Oddbean

one thing i think bitcoiners lose sight of is that we have successfully launched the largest and most decentralized layer-2 payment network (after credit cards) there is no other ecosystem that has achieved this. most L2s on other ecosystems dont even get close to the *Liquid* federation’s level of decentralization. they just use centralized servers and a manually coordinated multisig that brings with it a real cost: decentralization is expensive. duplication is basically the bedrock of decentralization but that also kills “efficiency of liquidity”, which is basically what every post-LN improvement is trying to fix upgrades happen in phases: we try going left, discover problems and course correct to go more right etc I’d expect the next iteration of “shared utxo” protocols to be more centralized in terms of liquidity, with the tradeoff of far more consensus design work (who all needs to agree on the current state of the world for us to move forward?)

whats a “stock settlement system”? Guessing here but closest thing this sounds like that currently exists is Liquid’s asset issuance platform (securities shipped and held as stuff in your Liquid wallet)

Exactly. Although I’m thinking RGB for legit equities, both private & public. Make a dex, then build the next NYSE on top for the pubcos. Little more to it than that, but that’s the gist of what I was thinking.

This makes sense to me. The implication seems to be that only a few large stackers will be able to be sovereign. Everyone else will be hodling in some form of custodial system. I’m optimistic that the community will eventually figure out a better and more decentralized layer.

yes, of course it is. we have a strict decentralization verification process. we guarantee decentralization by having every LN transaction’s route be chosen by a single server, kept in a closet at your mom’s house o.O

A paper from 2020 co-authored by Christian Decker shared that 10% nodes hold 80% liquidity: LN: A second path towards centralization of the bitcoin economy - https://arxiv.org/pdf/2002.02819.pdf Liquidity in 2024: https://mempool.space/lightning/nodes/rankings/liquidity Maybe someone could write another paper with present stats including use of custodial wallets

Is there any chance, Jack Mallers, Jack Dorsey, and Michael Saylor are working on a next gen L2? Whether together as individuals or separate as companies? (e.g. Strike, Microstrategy, Block?) After seeing how Corporate America wastes billions, I think this L2 can and will be solved with the appropriate funding. I just hope it is a 'Satoshi like selfless vision' versus a Corporate Jamie Dimon selfi$h vision. People have tried to leave a legacy of 'healthcare for all' or 'ending hunger for all' but could you imagine being on the dream legacy team of "Bitcoin is money for all" and scalability is done being addressed like it has been since day 1 with Satoshi?

The higher the layer the more centralized things will be as systems are rebuilt. But the bedrock will be the decentralized base layer that is the bitcoin protocol. Scams will happen as people discover ways to rehypothecate but I say again the base layer will remain stalwart