-
@ vnprc
2025-01-25 23:17:10
It seems to me that the primary opposition to ecash from bitcoiners comes from the belief that lightning will enable self-custodial micropayments for the masses. Many lightning enthusiasts see ecash as competition that will eliminate this technological outcome (whether they admit it or not).
I understand the motivation for this line of reasoning but I don't see things this way at all. Ecash is a superset of lightning. Cashu literally doesn't have a spec for on-chain transactions (yet!). Everything cashu accomplishes is built on the back of lightning. Standing on the shoulders of giants.
I don't believe that ecash will take away market share from self-custodial lightning because lightning is not a good technology for self-custody. The high overhead costs of running your own node create a natural incentive for a semi-centralized hub and spoke network graph. It just makes economic sense for many users to share a lightning node. It doesn't make economic sense for individuals to bear this cost alone.
This stacker news post is the best writeup on this topic: https://stacker.news/items/379225
It comes from a builder who struggled with these issues for years and learned the shortcomings of the tech first hand. Notice they experimented with ecash as a solution to these problems before they burned out and pivoted to save the company.
Ecash is a superset of lightning. It extends the capability and reach of the lightning network. Without ecash, I don't believe we can achieve bitcoin mass adoption. You can't jam a square peg into a round hole.
We still have a need for self-custody of "small" amounts of bitcoin. I put small in quotes because the block size limit and the fee market it creates impose a fundamental constraint on the minimum practical size of a UTXO. This limit is pegged to the unit of bitcoin. As bitcoin increases in value the minimum size for an on-chain transaction will grow in value as well. You can send $10 worth of bitcoin on-chain today but will this be true in 10 years when the price is much higher? 100 years?
If the current exponential trends hold, we will soon price out the majority of humanity from owning a UTXO. This is bad. Like really bad. "Bitcoin is a failure" bad. This is the motivation for my posts about scaling on-chain usage to 10 billion people. I believe we will need to radically rearchitect bitcoin to achieve this goal.
Lightning is not up to the task. We should leverage lightning for what it's good at: gluing together different self-custodial bitcoin service providers. We should leverage ecash for what it's good at: peer-to-peer electronic cash micropayments. IN ADDITION we also need to start seriously looking at new ideas for scaling self custody to "small" amounts of bitcoin. I am very optimistic that we can solve this problem. There are a number of promising avenues to pursue but I think first we need to move the Overton window ~~beyond the idea of mass adoption of self-custodial lightning~~ regarding on-chain scaling.
Edit: I think the original Overton window statement was incorrect. If on-chain fees stay low then self-custodial lightning or something similar is a much better prospect.
Just my 2 sats...let me know what you think. Keep it civil or be muted.