The Lightning Network is specifically designed to work around bitcoin design flaws. It entirely sidesteps the chain for a big part of the process. To me it proves that Satoshi did not, in fact, think of everything. Not the other way around.
> it takes less than one second to go through
Like Bitcoin used to be before someone had the brilliant idea of destroy the possibility of zero-confirmation transactions on-chain with Replace-by-fee transactions
Lightning has mostly done this by being a lot more centralized in practice and one could argue... What's the point of it all in this case? Why not just use regular currency?
> Except people wanting to do more than 15 transactions a minute
It's more like 7 transactions per second, which is still absolute crap, but that was after the original Bitcoin project was kidnapped. There aren't such limitations in the original Bitcoin (forked as Bitcoin Cash)
> Or that to scale everyone would need to store a petabyte size blockchain
That is addressed in the whitepaper (SPVs and pruning)
Except for the inevitable and obvious fact that proof-of-work creates a self-sustaining primary incentive for energy waste more pernicious than has ever been seen in any other financial or commercial enterprise, obliterating any hope of having energy that is too cheap to meter.
Mining Bitcoin requires both hardware and electricity, and the cheapest electricity is solar. There isn't any severe scarcity of the raw materials to make solar panels, or of sunlight, so Bitcoin miners can buy as many solar panels as they want and it would only increase the economies of scale for producing them for other purposes too.
Solar has inconsistent output. There is none at night and it varies based on weather during the day. Mining hardware wants a fixed constant amount of power. The logical thing for miners to do is to somewhat overbuild the amount of generation they need and then sell any surplus to the grid, and sell to the grid during the day and buy it back at night. The same incentives hold if the miners and the generators are two different parties, and the result is to increase the amount of generation capacity by more than the amount of consumption and have "too cheap to meter" during periods of above-average generation. (You were never going to get "too cheap to meter" during periods when generation is low and demand is high.) And even during short periods when demand significantly outstrips supply, then their incentive is to stop operating those few days out of the year because the spot price of electricity makes mining unprofitable then, which allows the generation capacity installed to do mining be used to support the rest of the grid and inhibits the price of electricity from rising above the point where mining becomes unprofitable even for people who already have mining hardware. It's basically a buffer that buys electricity when it's cheap and sells when it's expensive.
Bitcoin has a volatile price. When the price is high, miners buy hardware and increase or pay someone else to increase generation capacity. When the price declines, the mining hardware becomes idle but the power generation capacity still generates fungible electricity that can be used for any other purpose. The result is that miners pay to install a lot of generation capacity during the boom, and have the incentive to prioritize investing in more generation rather than newer/more efficient mining hardware because it's the thing that's still worth something if the price declines, and that generation capacity then gets offloaded into the grid during the bust, with the result that grid prices go up some during the boom and down by even more during the bust. By the next boom some of the generation added last time has already been sold to non-miners or locked into long-term contracts so now they're back to adding new capacity again.
"Incentive to fund increases in generation capacity but then not use all of it" has what effect on average prices?
You're making a lot of highly idealized assumptions that don't hold true in reality.
Most significantly that the increased demand due to mining will result in grid operators investing in proportional new capacity to offset it over a reasonable time scale. Instead of just driving up prices due to basic supply/demand.
Also that miners are only consuming electricity when renewables dominate the mix. Otherwise they're responsible for more CO2 emissions to do something useless.
Plus in markets like Texas, miners also manage to get subsidies intended for actually useful customers like factories to go offline at peak times. So ratepayers are essentially paying protection money so they won't over stress the grid by performing their useless work.
In a world where bitcoin miners had to install new solar capacity to entirely offset their peak usage and sell back to the grid any excess then sure, seems like that wouldn't be a big societal net negative like it is right now.
Or we could use all that "free solar energy" to benefit humanity through a million other more useful endeavors. Such as developing and deploying batteries.
One thing we do not lack is demand for more energy.
Now compare it to the annual energy use for the creation/printing of money and funding of infinite wars due to the Federal Reserve having the ability to print money out of thin air at the cost of future generations.
Except people wanting to do more than 15 transactions a minute. Or that to scale everyone would need to store a petabyte size blockchain.
https://en.wikipedia.org/wiki/Lightning_Network
I have been paying for my VPN with lightning payments; it takes less than one second to go through.
The Lightning Network is specifically designed to work around bitcoin design flaws. It entirely sidesteps the chain for a big part of the process. To me it proves that Satoshi did not, in fact, think of everything. Not the other way around.
> it takes less than one second to go through Like Bitcoin used to be before someone had the brilliant idea of destroy the possibility of zero-confirmation transactions on-chain with Replace-by-fee transactions
How does this work? I read the wikipedia article but I don't understand how Lightning enforces the transaction.
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Lightning has mostly done this by being a lot more centralized in practice and one could argue... What's the point of it all in this case? Why not just use regular currency?
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> Except people wanting to do more than 15 transactions a minute It's more like 7 transactions per second, which is still absolute crap, but that was after the original Bitcoin project was kidnapped. There aren't such limitations in the original Bitcoin (forked as Bitcoin Cash)
> Or that to scale everyone would need to store a petabyte size blockchain That is addressed in the whitepaper (SPVs and pruning)
Except for the inevitable and obvious fact that proof-of-work creates a self-sustaining primary incentive for energy waste more pernicious than has ever been seen in any other financial or commercial enterprise, obliterating any hope of having energy that is too cheap to meter.
Isn't this kind of the opposite?
Mining Bitcoin requires both hardware and electricity, and the cheapest electricity is solar. There isn't any severe scarcity of the raw materials to make solar panels, or of sunlight, so Bitcoin miners can buy as many solar panels as they want and it would only increase the economies of scale for producing them for other purposes too.
Solar has inconsistent output. There is none at night and it varies based on weather during the day. Mining hardware wants a fixed constant amount of power. The logical thing for miners to do is to somewhat overbuild the amount of generation they need and then sell any surplus to the grid, and sell to the grid during the day and buy it back at night. The same incentives hold if the miners and the generators are two different parties, and the result is to increase the amount of generation capacity by more than the amount of consumption and have "too cheap to meter" during periods of above-average generation. (You were never going to get "too cheap to meter" during periods when generation is low and demand is high.) And even during short periods when demand significantly outstrips supply, then their incentive is to stop operating those few days out of the year because the spot price of electricity makes mining unprofitable then, which allows the generation capacity installed to do mining be used to support the rest of the grid and inhibits the price of electricity from rising above the point where mining becomes unprofitable even for people who already have mining hardware. It's basically a buffer that buys electricity when it's cheap and sells when it's expensive.
Bitcoin has a volatile price. When the price is high, miners buy hardware and increase or pay someone else to increase generation capacity. When the price declines, the mining hardware becomes idle but the power generation capacity still generates fungible electricity that can be used for any other purpose. The result is that miners pay to install a lot of generation capacity during the boom, and have the incentive to prioritize investing in more generation rather than newer/more efficient mining hardware because it's the thing that's still worth something if the price declines, and that generation capacity then gets offloaded into the grid during the bust, with the result that grid prices go up some during the boom and down by even more during the bust. By the next boom some of the generation added last time has already been sold to non-miners or locked into long-term contracts so now they're back to adding new capacity again.
"Incentive to fund increases in generation capacity but then not use all of it" has what effect on average prices?
You're making a lot of highly idealized assumptions that don't hold true in reality.
Most significantly that the increased demand due to mining will result in grid operators investing in proportional new capacity to offset it over a reasonable time scale. Instead of just driving up prices due to basic supply/demand.
Also that miners are only consuming electricity when renewables dominate the mix. Otherwise they're responsible for more CO2 emissions to do something useless.
Plus in markets like Texas, miners also manage to get subsidies intended for actually useful customers like factories to go offline at peak times. So ratepayers are essentially paying protection money so they won't over stress the grid by performing their useless work.
In a world where bitcoin miners had to install new solar capacity to entirely offset their peak usage and sell back to the grid any excess then sure, seems like that wouldn't be a big societal net negative like it is right now.
Or we could use all that "free solar energy" to benefit humanity through a million other more useful endeavors. Such as developing and deploying batteries.
One thing we do not lack is demand for more energy.
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Now compare it to the annual energy use for the creation/printing of money and funding of infinite wars due to the Federal Reserve having the ability to print money out of thin air at the cost of future generations.
Clearly not because they created wallets that they can’t even use without unmasking their pseudonym. Seems pretty stupid to me.
Doesn't this assume that traceability of all transactions wasn't a goal?