[danShumway]

> And I don't understand how does LN centralize the chain.

It takes transactions temporarily off-chain making them more vulnerable to attack. Lightning Network is a system where the blockchain congestion is eased up by doing fewer things directly on the chain. It's also had a nontrivial number of privacy issues, some of them solvable but at least a few only solvable by expecting people to make lots of pools, which drives up transaction cost again, which kind of defeats the point. That decreased privacy guarantee feeds into fears about centralization and censorship.

The irony behind all of this is that systems like Lightning and even Bitcoin itself are kind of ripe for censorship. The blockchain maintains your entire transaction history immutably in public, and the only thing protecting you from having all of that leaked is if you use pseudonyms or mixers (again, increasing transaction fees and congestion) to transact on it. But then when you start reporting that stuff on taxes... it just becomes way easier than it should be to track people.

This is also something coming up a lot with NFTs, it turns out that censorship and centralization is about more than where your database gets stored, it's also about which exchanges will work with you and who will haul you into court.

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> So they are beneficial only to a subset of artists, not all of them. I can live with that.

Right, but I think the point is still that the rest of us aren't fine with y'all spending the equivalent of an entire worldwide entertainment industry's worth of power just to benefit an extremely tiny subset of the population, and that we see that as a very different outcome from decentralized finance.

You can bring up Bitcoin's benefits if you want, but it's not being used as a currency though by most people. It's not a financial system, it's a decentralized asset that people are speculating about. And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?

If the majority of the world was using Bitcoin, we might be having a different conversation, and we could potentially argue about whether the benefits of a decentralized financial system outweigh the downsides. But you don't have a dencentralized financial system, you have a set of assets that are being taxed as assets by the IRS, and that aren't really benefiting most of the world outside of some speculators.

[hrhrhrhrhr]

Transactions on LN are almost as secure as regular transactions onchain. There is no centralized party involved that you have to trust, to use LN. The funds just get locked on a multisig UTXO and can be unlocked at any moment by broadcasting an onchain transaction. This is more than enough, considering that LN is only needed for small purchases.

The privacy is also better with LN, since nobody but the recipient of the funds knows that you sent them money - LN routing is similar to onion routing that is used in TOR. The node that you are connected to, knows that you're sending money, but doesn't know the recipient. The last but one node knows who is the recipient but doesn't know the sender.

Despite the public ledger, I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.

>And maybe that is subjectively valuable to you, but it's not serving as a currency for most people, and maybe it's not good for a tiny subgroup to argue that their interests should be given equal resource budgets to activities that are accessible and useful to the majority of the world?

I don't think that it matters, but it's not a tiny subgroup of people anymore. I think it would even be comparable to the amount of PC gamers worldwide.

The fact is that crypto miners are paying for the energy that they are consuming on the free market, but for some reason, they are criticized for that, unlike other industries.

Gold is quite similar to crypto. It is used as a financial asset (Bitcoin) and as a luxury item (NFTs) which makes up most of the usage of Gold. Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.

Same goes for various entertainment industries, including videogames. Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do. But when it comes to crypto, it's all double standards.

[danShumway]

> Transactions on LN are almost as secure as regular transactions onchain

Almost being the key word there.

> LN routing is similar to onion routing that is used in TOR.

You should look into this more, not all routing on Lightning Network goes over Tor today, I think the highest numbers I've seen are around 50%, although maybe it's grown a bit since I last checked. And importantly, every hop in a Lightning Network transaction needs to be paid. I have heard so many people talk about Lightning Network multi-hop transactions or disposable channels like they're a silver bullet for privacy while failing to point out that all of these privacy mitigations cost extra money and there's a strong incentive for users not to pay extra for privacy.

> I find blockchain much better for privacy than having to trust my credit card details with actual PII to various companies.

I've experimented with crypto exchanges, and I had to provide them all with a frankly obscene amount of PII to set up accounts. For the mainstream average user who isn't exchanging coins in private or setting up their own exchanges, moving money into and out of the system using popular providers requires giving up a ton of data. And importantly, when you do give up that data it's then associated with a wallet that you transact with on that exchange, which the exchange can then use to track all of your coins that you associate with that wallet.

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> I think it would even be comparable to the amount of PC gamers worldwide.

I promise you this isn't the case, take a look at the average concurrent users on Steam -- not even just the number of people who have an account, the number of people actively playing games at the same time at any given moment. And that's before we ever factor in other PC storefronts, or consoles, or mobile phones, or web games. Zero chance that the number of people using cryptocurrency is the same as the number of people who play games. Zero chance that it's even the same as only the number of people who play PC games, even if we ignore the rest of the market.

And remember, if you do ignore the rest of the gaming market, the energy comparison between cryptocurrency and gaming starts to look a lot worse because PCs only make up a portion of the gaming power consumption you're trying to compare to.

> Gold mining also consumes much more energy than Bitcoin mining, but nobody seems to be upset about it or really care.

Er, no. People are upset about mining, particularly in environmental movements. No one is really giving gold a free pass. See also diamonds. This stuff gets criticized all the time, evil unethical mining is practically a media trope at this point.

> Does anyone care that gamers consume X amount of energy for their entertainment? No, because that's not what people normally do.

Okay, so first of all, people also do care about this, it's a strong motivator behind efforts to make consoles more power efficient and to work on power consumption and battery life. It also plays pretty heavily into the right to repair movement. Both Microsoft and Sony have gotten criticism over broken low-power modes in their consoles, and practically every piece of hardware in a modern gaming setup will be looking at energy standards during its production.

But second of all, it's not a double standard to say that one of the largest entertainment industries in the world is allowed to consume more power than a niche currency that isn't being used as a currency by most people -- because again, it is servicing more people. If I and 3 other people go out and start driving around in a new automobile that spits out the equivalent carbon of the entire rest of the transportation industry, we can't point at the entire rest of transportation industry and say, "see, transporting millions of people uses the same amount of energy as transporting the 4 of us, so it's just double standards to criticize us over our energy use."

Cryptocurrency is niche, extremely niche compared to other entertainment industries and currency systems. It's not a workable system or environmental standard for niche products to consume the same amount of power as mainstream products that service many times as many people. It's very reasonable for people to point out that small groups of people are using disproportionately more power, particularly if those people are trying to expand those power-hungry systems, and particularly if those systems are set up in such a way that they are naturally inclined to use as much power as possible.

[hrhrhrhrhr]

Going over your main points:

1. Payment for LN per "hop" costs about 1 sat. It's hilariously small, so no, it doesn't disencentivize anyone from using it. And best of all, the privacy doesn't depend on large anonymity sets, so you don't need everyone to use large multi hop payments to make yours private.

2. There are plenty of no KYC exchanges and there is Monero, if you care about privacy so much. I'm okay with law enforcement tracking down my transactions and requesting info from exchanges though. What I'm not okay is when I trust my CC info to companies (because there is no other option) and then that data gets leaked. Wouldn't have happened if I used crypto and all they got was some wallet address with inflows from an exchange.

3. Number of active Steam users is 120 million [0]. Number of Bitcoin owners is 106 million and total number of crypto owners is estimated to be 300+ million. 5% of Europeans own Bitcoins. [1]. Looks comparable to me.

[0] https://www.statista.com/statistics/308330/number-stream-use...

[1] https://www.buybitcoinworldwide.com/cryptocurrency-statistic...

[danShumway]

1. This is a very incomplete picture of the Lightning Network. Node fees aren't set in stone, operators can charge whatever they want (and if you want to have a profitable node, you're going to have to charge more than the base rate). At best I can find stats online saying that the median base fee for a node is around 1 sat[0]. I can't find anything indicating anything better than that, or that fees would be locked to that amount. And again, this is all kind of a pointless debate because:

A) The Lightning Network only avoids fees by grouping transactions, and large long-lived channels that group tons of transactions tend to be discouraged by most privacy advocates I see online. It's recommended to use multiple short-lived channels at which point you are dealing with blockchain fees again. By the by, blockchain fees are not usually under $1 by any metric I can find[1]. The fees that I'm seeing here are pretty bad unless you're spending a lot of money, which... generally reflects the usage of bitcoin as an asset people sit on rather than spend.

B) Even if Lightning Network was great and good privacy and not vulnerable to closed channels or other attacks because of being off-chain, it's also tiny and unprofitable, and it's not where the majority of cryptocurrency is happening. Dig a bit further into the stats I linked above, the entire network capacity of Lightning Network is $159 million. That's... not enough for a financial system. But it's OK, because it'll scale, right? Except no, because when we dig into it deeper, it's often unprofitable to run nodes, and the network right now is being operated on some levels as a volunteer effort to keep transaction fees low.

So even if we take the premise that Lightning Network is totally private and secure, which it's not, it's still not really being used that much in comparison to other financial systems, which brings us back to the original question, by what measure is this a competitive currency with traditional fiat? It doesn't have the usage numbers or capacity to back that claim up.

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2. Lots to unpack here. Coinbase is still one of the most popular traders in this space even after multiple complaints about seizing funds, and Monero solves zero of those problems because the problem is the exchange itself, not the coin. Coinbase is still one of the most popular traders despite the fact that it's literally withheld funds and stolen people's money before, which means the one thing cryptocurrency was designed to do it's not even doing, people can still have their money seized. That other exchanges exist means very little to me if the average/median user is still interacting with a centralized exchange. Again, Monero doesn't really solve that problem.

Coinbase is not a government agency and can do whatever it wants with your data. Bear in mind that some of the biggest investors into the cryptocurrency space are people like Jack Dorsey and companies like Paypal. I find it very hard to believe that there's not going to be commercial corporate monitoring of people's transactions given the history of everything else the investors have ever created.

Finally, the "Bitcoin is more secure" argument seems very hard to back up to me. I think all you really need to do is look at the NFT space to see that scams/attacks are a lot more common than cryptocurrency advocates like to pretend. And remember that when your money gets stolen you either rely on a centralized authority to get it back, or you don't get it back. For the average user, this is a decrease in security.

I'm no fan of credit cards, but credit card transactions can be reversed as a security measure to prevent fraud. The average user wants to be able to get their money back if someone scams them, because scams/phishing/etc are just as much of a threat as anything else. Additionally, we have to go back to the point that the average user of cryptocurrency is holding funds in internet-connected wallets, and people do sometimes hack into Coinbase accounts and empty people's wallets. There are ways to prevent that, but I care about the average user's experience.

I don't know how anyone looking at the overall cryptocurrency space could say that cryptocurrency in its current form solves these hacking problems, or that leaking keys isn't a serious risk. There are entire classes of malware designed around stealing wallet keys.

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3. Those aren't really the right numbers to use, let's break down the actual numbers in more detail.

Roughly 3/4 Americans (approximately 244 million people) play video games[2], compared to roughly 60 million Americans who own cryptocurrency[3], about a quarter of the size. This is just in America, which actually is a bit biased in cryptocurrency's favor because Americans are disproportionately using more cryptocurrency than other countries like China. More broadly, it is hard to estimate the number of worldwide gamers, but quick search puts that number at around 2.7 billion people[4], which is a significantly larger number than 300+ million.

However, it actually gets worse. When you look more closely at that first link, you find out that the median amount of money in a crypto wallet in the US is a little less than $200. So most of these people are not actively using cryptocurrency, they have a tiny investment and they're sitting on it. This does not an active financial system make, it's actually kind of hard to argue that cryptocurrencies are providing these people with a service other than that they're just kind of sitting on a tiny amount of money. This is the equivalent of a gamer only owns 3-4 AAA games. Not someone that only plays 4 games, someone who owns as their entire investment into the market less than $200 worth of hardware/software. So it becomes kind of difficult to argue that 60 million Americans are using crypto, when in reality a lot of them just invested once or twice and now are passively sitting on those funds while they actively play Fornite and Halo.

But what would happen if you compared the entire crypto market worldwide to just the number of active Steam numbers? Well, your energy argument would completely fall apart.

If you try to compare the power-consumption stats between those two spaces, limiting gamers to the number of active Steam accounts, I guarantee that cryptocurrency is not going to win that comparison. The only way you're going to get comparable numbers for power usage is if you compare cryptocurrency to worldwide gaming trends. So either you compare a 300M group of people with a 150M group and find out that cryptocurrencies use way more power than the ~150M active gamers on Steam, or you compare the full worldwide trends and grapple with the fact that you're using the same amount of power to service a market (generously) 10% of the size of the gaming market.

And we go back to the original question. Is it a double standard to complain that two markets, one of which is 10-11% the size of the other in terms of the customers it services, are using the same amount of energy? Of course not, of course a market that's servicing 300M people should not be using the same amount of power as a market servicing 2.7B people.

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[0]: https://1ml.com/statistics#baseFee

[1]: https://ycharts.com/indicators/bitcoin_average_transaction_f...

[2]: https://www.npd.com/news/press-releases/2020/more-people-are...

[3]: https://www.finder.com/how-many-people-own-cryptocurrency

[4]: https://financesonline.com/number-of-gamers-worldwide/