Thanks for the question Monkey Pox Denier! (😂)
We can have users share a lightning node but this brings in custodial risk. It all works fine as long as the lightning node runner is trustworthy. But when this trust is broken everyone using that node gets rugged.
One solution is to have users run a lightweight node that connects to this big shared node. This is essentially the Phoenix Wallet model. It's a good model but you give up a lot of privacy and still run into usability issues. You can't onboard people easily because they first need to set up a channel with inbound liquidity and that comes with a price. You send someone $10 and they only receive $4 after fees. Congrats, you just lost a potential new bitcoiner.
Furthermore, if the big node rugs, everyone now has to pay on-chain fees to close their channels and take their balance back. What happens if their balance is too small for an on-chain UTXO? They get rekt. They lose their balance either to the big node or to miner fees.
Faced with these limitations, people will just use Venmo because it's easier and cheaper. This is why I say we won't achieve mass adoption with this tech. We can't beat Venmo if the user experience has all these worts.
You can't go under the minimum on-chain UTXO threshold and maintain self-custody. Not even with lightning. Eventually you have to close the channel and that requires on-chain fees. If one on-chain transaction costs as much as a car or a house then it's not accessible for the majority of humanity.
In this scenario the end game is that most everyone will be corralled into custodial solutions. We will have swapped out one set of financial overlords for a different set. This is the scenario people like Jack are talking about when they say bitcoin would be a failure. I happen to agree.
vnprc
npub16v…umhgd
2025-01-25 20:32:44
in reply to nevent1q…20w8
Author Public Key
npub16vzjeglr653mrmyqvu0trwaq29az753wr9th3hyrm5p63kz2zu8qzumhgdPublished at
2025-01-25 20:32:44Event JSON
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"content": "Thanks for the question Monkey Pox Denier! (😂)\n\nWe can have users share a lightning node but this brings in custodial risk. It all works fine as long as the lightning node runner is trustworthy. But when this trust is broken everyone using that node gets rugged.\n\nOne solution is to have users run a lightweight node that connects to this big shared node. This is essentially the Phoenix Wallet model. It's a good model but you give up a lot of privacy and still run into usability issues. You can't onboard people easily because they first need to set up a channel with inbound liquidity and that comes with a price. You send someone $10 and they only receive $4 after fees. Congrats, you just lost a potential new bitcoiner.\n\nFurthermore, if the big node rugs, everyone now has to pay on-chain fees to close their channels and take their balance back. What happens if their balance is too small for an on-chain UTXO? They get rekt. They lose their balance either to the big node or to miner fees.\n\nFaced with these limitations, people will just use Venmo because it's easier and cheaper. This is why I say we won't achieve mass adoption with this tech. We can't beat Venmo if the user experience has all these worts.\n\nYou can't go under the minimum on-chain UTXO threshold and maintain self-custody. Not even with lightning. Eventually you have to close the channel and that requires on-chain fees. If one on-chain transaction costs as much as a car or a house then it's not accessible for the majority of humanity.\n\nIn this scenario the end game is that most everyone will be corralled into custodial solutions. We will have swapped out one set of financial overlords for a different set. This is the scenario people like Jack are talking about when they say bitcoin would be a failure. I happen to agree.",
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