[JumpCrisscross]

> You can also take money out of LN at any time (assuming your counterparty I cooperative)

This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account.

> Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money

Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. We then split the speculation and transfer functions of our financial system and ended up better for it.

[Klathmon]

>This isn’t what people mean when they imply liquidity. Needing consent and being able to demand cash are different domains.

I don't understand what you are trying to say here. You don't need "consent" if you want to wait the 3 days, but if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH. But if you want, you can feel free to open channels with shorter locktimes if needed.

>Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. That history is one Bitcoin is presently replaying.

But you can't lose money if LN is working correctly. The whole idea is that you sign the transactions saying "if this is broadcast under these conditions, you get all of my money" when you open the channel. It's literally not possible to fractionally lend on LN, because all money MUST be there, and signed, for you to use it.

I've had conversations with you before, and I'm fairly sure you don't understand the basics of Bitcoin as you keep repeating these things as fact, so I'm going to stop replying here. Please make an effort to understand it before you start denouncing it. Or at least explain why you think these apply to the conversation in ways that someone like myself who isn't well-versed in traditional banking systems but understands Bitcoin technically will understand.

[JumpCrisscross]

> if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH

You said, like a checking account, one “can also take money out of LN at any time.” I clarified that when people say “take money out at any time,” they mean unilateral liquidity. You can unilaterally demand cash or an instantaneous Fedwire transfer, the latter which costs 3 to 69 cents [1] (though some banks heftily upcharge this service), against your checking account balance. It takes a good deal longer to settle a LN balance (theoretically).

TL; DR The Lightning Network has some neat features, but pitching its liquidity as analogous to a checking account’s is disingenuous.

> you can't lose money if LN is working correctly

This applies to anything. In finance, things never work correctly because someone, somewhere, can be trusted to be an arsehole.

> It's literally not possible to fractionally lend on LN

The number of Americans who have lost a single U.S. dollar to this threat since the FDIC was formed is basically zero. The number of Americans who have nuked substantial fractions of their net worths speculating on Bitcoin is significantly greater.

[1] https://www.federalreserve.gov/paymentsystems/fedfunds_corep...

[wan23]

> This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account.

Is it really true that you can get easily the money out of your checking account if your bank declines to give it to you? In a traditional bank account, it is possible to place a hold on an account for various reasons, mostly when compelled by the government.

[JumpCrisscross]

> In a traditional bank account, it is possible to place a hold on an account for various reasons, mostly when compelled by the government

The traditional hierarchy of liquidity goes first cash, then Treasuries then checking accounts. Checking account balances (i.e. senior, registered claims on a bank) are junior to the first two (i.e. senior, registered claims on the U.S. Treasury and senior, unregistered claims on the Federal Reserve, respectively) for the reason you specified. I still contend a checking account will more reliably produce immediately-available funds quicker than a LN "deposit," even if one is a criminal.

This sidelines into why I believe illegal markets are the only place blockchains have a shot at being a currency. Shadow economies are substantial, between $1 and 3 trillion in the U.S. alone [1]. It's a different pitch from "replace the U.S. dollar," but it's more realistic. (I am not advocating anyone do anything illegal.)

Stepping back, it's pertinent to look at the Two Generals' Problem [2] which Satoshi's paper solved. It's a problem of exchanging information, not value per se. Blockchains are here to stay, but not--in my opinion--as currencies. Libor on a blockchain or legal documents "Docusigned" on a blockchain are far more compelling than "we'll make our light-speed payments system less reversible and better for illegal activity". They're also use cases which become difficult to justify if the "tokens" underlying them rise in value.

[1] http://www.imf.org/en/Publications/WP/Issues/2018/01/25/Shad... Table 4, page 11

[2] https://en.wikipedia.org/wiki/Two_Generals%27_Problem