But everyone still has to go through the steps of getting their money on to those alternate chains, which isn’t free. All of the transaction costs and exchange fees leading up to the checkout transaction and when the vendor later gets their money back out of the cryptocurrency are still expensive.
The only way vendors come out net ahead by using cryptocurrency is if it affords them some additional protections at the expense of the customer. For example, forcing customers to eat the transaction costs and exchange fees, eliminating the possibility of chargebacks if the product or service is bad, and so on.
Or more simply, they use cryptocurrency to dodge taxes. Or try to, anyway.
I'm only aware of Dharma wallet, but I'm sure there are others - allows direct & free(well, except MATIC for gas I suppose) deposits from your fiat accounts onto Polygon, an Ethereum L2.
Your exchange should support the alternate chains. They get economies of scale with the gas fees when bridging between chains. Of course, relying on an exchange for this contradicts the decentralization ideal.
Lightning has very little adoption, is hard to use because 1. you need to always be online to receive transactions and 2. routing is failure-prone, and costly in capital lock up - in an internet-connected hot-wallet no less - for payment channel collateral requirements.
Ethereum Rollups are much more promising L2 solutions.
> Ethereum Rollups are much more promising L2 solutions.
Your biases are blatant for all to see. But misinforming people to serve your interests is really uncalled for.
> Lightning has very little adoption, is hard to use because 1. you need to always be online to receive transactions and 2. routing is failure-prone, and costly in capital lock up - in an internet-connected hot-wallet no less - for payment channel collateral requirements.
Actually, Square via CASH App just enabled LN tx on it app to both iOS and Android users; so if you want to play the numbers game that is a significant onboarding--perhaps the largest in the entire ecosystem to date.
With that said, you don't have to run a node to take advantage of low tx fees: DL Muun wallet and you now have the ability to receive funds from both mianchain and LN without running a node.
FYI: Mempool on BTC mainnet is is clearing 1 sat/byte transactions (approx 5 cents.)
Question about LN, if I have funds in a Muun wallet, can I send to a friend with a CASH app wallet? The language makes it sound like we have to be on the same "payment channel" so I would guess the answer is no. But then how are retail checkouts meant to work, should a retailer set themselves up with a muun wallet as well, or is there a way for LN channels to interact?
I've been curious to try these things out for myself but I don't feel like I understand Muun wallet enough (as far as trusting myself not to screw it up)
> Question about LN, if I have funds in a Muun wallet, can I send to a friend with a CASH app wallet? The language makes it sound like we have to be on the same "payment channel" so I would guess the answer is no. But then how are retail checkouts meant to work, should a retailer set themselves up with a muun wallet as well, or is there a way for LN channels to interact?
Yes, I just tried it: this is what I did and it was all pretty seamless.
- I sent out a desired amount to my muun wallet using a LN invoice from my CASH wallet and it was received instantly for no fees.
- Once in my Muun wallet I sent it back to my CASH app bitcoin wallet using a Segwit address, as you cannot currently create a LN invoice within CASH.
So, it seems that while CASH supports LN it is only for withdraws and not deposits; this could possibly be added later as a feature by the CASH team, though. But as of now, only Segwit layer 1 address deposits are available to a CASH wallet.
Still, I paid ~7 cents with a 1sat/byte tx and it arrived in the next block since the mempool is clear using a segwit address.
If a retailer wants to take payments via BTC and LN they have two choices: use custodial wallets like Muun that support both Layer 1 and 2 protocols and move to a secure wallet where they hold the keys. Or invest in running their own nodes and a deploy a system that works for them.
Really interesting, thanks for these details, I haven't tried any of this since segwit and taproot, good to hear about that 7cent fee on an L1 transaction.
>>Actually, Square via CASH App just enabled LN tx on it app to both iOS and Android users
LN has less than 3.5K BTC for channel collateral, meaning relatively few people use it.
>>With that said, you don't have to run a node to take advantage of low tx fees:
I didn't say you need to run a node to use it. I said you needed an always online hot wallet. You need it because even to receive a LN transaction, your private keys need to sign a series HTLC of transactions linking the originating node with yours.
> LN has less than 3.5K BTC for channel collateral, meaning relatively few people use it.
Seeing as how the 2nd layer network is optimized for instant micro txs, that still is not accurate; the point is to be able to have low/no cost instant txs for small sums in order to not clog up the mempool on layer 1.
> I didn't say you need to run a node to use it. I said you needed an always online hot wallet. You need it because even to receive a LN transaction, your private keys need to sign a series HTLC of transactions linking the originating node with yours.
Sure, but that is like saying you need an internet connection to post on HN and decrying it as a pitfall of a system.
>>Seeing as how the 2nd layer network is optimized for instant micro txs, that still is not accurate; the point is to be able to have low/no cost instant txs for small sums in order to not clog up the mempool on layer 1.
It was also marketed as being a substitute for ordinary retail transactions, like purchasing a coffee, not solely micro-transactions.
>>Sure, but that is like saying you need an internet connection to post on HN and decrying it as a pitfall of a system.
Having to have your hot-wallet always online just to receive transactions is different than needing to connect to the internet to submit a comment on HN. You can still receive replies on HN when you're not connected to the internet. And connecting to the internet to post on HN doesn't expose your money to theft the way exposing your hot wallet to the internet does.
Ethereum transactions are moving to layer 2 which is a lot cheaper. Right now some layer 2 providers are as cheap as $0.15 and getting cheaper on a regular basis.
The only way vendors come out net ahead by using cryptocurrency is if it affords them some additional protections at the expense of the customer. For example, forcing customers to eat the transaction costs and exchange fees, eliminating the possibility of chargebacks if the product or service is bad, and so on.
Or more simply, they use cryptocurrency to dodge taxes. Or try to, anyway.