Blockstream bought out most of the the btc devs who had commit ability. Their end goal is to cripple btc to where it is today. The goal of this is to build an unnecessary product they can charge for on a second level. Think skimming money like charge cards do, but offering no real advantage or service beyond that. So far they have found building a new network neigh impossible. Hence the memes: Lightning only 18 months away, after 3 years of "development." You can find hilarious round table interviews with Adam Back where one asks how they can use btc for transactions like at bars with the fees dwarfing the regular transaction. Adam Back suggested using an IOU network out of paper or maybe build an IOU app for that. Can you believe that? Hilarious!
Sure but it would have to be special paper, hard to duplicate with security measures, probably special ink, weird watermarks, a whole bunch of things. Should probably name it something other than IOU to distinguish it from normal IOUs. I've always liked Johny Cash's music, maybe we could derive a name from him.
This is all true and anyone who payed attention to more than the heavily censored propaganda soaked /r/bitcoin saw it happen in real time. Years of saying that a throughput of more than a few kilobytes was impossible while one of the devs repeatedly - and this is not a joke - stated the sun revolved around the earth.
> I don't think anyone thought that was impossible from a technical standpoint, just from a decentralization standpoint.
That's the same thing and it makes zero sense. Most people never sync with the chain and those that want to only need bandwidth far less than watching a low res youtube video. Validating blocks is at least 600x faster than real time on a computer from last decade. I would love to hear how you can rationalize a statement like that. I watched people repeat this for years and when asked for explanations never saw anyone come close to something coherent.
> source?
Here he is denying evolution and claiming the sun revolves around the earth:
> Most people never sync with the chain and those that want to only need bandwidth far less than watching a low res youtube video. [...] I would love to hear how you can rationalize a statement like that.
Over 11 years, bitcoin's full blockchain has grown to 1/25th of a $150 hard drive.
When people say that you can't have more than a few kilobytes per second of throughput because VISA does 150M transactions per day, it doesn't make them sound like they have thought this through, it makes them sound like they are grasping at straws to try to rationalize nonsense that they want for reasons they won't say.
There are lots of cryptocurrencies now, no chain is going to suddenly have 150 million transactions per day while all the others die off. Even then, it would cost a single person far less in disk space than the electricity to run their refrigerator and again, few people even sync with the chain.
These are the same nonsense recycled bizarre statements that get made over and over. Why do the people in charge of bitcoin push propaganda that has no connection to reality? That's the real question.
>The goal of this is to build an unnecessary product they can charge for on a second level. [...] Hence the memes: Lightning only 18 months away, after 3 years of "development."
Can you elaborate on this? Isn't lightning free and open source? I'm not sure how that's going to be monetized.
Yes it is FOSS and multiple different implementations from different development groups / companies are available including c-lightning, LND, and eclair (I'm probably missing one or two).
The claim is truly a meme -- one that can only be laughed at when faced with the reality that I mentioned above.
Bitcoin adoption was growing and working well for monetary transfer but its capacity was throttled to encourage use of an unproven technology, the lightning network.
The claim, as far as understand it, is that Blockstream supported this plan, anticipating its failure, while working on its own replacement technology, Liquid.
Ironically, both liquid and lightning appear to be failing. Nb, both grubles and nullc have some close relationship with Blockstream.
> Bitcoin adoption was growing and working well for monetary transfer but its capacity was throttled to encourage use of an unproven technology, the lightning network.
What? Bitcoin's capacity has been limited its entire life, the limits were coded in by Bitcoin's creator. The limits are integral to protecting Bitcoin's decentralization, and have nothing in particular to do with lightning. Alternative blockchains without functional limits such as "BSV" are so bloated that it is practically unreasonable to run nodes, leaving participants blinding trusting third parties.
Liquid isn't some replacement technology for Bitcoin, it's something it's a distributed-centeralized (federated) system that can do things Bitcoin and other completely decenteralized systems cannot do like offer instantaneous settlement. It trades off decentralization to for latency. When users have funds in exchange they've already substantially lost their decentralization benefits, for for e.g. rapid arb between exchanges this tradeoff is probably a good one.
Bitcoin gives people the freedom to use their money in a bunch of different ways.
> nullc have some close relationship with Blockstream.
I haven't have any relationship at all with blockstream for over three years now.
> I researched this and found that Bitcoin had no initial capacity limit
That is simply untrue. From the very first version it had two capacity limits, an explicit one (https://github.com/trottier/original-bitcoin/blob/master/src...), and a smaller implicit and unintentional one (of about 500k) owing to the maximum locks that could be grabbed in a single BDB transaction.
Satoshi later reduced the explicit limit further and provided no explanation for doing so ( https://github.com/bitcoin/bitcoin/commit/a30b56ebe76ffff9f9... ). However, there was no issue with spam at the time or previously, nor mention of spam, and the network already had a separate and highly functional spam limiting mechanism. Had he intended to make the limit simply temporary he could have trivially programmed it that way-- e.g. as we did when we discovered the ~500kb limit, we wrote a rule that limited blocks to 500kb and then expired a few months later.
The claim that it was a "temporary anti-spam limit" is a novel construction that I don't believe I saw ever claimed until many years after that change.
At least by the time Satoshi went inactive he was well aware of the trade-offs: "Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices." ( https://bitcointalk.org/index.php?topic=1790.msg28917#msg289... )
Perhaps you should consider conducting "research" by having an open discussion with an actual expert rather than just reading manipulative tracts designed to sucker people into buying alternatives? :)
I'm happy to direct you to primary reference material even though you continue to treat me rudely and disrespectfully.
That doesn't answer my initial question, how is blockstream supposed to monetize lightning, or anything for that matter?
>The claim, as far as understand it, is that Blockstream supported this plan, anticipating its failure, while working on its own replacement technology, Liquid.
I took a quick skim of blockstream's materials on liquid, and it sounds like it's something totally different to lightning? They describe it as some sort of ripple-like network for transacting in tokens? eg.
>Liquid uses an approach to consensus called Strong Federations. A Strong Federation removes the need for costly Proof of Work mechanisms and replaces it with the collective actions of a group of mutually distrusting participants called functionaries.
The claim is not that Blockstream intended to profit from Lightning. Rather they used the promise of Lightning to throttle Bitcoin, in order to profit from Liquid.
Nonsense. Liquid is directly dependent on Bitcoin's success.
And as has been stated before, Blockstream employees got a chunk of their pay check in bitcoin. Do you really think they'd try to "throttle" their own livelihood?
Okay, how are they profiting from liquid? Moreover, what's liquid's "moat"? What's stopping me from copying liquid's software (seems to be open source) and making a clone that charges 0% fees?
This is just an outright lie and malicious defamation from top to f*king bottom. Hateful nonsense by scam promoters like you turns HN into a toxic enviroment.
Because it's just pure nonsense, untrue, and totally unsubstantiated (and thoroughly off-topic for the thread). Falsehood flies, and the Truth comes limping after it.
Rather than any substantive argument, it merely lists a set of wild allegations.
But since you asked nicely I'll break it down sentence by sentence.
> Blockstream bought out most of the the btc devs who had commit ability
Blockstream hired myself and Pieter, two of six people at the time that had commit access to the Bitcoin software project at a time when none of the many "bitcoin companies" of the day were willing to fund developers. Though I was independently wealthy at that point, supporting my own work on Bitcoin meant spending down my Bitcoin or not working on it most of the time, so being able to get funded to work on Bitcoin and well aligned technology was appealing. Two people is not most of by any measure.
The Bitcoin software has no particular control over the Bitcoin system, but none the less we took measures to reduce any potential conflict of interest: We were substantially paid denominated in Bitcoin (pre-purchased when the company was founded), so our compensation was directly tied to Bitcoin's value. The company took no copyright interest in our work on Bitcoin, and released all our patents for public use (both under defensive licensing and the IPA). Pieter and I both had employment agreements that allowed us to quit at and continue to get paid for a year as additional insurance against any unethical conduct by the company. I also dropped my commit access.
Neither of us continue to work for blockstream, I haven't for three years now.
> Their end goal is to cripple btc to where it is today.
Blockstream hasn't done anything to "cripple" bitcoin, nor would it have made any financial sense for its employees (100% of whom were (and I believe still are) substantially compensated in Bitcoin). Quite the opposite: Blockstream's purpose was to build on-ramps to Bitcoin to help the impedance mismatch with traditional finance systems, and to monetize Bitcoin unrelated applications of the same technology (e.g. private systems) and use that to fund development work in the public interest (particularly at a time when no one else was doing so).
> The goal of this is to build an unnecessary product they can charge for on a second level. Think skimming money like charge cards do, but offering no real advantage or service beyond that. So far they have found building a new network neigh impossible.
I can't even figure out what this is attempting to talk about.
> Lightning only 18 months away, after 3 years of "development."
Lightning is a large Bitcoin industry effort involving dozens of independent developers and a half dozen companies. It isn't blockstream specific. It's just the logical progression of the payment channel idea initially described by Satoshi and baked into Bitcoin since day one. (And for a weird on-topic tangent: It's a secure implementation of the "Ripple" concept which Ripple labs bought the name of and stuck on an entirely unrelated system.)
It's not "18 months away" it exists now, it's widely used, and it works pretty well.
However, cryptocurrency for small retail payments remains a pretty uncompelling use case: It is extremely tax disadvantaged in many jurisdiction's, including the US: mandatory per transaction gains tax reporting. And retail transactions are extremely well addressed by existing solutions-- would you prefer to pay with the hardest money available, or would you prefer to pay with a credit card that is already accepted virtually everywhere, provides substantial anti-fraud protection, and extends you 28 days of credit with several percent negative fees for debt in constantly debased fiat? It's important that people have the option-- and they do-- but expecting widespread use in this application over night is fantasy.
(And not a particular problem for Blockstream, which doesn't make any fees off transactions using lightning, contrary to the parent posters allegations)
> You can find hilarious round table interviews with Adam Back where one asks how they can use btc for transactions like at bars with the fees dwarfing the regular transaction. Adam Back suggested using an IOU network out of paper or maybe build an IOU app for that.
I have no idea the context there but I can only imagine that someone asked about buying single drinks with Bitcoin and he mentioned that it's customary for people at a bar to open a tab and settle up at the end of the night. Kind of ironic that Adam, who's a teetotaler, is more aware of how bars commonly work than his critics. :)
In any case, Bitcoin is a global broadcast network whos long term decentralized security is utterly and totally dependant on getting large amounts paid in transaction fees. That has always been part of the trade-off: Centralized systems can offer extremely low fees. The only arguments about avoiding market rate fees in Bitcoin have also been argument to unlimit the supply of coins and pay for security through debasement, which is an obvious non-starter.
Great response. Thank you for taking the time to write it. I'm curious why did you get interested in Bitcoin to begin with? If credit cards and fiat currencies are just fine, gold is still a pretty good store of value, why work on crypto at all?
Being just fine for a vast majority of transactions isn't "just fine": Being able to transact privately and without unaccountable private companies randomly censoring your transactions is critical to human rights. The capriciousness of institutional choke points deprives people of due process and makes it impossible or unreasonably complex to make automated systems that transact autonomously without constant human supervision and intervention.
But these are all issues of exceptional cases, where additional complexity, costs, or risks (e.g. from fraud due to irreversibility, key management liability, or loss due to exchange rate volatility) are acceptable costs of doing business. The vast majority of payments -- even by some hypothetical outlaw-freedom-fighter-bandit -- are extremely boring, low risk, and not likely to be subject to censorship. The value of being able to pay in Bitcoin primarily is that it exists if and when you need it. But on a daily basis for most boring non-international payments it isn't a big win.
I don't agree that gold is a good store of value at all. It's most commonly used form is a totally unauditable fractional-reserve (rehypothicated) censorship prone IOU. In physical form it is extremely expensive to secure, transport and transact with. It is easily seized both by state authorities and bandits. It's essentially unusable for international payments due to transport risks, which Bitcoin is extremely useful for international payments. It is easily forged in ways that are difficult and costly to detect (gold coated tungsten requires special instruments and potentially destructive tests to detect). There have been single incidents involving well over 2 billion dollars of fake gold at a time ( https://asia.nikkei.com/Spotlight/Caixin/Mystery-of-2bn-of-l... ). And if we ever figure out how to mine asteroids Gold will be no more valuable than the cost of dropping rocks from the sky. And as icing on top: Gold has even more disadvantageous tax treatment in the US than Bitcoin does!
Even if you use Bitcoin in a custodial way-- which essentially gives it all the positive properties of a centralized system, along with many of the negative one-- it still retains extremely powerful audit abilities, custodial Bitcoin can cheaply prove it isn't fractional reserve in an unforgable way, and it's still immune to central bank monetary policy whims. [Not that I advocate that-- I think custodial Bitcoin misses the point, but for applications that don't need Bitcoin's other properties it can be a reasonable alternative.]
Wall Street doesn't want Bitcoin to serve its intended purpose of removing their control over the money supply. They did this by co-opting the software project with venture capital money and making technical decisions that make Bitcoin ecommerce economically infeasible due to high fees. Initially they intended to replace Bitcoin with an alt-coin whose issuance was controlled by the Blockstream corporate entity. That project failed, and wall street investors pivoted to another alt-coin called Lightning that has failed to produce a reliable payment network after 7 years of investment, all the while the BTC fork remains unusable, which they are just fine with.
EDIT: The Lightning network markets itself as an improvement to Bitcoin, but it is a completely alternative settlement network that just happens to denominate in BTC. I don't think debating the use of the term "alt-coin" is material.
Man, your post is just full of malicious disinformation, most of it addressed elsewhere in this off-topic subthread.
> EDIT: The Lightning network markets itself as an improvement to Bitcoin, but it is a completely alternative settlement network that just happens to denominate in BTC. I don't think debating the use of the term "alt-coin" is material.
That is just entirely untrue. :( Whoever fed you that idea was confused or outright lying to you.
Lightning is a technique for using Bitcoin's smart contracting ability to pay bitcoin without bringing each and every transaction to the network.
The basic idea is that you take some Bitcoin and set a script on it that says that if there is a disagreement over who owns it, the involved parties will post to the ledger the last record in an external ownership transcript which is signed by the involved parties, and if anyone cheats and posts an outdated record, anyone else can post proof that a later entry existed and all the coins go to the non-cheating party.
With this in place, the parties can then transact back and forth securely as fast as they can sign and send Bitcoin transactions to each other without any global broadcast taking place. Taking it a step further, collections of these transactions can be made mutually atomic so that they're all successful or all fail (essentially by making them conditional on a common secret). This is how lightning makes it possible to pay people you've never transacted with before, by routing on a graph of these pairwise payments (that's what the 'network' in lightning network refers to).
All the transactions exchanged between participants are Bitcoin transactions-- which could be posted at any time to the network at the participant's whim, they refrain from doing so to save fees--, the system is built from the novel programmatic ability of Bitcoin, and it is completely ununsable without Bitcoin (or some clone that copies the required functionality, of course).
This kind of channelized usage of Bitcoin was foreseen by Bitcoin's creator and enabled by the consensus rules of the protocol from day one (particularly: nlocktime and sequence numbers which were explicitly added to support channels).
Lightning is not an “alt coin”. This whole comment is so absurd I don’t even know what to say other than it’s entirely conspiratorial and misinformed nonsense.
I don't think there are any major implications. The point of blockchain currencies is to be decentralized so hacking a random github repo shouldn't have major implications. It's not even the only bitcoin node implementation out there at this point.
Before wall street involvement there was a single fork of Bitcoin that was a viable currency with low transaction fees. After Wall Street involvement there are at least 3 forks, the biggest of which had fees spiking at 60 USD per transaction making it nonviable for anything but speculators, and the others having very low adoption. The protocol was decentralized but enough of the community that controlled it was bought out to bring it down.
EDIT: calling something a lie does not make it so. also, what on earth is hateful here
Bitcoin has an incentive model based on transaction fees. This is currently being "boot-strapped" by a mechanism called subsidy, where miners get "extra" bitcoin aside from the transaction fees.
That subsidy shrinks every 4 years and will eventually be zero.
As we move towards that point, the transaction fees need to be high enough that the miners are incentivized to continue protecting bitcoin.
For regular coffee-style orders, this becomes infeasible; that's why you can use layer-2 (or higher) tech to pay really low fees for each transaction.
As Bitcoin usage increases, we hit new speed bumps -- transaction fees spiking was one of them. While this is the inevitable (for a successful bitcoin) future, there need to be ways to make cheaper payments, but everyone (who's given it some thought, and who doesn't have an agenda of some kind) agrees that permanently storing coffee sales in the blockchain directly is not the way to go, if we can avoid it, and we can.
“The threshold should probably be lower than it currently is. I don't think the threshold should ever be 0. We should always allow at least some free transactions.” -Satoshi Nakamoto
The p2p electronic cash system I signed up for in June 2010 is not working “how it is supposed to work”. $7.77 average transaction fee? Why not try raising the block size to even 2MB? That would do nothing to hurt decentralization. And do you really think an asset currently worth $500B needs to incentivize people to keep it working?!
“I would never spend $100/yr to validate/store transactions and keep my Bitcoin investment working unless I can make a profit on that $100/yr on fees!”