As far as future innovation, I’m probably most excited about transfer of arbitrary tokens via Lightning. Despite my own reluctance to trust Stablecoins as a useful financial construction, the market has spoken of their usefulness. Stablecoins offer the mirage that muggles need to board the train. Lightning is a radical construction — you need to use it to truly understand what is happening here. Everything from eth-> is trying and failing on the same ideas, bloat the block, ramp the block inclusion fees, kick the tx to someone else’s chain and roll that up and smoke it.

If you have not been following Bitcoin development you may have missed the innovation. I don’t agree that people moved on; the best minds in this space at playing with Bitcoin. The others are trying to sell each other tokens and NFTs.

Lightening was first developed by Joseph Poon, a teenager who went on to work on Ethereum. He improved on his original idea with Plasma which was supposed to be deployed on Ethereum but was eventually abandoned for better more sophisticated scaling solutions.

The idea of lightening is literally just taking transactions off chain to reduce cost. That is it. So the solution to scaling the blockchain is not using the blockchain. I think this was invented already, it's called a (centralized) database.

The most amusing aspect of it is that Bitcoin supporters are trying to sell this as a big technological innovation when it's literally just circumventing the bloated chain.

Centralized database indeed! If you really feel LN is centralized, I point at infura et al and say that EVM chains by design can exist for 99.999% of their users as centralized databases accessed over http apis.

LN is a abstracted layered approach, the only realistic scaling design that works on the internet. It was disappointing that plasma style constructions were not successful. I really believe this is where we should go, but alas there is money to be made from issuing tokens for users of your sidechain, (even ones that use ETH as gas!). Actual innovative constructions may not allow you to increase the number of tradable units, so they get less attention.

I don’t even buy the tale that the roll up chains are another layer, it’s just moving the tx off chain to another chain, which operate mostly like centralized databases.

I argue that it is not more sophisticated, rather, it is much of the same with some magical zk binding to hide the seams.

> I notice is that a large part of HN consistently doesn't understand economics

Yes this is the problem. Not your average blockchain development.

Bitcoin does many things right but it's also really lacking in some fundamental ways. It still can't be used as a form of currency. There are issues with scalability, mining being centralized, and the overall UX not being there yet. It may be easy to jump on a new project which 'fixes' all of these issues in theory but when the numbers start pouring in it'll also face the same or other issues. We've seen that play out before.

Projects take time to mature. I think there is innovation in areas which are facing problems and people are working on improving it so that it can actually be viable as a currency.