0/7 I just released a new post about the Lightning Network as a utility for Web3 development. Web3 has typically been owned by the non-Bitcoin community (ETH, DOT, etc.), but I argue here that LN brings it firmly back into BTC's domain.
1/7 Multicoin defines Web3 as “the unbundling of data and application logic.” Rather than focusing on storing user data on a blockchain, LN takes an incremental step towards that vision: "strong decoupling of authentication and payment logic from application logic" h/t @roasbeef
2/7 This is fascinating to me. Web2.0 has been dominated by freemium business models with two tiers of users: 1) free and pseudonymous if you use Tor/proxies/etc. 2) paid, giving up your identity and data ownership
This given rise to the structural problems fueling Web3 interest
3/7 LN providing micropayments, self-sovereign authentication tokens, and a private, incentivized data layer adds a new tier: 3) pay-per-use, retaining your identity
This promises to allow brand new business models for developers, without requiring them to manage a token.
4/7 I'm incredibly excited to see how this ecosystem develops. My favorite tool to work with is Polar from @jamaljsr, check it out!
Apropos of nothing, here's a thread of recently published research focused on #bitcoin and Lightning.
I don't know if these researchers submitted their work to the Science of Blockchain Conference (SBC), or if SBC denied their applications. But it's clear they're researching!
"zk-PCN: A Privacy-Preserving Payment Channel
Network Using zk-SNARKs"
Published Aug 20, 2022 by researchers from Shandong University, Indiana University, Purdue University, and the Singapore University of Technology and Design arxiv.org/abs/2208.09716
"Revoke and Update: A More Flexible Payment Protocol for Payment Channel Networks"
Smart contract platforms have seemingly found PMF with DeFi over the last year. App devs are flocking to said platforms in hopes of launching the next COMP, UNI, SNX, etc. and cashing out life-changing money after a few months of work.
Too good to be true? 🧵
The canonical platform risk case study is Facebook vs. Zynga. Zynga built a $10B company on Facebook's platform, until March 2011 when Facebook cut off Zynga's access to their APIs and cratered their business. venturebeat.com/2016/06/30/fac…
Ethereum's narrative from 2014-2018 was that it existed to fix this problem.
A "world computer" running "unstoppable code" where nobody could pull the rug out from under you like Facebook did to Zynga.
This laid the groundwork for some super vibrant communities of node runners to pop up a la Ring of Fire and Plebnet. These groups are the primordial soup out of which the next wave of LN startups will emerge IMO... lots of tinkering and lots of great memes
Recently, I've been thinking about this chart from @hasufl and @nic__carter concerning the changing #bitcoin narrative. I think the recent focus on NgU has been misguided, and we've lost sight of the true common thread tying all of these together:
One thing I've learned from watching DeFi over the last year is that NgU tech is not unique to #bitcoin. Supply side liquidity crunches can be programmed in a few lines of Solidity.
But true monetary freedom cannot. #Bitcoin is the money chosen by people seeking to be free.
As the FUD machines spin up and market dominance wanes, I think this is very important for us to internalize. #Bitcoin guarantees its adopters that they will be free. Being free does not guarantee being rich. And if freedom is not continually fought for, it will disappear.
So I have a lot of thoughts about this. History is definitely rhyming as we build the Internet of Value today in a similar manner to how the Internet of Communications was built from the 1970s to now. But many people are applying the wrong lessons from the past to the present!
Email (SMTP) was invented in 1982, and was the Internet's (TCP/IP) killer app for 30+ years and arguably still is. When @ChairmanHeath says "Internet" he's prob referring to HTTP, invented in 1989 by Tim Berners-Lee and popularized by the browser, the Internet's second killer app
I can't remember where I got this screenshot, apologies, but it perfectly distills what HTTP brought to the table: more media types beyond text!
Similarly, Bitcoin only transfers BTC, while Ethereum allows for many types of "value" transfer. Pattern matching to HTTP isn't crazy.
So now that we all agree that globally available blockspace is not scalable for actual computation, but is best used for verification of off-chain computation instead, here are some thoughts on Ethereum's approach to scaling vs. Bitcoin's.
First, definitions: 1) broadcast txs: all-to-all gossip comms that succumbs to the scalability trilemma (all L1s) 2) unicast txs: 1-to-1 direct comms that occurs between two peers only (LN) 3) multicast txs: 1-to-many comms between a subset of peers (rollups, sidechains)
Both Bitcoin and Ethereum's L1 use broadcast txs. But because of (IMO) Bitcoin's use of UTXOs vs. Ethereum's use of accounts, Bitcoin has prioritized unicast txs via LN first, whereas Ethereum's initial unicast txs projects have been discarded in favor of multicast txs.