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40 sats \ 10 replies \ @justin_shocknet 21 Apr \ parent \ on: Cashu vs Fedimint bitcoin
Only if, to be intellectually consistent, you'd also say that ETF's scale Bitcoin.
Custodial solutions are not "scaling".
If you tell people that their Bitcoin is safer in your system vs other custodians based on a false premise, that's scamming.
You've missed the point, there's nothing incredible about it. It's a hoax, custody is not federated, it's no safer or any more distributed than an SQL database.
Only if, to be intellectually consistent, you'd also say that ETF's scale Bitcoin.
To be "intellectually consistent," you should have mentioned that you can't withdraw bitcoin from your ETF while you can from a fedimint.
edit: I already regret this comment since I don't actually have a horse in this game. Just wanted to point out that there's still a big difference between ETFs and fedimints.
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He already tried that gotchya, SoV vs. MoE... sub ETF for Wallet of Satoshi if you like.
A database is a database.
Even at that, at least ETF's open up the collateral use-case, I can spend from an ETF to a Lightning gateway ... which is all fake L2's do ... without without actually selling any claims to Bitcoin thanks to margin.
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WoS could be rug-pulled by a single malicious developer or CEO.
In a Federation, potentially hundreds of well-known, local community members would have to collude to rug-pull the community's funds. No single person could. Not even 10 people colluding could if it's a 20/100 multi-sig.
These are very important nuances.
Look, I'm only trying to push back on your calling Federations outright "hoax/scams". If you think Federations are scams, WoS is 100x worse! Yet, you seem to think there is no difference between them.... no nuance at all. ETF's and centralized companies like WoS are very different from Federated Mints.
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Fedimints have already rugged people, by just a single member going down.
If WoS rugs you you know who to blame, mints exist to point fingers.
There's nothing that requires collusion, they have a single point of failure. Get that through your head, it's a scam, there's no protection via distribution. You've been lied to.
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I'm not aware of any large-scale, properly setup Fedimint to-date. So, of course there's been rugging with them.
But, from having a basic understanding of the technology, it's clear that it shouldn't be called a "scam". That's too harsh. It's a tool that scammers could use, but it can also be a powerful scaling tool.
Perhaps I have been "lied to" about how Fedimints work. I admitted earlier that I have not audited its code. But I am a software engineer by trade, and I understand Bitcoin/Lightning very well. If Fedimint doesn't work the way I think, I know for a fact that it wouldn't be difficult to create my version of how Fedimints have been pitched to me. It's not like I'm believing in magic. I've learned enough about them to understand the basics. Fedimints, the way I've learned they work, can be incredible tools, if used properly.
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large-scale, properly setup Fedimint to-date.
Liquid, also by Blockstream, is effectively the same thing. Liquid still relies on swaps, a single point of failure, and you still need COMPLETE AND TOTAL TRUST as to how many key holders there actually are.
the technology
There is no technology bro, THAT IS THE SCAM... "the technology" you speak of is a hoax.
create my version
Get to work then, because the sooner you do the sooner you'll discover it's not possible and move on to something not retarded.
If it were possible we wouldn't need Bitcoin and proof of work in the first place.
Two quick things:
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There are different categories of scaling. ETF's scale Bitcoin as a savings tech, but they do not scale Bitcoin as a MoE. Federations scale Bitcoin for both use-cases. I'm very interested in scaling as an MoE because I view it as an existential threat to Bitcoin if it cannot scale in this category.
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Saying that a properly setup Federation is akin to an SQL database is disgustingly misguided. If the federation is setup well, no single person has unilateral transactional power. It's just a multi-sig setup where potentially a hundred people have 1/100 keys. It's 1000x better than traditional banks, while giving the people the same conveniences as traditional banks. Nothing beats self-custody, but I think Federations can be an incredible middle-ground tradeoff for the average person living paycheck to paycheck anyway.
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It doesn't scale it as an MoE either any more than Wallet of Satoshi (SQL database) does, the IOU passes through a Lightning Gateway. Lightning is the scaling layer, not the mint.
no single person has unilateral transactional power.
That's where you're wrong, kiddo.
Fedimints aren't even multisig last I checked, just promises of FROST maybe at some point in the future... even so, for Lightning, there's inherently a single spender because channels are only 2:2
There's also the issue of a single gateway API point of failure that only needs to be taken down to rug your shittokens.
(Ark is also a scam for many of the same reasons)
the average person living paycheck
You're not even debating the tech at this point, just virtue signaling about poors... pathos is at the top of the scammer playbook.
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I think we have different ideas of how Fedimints work. I haven't audited the code, so I could be wrong. But from my understanding your comment that "Lightning is the scaling layer, not the mint" is not correct, and could explain our disconnect.
Lightning works on the edges of mints, to connect them to other mints or other sovereign LN nodes. There could be hundreds of LN node operators within the mint. They get paid in the mint's ecash whenever someone uses their node to route payments to the outer world. But within the mint, ecash is the database layer. The raw Bitcoin held inside the mint is held in a multi-sig setup where potentially hundreds of people hold a single key in offline, cold-storage. Those people could collude to rug pull, and that's why I'm so interested in the social element to this, because there are infinite social-layer ways it can be done. Similar to how banks prevent executives from stealing funds.
So, that's my understanding
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You hold the idealized scammer marketing version you want to be true, I hold the actual technical reality version.
If scaling MoE is your thing, there's Lightning on the protocol level, and custodians on the aggregation level. End of story.
Mints are neither, they're just inefficient databases sold by scammers attempting to distinguish themselves from other databases.
The shittokens are no different than any database record in that all you have is HOPE that someone will exchange you sats for it.
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