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When onboarding friends and family, there's the wish to provide them with something that's self-custodial and not too complex. For people that are starting slow but will keep stacking in the future, we cannot just recommend them to stack 10k sats or 100k sats UTXOs. Since they're stacking for the long term it doesn't seem responsible to recommend them that.
So there comes the Lightning Network. They could stack there and swap out eventually when they reach 1-10M sats. The thing is, Lightning (in its self-custodial form) isn't really fit for this use case. Because to receive 100k sats, you first need to get some inbound liquidity from LSPs that sometimes isn't even 2x the amount you're receiving. So at best it's good for your next 100k but then you'll have to do something onchain again.
And you can always open channels to them yourself. But it's hard to predict who will stack hard and who will just forget about it. Also it puts some responsibility onto your node's uptime.
What I'm doing lately is recommending something like Wallet of Satoshi. As some kind of entry level test. Because if you have to explain onchain fees, UTXOs, channels, and inbound liquidity to a newbie, they're going to run away. Then whoever passes the first test might get a channel from your node or at least from an LSP on a self-custodial wallet.
And in general, LN is not good for stacking. If onchain fees were off the roof you would struggle to resize or open new channels while growing your stack.
So what's the way of scaling Bitcoin so that hundreds of millions of people can save in a self-custodial way?
Maybe multipeer channels make things better, where people in the “spending more than saving” part of their life could peer up with others doing the opposite. Or maybe it's something like Fedimint.
But on the other hand, should we be worrying about this now? Onchain fees are soooo cheap (as cheap as possible actually).
What do you think?
I would agree that there is some "worry factor" while even some of us (yours truly included) are not 100% clear on Lighting rules and channel liquidity, it is almost impossible to ask/encourage new guy to participate and have 1 mil sats channels (1M is $1000 mind you) just for buying coffee and movie tickets once in a while. Phoenix mobile wallet and Blink making it easier for a new folks to grasp or experience the new cool reality but there is a rather steep learning curve and not everyone will make it... IMO. YMMV
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No, no worrying. Build for the future and anticipate it, but no need to worry
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3 sats \ 2 replies \ @klk OP 19h
Right. I've used the wording. Should we work on scaling Bitcoin now? Or is it too soon?
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Then I agree. Yes!
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0 sats \ 0 replies \ @klk OP 18h
Any ideas or promising projects?
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"When people want the impossible only liars can satisfy"
--Thomas Sowell on Bitcoin Scaling and Fake L2's
The only scaling limitation of Bitcoin is its finite supply and distribution, therefore, it cannot be scaled without a supply increase or people with large amounts of Bitcoin giving large amounts of it away. These things are not going to happen, so when someone tells you there are scaling paths they are scammers and liars, or retarded.
Lightning is just re-usable chain transactions, so your complaint with Lightning is that people cannot afford even 1 transaction.
This is inherent to all fake layer 2's, the difference is they knock lightning and smuggle trust to scam you.
There's nothing that can be done about this. A transaction requires a minimum amount of sats even at a near 0 fee rate (which we're basically at now).
This means the upper bound on scale is how many sats available divided by the number of people that desire them, and sats are very rare.
something like Wallet of Satoshi
Now you're getting it, if you cannot afford to make a transaction yourself, you must trust someone who can make it for you.
a self-custodial way
The only way to be self-custodial is to be able to afford to be self-custodial. This fact cannot be cheated.
Realistically this will take about 20k sats minimum, but in all economic practicality it's more like 200k+
ShockWallet with Lightning.Pub for example will use a trusted "credit" balance to then automatically buy a channel from the LSP market once it is economically viable to do so. Since it is an account system that solves node sharing over Nostr, your entire household and every app/device can use a single node (channel) for economic sustainability.
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17 sats \ 0 replies \ @klk OP 18h
Very clarifying. Thanks for your comment.
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@k00b, what was the wallet you talked about on SNL that sort of advances as you stack more?
IIRC, it starts out fully custodial, but then progresses to non-custodial. I forget all the steps, but I thought it sounded very cool.
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154 sats \ 1 reply \ @teemupleb 8h
Blitz Wallet has a similar approach: very low amounts are e-cash tokens, then when you cross a threshold, they become Liquid BTC, and finally once you have enough, it opens a self-custodial Lightning channel for you.
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I think this is what I was actually trying to think of.
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137 sats \ 0 replies \ @k00b 12h
Cypher Box Wallet ... name was totally forgettable ... ended up searching the youtube channel for it.
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If someone is buying less than 20$... go custodial. Wallet of Satoshi or CoinOS. Up to 50$ maybe custodial but at these fee rates 50k sats is OK.
At 100k sats definitely hold the UTXO... if Bitcoin 'goes up' the appreciation will hopefully pay for the transaction fee. If it 'goes down' the on-chain fees will be lower anyway.
Stacking 200k to 500k UTXOs is good for most people... then when they have 500k-1mil sats they can combine some. Yes there are privacy compromises but nothing is perfect. CoinJoins can also be very economical and provide a good spread of UTXO sizes for the accumulated 'chunks' and add a tremendous amount of privacy.
On the other hand, stacking into a Lightning channel works too... I recommend purchasing a channel ie from Zeus or Phoenix on their app... and buying non-kyc right into the channel providing invoices. You can 'pick' the size of the channel and the duration you need it for... that way you can balance cost with size and duration (heh). One 20-30$ 'setup fee' to get a 1mil sat channel is a great deal imo because you can buy over Lightning and avoid all fees until you either close the channel (later) or swap out of the channel to on-chain at like .5% fee per swap.
Someone may not want to pay 20-30$ initially to rent a channel on phoenix or Zeus ... but if they don't want to pay 20$ I don't know what to tell them maybe go custodial anyway? That way they can learn more about Bitcoin which is the important thing (education).
Like someone else pointed out there is no 'free lunch' and if you want Bitcoin like with anything else you have to pay for it. Great discussion.
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34 sats \ 0 replies \ @OT 11h
It's good to be a little worried but IMO it might be a little early for this.
During the fee spikes of 2022-23 the idea of having larger UTXO's started growing.
Now that fees have gone down it seems to be a distant problem.
There are a bunch of scaling solutions in the works. Most will fail, but there could be some that work!
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'Maybe multipeer channels make things better, where people in the “spending more than saving” part of their life could peer up with others doing the opposite. '
This.
If a person starting out can find others who are selling down then its the perfect match and avoids KYC and CEX fees etc.
Think decentralised- find peers and deal directly.
The other thing I would suggest is start with Coinos.io LN wallet- its so easy to use for MoE and could also be used for small scale stacking as long as you have a good onchain wallet like Electrum to send stacks to as you build your savings. Coinos fees are close to zero compared to others I have tried.
IMO it is important newbies learn to operate wallets onchain and LN and enjoy the freedom of P2P trading and MoE...free of intermediaries as much as possible.
Depending on your situation often simply discreetly asking around your social network of trusted friends and family you can find several hodlers with sats to sell (or visa versa) - I am far from a social butterfly but found several significant stackers within my immediate circles who are on occasion keen to buy or sell directly P2P.
Build p2p networks where ever possible.
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90 sats \ 0 replies \ @optimism 17h
But on the other hand, should we be worrying about this now? Onchain fees are soooo cheap
Be careful when on boarding for low amounts on-chain. Your fee may be low now but their fee may be high in the future. I currently do min onchain output = 200k sats, and prefer them to be 1M.
(as cheap as possible actually).
Still can be 1000x cheaper: mempool and feefilter work with sats/kB and therefore can be expressed as a fraction of a sat. See also #998229
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0 sats \ 1 reply \ @ek 18h
How are they stacking bitcoin? Do they immediately need to withdraw?
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90 sats \ 0 replies \ @klk OP 18h
It depends on the case. It usually starts with splitting the bill at a bar/restaurant and me offering to pay them in sats. This repeats from time to time but with small amounts.
For others I “manage” their Bisq account and buy for them. In this case I send them a decent chunk from LN but then to not saturate their inbound, accumulate more in their Bisq wallet and coinjoin to their cold storage the rest.
Maybe some of them are ready for RoboSats but most aren't. It's already hard to get someone into Bitcoin, having to get them into “tech” as well really leaves most people out (of self-custodial non-KYC corn).
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You could receive BTC LN on Coinbase and convert to another coin for earning money from staking cryptocurrency like Litecoin for example.
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I'm worried about my scaling teeth now
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