This is a value for value post: see the explanation in the footer.
Last Week
Last week at the height of the Mempool's insane climb to some of the highest fees we've ever seen and a backlog of 400,000+ transactions, I wrote the following:
I’ve been reluctantly building on Lightning because I saw big VC money going in and to ride those coat tails and pick up on what they built.
The current fiasco with Ordinals has me doubting Lightning’s future entirely.
I don’t see any ROI for VCs when channel openings and random closures will eat all possible profits and cost reductions. Without centralised services and huge nodes investing big BTC bucks, I don’t see any way this works.
I don’t see what incentive Miners have to do anything different, they make bank on these fees. They don’t want stupid 1 sat/vb channel openings and at 100+ sat/vb I don’t see how Lightning is viable.
Perhaps at some point this destroys Bitcoin completely, I don’t see how the original “best money ever” continues when moving it even via Lightning requires either a huge upfront investment or huge fees.
Where is the incentive for Miners to even want to change the code and discourage arbitrary data storage?
Unfortunately Bitcoin’s ridiculous governance model (i.e. shouting on Twitter and some email lists with no actual ability to force a change in the code) looks increasingly like its biggest vulnerability.
Why am I wrong?
But The Mempool is Recovering? Right?
As I write this on Friday, the Mempool is back to costing 35 to 60 sats/vB to get Bitcoin transactions confirmed quickish (as quick as BTC ever is with its 10 minute blocks). This is still 50x more than I've been paying for most of the time I've been using Lightning.
This matters critically to Lightning because channel opening and closing is the ONLY way Bitcoin moves INTO or OUT OF the Lightning Network. Somewhere, someone has to open or close a channel for the amount of Bitcoin within the Lightning network to change.
What does this spike do?
If you can open and close a Lightning channel for pennies and then move a few hundreds or thousands of dollars back and forth, Lightning makes sense.
I've had one channel which whilst only being 5m Sats ($1,300) managed to transfer 2.1 BTC ($55,000) backwards and forwards over its 9 month life. That channel cost me peanuts to set up. The problem is, for no readily discernible reason, it was closed automatically just before this current blow up. I did nothing wrong but somewhere something happened and the channel close.
I actually have a reason for running a Lightning node. I provide a service which many people use. The dream of the Bitcoin Maxis however, is that "ordinary" people will run these nodes. Well that works when channels cost 30c to open, but not when they cost $10. That's what the spike in fees does.
The result of driving out the hobbyists is exactly what @theycallmedan @starkerz and I go on about every week on @cttpodcast : centralisation and capture.
Thanks for reading this far, I'll be back posting about the new @v4vapp website build after the weekend and if you haven't heard, we're under steady rocket attack here in Israel. Stay safe everyone, see you next week.
Value for Value
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Thanks for the feedback Brian on your LN experience. WIll continue supporting your working proposal. I personally believe most of Ordinals activities will move to Layer 2 chains for better UX, fast & near zero-fee trx. Why not try build bridge better Hive & Libre where you can already transact in #Sats denominations, have human readable usernames, design for end-users. Libre is a Bitcoin side-chain that has also integrated Ligthning. It has many characteristic of Hive.
But then you are in the same boat as the ETH network. Layer 2s/sidechains that rarely update to L1 and have to be an L1 security wise.
The problem with all the side systems that grow off Bitcoin is that the Maxis hate them and call them shitcoins. They have no imagination or ability to understand the paradox of their position which I call the "Bitcoin maxi shitcoin paradox"
https://peakd.com/hive-110369/@brianoflondon/the-bitcoin-maxi-shitcoin-paradox
When you setup a lightning node, how much do you have to game it to actually earn anything? I don't exactly get the network structure.
I contest that running a Lightning node just for routing is not a money making operation. I believed this when fees were 1 sat/vB. I'm 30x more correct when the fees are 30x.
yep, the situation is becoming dramatic, the only way to solve this issue is to move ordinals and the other BRC-20 rubbish to other chain... litecoin for instance?
The maxis spent so much effort telling everyone BTC is the ONLY chain, now they're all bent out of shape when people want to use it!
I was running a lightning node just for fun. I only opened some channels in the beginning and left some open for some month. There was nearly Zero Traffic. Finally I closed my Lightning node again. why do you open and close Channels frequently?
I don't actually open or close frequently but I recently had a few channels close because of bugs in Lightning. I chose which channels to open based on what users of @v4vapp are actually doing and where they're sending to and from to try to minimise the fees I and they pay. So I avoid connecting to small nodes like the one you probably had and avoid paying routing fees.
If people want to send to Wallet of Satoshi or GetAlby through me, that's very cheap because I have channels with both those destinations!
How much does it cost to run a lightning node? And why would you run it?
Btw, I saw a user running Bitcoin node as small as this. Do you know what it is?
That's a raspberry pi running Umbrel (probably). I have this. It's not very reliable and costs around $150. It's a toy really.
I assembled such a toy and can confirm, it isn't practical for the vast majority of self-sovereignty-concerned Bitcoin users.
Hah. I thought it was something worth considering especially because of its size. But if it's a toy then $150 is too much. xD Thanks a ton for the info. :)
Raspiblitz
This is what you call it?
https://shop.fulmo.org/product/raspiblitz-1-8-metalcase-edition/
Thanks for the info brother. Cheers!
How much are you willing to pay for a BTC transaction? Your Life? :P
Things are taking a different turn with BTC and the lighting network. I love reading the concerns at crypto twitter. Maxis seem to be downplaying the problem.
I've seen the news. You too stay real safe over there :)
Thanks... fortunately we are well defended.
Sorry to say this post was loaded with too much technical stuff and goes over my head :D the only thing I understand is that in recent days, bitcoin and Eth transactions fees went very high, which is really a thing to concern. I have read that a person who bought meme coins has to pay 152k$ in fees. Is it true? if that is the case, we are going towards disaster.
I can't even be bothered to read all the nonsense. I just know what effect it has on the things I need to do with BTC.
I can understand mate. You are doing right by only reading or grabbing the information which has your interest.
I think we need some changes in the bitcoin code.
Definitely. And they won't make them.
Are we have the authority to change it? is Satoshi left a way?
There is a way: it's called a hard fork or an agreed software change. The problem is there is no easy way to get agreement in Bitcoin the way we do here on Hive with voting and witnesses.
I listed a podcast of Bad Crypto this week talking about the surge of Ordinals euphoria. Personally, I don't see the value of creating those NFTs and tokens with them over Bitcoin.
The Lightning Network is there to avoid the fees. Paying over $30 to transfer value makes no sense. That is why the utopia of crypto will take the world. I don't believe it anymore.
Just because Bitcoin isn't the transaction system for the world, doesn't mean other better systems won't be built. We're doing that here on Hive.
https://reddit.com/r/btc/comments/13ge9mr/ordinals_and_the_mempool_apocalypse_peakd/
The rewards earned on this comment will go directly to the people sharing the post on Reddit as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.
Wow there's actually some engagement over there. I usually get no love on Reddit!
This is great! I also noticed your post earned the "PeakD daily top" badge. Maybe the Reddit traffic helped gain some views.
What a bunch of crap dude, I’ve been interested in lightning since you started posting about it but it’s sad to see this development. With how slow things move on that chain governance wise, it’ll be years before they correct it it seems. Annoying!
Also stay safe with those rockets!
I hope I'm wrong and I hope they fix it too.
I've never understood how lightning node operators make money. The profit margin of lightning node operators must be tiny and can turn negative so easily.
They don't. Lightning itself is poorly incentivized. The most likely outcome is that businesses can USE lightning to do other productive businesses, but Lightning won't be decentralised.
I was literally just about to say that they DON'T! LOL, we are definitely of similar perspective on this. B2B is one possible use, but, you still have to settle the transaction on-chain, which is backed up for weeks now according to the mempool.
Transactions can and do go through in 10 to 20 minutes, but you just need to set a very high fee to get that.
Most importantly Stay safe my friend 🙏
Second, #ITM 🤚
Third, so how bad could this be?
Longterm I mean? Is there a good source to look at more on this recent issue? Gotta be honest it sounds concerning. I buy bitcoin weekly and haven’t had had anything give me pause but your take is usually rational and not hyped so I’m just wondering where can I dig even deeper into this? Any good long form podcasts discussing it?
I'm not too worried about Bitcoin long term, but building Layer 2's like Lightning on top of a slow expensive layer 1 might not work out.
I have been watching the ordinals on YouTube. These brc tokens are selling for a fortune. It doesn't make much sense doing this on the BTC network. 12 million sats at $3500, i dont quite understand all the technical stuff !
I can't see these things having any value. They have 0 utility and are insanely easy to lose if you ever use a normal wallet against your account with ordinals in it.
It seems impossible now to use BTC or ETH for small transaction like paying the hotel bills, movie tickets, utility bills etc. If common man is unable to use them for his ease, what purpose are these coins serving? The very first transaction was made to buy the pizza with BTC, that now becomes hard to do so.
👍
My personal struggle, involves waiting for my webhosting company to process the BTC payment that I made to them on April 30th to renew my web domain. Mempool says the transaction has over 1600 confirmations, and it was recorded on-chain the same day, but the webhost doesn't reflect that as having happened. Waiting on customer service to respond to my inquiries since that web domain comes due for renewal in 6 days!
I think the Bitcoin Ordinals NFTs craze is a concentrated attack on the Bitcoin blockchain to see if it is capable of handling mania like Ethereum hasn't. ETH costs so much to transact with that it's unusable for the masses, and that leads me to think that in its form, it isn't viable for anything.
The mempool is still supposedly backed up to the tune of 200,000+ transactions, dating back weeks...
That would indicate the transaction completed 11 days ago. Which Webhost is this?
Which webhost do you use for v4vapp?
I use @privex which is set up to just give you a bare server. You do have to know what your doing on the command line because there aren't cpanel dashboards and other nice stuff.
ah ok. I looked into privex a little, but hadn't done a deep dive into it. I'm basically dependent on cpanel right now to manage my file systems for my domains :/
EPIK. I only chose them because they're one of the more private ones, but, I definitely am open to new options. I pay $14.99/month to host my 3 websites, which are currently low-traffic
People don't understand that in primarly instance the centralization is necesary for the mass adoption. Not everybody want to run their own channel or lightning node. The big mass only wants send or receive money fast and secure.
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