[replying because I previously downvoted and another respondent didn't know why people were downvoting.]
> Really? From your description it sounds like I would have to trust Sparkswap and some other unknown bank with my fiat.
Fiat transactions have extremely high reversibility often for months after the fact, and law enforcement is actually responsive around fiat theft in a way they haven't been around cryptocurrency theft. As a result, at least so-far, exchange thefts have not centered around the fiat side of the operations, and in the rare cases fiat has been lost it seems to have always, AFAIK, been cases where the exchange self-traded in order to cover up a cryptocurrency loss. But perhaps as the cryptocurrency side gets derisked we'll see more fiat shenanigans.
>> In just the first half of 2019, almost $500M^3 was stolen from custodial exchanges.
> And why would you be immune to this?
They'd be immune because those thefts targeted huge standing balances of highly liquid, irreversible cryptocurrencies, that users left on exchanges for convenience in trade. It sounds like their intent is to eliminate all large standing cryptocurrency balances. I have no idea if they will be successful, but if they are it should be a substantial derisking.
> What problem? To buy LN coins instead of Bitcoins?
There is no such thing as "LN coins", lightning is a bitcoin smart contract that allows effectively instantaneous transfers of Bitcoin between users. It works by telling the bitcoin network that some collection of your coins will be governed by a programmatic contract between you and another user, then you can trade your coins back and forth as fast as you want at no cost, and you only need to go back to the network if there is a dispute between parties (where the network then forces correct handling) or you want to remove the coins from the agreement.
This is conceptually similar to how you enjoy the protection of the law and the courts while virtually never going to court yourself-- except more powerful because taking your dispute to the network is completely automated, radically cheaper than a court, and not so subject to making a wrong decision. :)
(The network part of the name comes in because the lighting contracts allow transitive trade, e.g. if Alice and Mallory have funds subject to lightning contract, and Mallory and Bob have funds subject to lighting contract-- then Alice can pay Bob, transitively via Mallory without posting transactions in public. This is possible because the protocol is constructed so that multiple trades can be made cryptographically atomic-- where either all succeed or all fail.)
Part of the reason that you're being downvoted is because misinformation claiming that lightning issues some kind of additional or alternative cryptocurrency is a dog whistle of some well known cryptocurrency scammers, such as Craig Wright and his staff.
Downvoters may have been assuming that you were employed by one of these scammers, but it's just as possible that you simply picked up some of their terminology in ignorance.
Readers should now this is one of the main Bitcoin developers behind the "fee market" and in 2017 celebrated $50 fees, caused by his ideas.[0] While being the CTO of Blockstream, a company whose business plan is to create side-chains like LN. By keeping on-chain fees high they managed to artificially create a need for side-chains, which they could fill with LN and recently Liquid.
Anyway that's a lot of words to not answer my questions other than guessing their intent to eliminate large cryptocurrency balances (using LN means they do have to hold Bitcoins).
I used the term "LN coins" to signify that LN have fundamentally different properties than Bitcoin, whereas your wall of newspeak suggest LN and Bitcoins are the same. They are not.
LN operates by trading unconfirmed Bitcoin transactions, and holders are expected to challenge fraud not to loose their coins. Yes this mean you have to be always online (or you need someone else to be for you). Also you might not be able to pay someone, because there is no route with sufficient funds. There is something called the "inbound capacity problem"[1] which limits how much you can receive.
In fact LN developers are saying that LN is not ready and should not be used in production, simply because it's not ready. See for example a recent CVE which has been exploited in the wild.[2]
Implying, as you do, that using LN is as good as using Bitcoin is far worse misinformation than you misinterpreting my choice of words as if I said LN is another cryptocurrency. (Also funny how you react to that, as if all cryptocurrencies other than Bitcoin are scams, which is of course not the case).
Transitioning from subsidy to transaction fees to reward miners existed as an idea before nullc. It's in the whitepaper for crying out loud.
>Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.
At any rate, the rest of your commentary is inaccurate. Lightning channels can go offline and be completely fine. I've had one offline for months before I brought my node back online and everything was fine.
The inbound liquidity issues are being resolved through dual-funded channels, which means both parties of a channel coordinate to start a channel off with the liquidity balanced between them instead of completely on one side.
LN is in fact still in beta, and you should expect bugs like any other beta software. That should come as no surprise.
Lightning is however in a state where it is more or less safe to use. The twitter bot I run that relays Blockstream Satellite transmissions has on order of 3,000 tweets -- which means there have been 3,000 payments with Lightning for just this one service.
Keep in mind Lightning in general is more suited to small amounts given the very cheap fees and divisibility down to 0.00000000001 of a bitcoin.
So to sum it all up, your post is pretty inaccurate.
> Transitioning from subsidy to transaction fees to reward miners existed as an idea before nullc.
That's a completely different idea than having full blocks where users compete for fees. You can also fund miners via lot's of transactions instead of few transactions with large fees.
> Lightning channels can go offline and be completely fine.
That's only because the other party didn't do anything. It's like saying leaving your door unlocked and open is safe because you did it once and nobody walked in to steal your stuff. You were lucky.
> Lightning is however in a state where it is more or less safe to use.
I did post link to a recent bug where LN is exploited to steal users funds didn't I? This kind of misinformation that "LN is more or less safe" really downplays the existing issues. It is beta software and should be treated as such.
> So to sum it all up, your post is pretty inaccurate.
To sum it all up, I was saying transactions in LN are different than Bitcoin transactions and that LN is only in beta, which you also confirm.
> Really? From your description it sounds like I would have to trust Sparkswap and some other unknown bank with my fiat.
Fiat transactions have extremely high reversibility often for months after the fact, and law enforcement is actually responsive around fiat theft in a way they haven't been around cryptocurrency theft. As a result, at least so-far, exchange thefts have not centered around the fiat side of the operations, and in the rare cases fiat has been lost it seems to have always, AFAIK, been cases where the exchange self-traded in order to cover up a cryptocurrency loss. But perhaps as the cryptocurrency side gets derisked we'll see more fiat shenanigans.
>> In just the first half of 2019, almost $500M^3 was stolen from custodial exchanges.
> And why would you be immune to this?
They'd be immune because those thefts targeted huge standing balances of highly liquid, irreversible cryptocurrencies, that users left on exchanges for convenience in trade. It sounds like their intent is to eliminate all large standing cryptocurrency balances. I have no idea if they will be successful, but if they are it should be a substantial derisking.
> What problem? To buy LN coins instead of Bitcoins?
There is no such thing as "LN coins", lightning is a bitcoin smart contract that allows effectively instantaneous transfers of Bitcoin between users. It works by telling the bitcoin network that some collection of your coins will be governed by a programmatic contract between you and another user, then you can trade your coins back and forth as fast as you want at no cost, and you only need to go back to the network if there is a dispute between parties (where the network then forces correct handling) or you want to remove the coins from the agreement.
This is conceptually similar to how you enjoy the protection of the law and the courts while virtually never going to court yourself-- except more powerful because taking your dispute to the network is completely automated, radically cheaper than a court, and not so subject to making a wrong decision. :)
(The network part of the name comes in because the lighting contracts allow transitive trade, e.g. if Alice and Mallory have funds subject to lightning contract, and Mallory and Bob have funds subject to lighting contract-- then Alice can pay Bob, transitively via Mallory without posting transactions in public. This is possible because the protocol is constructed so that multiple trades can be made cryptographically atomic-- where either all succeed or all fail.)
Part of the reason that you're being downvoted is because misinformation claiming that lightning issues some kind of additional or alternative cryptocurrency is a dog whistle of some well known cryptocurrency scammers, such as Craig Wright and his staff.
Downvoters may have been assuming that you were employed by one of these scammers, but it's just as possible that you simply picked up some of their terminology in ignorance.
Cheers.