Understand the implications of Bitcoin's downfall in El Salvador. Learn about the failed economic bet and its impact on the country's financial stability.
You still use it as a settlement and security layer. The lightning network is made up of pairs of people that both lock money in a new account with a transaction. Both people get a fully signed copy of a second transaction to reclaim the money, but they don’t publish it immediately. If they need to make a new transaction between each other, they just replace the second fully signed transaction with a new one that divides the money according to the new balance. They can do this as many times as they want for as long as they want, and they only have to make two transactions: one to start and one to stop. If anyone tries to cheat, the only thing they can do is publish an older version of that second transaction that favors them, but you have… I think a day or three, I forget, to publish a newer version that proves they cheated, and if you do, you get ALL the money even if some was owed to them, so cheating won’t go well. The down side is you need a node that’s always online or connects to the network frequently so you can be ready to catch a cheater.
To make a network, they use some fancy cryptography to send money to someone if and only if they send it (minus very, very, very small fees) to the next person in line towards the destination. If anyone in the chain refuses or fails to commit, the transaction fails and no money moves at all. Because it’s all secured by the blockchain, you can trust that everyone both can and will complete the transaction exactly as requested, or the whole thing fails and nothing happens.
You realize “it’s so energy and time consuming that we had to create a secondary layer to try and make it actually usable” isn’t the defense you think it is, right?
the lightning network still uses the blockchain, just less. it’s acts like an immutable public bar tab you can’t default on. once you have spent enough with another person that it is worth them conducting the transaction on chain then it does it. usually when fees are low too.
That is an extremely simplified explanation of how it works though, it is more complex than that.
Edit: another analogy i have just read is it’s like cashing in at a casino. you put some money in the house (the blockchain) and get some chips, you go in and transact with loads of people, then when it’s advantageous you can cash out and get your BTC on chain; to the house that is two transactions, cash in and then out, rather than a transaction for everyone you exchanged with on the network. that’s probs a better analogy than the bar tab one… but again, oversimplified
bar tab is more accurate, casino is easier to understand.
the actual functionality doesn’t really matter to the layperson though. basically, you put some of your bitcoin on the network (minimum amounts apply), and then you can spend that with very fast transactions and low fees. when you’re ready you can send what you have back to the chain
Bitcoin is a great alternative to something like Western Union that charges high transaction fees. It’s time to transmit is comparable to a traditional back wire, but days faster than an EFT.
Everybody knows Bitcoin is too slow to process point of sale transactions on-chain but there are other Blockchain solutions that can do it. Another user mentioned the lightning network which still actually is Bitcoin but it’s another layer.
Also, I’ve just ignored the environmental impact of Bitcoin, which probably needs to move away from proof of work, or some other solution is required to lower the every requirements.
Yeah, and Zelle, Cashapp, venmo, PayPal all do the same and don’t have that environmental impact you so easily dismissed.
It’s been great watching Bitcoin grow from this digital currency for buying drugs online to having all these layers added on to almost sort of make it comparable to the systems we already have. By the time you guys actually make something that isn’t just stocks with no backing but faith, we’ll have moved on to a post-money society(probably not but I have more faith in that than blockchain ever being a useful currency.
The fact that one anonymous person could create a solution that “almost sort of make(s) it comparable to the systems we already have” is fucking amazing since all of humanity worked for like 70 years since the invention of the computer to create those systems.
Remind me again where Bitcoin is actually used vs actual databases. It didn’t solve anything and did it in an energy hungry way. It’s not “almost sort of comparable”. All of the scams that immediately came about because it doesn’t have the numerous regulations regular financial instruments have is proof. For the last decade Bitcoin has been struggling to reach parity with financial regulations. Ffs, the US PRESIDENT JUST PULLED A RUG PULL.
You’re the one who said it was “almost sort of comparable” to the systems we already have, I was literally quoting you. Then you disagree with yourself? Argue with yourself then, you don’t need me.
“Bitcoin is great if you don’t use the block chain”
That’s what you just said. So why even use it in the first place?
You still use it as a settlement and security layer. The lightning network is made up of pairs of people that both lock money in a new account with a transaction. Both people get a fully signed copy of a second transaction to reclaim the money, but they don’t publish it immediately. If they need to make a new transaction between each other, they just replace the second fully signed transaction with a new one that divides the money according to the new balance. They can do this as many times as they want for as long as they want, and they only have to make two transactions: one to start and one to stop. If anyone tries to cheat, the only thing they can do is publish an older version of that second transaction that favors them, but you have… I think a day or three, I forget, to publish a newer version that proves they cheated, and if you do, you get ALL the money even if some was owed to them, so cheating won’t go well. The down side is you need a node that’s always online or connects to the network frequently so you can be ready to catch a cheater.
To make a network, they use some fancy cryptography to send money to someone if and only if they send it (minus very, very, very small fees) to the next person in line towards the destination. If anyone in the chain refuses or fails to commit, the transaction fails and no money moves at all. Because it’s all secured by the blockchain, you can trust that everyone both can and will complete the transaction exactly as requested, or the whole thing fails and nothing happens.
You realize “it’s so energy and time consuming that we had to create a secondary layer to try and make it actually usable” isn’t the defense you think it is, right?
the lightning network still uses the blockchain, just less. it’s acts like an immutable public bar tab you can’t default on. once you have spent enough with another person that it is worth them conducting the transaction on chain then it does it. usually when fees are low too.
That is an extremely simplified explanation of how it works though, it is more complex than that.
Edit: another analogy i have just read is it’s like cashing in at a casino. you put some money in the house (the blockchain) and get some chips, you go in and transact with loads of people, then when it’s advantageous you can cash out and get your BTC on chain; to the house that is two transactions, cash in and then out, rather than a transaction for everyone you exchanged with on the network. that’s probs a better analogy than the bar tab one… but again, oversimplified
bar tab is more accurate, casino is easier to understand.
the actual functionality doesn’t really matter to the layperson though. basically, you put some of your bitcoin on the network (minimum amounts apply), and then you can spend that with very fast transactions and low fees. when you’re ready you can send what you have back to the chain
Bitcoin is a great alternative to something like Western Union that charges high transaction fees. It’s time to transmit is comparable to a traditional back wire, but days faster than an EFT.
Everybody knows Bitcoin is too slow to process point of sale transactions on-chain but there are other Blockchain solutions that can do it. Another user mentioned the lightning network which still actually is Bitcoin but it’s another layer.
Also, I’ve just ignored the environmental impact of Bitcoin, which probably needs to move away from proof of work, or some other solution is required to lower the every requirements.
Yeah, and Zelle, Cashapp, venmo, PayPal all do the same and don’t have that environmental impact you so easily dismissed.
It’s been great watching Bitcoin grow from this digital currency for buying drugs online to having all these layers added on to almost sort of make it comparable to the systems we already have. By the time you guys actually make something that isn’t just stocks with no backing but faith, we’ll have moved on to a post-money society(probably not but I have more faith in that than blockchain ever being a useful currency.
The fact that one anonymous person could create a solution that “almost sort of make(s) it comparable to the systems we already have” is fucking amazing since all of humanity worked for like 70 years since the invention of the computer to create those systems.
Remind me again where Bitcoin is actually used vs actual databases. It didn’t solve anything and did it in an energy hungry way. It’s not “almost sort of comparable”. All of the scams that immediately came about because it doesn’t have the numerous regulations regular financial instruments have is proof. For the last decade Bitcoin has been struggling to reach parity with financial regulations. Ffs, the US PRESIDENT JUST PULLED A RUG PULL.
Blockchain is just digital speculation.
You’re the one who said it was “almost sort of comparable” to the systems we already have, I was literally quoting you. Then you disagree with yourself? Argue with yourself then, you don’t need me.