Bitcoin Maxis and Lightning Lovers: your systems have their uses, but combined they are not suitable for widespread adoption by people wishing to receive a continuous stream of very small payments through Podcasting 2.0 TODAY.
You might be working on stuff to fix this problem, but right now you haven't solved the problem.
And if any Bitcoin Maxis would like to comment on this, please leave a comment below.
I'll just highlight where this is going:
Already today Hive is Better for Receiving Podcasting Streaming Sats
I'm still NOT promoting this as much as I could even though it works. Right now if you're a podcaster and you want value for value payments on your podcast the best way is via Hive, and I'm going to make this even easier.
The steps are laid out here: ANYONE can Start Receiving Value 4 Value Streaming Sats for your PODCAST! and when I'm done with my current work allowing super easy swaps from Lightning to Hive (to mirror the Hive to Lightning I already have at lnd.v4v.app) I'll make this process of onboarding podcasters far easier.
Background
Last week, for some reason almost certainly connected to the quiet success of @podping on Hive, a few Bitcoin maximalists were engulfed in a rage of jealousy and anger toward me and Adam Curry over at PodcastIndex. I wrote about this from the Podping point of view here in "Living on the edge!".
But what I didn't do in that post was poke the bear and tell the Lightning guys exactly why their present systems aren't even very good for a very important part of the flagship Value for Value system of streaming sats and sending Boostograms to Podcasters.
They throw around the term "shitcoin" with abandon, I don't care I grew up in the "sticks and stones may break my bones but words can never hurt me" era. This came up on the Podcasting 2.0 Podcast with Adam Curry talking to Roy Sheinfeld of Breez. Adam Curry again had some very kind words toward me for which I'm hugely appreciative and he is definitely starting to understand the utility of Hive.
I propose what they've built in Lightning right now is a "shit-network" until they sort out some fundamental problems and develop some missing tools.
The good news for Lightning
First the good news: for relatively small value wallets on phones and making most payments to common destinations, Lightning works well and they've nailed the UI and onboarding. That's very admirable and I'm glad. In fact I'm happy to be integrating it with Hive. There are even some solutions on mobile where you truly own the keys for the crypto on your phone.
Tied up in Channels
However, unless you own and run either a rented Lightning node in the cloud (do you really own a cloud based node?) or a physical device of your own, your Bitcoin sats as Lightning are not fully under your control.
Unlike a public blockchain system (such as Bitcoin or Hive) your actual Lightning (denominated in sats like Bitcoin) truly resides in a contract tied up between your node and a partner node (called a channel). You open up these channels by locking up Bitcoin and then you shuffle sats like beads on an abacus back and forth to your partner. It isn't truly in your own self custody until you close the channel.
If you open enough of these channels, and other people open channels to you, your abacus beads can shuttle back and forth and payments can flow, like waves, through the whole system. If you're trying to run a routing node, if you set your fees just right, other people's payments will route through you and you can take a fee.
The Receiving Problem
You can only receive Lightning when you have a computer connected to the internet and running properly with good connections to the rest of the Lightning network and the correct distribution of capital in those connections. If you have 5,000,000 sats in channels but all the sats are on your side of the channels, you can't receive anything.
Imagine if you could only receive email if both you and the sender were online at the same time and you had anticipated that sender trying to send you a mail and lined up the right pipes to connect you both. This is the Lightning network liquidity issue.
Failed Payments Problem
While talking to Adam, Roy Sheinfeld discussed his latest post (on the VC funded, Web 2.0 exploitative shit-site called Medium): Lightning is a Liquidity Network. That title is being kind, I find it to be a Viscosity Network.
Lightning payments are failing mainly because the network lacks liquidity, and the liquidity we have is not allocated correctly. This inhibits our growth in two ways. First, users get frustrated and slow their own adoption until Lightning becomes at least as good as fiat in completing payments. Second, we node operators lose revenue whenever a payment fails. Routing fees are our income, and allowing payments to fail is leaving money on the table, which deprives us of capital and deprives the network of reinvestment.
Setting aside the issue that it is absolutely impossible to receive payments direct to you if you're not online, making payments from one point to another across the network is not guaranteed. There is a complex dance of finding paths and liquidity across the network which depends on how much you're trying to send and the connectivity of the sending and receiving nodes.
From my point of view, running a node and trying to make payments when people use lnd.v4v.app to turn Hive into Lightning, I am seeing a number of failed payments. Fortunately I can immediately send Hive back at zero cost (free transactions on Hive obviously) but that doesn't help me figure out how to make people happy. It is taking me a significant amount of effort every day to keep this working.
I'm not even trying to run a profitable routing node to make money so I'm much more interested in just getting all transactions to work. I really don't need to make money on routing because of the generosity of the proposal grants I've had from the DHF and because the return on Bitcoin invested is paltry.
Paying for the network
Which all comes down to the incentive problem which I feel we have solved here on Hive. If you can't make money running Lightning Nodes why do people do it? I know running Hive Witness nodes, other infrastructure and dapps on Hive makes money, so I understand why people do it.
If you invest hundreds of Bitcoin in your Lightning node and then manage the pants off it watching every failed routing attempt and opening and closing channels (and paying the full on-chain Bitcoin fees) maybe you can make some money. The Lightning "community" is remarkably tight lipped on how to do this and how much you can make. There are some fledgling tools to automate this but they're incredibly nerdy to set up and you're always one keystroke away from losing 10,000 sats and messing up your channels.
This is the first comment under Roy's Medium post:
I run a node and it's incredibly manual and time-consuming for the low yield that is possible.
Having tools that auto-manage the node would help a lot (open channels, rebalance etc.). Maybe there are some out there that do that?
I know exactly what he means.
Fee Tension
For Podcasting 2.0's use for millions of micropayments, Lightning needs to adopt a very low base fee and higher proportional cost (measured in parts per million sats). It's not clear the wider network is going that way. Podcasting can (and largely has) its own network to route very small single digit sat payments, but this is fragile and mostly only possible because MOST of the podcast listening apps and a great majority of the podcaster receiving wallets are centered on a tiny number of bulk wallets (i.e. very centralised).
Roy writes:
The idea that Lightning would always and automatically have lower fees than on-chain transactions is a misconception. Lightning is faster and payments are settled instantly. When deciding which medium to use for which transaction, fees are only one consideration among several. (To take an analogy from fiat, checking accounts, savings accounts, credit cards, and PayPal all coexist because they all have their uses.)
If Lightning fees across the wider network rise to a few cents per transaction, this destroys the idea of streaming 20 sats per minute.
Maintaining and running a semi segregated network for this micro payment system will be architecturally complex and prone to having its liquidity pushed around by the wider network finding cheap routes through it.
Chaos
Years ago, just before I went to University to study Physics I read "Chaos: Making a New Science" by James Gleick. What Lightning has created is a fundamentally chaotic system. 1000's of distributed nodes all able to adjust pricing and routing in real time leads to a non deterministic system where any given payment or transfer can succeed one minute and fail the next.
Will it scale? From a point of view of transactions per second, absolutely. Will it make your transaction work? The only way to know is to try.
Where is the "community"?
There isn't a place for the community to gather. They're all across Twitter, Telegram, Medium, Discord and lord knows where else. They actively avoid decentralised solutions like Hive or LeoFinance (because shitcoins remember?). Then there's the internecine fighting. Like all open source projects, and especially ones where a vast influx of VC money has been dumped on a very few number of participants, jealousy and arguments over direction take hold.
The last couple of years of enforced isolation without conferences to meet up at, Roy Sheinfeld proposes, has led to the current round of bickering. I'm sure that's part of it, but I'd point to huge VC involvement in some projects but not others as a bigger source of friction.
I want Lightning to Work
I want to be able to get on a bus and use an NFT transaction to pay with Lightning. Scrub that, I don't like buses but I could pay for my petrol (gas) perhaps. Lightning has the power to replace any contactless transaction right now but only if the network develops a lot better tools for internally managing itself.
Distributed systems, filled with people with competing and often diametrically opposed, interests is really hard! The more one knows about it, the more one can see that Bitcoin was an absolutely astonishing thing to take off. I put Hive in a similar category for a whole load of different reasons.
One of the complaints thrown at me about Hive for @podping was that it won't be around for the long term. Of course I don't know if it will, but I can say absolutely that Lightning is not a sure thing at this stage either.
Today Hive is Better for Receiving Podcasting streaming sats
I'm still NOT promoting this much even though it's ready. Right now if you're a podcaster and you want value for value payments on your podcast the best way is via Hive, and I'm going to make this even easier.
The steps are laid out here: ANYONE can Start Receiving Value 4 Value Streaming Sats for your PODCAST! and when I'm done with my current work allowing super easy swaps from Lightning to Hive (to mirror the Hive to Lightning I already have at lnd.v4v.app) I'll make this process of onboarding podcasters far easier.
Short version: go to https://podcasterwallet.com/ and claim your podcast by getting an email sent to the address in your podcast's public feed. Then put in the following Public Key:
*** IMPORTANT UPDATE: THIS IS A NEW NODE ADDRESS - MARCH 2022 - IGNORE THE ONE IN THE SCREEN SHOT, USE THIS ONE STARTING 0266 ***
0266ad2656c7a19a219d37e82b280046660f4d7f3ae0c00b64a1629de4ea567668
And add the customKey of 818818 and the customValue should be your Hive name.
Then tell your audience to get a better podcasting app from http://newpodcastingapps.com/ and steam you some sats which will magically show up as HBD. Boostagrams will come in with message.
Thank You
I end as always by expressing gratitude for the ongoing DHF funding which powers all of this and without which I'd be going a heck of a lot slower!
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Your efforts towards this project is awesome which I believe every individual in the platform will be proud of witness. Keep up the tremendous effort and a work well-done in promoting hive
This is a wonderful project. You've impact a great effort on this project. And I'm pretty sure it will aid the improvement of Hive and HBD.
Maybe you should get ahead of the curve and develop "streaming HBD" (or Hive). Maybe the reality is that is a project ideally suited for Hive that you know will work. After all, how often does a transaction not go through on Hive.
There is also the recurrent payment feature now in the base code.
Posted Using LeoFinance Beta
I've thought about this from the start and even got some way to coding it up but the issue is that Hive is still too small and I still don't quite see how we onboard the listeners.
Lightning IS building the infrastructure for micropayments FROM millions to a far smaller number of merchants and in this case podcasters. Many to Few is the architecture. Hive has an excellent shot at being at the "Few" end not the many as far as I can see.
And if Podcasting 2.0 streaming sats really takes off, and every 1 minute listen event tried to be an on chain transaction for 0.001 HBD, that would cause us problems.
So I'm happy with a Lightning system for SENDING the money, but not the Lightning system for receiving it.
I burst out laughing when I read the above sentence. Yeah, I'd say those are some poke the bear words.
As you know I'm a big fan of what you are doing in the Podcasting 2.0 + Hive space. So I say, keep building the solutions which will benefit all no matter what side of the maxi/$&*!coin road they prefer to walk. The proof is always in the pudding. Go! Brian! Go!
One of the reasons why Hive is incredible!!! Then why do they run node for lightning when it's stressful and yet brings a low yield.
Posted Using LeoFinance Beta
I wonder if we could get some of these podcasting apps to add in Hive to their wallets (apps??)
so you could tip with either Hive or Sats on lightning.
just a thought.
Posted Using LeoFinance Beta
I actually think we're going to be better off putting Lightning in our Hive wallets. That's what I'm working towards.
!LUV that idea
@simplegame(2/4) gave you LUV.
H-E tools | connect | <><
Given the current emission rate of LUV pushing 500/day, increases to required LUV levels will likely be forthcoming.
Best idea I’ve heard!
Hey Sir Brian! In The Morning to ya 🤟
Maybe a bit off topic but I’m curious ur thoughts. I believe HBD isn’t needed and I believe it’s just a extra target for regulators given it’s in name at least a pegged token ( in theory or to outsider seeing description) and I in a perfect world would rather see a Fork where we drop it and one time turn it into Hive and move on without it. Even the 12% interest is hardly worth risk with real inflation around same and the risk the peg doesn’t hold as its almost never at a dollar.
Seeing what you write about adding lighting
I’d love to see HBD go away and see lightning in its place. I’m not a programmer so feel free to point out anything I said that’s not correct. Just respect ya a lot and curious ur thoughts 🙏
I'm pretty convinced that the US government will come for all stablecoins. HBD will be one. But unlike most of that ilk, it is not backed by any actual dollars. It is backed by a dollar worth of HIVE. This, makes it is unlikely they will be able to use the same logic they would to regulate coins like USDT or DAI. The pegged is a bit loose in my opinion, and it could use better branding.
If you build it they will come 🙏
👍🏻 Really good insights, Brian. You are digging deeper and deeper into that rabbit hole. Unbelievable.
Will have to read everything twice at least as it has so much valuable details to get.
I do get your explanation. Basically to send a few sats costs more than it's worth in transaction fees. This can work offline too. Nfc if can be incorporated into the smartphone, then payments can be like contactless. Your enthusiasm is so amazing. I need to read this lots of times so I can absorbed the information !
Very impressive work, Brian. The free flow of information and sharing of knowledge will only permeate the world further through the adoption and use of Hive blockchain, not Bitcoin, which is an extremely volatile, highly-speculative, slow network to transact on. Once I have my podcast up and running, I will be getting the Lightning address setup with podcasterwallet.com
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This will be a great project. Great work for you promoting hive here
Lightning + hive in our hive wallets is a "Dream come true". We need a something like fixedfloat too conected to hive ecosystems
Posted Using LeoFinance Beta
BTC is just a popular brand. That's all I'm seeing here. LN just get trickle down exposure because of BTC. Thanks a ton for promoting Hive. We've got things so much better here :)
!PIZZA
Posted Using LeoFinance Beta
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If HIVE is not an opinion in the value for value block of the podcasting 2.0 spec, it really needs to be added. We need to fix onboarding to make it actually work, but it is clear HIVE would be 1000x better at microtransactions than Bitcoin / Lightning.