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This is a value for value post: see the explanation in the footer.
Lightning's problems
I've written extensively on what Lightning is for my Hive audience. One of my first articles: Lightning and Hive: same same but different? back in September 2021 had the following points about Lightning weaknesses:
- Doing lightning "properly" requires a full Bitcoin node holding and verifying every Bitcoin transaction (450gb and growing on an SSD) and operating online running 24x7.
- Even the best full custodial, run your own node software (my choice) of Umbrel, carries a scary warning right on the first page on Github.
As time has gone on I've written multiple articles about Lightning and it's gravitation toward fully KYC centralised solutions because the task of running your own Bitcoin and Lightning server for personal use is neither simple nor cheap.
In particular I wrote this about plans to "wrap" other coins on Lightning: Lightning Isn't The Place To Use For Storing Other Coins.
In that article I explained why the heavily VC backed attempts to "wrap" other coins and especially stable coins, on Lightning will be a mess. And I said, what we need is BTC wrapped on Hive.
@vsc.network
Which is exactly what I wrote about yesterday
Here's what Lightning people need to know about Hive
Hive is decentralised. Hive is properly decentralised and probably the closest thing to a decentralised system outside of Bitcoin. Likewise, the stable coin side of Hive, HBD or Hive Backed Dollar, is the longest running stable coin which doesn't have a central entity behind it. It doesn't have huge liquidity, it's got barely any central exchange support, but it is growing organically.
Lightning is failing without stable value
Bitcoin Maxis don't want to hear it, but 99% of the world isn't interested in transactions denominated in Bitcoin sats. Sats are too volatile and too alien for 99% of the world.
People want the USD. I know it's a fiat currency backed by the hopes and dreams of a corrupt system, but its the world's reserve currency (for now).
And any solutions which Lightning will try to wrap onto Lighting, will be the centralised stable coins which are all hideous. And using them on Lightning will inherently be centralised on a few wallet providers. And lets not forget: these are in very delicate positions as the sudden removal of Wallet of Satoshi from the US market indicates. “Wallet of Satoshi” Quits U.S. Market Amid Regulatory Crackdown.
Bitcoin can't cope
Bitcoin's high resistance to being changed means it is only useful because it is today's largest independent store of value outside the existing corrupt financial systems. But actually using it is very expensive and volatile. It simple doesn't have the capacity to transact and this is only getting worse.
Bitcoin has decreasing utility and only really has security. And even that is in some doubt looking off to the future as the mining reward declines.
Hive does have the capacity
Hive has both the transactional capacity and the security to resist attack. Hive is the only battle hardened system which has come through a money attack and evolved itself to thwart that kind of threat and many others. Hive is nimble enough to adapt whilst stable enough to survive: both qualities not present in BTC main chain.
VSC's design thesis
The full details of VSC are here: VSC Proposal - Interim - Bring Smart Contracts to Hive.
But I want to highlight for a Lightning audience the key points of what is being built and why it beats centralised systems which VC's are pouring money into on Lighting.
Over Collateralization
The idea is that anyone can try to be a BTC wrapping provider on Hive but they will have to put at risk funds at least equal to and probably greater than the amount of BTC they lock up and issue. This is "Over Collateralization".
Any BTC wrapped and able to move around Hive with fast, truly feeless transactions, will be backed by the net resources of all the wrapping providers. These will be real entities with trust: the identities don't have to be known, but their reputations and reliability will be inscribed on Hive. Their overall reliability will determine the level of collateralization they need to supply.
Hive
Hive is a bit of a sleeper. It's not about the value of the token, it's about how the eco-system of uses for Hive (things utterly under the radar like @podping) are showing how Hive has uses nobody can replicate on any other system.
Wrapping Bitcoin is going to be huge, I wonder how many people see this yet.
Bitcoin Maxis on Nostr
I can't imagine you'll read this article when I link to it, but if you do I'll answer questions primarily on Hive but I will try and reply to reasonable ones on Nostr.
Value for Value
For the last few months while building @v4vapp I was generously supported by the DHF. Going forward I have a much more modest support which covers direct server costs and a little of my time.
If you appreciate the work I do on and around Hive, you can express this directly: upvoting posts on Hive is great. Also consider a direct donation (there's a Tip button on Hive or a Lightning Address) on all my posts.
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Oye @uncubanomas @btcyberpunk. Les recomiendo esta lectura.
I'm still struggling to understand the security of this wrapping model.
You touched on it briefly that it relies on BTC collateral.
Eh? What does that mean? Who determines 'reliability'?
Where is the Bitcoin stored and who has access to it?
I guess I just need to read the original post you linked to.
Reliability doesn't directly determine collateralization. Reliability might be used to determine additional rewards or slightly reduce requirements by a very small margin. Reliability would be measured by the speed at which a wrapping provider unwraps bitcoin. If we can assume 2 hours is a maximum for good UX, then anything longer than 2 hours could create a negative reputation hit for taking too long (or never) unwrapping a transaction. This could be measured over a long period of time and count total volume to determine a score for a specific node. All of this can be counted via smart contract logic.
The bitcoin is stored on wrapping providers using collateralization and chain proofs for security. Collateralization is used as punishment for behavior, while the chain proofs allow a smart contract to verify Bitcoin activity trustlessly.
its confusing and sounds for me like "nobody takes responsibility"
I think @vaultec is going to need to explain this in due course. I sort of see how this will work but the impact of volatility on the collateral amount isn't clear to me either.
You mentioned that Hive has faced a money attack
Can you please explain further?
The story of the Steem takeover and the fork to Hive is at its root a money attack.
Thank you for this detailed and well explained explanation
Right here I would like to say that what is hive is better and we see that people are working very hard here and working even harder to make it known in the world everywhere. is being promoted and we have also seen that HPD has handled the bear market very well and has not lowered its price at all so this is proof that in the coming times We will also see its prices going up and here we will also see that new user.
Looking forward to further developments in this space and how solutions like VSC can contribute to the evolution of decentralized financial ecosystems.. kudos to you on your great work on the system.
That's an amazing explanation, we need to work to spread this post to the BTC people :D
That's going to be a hard sell but eventually when the fees get too high, they may arrive here.
Hive really have a good impact that interest people to get involve which is a platform we don't need to be left out.
Keep up the good work brother.
#hive #posh
@anli denkt du hast ein Vote durch @investinthefutur verdient!
@anli thinks you have earned a vote of @investinthefutur !
Well, first off you seem to be busy and not reading comments ATM (at the moment). I guess that's a good thing. Second, Hive is not an UTXO ecosystem. Don't miss this fact, please. When I visit the pub nearby that only accepts Lightning next to Fiat, I use v4v for a swap. Thanks for that! Because I like the fact that they accept an alternative at the least. For anything else for me there is Bitcoin Cash, and it's spreading massively already while being ghosted everywhere else. Just as with Hive. Both are awesome, because the communities are. Anyway. Looking forward. !invest_vote
Bitcoin Cash also suffers from not having our greatest weapon: the HBD stable coin built in. That for me is the killer feature which none of the other blockchain alone systems can rival.
True, yet don't forget that no fiat Dollar is stable. And that currencies are exchangeable, regardless of whether they compete or not. While that's not the conversation I wanted to start here.
I know I'm probably asking too much to read an Actifit report from me. But in that specific report, in the first post- scriptum, I shared a recap of our encounter around Podcasting 2.0 a year ago after I share a clip through Fountain.
So I want to give it a second try to point you where I mentioned your account in https://peakd.com/hive-193552/@anlifit/actifit-anlifit-20231203t092547628z
!invest_vote
@anli denkt du hast ein Vote durch @investinthefutur verdient!
@anli thinks you have earned a vote of @investinthefutur !
yes it makes sense
Really cool thumbnail picture, with that divided tree 🌳 Did you create that yourself, Brian? Which AI App did you use? I am more and more amazed by what this technology is capable of, knowing that you also need certain skills to really get what you want. My medium to try it out is Leonardo.AI which is quite easy to use and you have a good free version.
I have a subscription to OpenAI ChatGPT and they recently added a Dall-E tab which is freaking amazing.
Ah ok. Wow. 👍🏻
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Learn some new from your post. Love to read it. Good day.