Oddbean new post about | logout
 Thats why I said Lightning or ecash. No UTXOs there.  
 And yet a utxo must be sent in an onchain transaction to open a lightning channel. All the state has to do is ask to prove you still have it.  
 So what do you propose? Targeted ads like we so today, micropayments via PayPal? Lightning is the best solution we have today for that use case. I can put a KYCed UTXO into a ecash mint and the state does not know what payments I make using that ecash. 
Pretty much the same is true for a self custodial lightning channel. Sure, I at one point owned that amount of sats, but no one knows what I paid for. I can also receive payments in the meantime and use that lightning channel to facilitate payments for friends in amounts exceeding what was once the KYCed UTXO size.  
 My post is about how micropayments for services or access is an exciting idea until you can't do anything without your id associated to it. 
For most people, they have very transparent on chain fingerprints. It isn't a matter of what is bought more that you owe cap gains for buying.
Lightning is tiny with like some 5000 bitcoin in the network at one time. Ecash is a fraction of that. I am grateful for them.
I am really trying to point out that we could build a worse prison for ourselves if we don't have better privacy and force a payment on everything because it is possible.