 sats \ 9 replies \ @028559d218 OP 2 Dec

Stacking sats is what Stackers do... But the world does not really do this yet. People will learn eventually but they need education

0 sats \ 8 replies \ @DarthCoin 2 Dec

That doesn't mean you have to fool noobs into believing that Liquid is the "salvation". It is not. Is just a crap failed Blockstream project that now they want to push it forward.

0 sats \ 7 replies \ @028559d218 OP 2 Dec

Without making Bitcoin easy to use, imo, 1% of the world will end up with 90% of the Bitcoin.

Bitcoin will be stacked, big time, by the 'Elites' and the institutions before people 'really' understand it. This is already going on I believe.

And so what right? Well by having imperfect solutions that are temporary, binary in whether people can get access to Bitcoin at all, we can give people a chance to stack sats and get channels open.

That is what I believe and why I wrote the above post.

0 sats \ 6 replies \ @DarthCoin 2 Dec

There are many ways to use bitcoin with LN, without any bullshit Liquid.

1% of the world will end up with 90% of the Bitcoin.

So be it.

Without making Bitcoin easy to us

And that bullshit app using liquid swaps you think is making it easier? LOL it just adding more complexity on top of LN.

0 sats \ 5 replies \ @028559d218 OP 2 Dec

That is an interesting take.

I want to be able to technically, ethically onboard more people to Bitcoin, those who need it the most, ie those in developing countries with hyperinflation etc. That was the point of my post... anyway.

0 sats \ 4 replies \ @DarthCoin 2 Dec

It's SURVIVAL from this point forward.

0 sats \ 3 replies \ @028559d218 OP 2 Dec

what do you mean?

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0 sats \ 2 replies \ @iguano 2 Dec

BTW I tried the wallet, but there is a thing that is not working or missing, If you receive in lightning (i know it swap it to liquid) , then you cannot pay a regular Bitcoin onchain address. Thats is needed as so far almost none ATM use liquid or lightning.

0 sats \ 1 reply \ @028559d218 OP 2 Dec

That is correct. I hope they add that feature in the future. I think the point of the wallet... was to onboard people to lightning in the least painful, but non-custodial way possible.

It is possible to accept on-chain on the wallet... but the developers have stated the Wallet is designed for lightning mostly..

Edit: I hope that most/all BTMs will use Lightning in the future. As fees rise it's logical that they all will to reduce fees and get quick payouts, liquidty, balanced channels etc.

10 sats \ 0 replies \ @iguano 3 Dec

Well, i think is a mistake to not allow people to use mainchain if needed. I think AQUA is better option for this ( the UX sucks i know).

0 sats \ 0 replies \ @denlillaapan 2 Dec

Excellent rundown, thank you very much.

And they don't have the interest or time to 'sign up' for an exchange - If Bitcoin is so great why does 'an exchange' have to be involved anyway? KYC, paperwork, waiting periods WTF what a great way to turn newbies off to Bitcoin.

I usually use this moment to educate peeps about the madness of the incumbent banking/money system. Since knowing how money works (or some skepticism) usually is a prerequisite to become a Bitcoiner, in a sly roundabout way I am onboarding peeps this way

0 sats \ 1 reply \ @BlokchainB 2 Dec

I use liquid to hide small utxos I think this is a reasonable solution for this problem

76 sats \ 0 replies \ @028559d218 OP 2 Dec

It is a tool like anything else.