2018 Clusterfuck Forecast

[Zenaan Harkness]

On Mon, Jan 08, 2018 at 12:46:33AM -0300, Juan wrote:
> On Sun, 7 Jan 2018 19:27:55 -0800
> Steven Schear <schear.steve at gmail.com> wrote:
> 
> > Yes, it's a rather open secret that LN channel abuse,
> 
> 	abuse, exactly how? 
> 
> 	I'm not seeing any open secret. LN works like I described it. 
> 
> 	
> > esp. using Hub
> > architecture,  can do FR just link banks.
> > 
> 
> 	No it can't.
> 
> 
> > https://www.reddit.com/r/Bitcoin/comments/56ehi1/fractional_reserve_on_lightning_network/
> 
> 	from your own link 
> 	
> 	Q: "could this lead to a form of fractional reserve bitcoin?"
> 
> 
> 	A: "It's not possible with Lightning. For each satoshi on the
> 	Lightning network, at least one satoshi on the Bitcoin network
> 	is tied up and unspendable. "
> 
> 
> > By never closing channels it difficult to detect what's going on.
> 
> 	It doesn't matter if you close the channel or not. What matters
> 	is that in order to open it you need actual bitcoins.

BUT, from the wiki https://en.wikipedia.org/wiki/Lightning_Network

  "It is expected that normal use of the Lightning Network consists
  of opening a payment channel by committing a funding transaction to
  the relevant blockchain, followed by making any number of Lightning
  transactions that update the tentative distribution of the
  channel's funds without broadcasting to the blockchain, followed by
  closing the payment channel by broadcasting the final version of
  the transaction to distribute the channel's funds."

Sure, there's 1 BTC behind 1 LN "satoshi" or whatever they want to
call it.

BUT, the whole point of LN is that any number of micro transactions
(or any tx up to the channel MAX) can be transacted within that
channel, and only the final result is updated to the public BTC
ledger, "when the channel is closed".

This provides for the possibility of walled gardens:

* Amazog online retail market supports LN Satoshis, but not BTCs,
  although they support tx of USD equivalent from your Amazog account
  to your SWIFT bank account, at an exorbitant fee which makes it not
  worthwhile.

* Googoyle online wallets also support satoshis, and tx to BTC, but
  within their own bank only;
  and also supports tx to Amazog, but only in LN Satoshis, since
  Googoyle and Amazog have opened a USD $10 million LN channel
  between them, and they honour each other's tx and do USD end of day
  balancing between themselves, each day;
  Direct USD → Googoyle Satoshis has a significant tx fee discount.


So, two partnered privacy-abusing government-supporting end-user
dominating "LN Satoshi" ZOG-loving providers, constituting a Satoshi
walled garden, end up never closing out their channel, except perhaps
yearly, or simply never, since they do all their non-anon stuff out
of view of the public BTC ledger, and who knows if their now
internal-only satoshi's actually match up against their $10 million
BTC "channel"?

And seriously, for those buying the latest Star Wars DVD, who gives a
firetruck?

And the shareholders? They will praise Googoyle and Amazog for their
"incredible" "billion dollar record profits".

And the tax man? They will praise the selling out of all the little
guys for their non-payment of taxes, by the behemoths Googoyle and
Amazog, in return for "favourable tax treatment with respect to off
shore cash havens".

And everyone else? "Well, there's no real value behind it anyway,
right, so why do you give a crap?"