This is a value for value post: see the explanation in the footer.
This is by way of a reply and expansion of what @taskmaster4450 wrote here: Wrapped Bitcoin Using Hive: How That Would Change Things.
Lightning and Taro
The Lightning people think they will wrap "shitcoins" and "stablecoins" (many of them consider these to be the same) on Lighting. In fact this is the basis for a great deal of VC funded work by Lightning Labs on something called Taro. Try as hard as I might, I can't figure out what they're doing. You can see for yourself in their Medium post.
The reality is Lightning is the worst place to wrap anything.
I'm pretty sure we'll be wrapping BTC before Lightning is usefully wrapping anything.
Bitcoin on Hive
What I'm really waiting for is a solid way to wrap Bitcoin on Hive. Something like an over-collateralised multi-sig kind of thing which is the direction the @spknetwork and @disregardfiat are heading in.
That might sound like gobbledegook but in reality it builds on the things I wrote about trust and value here. If I were to wrap $5,000 worth of BTC and pass it into the control of others, if those people's total skin in the game or their own funds at risk greatly exceed $5,000 I'm happy to trust them.
Once we have a token on Hive that represents one Sat, we can move those around all day every day with our nearly zero fees (assuming you have enough Resource Credits). This would be so much easier than the Lightning Network.
Lightning still sucks
And just to rub this in, here's an explanation of what happened on my node this morning. A few weeks ago, just before the current explosion in fees on Bitcoin, my direct channel to the Lightning Node used by the Muun wallet shut down. I didn't do it deliberately but something caused my node not to like what their node was doing and it shut a very useful channel for me.
At just about this time Muun ran into various problems because internally they aren't really a Lightning wallet. The swap on and off the BTC main chain when people send and receive Lightning. That just isn't tenable when the fees sky rocket.
I emailed them and asked them to re-open a channel to me and finally they did that this morning. Previously I had a 5,000,000 or 5m Sat channel. This morning they opened to me a 21m Sat channel which is very big and nice.
Lightning Channels are like strings on an Abacus
The problem with this is that immediately after opening this channel, I started routing payments in from their channel and out of other channels of mine. I charge a few Sats for this so I do make some money, but the problem was that Sats which I have waiting to go out on behalf of users, suddenly now sit on my side of a channel to Muun instead of on more generic channels that are good for other payments.
Fees
I did earn about 115k sats in the minutes after they opened the channel, but then I had to pay fees to restock sats (by moving Bitcoin around on chain) and put the Sats in the right places on my node.
Sorry I can't Explain
If all this sounds like gibberish, I'm sorry, I'm doing my best to explain it but it all comes down to the fact that running a Lightning node is far from hands free or simple.
Bitcoin wrapped on Hive would be amazing by comparison!
Value for Value
For the last few months while building @v4vapp I was generously supported by the DHF. Going forward I have a much more modest support which covers direct server costs and a little of my time.
If you appreciate the work I do on and around Hive, you can express this directly: upvoting posts on Hive is great. Also consider a direct donation (there's a Tip button on Hive or a Lightning Address) on all my posts.
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