[troymc]

You can send someone one Linden in Second Life (the virtual world), i.e. over the Internet. One Linden works out to about 0.004 US dollars. (It depends on the exchange rate, which is determined by an open market.)

This has been possible for many years.

[josephpoon]

Ah yeah, that's a good point, I totally forgot about them, thanks!

I think the big difference here is that obviously decentralization is nice, but the real issue is that Linden could do it because they simply didn't become big enough to be a target. There were some attacks at the edges, but if you wanted to do what Linden did at Visa-scale, they would quickly put a stop to it with chargebacks.

Adversarial problems are far easier at smaller scale, but it is a good point, thanks for the correction! It may be more accurate to say nobody's done it where it could be conceptually feasible at high-scale/volume with dedicated adversaries (many of the Linden exchanges solved this with high exchange rates to buy in, e.g. Virwox).

[MichaelGG]

Bitcoin doesn't offer chargebacks though, and nor do any of the exchanges. I think GP's point is that Linden money is equivalent to BTC, just centralized. And they can send small amounts of money.

If you mean Linden would have issues with chargebacks for people exchanging real money -- why wouldn't any BTC exchange have the same problem? It seems unlikely you'll be able to buy $0.01 of BTC.

In fact, any centralize system that throws out chargebacks should have zero problems scaling. A few years ago VISA said their target was around 50K tx/sec peak (though their daily peak is only a few thousand). It'd be slightly odd for a centralized system to not be able to easily scale to that volume.

Forgive me if I'm misunderstanding the thread.

[josephpoon]

The presumption would be the underwriting risk is batched and pushed to one point (the exchange point). It's economically feasible to underwrite a single transaction for hundreds of dollars to buy Bitcoin (exchanges doing AML/KYC). It's much more uneconomical to underwrite a $0.001 payment -- as a result building a real marketplace for this becomes difficult even if there would be a lot of users.

[bedeho]

I don´t get this answer. Linden needs not underwrite any micropayment inside it´s silo?

The only utility in LN is hopefully retaining decentralized properties of bitcoin. PokerStars, Linden & WoW have supported micropayments for a long time?

Im not sure why any of these services could not grow 10x and still function internally? They are already servicing tens of millions.

[onetallnerd]

I think you're missing the point. You can't scale Linden's micropayment worldwide without there being counterparty risk. It's much more useful to build these on top of decentralized systems with a strong bedrock without fearing the company being targeted by hackers or governments. Can you use Linden in China?