Re:A from-scratch tour of Bitcoin in Python
by wickoff on Tuesday June 22, 2021 @06:01PM
(#27597776)
If I decide I want to be long BTC, why not also lock it up to earn fees?
No one questions that the people who are bullish on BTC are in on it (some).
The question is why would I pay you to lend me BTC when I actually want to send my BTC to someone.
It literally adds a third party in what should be a p2p transaction. They replaced the "evil third parties" called banks with their own liquidity pool.
Funny how they figured out that you cant make money with money services if you remove the third party, so they added it back in.
On top of that there are countless other blockchains/DLT that have cheap transactions on the first layer. Cheap as in fractions of a cent. To compete with that you would need to lock your BTC for free but then you still have the on chain transaction that LN needs sometimes that cost way too much.
Today people in crypto may be willing to look up bitcoins they hold long term anyway. But in the real world this would be dead and trapped capital it doesn't work for you and you cant even use it to quickly buy something an take advantage of a market situation.
The only reason why someone would look up capital like that if is it makes money. So people who use someone else locked up bitcoins have to pay. This makes LN impossible to be cheap. You literally lend money to send money to someone. Its complete absurd. And as you said to make this more efficient large centralized pools are created so there will be a monopoly or oligopoly for lending, hows that gonna be good for the fees.
LN was dead before they started coding it.