Author Topic: What do you think of adding a low% of crypto allocation  (Read 32883 times)

Rosy

  • Magnum Stache
  • ******
  • Posts: 2601
  • Location: Florida
Re: What do you think of adding a low% of crypto allocation
« Reply #650 on: November 21, 2021, 07:11:15 AM »

There certainly are no 100Xs any longer, no one even expects a 3X or 5X except for the moon boys. Perhaps the institutional investments will have an effect on price stability...
It hurts your case that Bitcoin tripled in the last 12 months.  Nobody expects what happened now to happen again?  Historical data doesn't support your claim.
https://finance.yahoo.com/quote/BTC-USD/

In case BTC changes price soon, note that GBTC quadrupled last year, in 2020:
1. Sorry, I wasn't clear - the 100X referred to the past and the part about the 3X or 5X is meant to refer to the present as in going forward from right now.
As in from today to the end of this cycle.
Based on what data?  You claim nobody "expects a 3X or 5X except for the moon boys".  Is that insult supposed to prove your point without data?

In the past 12 months, Bitcoin tripled.  I provided evidence.  I think it's reasonable to assume it could triple in the future.  Right now, the data is on my side, not yours.  Feel free to add data to support your view... a viewpoint without data strikes me as weaker than a point backed by data.

No insult intended here and certainly not to you. My statement reflects my opinion which was originally a response to Malcat's post.
Of course, I've seen the same data you have - there is no disagreement about that either. 

My viewpoint is more conservative because I see the data only as a starting point. There will be no more 100X going forward surely you agree on that.
No, I do not think it is reasonable to assume bitcoin could triple again 'in this cycle' - in the future, absolutely.
There are plenty of predictions and charts wherever you look, 3X is popular but I am not convinced. 

I don't see the point in arguing about which projection is more reasonable.
Past data did not include the effect of institutional adoption and the approval of BITO Futures ETF has on the current bitcoin market since neither one existed. If it does 3X great, I'd love that but I think it is more reasonable to assume it will do $98K to around $135K in this cycle.
Nobody knows what bitcoin will do until it happens.
Just my two cents.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #651 on: November 21, 2021, 09:33:24 AM »

There certainly are no 100Xs any longer, no one even expects a 3X or 5X except for the moon boys. Perhaps the institutional investments will have an effect on price stability...
It hurts your case that Bitcoin tripled in the last 12 months.  Nobody expects what happened now to happen again?  Historical data doesn't support your claim.
https://finance.yahoo.com/quote/BTC-USD/

In case BTC changes price soon, note that GBTC quadrupled last year, in 2020:
1. Sorry, I wasn't clear - the 100X referred to the past and the part about the 3X or 5X is meant to refer to the present as in going forward from right now.
As in from today to the end of this cycle.
Based on what data?  You claim nobody "expects a 3X or 5X except for the moon boys".  Is that insult supposed to prove your point without data?

In the past 12 months, Bitcoin tripled.  I provided evidence.  I think it's reasonable to assume it could triple in the future.  Right now, the data is on my side, not yours.  Feel free to add data to support your view... a viewpoint without data strikes me as weaker than a point backed by data.

No insult intended here and certainly not to you. My statement reflects my opinion which was originally a response to Malcat's post.
Of course, I've seen the same data you have - there is no disagreement about that either. 

My viewpoint is more conservative because I see the data only as a starting point. There will be no more 100X going forward surely you agree on that.
No, I do not think it is reasonable to assume bitcoin could triple again 'in this cycle' - in the future, absolutely.
There are plenty of predictions and charts wherever you look, 3X is popular but I am not convinced. 

I don't see the point in arguing about which projection is more reasonable.
Past data did not include the effect of institutional adoption and the approval of BITO Futures ETF has on the current bitcoin market since neither one existed. If it does 3X great, I'd love that but I think it is more reasonable to assume it will do $98K to around $135K in this cycle.
Nobody knows what bitcoin will do until it happens.
Just my two cents.
I expect many people expect Bitcoin to go 3X or more, which is why I got argumentative over the term you used.  But with that out of the way, I'm open to being corrected if my 3X or greater estimate (based on past data) is unrealistic.  If I was 100% certain Bitcoin is growing at just 2x in the next 4 years, I'd sell my holdings.  That would only be a 19% rate of return for something that could lose almost all it's value.

While I would also worry about institutional adoption, I don't think it's happened yet.  Take the new BITO ETF with $1.4 billion and GBTC with $8 billion.  Compare that to the 24h volume of Bitcoin, which is $25 billion.  Even if that number is inflated, BITO's assets are nothing compared to a month of BTC trad volume.  And GBTC has been around for years, so the comparison is even more stark there.  If you have a different source of institutional Bitcoin investing, I could be wrong - and that I'd like to know.  Institutional billions is a danger sign for me.

Last year Bitcoin dropped about twice as much as the stock market, and several years ago it fell by about 80%.  Bitcoin recovered both times, as it has in the past, and made new highs later.  Why?  Well, that's speculation for you.  But the past high returns were also accompanied by steep drops, suggesting Bitcoin might still have price gains to make.

BicycleB

  • Magnum Stache
  • ******
  • Posts: 3874
  • Location: Live Music Capital of the World
  • Older than the internet, but not wiser... yet
Re: What do you think of adding a low% of crypto allocation
« Reply #652 on: November 21, 2021, 12:40:58 PM »
Read the quote again - that's not what you said.  You said of this thread, "solve non-existent problems they didn't understand".  That's an insult, not curiousity.  You claim others "didn't understand", implying you do?  And you said "non-existent problems" covering every post in this thread?  That comes off as arrogant and trolling.

Perhaps your definition troll differs from mine. I feel like Iím being gaslit here.

Reread the thread. There are examples of: Ticketmaster replacements, supply chain tracking, etc. And they all fall into the ďthe poster did not understand the problem at hand. And blockchain is also an non-solutionĒ. I do not believe you are debating in good faith. I wonít recognize any further bad-faith responses from you.

It's all he does welcome to the debate about words because the real debate can't be debated. 

Ive decided this poster is toxic to actual conversations so I've quit talking to them. All they do is claim personal attack and then debate the words that were said and what was meant and do not actually have productive conversations about what's going on.

I come to a different conclusion fwiw. The same person you're talking about has repeatedly tried to apply precise terms and reasoning not just to crypto but to other investing questions, such as:

1) whether to hedge stock index investments or even speculate using defensive SPY options (puts?) in Feb 2020 due to COVID (he did it, explained his actions and reasons in real time; made a few bucks, narrowly missed a huge win, timed the trough within days in his first timing exercise);
2) whether continued analysis of COVID growth could generate continued useful investing theses;
3) whether investments based on the theory that we would bounce back from COVID could be profitably done (see his Experiment series, where he detailed 200%+ gains in real time over numerous posts using 3 example picks of individual stocks);
4) in this thread, I have seen him respond with precision, misunderstand others' words, and apologize after clarification was made.

Finding precise definitions of terms and then reasoning from them is just how he thinks, as far as I can tell. Sometimes very productively.

Overall, it appears to me that he:
5) argues in good faith, but sounds so vehement that some people who look at individual examples suppose he's a troll when he really isn't;
6) is exactly the same as several other posters on this thread, in that several posters meet the description in 5 - I think you are one of them, and I probably am too sometimes;
7) has a lot to say, as do you and several others;
8) adds to the discussion by his questions, just as you do by yours.

Fwiw, this thread has gone to greater depth than many others by continuing discussion instead of assuming bad faith on others' part. I hope the assumption is something that fades and that the discussion, the most informative I've seen so far, continues.
« Last Edit: November 21, 2021, 02:40:31 PM by BicycleB »

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #653 on: November 23, 2021, 01:21:28 AM »
Read the quote again - that's not what you said.  You said of this thread, "solve non-existent problems they didn't understand".  That's an insult, not curiousity.  You claim others "didn't understand", implying you do?  And you said "non-existent problems" covering every post in this thread?  That comes off as arrogant and trolling.

Perhaps your definition troll differs from mine. I feel like Iím being gaslit here.

Reread the thread. There are examples of: Ticketmaster replacements, supply chain tracking, etc. And they all fall into the ďthe poster did not understand the problem at hand. And blockchain is also an non-solutionĒ. I do not believe you are debating in good faith. I wonít recognize any further bad-faith responses from you.

It's all he does welcome to the debate about words because the real debate can't be debated. 

Ive decided this poster is toxic to actual conversations so I've quit talking to them. All they do is claim personal attack and then debate the words that were said and what was meant and do not actually have productive conversations about what's going on.
Yet you can't stop attacking me, can you?  I started a thread to debate factor investing with you, and what did you do?  Attack me for discussing GME options, which wasn't being discussed.  Attacked me for posting about crypto, which also wasn't being discussed.  You can play the victim and deny it - after you deleted the evidence - but it's still quoted in my replies.
https://forum.mrmoneymustache.com/investor-alley/factor-investing-(small-value-momentum-quality-investibilty-)/msg2925111/#msg2925111

Yes, I quote people's words when they say the wrong thing - like you just did.  Where in this thread did I "claim personal attack"?  Like I said before, quote me - don't misinterpret what I said.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #654 on: November 23, 2021, 11:55:37 AM »
I wasn't the only one who thought you were attacking me, @boarder42.  To refresh your memory, this is the moderator warning you got less than 4 weeks ago:

...
...
You're arguing with someone who is citing the last 10-15 years as reasons for investing strategy in multiple threads on here. Also someone trading gme options I'm not sure it's worth the effort.

MOD NOTE: Attack an argument, not a person, please.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #655 on: November 27, 2021, 07:11:42 AM »
Read the quote again - that's not what you said.  You said of this thread, "solve non-existent problems they didn't understand".  That's an insult, not curiousity.  You claim others "didn't understand", implying you do?  And you said "non-existent problems" covering every post in this thread?  That comes off as arrogant and trolling.

Perhaps your definition troll differs from mine. I feel like Iím being gaslit here.

Reread the thread. There are examples of: Ticketmaster replacements, supply chain tracking, etc. And they all fall into the ďthe poster did not understand the problem at hand. And blockchain is also an non-solutionĒ. I do not believe you are debating in good faith. I wonít recognize any further bad-faith responses from you.
My quoting you is gaslighting?  I think the distinction you're missing is that something can both be true and be offensive.  Someone calling their boss a jerk may be true, but they can still get fired for offending their boss.  Your original quote, which I keep going back to, was offensive.

Now to take what you're bringing up, it's also not true.  There are actual problems Bitcoin aims to solve.  The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.  There's mentions of people sending cross-border payments without Western Union taking a 6% fee.  There's various discussions of real problems that you ignore by calling everything in this thread a "non-problem".

1. I think the utility of crypto as a currency in 3rd world countries with unstable currencies is real.

This is the main reason that I am pro-crypto...it solves several problems that the world needs solved...
1.  It's a global currency in a world that is now global. 
2.  Even if picked a nation-state backed currency like the dollar, the Euro, or the yuan to be a universal currency, it would still  require us to trust that nation state to
      a) not debase it...which we know won't happen...all nation states are debasing their currency by printing money.
      b) not cease to exist.  History shows us that the rise and fall of empires is a given.  The people who live in the US may continue to thrive if the U.S. empire changed ownership, but it's currency would likely be replaced.  Crypto is not tied to a nation state, so as long as there's internet, bitcoin will still be there. 

i think we've seen a practical application of block chain thru the tracking of digital art and media that people are selling.

Bitcoin can handle 7 transactions per second that's it.
In comparison, Visa can handle 45,000+ transactions vs Lightning currently at 25Mil per second but with the potential to do hundreds of millions.
Lightning solved the scaleability issue in this instance but there are always new projects and improvements in the wings.

The history of vulnerabilities with cash and credit card is even less encouraging because, unlike cash and credit card vulnerability, Lightning Network fixed their issues well over a year ago.  Also, no one lost funds due to a lightning network vulnerability.  The same cannot be said about the alternative.

I really, really hate paying credit card transaction fees. Crypto has the promise to solve this and make humanity vastly better off, but because bitcoin is so terribly designed it is actually preventing that scenario from becoming a reality.

I don't expect Bitcoin to work miracles in El Salvador, but I can easily imagine that thousands of people are already seeing tangible benefits. Let's say my neighbor and I both receive $100/month remittance from a relative in the United States, which is a very common situation there. Every month we walk to the Western Union office where we collect $94 after fees. Only this month I've received $100 through the Chivo App with no fees and didn't have to leave my home. I'm already $6 ahead, which is the first real-world tangible benefit most El Salvadorans will notice.



MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #656 on: November 27, 2021, 07:26:10 AM »
In a poll I created, I mentioned rounding my crypto allocation up to 1%.  In this thread I also mentioned 1%.  So I find it odd that people want to accuse me of chasing crypto, when it's clearly "adding a low% of crypto" as the thread title states. 

And I will report each of them to the mods for breaking the forum rule of "attack an argument, not a person".  Times past I might have argued back and forth, and brushed off the character assassination.  Now I view it as someone who needs to learn the forum rules, and isn't worth the back and forth.  So if you see me not respond to one of these character attacks, it's with this in mind.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #657 on: November 27, 2021, 03:37:38 PM »
The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.

The Lightning Network has serious security vulnerabilities and undermines the security and anonymity of Bitcoin's blockchain.  While it might be at some point in the future . . . to date it's not a safe or effective way to transact.

onecoolcat

  • Pencil Stache
  • ****
  • Posts: 603
  • Age: 34
  • Location: SoFla
Re: What do you think of adding a low% of crypto allocation
« Reply #658 on: November 27, 2021, 11:21:19 PM »
The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.

The Lightning Network has serious security vulnerabilities. . .

You should point them out then so you can collect on a large bug bounty.

The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.
. . . undermines the security and anonymity of Bitcoin's blockchain. . .

This statement does not make any sense. 

The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.

. . . While it might be at some point in the future . . . to date it's not a safe or effective way to transact.

Tell that to the tens-of-thousands of users that safely and effectively use the LN daily.


MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #659 on: November 28, 2021, 01:20:55 AM »
The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.

The Lightning Network has serious security vulnerabilities and undermines the security and anonymity of Bitcoin's blockchain.  While it might be at some point in the future . . . to date it's not a safe or effective way to transact.
And others answered your post about that, that Lightning Network has fixed theoretical vulnerabilities, while nobody has lost money.  Another poster compared that to credit cards, where the vulnerabilities persist.

But my point was to refute the_gastropod's claim that crypto deals with non-problems.  A cheaper payment system can compete with Visa and Mastercard, who charge vendors a fee.  Bitcoin allows cross-border transfers, which avoids Western Union's even higher fees (according to the poster I quoted above).

Rosy

  • Magnum Stache
  • ******
  • Posts: 2601
  • Location: Florida
Re: What do you think of adding a low% of crypto allocation
« Reply #660 on: November 28, 2021, 08:29:35 AM »
The thread has numerous posts about how Lightning Network, which can scale up beyond what Visa already processes.

The Lightning Network has serious security vulnerabilities. . .

You should point them out then so you can collect on a large bug bounty.

I think that is a great idea:)! There are millions of dollars ready and waiting for you to collect - all you have to do is find proof.

We've already discussed this from every angle what happens on lightning does not affect the bitcoin blockchain. Lightning is a success and they are developing/building bridges to other chains and more...

I wonder what Visa and Mastercard will give you if you find a flaw in their system?
They've been around for decades and undeniably still have hacks.

Think about it,
worldwide payment systems whether using crypto or not - cannot afford known serious security vulnerabilities or they are dead in the water.

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #661 on: November 28, 2021, 10:13:35 AM »

But my point was to refute the_gastropod's claim that crypto deals with non-problems.  A cheaper payment system can compete with Visa and Mastercard, who charge vendors a fee.  Bitcoin allows cross-border transfers, which avoids Western Union's even higher fees (according to the poster I quoted above).

But youíre not refuting my point. Solving problems youíve created for yourself is not solving a problem. If I invent a car that runs on hamburgers, but itís wildly expensive to run, replacing 40% of the hamburgers with gasoline is not solving a problem the world has, itís solving a problem I have created by inventing my burger-mobile.

Iíve conceded repeatedly that one of the few things cryptocurrencies currently can do is: regulatory arbitrage. In fact, I stated precisely this in the same post youíre allegedly trying to refute. Iíll include it below again for completeness:

and still the only use-cases are speculation, regulatory arbitrage, ransomware, and criminality. Is it not possible thatólike the Segwayócrypto is a really amazing solution to almost nothing worthwhile?

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

Do you see why itís easy to believe youíre not arguing in good faith? Iíll try to keep an open mind. Please. Give me a use-case that doesnít fit the above exceptions that Iíve repeatedly given.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #662 on: November 28, 2021, 01:05:13 PM »

But my point was to refute the_gastropod's claim that crypto deals with non-problems.  A cheaper payment system can compete with Visa and Mastercard, who charge vendors a fee.  Bitcoin allows cross-border transfers, which avoids Western Union's even higher fees (according to the poster I quoted above).

But youíre not refuting my point. Solving problems youíve created for yourself is not solving a problem. If I invent a car that runs on hamburgers, but itís wildly expensive to run, replacing 40% of the hamburgers with gasoline is not solving a problem the world has, itís solving a problem I have created by inventing my burger-mobile.

Iíve conceded repeatedly that one of the few things cryptocurrencies currently can do is: regulatory arbitrage. In fact, I stated precisely this in the same post youíre allegedly trying to refute. Iíll include it below again for completeness:

and still the only use-cases are speculation, regulatory arbitrage, ransomware, and criminality. Is it not possible thatólike the Segwayócrypto is a really amazing solution to almost nothing worthwhile?

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

Do you see why itís easy to believe youíre not arguing in good faith? Iíll try to keep an open mind. Please. Give me a use-case that doesnít fit the above exceptions that Iíve repeatedly given.
I said a "cheaper payment system", referring to the Lightning Network, and you call that "Solving problems youíve created for yourself"?  Instead of talking about the "cheaper payment system", you make up a story about cars running on hamburgers.  Who was arguing in bad faith, again?

You refuse to talk about "cheaper payment systems" because it's a real problem, and you claimed this thread had none.  Lightning Network starts and ends with transactions on Bitcoin's Blockchain, and uses Bitcoin for payments.  It has been mentioned repeatedly in this thread.  I'll repeat two quotes from earlier:


Bitcoin can handle 7 transactions per second that's it.
In comparison, Visa can handle 45,000+ transactions vs Lightning currently at 25Mil per second but with the potential to do hundreds of millions.
Lightning solved the scaleability issue in this instance but there are always new projects and improvements in the wings.

The history of vulnerabilities with cash and credit card is even less encouraging because, unlike cash and credit card vulnerability, Lightning Network fixed their issues well over a year ago.  Also, no one lost funds due to a lightning network vulnerability.  The same cannot be said about the alternative.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 2787
  • Location: Seattle, WA
Re: What do you think of adding a low% of crypto allocation
« Reply #663 on: November 28, 2021, 01:21:44 PM »
And others answered your post about that, that Lightning Network has fixed theoretical vulnerabilities, while nobody has lost money.  Another poster compared that to credit cards, where the vulnerabilities persist.

But my point was to refute the_gastropod's claim that crypto deals with non-problems.  A cheaper payment system can compete with Visa and Mastercard, who charge vendors a fee.  Bitcoin allows cross-border transfers, which avoids Western Union's even higher fees (according to the poster I quoted above).

All your benefits should be prefaced with "in theory."   First, lets talk about the payment system.  The grocery store, gas station, and mortgage company don't accept Bitcoin.  They only take dollars.  So in order to buy a latte'  a transaction looks like this: USD -> BTC --> transfer via Lightning --> USD.  So there is still a round trip on the blockchain before the merchant can spend it.  That guaranteed more expensive than a Visa transaction.   

And let's do a thought experiment.  Big retailers like Wal-Mart and Amazon have sales in the hundreds of billions per year.  If they could shave even half a percent off of transaction costs that would still result in billions of dollars in savings.  I guarantee a tech company like Amazon isn't going to leave billions of dollars on the table because they don't understand Bitcoin/Lightning tech.  They've looked at it and concluded it doesn't make sense. 

A problem is that at a minimum, the capital cost of the transaction must be locked up per channel.   But if the payment is not sent directly from payer to payee, but rather hops via other routing nodes, these nodes also need to lock up at least transaction cost.  For that reason, the Lightning transaction failure rate increases in proportion to the size of the transaction.   No merchant wants  a payment system that has a risk of failure for high value transactions.  And it is also a lot of capital being locked up for unproductive uses. 

Another problem is the liveness issue.  Both parties need to be online to complete the transaction.  There are work arounds for this like watchtowers, which increase costs.  Or use of a custodial wallet--using a trusted third party, in other words. 

Let that last part sink in:  Lightning is a centralized network that benefits from use of a trusted third party.  It is the antithesis of the entire raison d'etre of Bitcoin.   It represents everything Bitcoin was designed to eliminate. 

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #664 on: November 28, 2021, 01:37:54 PM »
Perfectly stated, Telecaster. MustacheAndaHalf. I do not mean this as a slight. It is just self-evident that once again, youíre providing hypothetical solutions to problems you donít understand that well. Blockchain literally cannot be cheaper than a centralized solution like Visa or Mastercard because it is by design less efficient for the sake of decentralization. Again: the only place it can be cheaper is by bypassing regulations (which is what I mean by ďregulatory arbitrageĒ)

Telecaster

  • Magnum Stache
  • ******
  • Posts: 2787
  • Location: Seattle, WA
Re: What do you think of adding a low% of crypto allocation
« Reply #665 on: November 28, 2021, 02:41:01 PM »
But youíre not refuting my point. Solving problems youíve created for yourself is not solving a problem. If I invent a car that runs on hamburgers, but itís wildly expensive to run, replacing 40% of the hamburgers with gasoline is not solving a problem the world has, itís solving a problem I have created by inventing my burger-mobile.

Iíve conceded repeatedly that one of the few things cryptocurrencies currently can do is: regulatory arbitrage. In fact, I stated precisely this in the same post youíre allegedly trying to refute. Iíll include it below again for completeness:

Do you see why itís easy to believe youíre not arguing in good faith? Iíll try to keep an open mind. Please. Give me a use-case that doesnít fit the above exceptions that Iíve repeatedly given.
I said a "cheaper payment system", referring to the Lightning Network, and you call that "Solving problems youíve created for yourself"?  Instead of talking about the "cheaper payment system", you make up a story about cars running on hamburgers.  Who was arguing in bad faith, again?

I see that @the_gastropod already responded, but I did not believe his analogy was in bad faith.  Let me explain.  Many people like the idea of Bitcoin for a long list of reasons we are all familiar with.  But two of the problems with using Bitcoin are 1) scalability and 2) transaction cost.  Lightning fixes some of those problems, but creates new problems which also require new fixes on top of the original fix.   

For example, the first step to initiating a Lightning transaction is to open a node.  I guarantee that step alone just eliminated 95% of the potential user base.    And you can't open a node on mobile at all without use of a third party app.  The original Bitcoin paper is titled "A Peer-to-Peer Electronic Cash System."  Using a third-party app isn't peer-to-peer. 

Another problem is that users don't pay Visa fees.  The merchants do.  Merchants could eliminate Visa fees tomorrow by requiring cash, at least for in-person purchases.  But most of them don't because the convenience of  credit card purchases increases consumer spending, and that makes up for the higher costs.   Easy to pay = good, from the payee's perspective.

Getting set up to open a Lightning node is a lot harder than swiping the Visa you already have.  The fact it might be cheaper for the merchant (which I don't believe, as discussed in my previous post) but it doesn't help the consumer--which is the person you need to convince.   Now, the merchant could rebate a percentage of the purchase price in exchange for using Lightning.  But doesn't benefit the merchant.   Why wouldn't he just continue to use the existing system if the costs are the same?  For mobile consumers, which is most of them--using Lightning in any practical sense requires using a custodial wallet.  Which is nearly identical to using a bank, but without the regulatory protections of using a bank.

Point is, as you start adding fixes on top of fixes you also start eliminating reasons to own Bitcoin in the first place.   I laughed at @the_gastropod 's hamburger car analogy, but it made sense.  The more you start trying to make the hamburger car function as well as a real car, the more like a real car it becomes. 

Malcat

  • Walrus Stache
  • *******
  • Posts: 9478
Re: What do you think of adding a low% of crypto allocation
« Reply #666 on: November 28, 2021, 03:17:34 PM »
But youíre not refuting my point. Solving problems youíve created for yourself is not solving a problem. If I invent a car that runs on hamburgers, but itís wildly expensive to run, replacing 40% of the hamburgers with gasoline is not solving a problem the world has, itís solving a problem I have created by inventing my burger-mobile.

Iíve conceded repeatedly that one of the few things cryptocurrencies currently can do is: regulatory arbitrage. In fact, I stated precisely this in the same post youíre allegedly trying to refute. Iíll include it below again for completeness:

Do you see why itís easy to believe youíre not arguing in good faith? Iíll try to keep an open mind. Please. Give me a use-case that doesnít fit the above exceptions that Iíve repeatedly given.
I said a "cheaper payment system", referring to the Lightning Network, and you call that "Solving problems youíve created for yourself"?  Instead of talking about the "cheaper payment system", you make up a story about cars running on hamburgers.  Who was arguing in bad faith, again?

I see that @the_gastropod already responded, but I did not believe his analogy was in bad faith.  Let me explain.  Many people like the idea of Bitcoin for a long list of reasons we are all familiar with.  But two of the problems with using Bitcoin are 1) scalability and 2) transaction cost.  Lightning fixes some of those problems, but creates new problems which also require new fixes on top of the original fix.   

For example, the first step to initiating a Lightning transaction is to open a node.  I guarantee that step alone just eliminated 95% of the potential user base.    And you can't open a node on mobile at all without use of a third party app.  The original Bitcoin paper is titled "A Peer-to-Peer Electronic Cash System."  Using a third-party app isn't peer-to-peer. 

Another problem is that users don't pay Visa fees.  The merchants do.  Merchants could eliminate Visa fees tomorrow by requiring cash, at least for in-person purchases.  But most of them don't because the convenience of  credit card purchases increases consumer spending, and that makes up for the higher costs.   Easy to pay = good, from the payee's perspective.

Getting set up to open a Lightning node is a lot harder than swiping the Visa you already have.  The fact it might be cheaper for the merchant (which I don't believe, as discussed in my previous post) but it doesn't help the consumer--which is the person you need to convince.   Now, the merchant could rebate a percentage of the purchase price in exchange for using Lightning.  But doesn't benefit the merchant.   Why wouldn't he just continue to use the existing system if the costs are the same?  For mobile consumers, which is most of them--using Lightning in any practical sense requires using a custodial wallet.  Which is nearly identical to using a bank, but without the regulatory protections of using a bank.

Point is, as you start adding fixes on top of fixes you also start eliminating reasons to own Bitcoin in the first place.   I laughed at @the_gastropod 's hamburger car analogy, but it made sense.  The more you start trying to make the hamburger car function as well as a real car, the more like a real car it becomes.

This is exactly the thing. There may be brilliant uses for crypto, but like with any revolutionary invention, the uses that people propose for them tend to be stupid as fuck. Instead, it's the uses that evolve to meet the existence of the revolutionary tech that are the game changers.

The internet existed for a very long time before it became all that useful to anyone, and the predictions of what it could be used for back then were generally idiotic and easily shot down.

The phrase is that "necessity is the mother of invention" but history has proven that again and again to be a load of horseshit. People invent things generally because they're fucking nuts and feel compelled to, then down the line someone sane and practical figures out a use for it.

Wasn't the first internal combustion engine absolutely massive and had no practical use whatsoever, or something like that?

If blockchain ends up revolutionary, like the internet, and like many technologies before it, it will be difficult for us pre-revolutionary people to predict what it will mean to the world.

The question as to whether or not it's revolutionary remains to be seen.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #667 on: November 29, 2021, 07:06:53 AM »
Perfectly stated, Telecaster. MustacheAndaHalf. I do not mean this as a slight. It is just self-evident that once again, youíre providing hypothetical solutions to problems you donít understand that well. Blockchain literally cannot be cheaper than a centralized solution like Visa or Mastercard because it is by design less efficient for the sake of decentralization. Again: the only place it can be cheaper is by bypassing regulations (which is what I mean by ďregulatory arbitrageĒ)
You're trying to move the goalposts, when I've bought up your same quote over and over.  You did not talk about "hypothetical solutions", you said and I quote, "solve non-existent problems".

You were wrong to ignore the Lightning Network, which does not "solve non-existent problems".  This post of yours, which I've quoted repeatedly, shows you were wrong.  Now others can watch you refuse to admit it for the 3rd or 4th time.

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #668 on: November 29, 2021, 07:19:16 AM »
And others answered your post about that, that Lightning Network has fixed theoretical vulnerabilities, while nobody has lost money.  Another poster compared that to credit cards, where the vulnerabilities persist.

But my point was to refute the_gastropod's claim that crypto deals with non-problems.  A cheaper payment system can compete with Visa and Mastercard, who charge vendors a fee.  Bitcoin allows cross-border transfers, which avoids Western Union's even higher fees (according to the poster I quoted above).

All your benefits should be prefaced with "in theory."   First, lets talk about the payment system.  The grocery store, gas station, and mortgage company don't accept Bitcoin.  They only take dollars.  So in order to buy a latte'  a transaction looks like this: USD -> BTC --> transfer via Lightning --> USD.  So there is still a round trip on the blockchain before the merchant can spend it.  That guaranteed more expensive than a Visa transaction.   

And let's do a thought experiment.  Big retailers like Wal-Mart and Amazon have sales in the hundreds of billions per year.  If they could shave even half a percent off of transaction costs that would still result in billions of dollars in savings.  I guarantee a tech company like Amazon isn't going to leave billions of dollars on the table because they don't understand Bitcoin/Lightning tech.  They've looked at it and concluded it doesn't make sense. 

A problem is that at a minimum, the capital cost of the transaction must be locked up per channel.   But if the payment is not sent directly from payer to payee, but rather hops via other routing nodes, these nodes also need to lock up at least transaction cost.  For that reason, the Lightning transaction failure rate increases in proportion to the size of the transaction.   No merchant wants  a payment system that has a risk of failure for high value transactions.  And it is also a lot of capital being locked up for unproductive uses. 

Another problem is the liveness issue.  Both parties need to be online to complete the transaction.  There are work arounds for this like watchtowers, which increase costs.  Or use of a custodial wallet--using a trusted third party, in other words. 

Let that last part sink in:  Lightning is a centralized network that benefits from use of a trusted third party.  It is the antithesis of the entire raison d'etre of Bitcoin.   It represents everything Bitcoin was designed to eliminate.
Since when does the Lightning Network does not require third-party custodial wallets?  Can you quote your source for that claim?

I don't think that's true at all.  Others more familiar with Lightning Network can do a better job refuting it.  What I read is that either party can finish the transaction by themselves - they can close the channel at any time.  If one party is trying to steal from the other, they can be caught up to a week later, and lose all the Bitcoin they put into the transaction.  None of which involves third-party trust or wallets, so you should give a source for that.

I don't know who you're quoting with "in theory", but I would agree Bitcoin and Lightning Network are speculative.  That's why there's controversy, because some people believe there will be more value than the current BTC price, and others argue less - or even worthless.

If a start-up creates a payment system, they face a similar problem.  How many brick and mortar stores accept PayPal?  Not as many as accept it online.  A payment system starts as an untested experiment that people fear will risk their money.  Early adopters need to prove it works before there's any hope of adoption by later waves of customers and vendors.  We're not there yet for Lightning Network - it's speculative, and early on.  So yes, we don't know how it will turn out, which is why there's such strong disagreement in this thread about crypto.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #669 on: November 29, 2021, 07:22:16 AM »
By the way, for people who view my posts here and think I own lots of crypto, I don't.  I've created a thread to discuss that over in 'case studies' so threads here don't go off topic.  If you think I am personally being too risky and chasing crypto, well I disagree, but it can be discussed here:
https://forum.mrmoneymustache.com/case-studies/passive-investor-20-years-turned-partially-active-in-2019/

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #670 on: November 29, 2021, 07:36:44 AM »
By the way, for people who view my posts here and think I own lots of crypto, I don't.  I've created a thread to discuss that over in 'case studies' so threads here don't go off topic.  If you think I am personally being too risky and chasing crypto, well I disagree, but it can be discussed here:
https://forum.mrmoneymustache.com/case-studies/passive-investor-20-years-turned-partially-active-in-2019/

Is that whole thread just you arguing with nobody about how awesome your investment sense is?

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #671 on: November 29, 2021, 08:06:20 AM »
By the way, for people who view my posts here and think I own lots of crypto, I don't.  I've created a thread to discuss that over in 'case studies' so threads here don't go off topic.  If you think I am personally being too risky and chasing crypto, well I disagree, but it can be discussed here:
https://forum.mrmoneymustache.com/case-studies/passive-investor-20-years-turned-partially-active-in-2019/
Is that whole thread just you arguing with nobody about how awesome your investment sense is?
Well played. :)
It's more of an invitation to discuss my personal performance and investment choices there, for people who have trouble with "attack an argument, not a person" in the forum rules.  I do not have an "awesome ... investment sense" now, because my experiment is over and I've sold my outperforming investments.  But I did beat the market - see "an experiment" from Mar 26 2020 to Nov 5, 2021.

If you lack the urge to tell me to stop chasing crypto, that "Case Studies" thread is probably not for you.  But others here take my posts and assume I chase crypto with a large allocation, and I'd rather their opinions find voice in one thread there, than derail threads in this forum.

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #672 on: November 29, 2021, 08:19:39 AM »
You're trying to move the goalposts, when I've bought up your same quote over and over.  You did not talk about "hypothetical solutions", you said and I quote, "solve non-existent problems".

You were wrong to ignore the Lightning Network, which does not "solve non-existent problems".  This post of yours, which I've quoted repeatedly, shows you were wrong.  Now others can watch you refuse to admit it for the 3rd or 4th time.

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

There is a massive misunderstanding going on. The problem Lightning Network solves is a problem Bitcoin created. This was what my hamburger car analogy was all about. Altering a hamburger car to use gasoline isn't really solving a problemóit's just making your hamburger car less hamburgery. It's solving a problem you created for yourself by making a car that runs on hamburgers.

If you want me to admit "Lightning Network solved a problem Bitcoin created". Sure. Centralization (Lightning Network) is necessarily more efficient than decentralization. In that sense, Lightning Network solves a problem that Bitcoin suffers from. But is that really what you're arguing? I'm really bending over backwards to assume you're not trolling, at this point, though.
« Last Edit: November 29, 2021, 08:22:40 AM by the_gastropod »

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #673 on: November 29, 2021, 08:46:36 AM »
You're trying to move the goalposts, when I've bought up your same quote over and over.  You did not talk about "hypothetical solutions", you said and I quote, "solve non-existent problems".

You were wrong to ignore the Lightning Network, which does not "solve non-existent problems".  This post of yours, which I've quoted repeatedly, shows you were wrong.  Now others can watch you refuse to admit it for the 3rd or 4th time.

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

There is a massive misunderstanding going on. The problem Lightning Network solves is a problem Bitcoin created. This was what my hamburger car analogy was all about. Altering a hamburger car to use gasoline isn't really solving a problemóit's just making your hamburger car less hamburgery. It's solving a problem you created for yourself by making a car that runs on hamburgers.

If you want me to admit "Lightning Network solved a problem Bitcoin created". Sure. Centralization (Lightning Network) is necessarily more efficient than decentralization. In that sense, Lightning Network solves a problem that Bitcoin suffers from. But is that really what you're arguing? I'm really bending over backwards to assume you're not trolling, at this point, though.
You invented the part in quotes, rather than quote what I actually said.  Quote me.  I've given you plenty of examples where I quote you.

(1) gastropod said "solve non-problems" referring to this entire thread, including the cheaper payment system called the Lightning Network
(2) I provided evidence this cheaper payment system, the Lightning Network, was discussed earlier.
My conclusion is the Lighting Network aims to provide a cheaper payment system (2), which is not solving a non-problem (1), therefore the gastropod's earlier statement (1) was wrong.


(1)
Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

(2)
Bitcoin can handle 7 transactions per second that's it.
In comparison, Visa can handle 45,000+ transactions vs Lightning currently at 25Mil per second but with the potential to do hundreds of millions.
Lightning solved the scaleability issue in this instance but there are always new projects and improvements in the wings.

The history of vulnerabilities with cash and credit card is even less encouraging because, unlike cash and credit card vulnerability, Lightning Network fixed their issues well over a year ago.  Also, no one lost funds due to a lightning network vulnerability.  The same cannot be said about the alternative.

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #674 on: November 29, 2021, 09:07:16 AM »
You're trying to move the goalposts, when I've bought up your same quote over and over.  You did not talk about "hypothetical solutions", you said and I quote, "solve non-existent problems".

You were wrong to ignore the Lightning Network, which does not "solve non-existent problems".  This post of yours, which I've quoted repeatedly, shows you were wrong.  Now others can watch you refuse to admit it for the 3rd or 4th time.

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

There is a massive misunderstanding going on. The problem Lightning Network solves is a problem Bitcoin created. This was what my hamburger car analogy was all about. Altering a hamburger car to use gasoline isn't really solving a problemóit's just making your hamburger car less hamburgery. It's solving a problem you created for yourself by making a car that runs on hamburgers.

If you want me to admit "Lightning Network solved a problem Bitcoin created". Sure. Centralization (Lightning Network) is necessarily more efficient than decentralization. In that sense, Lightning Network solves a problem that Bitcoin suffers from. But is that really what you're arguing? I'm really bending over backwards to assume you're not trolling, at this point, though.
You invented the part in quotes, rather than quote what I actually said.  Quote me.  I've given you plenty of examples where I quote you.

Ok, this is apparently one part of confusion. Quotation marks don't always indicate a quotation. You quote titles in books, etc. My use of quotation marks here is grouping a thought / argument. I'm explicitly asking you if that is what you are arguing. Apparently it is not. But I am really struggling to understand your point.

(1) gastropod said "solve non-problems" referring to this entire thread, including the cheaper payment system called the Lightning Network
(2) I provided evidence this cheaper payment system, the Lightning Network, was discussed earlier.
My conclusion is the Lighting Network aims to provide a cheaper payment system (2), which is not solving a non-problem (1), therefore the gastropod's earlier statement (1) was wrong.

(1)
Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

(2)
Bitcoin can handle 7 transactions per second that's it.
In comparison, Visa can handle 45,000+ transactions vs Lightning currently at 25Mil per second but with the potential to do hundreds of millions.
Lightning solved the scaleability issue in this instance but there are always new projects and improvements in the wings.

...What in the world? I am so confused here. You're comparing Lightning's hypothetical upper-limit to Visa's actual transactions to assert that Lightning Network solves a real-world problemóthat Visa users suffer from Visa's well-known transaction scalability issues? And that is also your argument to prove that I was wrong about solving non-problems? You've got to be kidding me.
« Last Edit: November 29, 2021, 09:09:32 AM by the_gastropod »

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #675 on: November 29, 2021, 09:09:35 AM »

The history of vulnerabilities with cash and credit card is even less encouraging because, unlike cash and credit card vulnerability, Lightning Network fixed their issues well over a year ago.  Also, no one lost funds due to a lightning network vulnerability.  The same cannot be said about the alternative.

It's not correct to compare 'losses' due to credit card vulnerability with losses due to lightning network vulnerability.

With credit cards, the individual users are protected by the credit card company.  Any issue or problem that exists and causes a loss will not be borne by the credit card holders - and thus is inconsequential from a use perspective.  This is fundamentally different from problems in the Lightning network where the risk is entirely borne by users.

Also, the Lightning Network has not fixed their known issues - several still exist.  See Griefing attacks, Eclipsing attacks, Pinning attacks, and Flood & Loot attacks.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #676 on: November 29, 2021, 10:28:44 AM »
You're trying to move the goalposts, when I've bought up your same quote over and over.  You did not talk about "hypothetical solutions", you said and I quote, "solve non-existent problems".

You were wrong to ignore the Lightning Network, which does not "solve non-existent problems".  This post of yours, which I've quoted repeatedly, shows you were wrong.  Now others can watch you refuse to admit it for the 3rd or 4th time.

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

There is a massive misunderstanding going on. The problem Lightning Network solves is a problem Bitcoin created. This was what my hamburger car analogy was all about. Altering a hamburger car to use gasoline isn't really solving a problemóit's just making your hamburger car less hamburgery. It's solving a problem you created for yourself by making a car that runs on hamburgers.

If you want me to admit "Lightning Network solved a problem Bitcoin created". Sure. Centralization (Lightning Network) is necessarily more efficient than decentralization. In that sense, Lightning Network solves a problem that Bitcoin suffers from. But is that really what you're arguing? I'm really bending over backwards to assume you're not trolling, at this point, though.
You invented the part in quotes, rather than quote what I actually said.  Quote me.  I've given you plenty of examples where I quote you.

Ok, this is apparently one part of confusion. Quotation marks don't always indicate a quotation. You quote titles in books, etc. My use of quotation marks here is grouping a thought / argument. I'm explicitly asking you if that is what you are arguing. Apparently it is not. But I am really struggling to understand your point.

(1) gastropod said "solve non-problems" referring to this entire thread, including the cheaper payment system called the Lightning Network
(2) I provided evidence this cheaper payment system, the Lightning Network, was discussed earlier.
My conclusion is the Lighting Network aims to provide a cheaper payment system (2), which is not solving a non-problem (1), therefore the gastropod's earlier statement (1) was wrong.

(1)
Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

(2)
Bitcoin can handle 7 transactions per second that's it.
In comparison, Visa can handle 45,000+ transactions vs Lightning currently at 25Mil per second but with the potential to do hundreds of millions.
Lightning solved the scaleability issue in this instance but there are always new projects and improvements in the wings.

...What in the world? I am so confused here. You're comparing Lightning's hypothetical upper-limit to Visa's actual transactions to assert that Lightning Network solves a real-world problemóthat Visa users suffer from Visa's well-known transaction scalability issues? And that is also your argument to prove that I was wrong about solving non-problems? You've got to be kidding me.
I used "cheaper payment system" in every line of the middle of my post, and you still refuse to talk about "cheaper payment system".  You have literally ignored the key point of my post three times in a row, which is a cheaper payment system.  How many posts do I have to write "cheaper payment system" before you use that phrase even once?

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #677 on: November 29, 2021, 10:30:40 AM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #678 on: November 29, 2021, 11:09:02 AM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

What's extra funny about this is: LN is a de-decentralization scheme. It's a mechanism to try to strike a balance between centralization and decentralization, because decentralization is inherently slow. In response to my assertion that blockchain almost exclusively solves non-problems, you cite a bypassing of the blockchain that makes blockchain-based systems faster as evidence that blockchain solves problems. With all due respect, that's a weird take, friend.
« Last Edit: November 29, 2021, 11:20:49 AM by the_gastropod »

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #679 on: November 29, 2021, 11:10:11 AM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

Yep - cheaper payment system.  Cheaper than using bitcoin.

The whole point of the invention of the Lightning Network was to solve the problems caused by attempting to use a decentralized, anonymous, peer to peer method of trading a commodity as though it were a currency.  That's why it implemented a centralized, fully identified, third party dependent payment system.

index

  • Bristles
  • ***
  • Posts: 430
Re: What do you think of adding a low% of crypto allocation
« Reply #680 on: November 29, 2021, 11:48:26 AM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

What's extra funny about this is: LN is a de-decentralization scheme. It's a mechanism to try to strike a balance between centralization and decentralization, because decentralization is inherently slow. In response to my assertion that blockchain almost exclusively solves non-problems, you cite a bypassing of the blockchain that makes blockchain-based systems faster as evidence that blockchain solves problems. With all due respect, that's a weird take, friend.

Let's define the competition as well:

Credit cards - Visa charges 14 bps + 5 - 22c to facilitate the transaction. The majority of the headline 2-3% transaction cost is split between the issuing and receiving bank to facilitate the loan and provide consumer protections and benefits (rewards).

Debit cards - Visa charges 5 bps + 22c per transaction. The consumer protections are still better with a debit card than the non-guaranty provided by the lightening network, but at least compare the right product. The fees on a $100 debit transaction are 27c.
 

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #681 on: November 29, 2021, 12:58:44 PM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

What's extra funny about this is: LN is a de-decentralization scheme. It's a mechanism to try to strike a balance between centralization and decentralization, because decentralization is inherently slow. In response to my assertion that blockchain almost exclusively solves non-problems, you cite a bypassing of the blockchain that makes blockchain-based systems faster as evidence that blockchain solves problems. With all due respect, that's a weird take, friend.

Let's define the competition as well:

Credit cards - Visa charges 14 bps + 5 - 22c to facilitate the transaction. The majority of the headline 2-3% transaction cost is split between the issuing and receiving bank to facilitate the loan and provide consumer protections and benefits (rewards).

Debit cards - Visa charges 5 bps + 22c per transaction. The consumer protections are still better with a debit card than the non-guaranty provided by the lightening network, but at least compare the right product. The fees on a $100 debit transaction are 27c.

Are we not discussing this from an actual human use case?

As a credit card end user, I have never paid a fee to use a credit card.  0$ per transaction.  For that 0$, I have protection from the issuing bank against fraudulent use of my credit, the ability to perform a chargeback should a problem with a transaction arise, a warranty on a variety of items, insurance, and a rewards program.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 2787
  • Location: Seattle, WA
Re: What do you think of adding a low% of crypto allocation
« Reply #682 on: November 29, 2021, 01:02:36 PM »
Since when does the Lightning Network does not require third-party custodial wallets?  Can you quote your source for that claim?

I don't think that's true at all.  Others more familiar with Lightning Network can do a better job refuting it.  What I read is that either party can finish the transaction by themselves - they can close the channel at any time.  If one party is trying to steal from the other, they can be caught up to a week later, and lose all the Bitcoin they put into the transaction.  None of which involves third-party trust or wallets, so you should give a source for that.

I don't know who you're quoting with "in theory", but I would agree Bitcoin and Lightning Network are speculative.  That's why there's controversy, because some people believe there will be more value than the current BTC price, and others argue less - or even worthless.

If a start-up creates a payment system, they face a similar problem.  How many brick and mortar stores accept PayPal?  Not as many as accept it online.  A payment system starts as an untested experiment that people fear will risk their money.  Early adopters need to prove it works before there's any hope of adoption by later waves of customers and vendors.  We're not there yet for Lightning Network - it's speculative, and early on.  So yes, we don't know how it will turn out, which is why there's such strong disagreement in this thread about crypto.

According to the AP Stylebook, a correct use of quotation marks is to set off or delineate a word or phrase.  For example:

The words "accept" and "except" are frequently confused.

The words in quotation marks aren't quotes.  Quotes are used to set them apart from the rest of the sentence.    I truly hate pedantic posts--like this one.  Sincere apologies up front, for that.  I mention this only because that use of quotations mark as a signifier has caused a huge amount of confusion in this thread.   You thought I was quoting someone when I was instead setting apart a phase.  In order to reduce the miscommunication, I'll use italics instead for that purpose from now on in this thread.

That out of the way, I may have misunderstood you when you listed the benefits of Lightning.  I thought you were listing actual benefits when you seem to be listing potential benefits.  Is that correct?  I agree, the benefits seem to be potential, not actual.

To be clear, I didn't say Lightning requires a third party, I said it benefits from use of a third party.  The exception is mobile because you cannot open your own node on a phone, so you must use a third party to make mobile payments via Lightning.  This is a major design flaw in my view. 

This also creates a philosophical problem.  The promise and premise of Bitcoin is that allows for trustless, peer-to-peer payments on a decentralized system that is not controlled by any government or organization.  This concept is intriguing to me, and the reason why I got interested in Bitcoin in the first place.      But once you start using Lightning, you've tossed at least two, if not all four of those premises.  So if you are going to toss out the benefits of Bitcoin, why not just stick with Visa?  Serious question.

And is it not just philosophical.  To great fanfare, El Salvador declared Bitcoin as legal tender and rolled out a wallet (which you don't have to use) and its own Lightning app, called Chivo.  So instead of a decentralized payment, we have centralized system, designed and operated by the government--and a government with a very sketchy history at that.  A centralized, government designed and operated payment system is as far from the basic promise of Bitcoin as you can get.    Yet, many people, including some on this board, think having the El Salvador government controlling Bitcoin payments is a major step forward in the evolution of Bitcoin.  Seems to me to be a gigantic leap backward, no?

Re: Paypal.  Great example.  IIRC, eBay's public interface was rolled out in 2000 (could be off on the dates a bit but something like that).   At the time, I was a big user of Ebay (this is before you could buy anything on Amazon) and I remember when it happened.     A problem at the time was most people didn't take credit cards and so you had to physically mail a check.  Slow, required trust, and just a big pain.  There were some work arounds, but they were a pain too.   Paypal fixed all that, and it was adopted by a huge percentage of Ebay users in what seemed like overnight.  Just two years later Paypal was purchased by eBay, who had come up with their own payment system but it never took off. 

The Lightning whitepaper was written in 2015.  Six years later, where is the Lightning eBay?  Nowhere.  From a consumer aspect, Visa works fine.   From the merchant side, you've claimed Lightning is a cheaper payment system and it is, but only compared to native Bitcoin.   The payee still has to convert Bitcoin to dollars, which is very expensive.  And there are also the capitalization costs of opening a node.   Those costs alone, I suspect eliminate or nearly eliminate any cost savings over Visa.  As I mentioned previously, if big venders thought they could save money with Lightning, they would have done so already. 

index

  • Bristles
  • ***
  • Posts: 430
Re: What do you think of adding a low% of crypto allocation
« Reply #683 on: November 29, 2021, 01:28:51 PM »
GuitarStv - Would you agree or disagree that Lightning Network was brought up earlier in this thread as a cheaper payment system?  I am pointing out, to no avail, that Lightning Network is a cheaper payment system, and therefore is not solving a non-problem.  I am still waiting, for the nth time in a row, for gastropod to use the phrase "cheaper payment system" when I repeat it in every sentence of my post.

That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

What's extra funny about this is: LN is a de-decentralization scheme. It's a mechanism to try to strike a balance between centralization and decentralization, because decentralization is inherently slow. In response to my assertion that blockchain almost exclusively solves non-problems, you cite a bypassing of the blockchain that makes blockchain-based systems faster as evidence that blockchain solves problems. With all due respect, that's a weird take, friend.

Let's define the competition as well:

Credit cards - Visa charges 14 bps + 5 - 22c to facilitate the transaction. The majority of the headline 2-3% transaction cost is split between the issuing and receiving bank to facilitate the loan and provide consumer protections and benefits (rewards).

Debit cards - Visa charges 5 bps + 22c per transaction. The consumer protections are still better with a debit card than the non-guaranty provided by the lightening network, but at least compare the right product. The fees on a $100 debit transaction are 27c.

Are we not discussing this from an actual human use case?

As a credit card end user, I have never paid a fee to use a credit card.  0$ per transaction.  For that 0$, I have protection from the issuing bank against fraudulent use of my credit, the ability to perform a chargeback should a problem with a transaction arise, a warranty on a variety of items, insurance, and a rewards program.

A credit card end user doesn't see the fees paid by merchants, but that doesn't mean the fees are not passed on. I was making the point comparing the Lightning network to credit cards with all the benefits you highlighted is comparing apples to a five coarse meal. Debit cards with a merchant fee of 27 bps on a $100 transaction is the more direct comparison to the Lightning network.

People spend more on credit cards because the solve paycheck to paycheck cashflow issues. Merchants are willing to pay 200 - 300 bps because consumers are willing to spend more. Merchants could elect to only accept only debit cards and cut processing fees by 90%. I see very few businesses which accept debit only or place a surcharge on credit; until that changes, I don't think Lightning has a future.     

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #684 on: November 29, 2021, 01:35:47 PM »
A credit card end user doesn't see the fees paid by merchants, but that doesn't mean the fees are not passed on. I was making the point comparing the Lightning network to credit cards with all the benefits you highlighted is comparing apples to a five coarse meal. Debit cards with a merchant fee of 27 bps on a $100 transaction is the more direct comparison to the Lightning network.

People spend more on credit cards because the solve paycheck to paycheck cashflow issues. Merchants are willing to pay 200 - 300 bps because consumers are willing to spend more. Merchants could elect to only accept only debit cards and cut processing fees by 90%. I see very few businesses which accept debit only or place a surcharge on credit; until that changes, I don't think Lightning has a future.   

Ah, I think I understand your point now . . . and agree with you.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #685 on: November 30, 2021, 06:21:52 AM »
That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

Making a payment system cheaper is not "solve non-existent problems", but is solving a real problem, which means your earlier quote was wrong.  I don't have to prove anything about Lightning Network itself, only that it is not "solve non-existent problems", but instead aims to make cheaper payments, which shows your earlier quote was wrong.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #686 on: November 30, 2021, 06:28:22 AM »
Many people are confused by my repeated attempts to show that gastropod's earlier comment on this thread was wrong.  Lightning Network tries to solve a real problem, that of cheaper payments than say Western Union (charging $6 on $100 transfer).  It's not about Lightning Network's success or failure - just that it was brought up earlier, and targets a real problem - not "solve non-existent problems".

What I got, surprisingly, was 3 replies in a row from gastropod never talking about the main topic of every one of my posts.  If I post a quote at the end, gastropod talks about the quote.  If I avoid quotes, gastropod makes something up to discuss, or changes the goalposts by claiming Lighting Network isn't successful.  Calling payment systems a "non-existent problem" is wrong, even before analyzing the success or failure of the Lightning Network.  Now there's finally a reply mentioning the cheaper payment system, but ignoring the context of gastropod's earlier post.

That's the pattern - never replying to what I said, which was that trying to have a cheaper payment system is not "solve non-existent problems".

talltexan

  • Magnum Stache
  • ******
  • Posts: 4780
Re: What do you think of adding a low% of crypto allocation
« Reply #687 on: November 30, 2021, 06:49:26 AM »
I reported three more trades over at my crypto- trading journal:

https://forum.mrmoneymustache.com/journals/tall-texan's-crypto-trading-journal/msg2939004/#msg2939004

Nothing but gratitude to the group on this thread for affecting my thinking!

the_gastropod

  • Bristles
  • ***
  • Posts: 399
  • Age: 35
  • Location: Brooklyn, NY
Re: What do you think of adding a low% of crypto allocation
« Reply #688 on: November 30, 2021, 06:57:46 AM »
That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

Making a payment system cheaper is not "solve non-existent problems", but is solving a real problem, which means your earlier quote was wrong.  I don't have to prove anything about Lightning Network itself, only that it is not "solve non-existent problems", but instead aims to make cheaper payments, which shows your earlier quote was wrong.

😂 good god. CoolóIím going to plant these magic beans I bought on eBay that solve world peace. Donít dare question me whether they solve real problems!

index

  • Bristles
  • ***
  • Posts: 430
Re: What do you think of adding a low% of crypto allocation
« Reply #689 on: November 30, 2021, 07:28:02 AM »
Many people are confused by my repeated attempts to show that gastropod's earlier comment on this thread was wrong.  Lightning Network tries to solve a real problem, that of cheaper payments than say Western Union (charging $6 on $100 transfer).  It's not about Lightning Network's success or failure - just that it was brought up earlier, and targets a real problem - not "solve non-existent problems".

What I got, surprisingly, was 3 replies in a row from gastropod never talking about the main topic of every one of my posts.  If I post a quote at the end, gastropod talks about the quote.  If I avoid quotes, gastropod makes something up to discuss, or changes the goalposts by claiming Lighting Network isn't successful.  Calling payment systems a "non-existent problem" is wrong, even before analyzing the success or failure of the Lightning Network.  Now there's finally a reply mentioning the cheaper payment system, but ignoring the context of gastropod's earlier post.

That's the pattern - never replying to what I said, which was that trying to have a cheaper payment system is not "solve non-existent problems".

Have you checked Western Union fees?

The service fee is $2 if you use a bank account and transferring to another bank (at least for India which I have used as well as Mexico). The $6 price you are quoting for a $100 transfer is to drop USD cash off at a store and have someone pick up Pesos in Mexico.

Wester Union charges a ~0.3% exchange rate when paying in cash or debit and transferring to a foreign bank and a 1.8% exchange rate when going cash to cash. If transferring bank to bank, the exchange rate is the spot rate.     

This site allows you to compare exchange rates and service fees for multiple transfer services:
https://www.exiap.com/

What is the exchange rate to use USD to buy BTC and later sell BTC and buy local currency? What infrastructure is needed by the person sending and receiving the money on the Lightning network to got USD->BTC->local currency? Western Union charges ~$6.80 for $100 ($26 for $1000) and neither the sender or receiver needs an internet connection or bank account to complete the transaction. If the sender and receiver both have a bank its $2 for up to $5000. If the sender has a bank and the receiver picks up cash it is $3 for up to $5000.

Western Union allows someone working in any country to send funds for local currency cash pickup in a different country. Can the Lightning network accomplish the same?     

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #690 on: November 30, 2021, 07:50:05 AM »
That nobody seems to be understanding the crux of your argument may indicate that your argument isn't particularly clear...

But ok. "cheaper payment system". Cheaper than what? To who? And how? Let's see some evidence. Why isn't it being more broadly used? What problem do you think the creators of the Lightning Network set out to solve? Was it "cheaper payments"? Further, do you think it's reasonable to compare costs of systems with under 60k users with ones serving over 1 billion people? Do you think Visa's operating at-cost, or do they operate on a profit because the market can bear that much in fees? If LN helped them lower their operating costs, do you think they'd adopt LN?

Every example future use-case given in this thread was people taking the solution (blockchain, duh) to solve non-existent problems they didn't understand.

Making a payment system cheaper is not "solve non-existent problems", but is solving a real problem, which means your earlier quote was wrong.  I don't have to prove anything about Lightning Network itself, only that it is not "solve non-existent problems", but instead aims to make cheaper payments, which shows your earlier quote was wrong.

😂 good god. CoolóIím going to plant these magic beans I bought on eBay that solve world peace. Donít dare question me whether they solve real problems!
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #691 on: November 30, 2021, 07:52:45 AM »
Many people are confused by my repeated attempts to show that gastropod's earlier comment on this thread was wrong.  Lightning Network tries to solve a real problem, that of cheaper payments than say Western Union (charging $6 on $100 transfer).  It's not about Lightning Network's success or failure - just that it was brought up earlier, and targets a real problem - not "solve non-existent problems".

What I got, surprisingly, was 3 replies in a row from gastropod never talking about the main topic of every one of my posts.  If I post a quote at the end, gastropod talks about the quote.  If I avoid quotes, gastropod makes something up to discuss, or changes the goalposts by claiming Lighting Network isn't successful.  Calling payment systems a "non-existent problem" is wrong, even before analyzing the success or failure of the Lightning Network.  Now there's finally a reply mentioning the cheaper payment system, but ignoring the context of gastropod's earlier post.

That's the pattern - never replying to what I said, which was that trying to have a cheaper payment system is not "solve non-existent problems".

Have you checked Western Union fees?

The service fee is $2 if you use a bank account and transferring to another bank (at least for India which I have used as well as Mexico). The $6 price you are quoting for a $100 transfer is to drop USD cash off at a store and have someone pick up Pesos in Mexico.

Wester Union charges a ~0.3% exchange rate when paying in cash or debit and transferring to a foreign bank and a 1.8% exchange rate when going cash to cash. If transferring bank to bank, the exchange rate is the spot rate.     

This site allows you to compare exchange rates and service fees for multiple transfer services:
https://www.exiap.com/

What is the exchange rate to use USD to buy BTC and later sell BTC and buy local currency? What infrastructure is needed by the person sending and receiving the money on the Lightning network to got USD->BTC->local currency? Western Union charges ~$6.80 for $100 ($26 for $1000) and neither the sender or receiver needs an internet connection or bank account to complete the transaction. If the sender and receiver both have a bank its $2 for up to $5000. If the sender has a bank and the receiver picks up cash it is $3 for up to $5000.

Western Union allows someone working in any country to send funds for local currency cash pickup in a different country. Can the Lightning network accomplish the same?     

I had to post less and less context because gastropod never focused on what I said.  So I stopped including the original context for this, which was not me:

I don't expect Bitcoin to work miracles in El Salvador, but I can easily imagine that thousands of people are already seeing tangible benefits. Let's say my neighbor and I both receive $100/month remittance from a relative in the United States, which is a very common situation there. Every month we walk to the Western Union office where we collect $94 after fees. Only this month I've received $100 through the Chivo App with no fees and didn't have to leave my home. I'm already $6 ahead, which is the first real-world tangible benefit most El Salvadorans will notice.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #692 on: November 30, 2021, 08:45:38 AM »
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).


The problem you're talking about solving with the Lightning Network is a problem caused by the failure of Bitcoin to be able to act as a currency.  It's still an open question if Bitcoin really needs to act as a currency (the non-existent problem).

To give you an analogy - I start smashing my head with a hammer.  This hurts.  So I invent a special helmet that allows me to smash my head with a hammer without it hurting any more.  Have I solved a problem?  Kind of.  Was it a real problem to begin with, or a non-existent problem?  That depends on your acceptance of the need to smash your head with a hammer.

boarder42

  • Walrus Stache
  • *******
  • Posts: 9249
Re: What do you think of adding a low% of crypto allocation
« Reply #693 on: November 30, 2021, 08:53:22 AM »
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).


The problem you're talking about solving with the Lightning Network is a problem caused by the failure of Bitcoin to be able to act as a currency.  It's still an open question if Bitcoin really needs to act as a currency (the non-existent problem).

To give you an analogy - I start smashing my head with a hammer.  This hurts.  So I invent a special helmet that allows me to smash my head with a hammer without it hurting any more.  Have I solved a problem?  Kind of.  Was it a real problem to begin with, or a non-existent problem?  That depends on your acceptance of the need to smash your head with a hammer.

so why are you still smashing your head on this hammer?

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #694 on: November 30, 2021, 09:22:40 AM »
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).


The problem you're talking about solving with the Lightning Network is a problem caused by the failure of Bitcoin to be able to act as a currency.  It's still an open question if Bitcoin really needs to act as a currency (the non-existent problem).

To give you an analogy - I start smashing my head with a hammer.  This hurts.  So I invent a special helmet that allows me to smash my head with a hammer without it hurting any more.  Have I solved a problem?  Kind of.  Was it a real problem to begin with, or a non-existent problem?  That depends on your acceptance of the need to smash your head with a hammer.

so why are you still smashing your head on this hammer?

Because I strongly believe that hammers are the future?

ChpBstrd

  • Magnum Stache
  • ******
  • Posts: 3721
Re: What do you think of adding a low% of crypto allocation
« Reply #695 on: November 30, 2021, 08:00:49 PM »
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).


The problem you're talking about solving with the Lightning Network is a problem caused by the failure of Bitcoin to be able to act as a currency.  It's still an open question if Bitcoin really needs to act as a currency (the non-existent problem).

To give you an analogy - I start smashing my head with a hammer.  This hurts.  So I invent a special helmet that allows me to smash my head with a hammer without it hurting any more.  Have I solved a problem?  Kind of.  Was it a real problem to begin with, or a non-existent problem?  That depends on your acceptance of the need to smash your head with a hammer.

so why are you still smashing your head on this hammer?

Because I strongly believe that hammers are the future?

If you had a hammer...
https://www.youtube.com/watch?v=01M_J7c1ft4

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 4481
Re: What do you think of adding a low% of crypto allocation
« Reply #696 on: December 01, 2021, 05:01:27 AM »
And you're back to ignoring the topic again.  You were the one who said "solve non-existent problems", which I quoted repeatedly.  This thread takes aim at payment systems, which are not "non-existent problems" (again quoting you).
The problem you're talking about solving with the Lightning Network is a problem caused by the failure of Bitcoin to be able to act as a currency.  It's still an open question if Bitcoin really needs to act as a currency (the non-existent problem).
If you read my post again, I said "cheaper payment systems" in that post and several before it.  So no, you are not capturing "the problem [I'm] talking about solving", which is cheaper payment systems.  Others previously compared Lightning Network to Visa, which I quoted in an earlier post:

I really, really hate paying credit card transaction fees. Crypto has the promise to solve this and make humanity vastly better off, but because bitcoin is so terribly designed it is actually preventing that scenario from becoming a reality.

I don't expect Bitcoin to work miracles in El Salvador, but I can easily imagine that thousands of people are already seeing tangible benefits. Let's say my neighbor and I both receive $100/month remittance from a relative in the United States, which is a very common situation there. Every month we walk to the Western Union office where we collect $94 after fees. Only this month I've received $100 through the Chivo App with no fees and didn't have to leave my home. I'm already $6 ahead, which is the first real-world tangible benefit most El Salvadorans will notice.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 2787
  • Location: Seattle, WA
Re: What do you think of adding a low% of crypto allocation
« Reply #697 on: December 01, 2021, 11:33:40 AM »
I think the disconnect is cheaper payments could be the goal of Lightning, but that's not the outcome in a practical sense, except for a tiny number of niche use cases. 

In the sending money to El Salvador example, both parties can avoid going to the Western Union office, so there could be some utility there.  But there still are a minimum of two blockchain transactions required to send and make the Bitcoin spendable.  At that point, there are little or no savings to be had.   And that is the same case for consumer transactions as well.  Two blockchain transactions are required.   

If you are really serious about regular cheaper payments, you could send money to El Salvador by ACH, which is essentially free, and simpler than Lightning.  It does require both parties to have a bank account, however. 


GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 19332
  • Age: 40
  • Location: Toronto, Ontario, Canada
Re: What do you think of adding a low% of crypto allocation
« Reply #698 on: December 01, 2021, 12:17:46 PM »
I think the disconnect is cheaper payments could be the goal of Lightning, but that's not the outcome in a practical sense, except for a tiny number of niche use cases. 

In the sending money to El Salvador example, both parties can avoid going to the Western Union office, so there could be some utility there.  But there still are a minimum of two blockchain transactions required to send and make the Bitcoin spendable.  At that point, there are little or no savings to be had.   And that is the same case for consumer transactions as well.  Two blockchain transactions are required.   

If you are really serious about regular cheaper payments, you could send money to El Salvador by ACH, which is essentially free, and simpler than Lightning.  It does require both parties to have a bank account, however.

I think there's also a real concern about holding a wildly variable commodity like bitcoin instead of a stable currency like the US dollar.  You might have 100$ worth of bitcoin transferred to you that is only 80$ (or that has gone up to 120$) when you want to spend it.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 2787
  • Location: Seattle, WA
Re: What do you think of adding a low% of crypto allocation
« Reply #699 on: December 01, 2021, 12:30:44 PM »
For sure!  And take the example of say, a low margin business like a restaurant.  The customer payments are on the gross, so if you get even small movement in the wrong direction you can wipe out your yearly profit in one night.   

Bitcoin/Lightning tech is very clever, but they never stopped to think about how money works.