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eustan 2 years ago

"and with a greater degree of privacy" (seen in preview above) seems unrealistic. Why would an exchange give you greater privacy? They don't economize with privacy today just because they can't use LN.

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kattbilder 2 years ago

Greater than on-chain? Economize? Aren't LN transactions cheaper than on-chain? Lower fees for their customers and liquidity for their LN node.

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makriath 2 years ago

This document outlines a few obvious lightning network use-cases for exchanges and their customers.

I like that it will provide customers the ability to store their own funds, and have the option to instantly deposit for when they want to trade. This is a big win for both exchange and customer. Customer doesn't need to trust the exchange to hold their coins long-term and can still trade, and it may help reduce the incentive for hacking exchanges since they won't need to hold as many funds.

Lightning settlement between exchanges is a bit more problematic, IMO. Having massive channels open is a security risk since they have to be in a hotwallet, although since exchanges often have to keep a lot of funds online anyway, that might get alleviated. There's also the fact that sidechains like Liquid are coming that can bear a lot of the burden of inter-exchange transfers.

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chrisrico 2 years ago

> Lightning settlement between exchanges is a bit more problematic Also, if I'm thinking about this correctly, completely unnecessary. Rather than having each exchange maintain channels with each other, it would be better for users to maintain channels with the exchanges they use. To transfer from one exchange to another, they could just do a Lightning withdraw from exchange A and then a deposit to exchange B. It's nearly instant and atomicity isn't required since the intermediary is the user themselves.

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makriath 2 years ago

There's a liquidity issue here, though. If I want to move 1btc from exchangeA to exchangeB, that means I have to have a 1btc-sized channel open with each exchange. Also, I need exchangeA to have 1btc in their end of the channel with me, and I need to have 1btc in my end of the channel open with exchangeB. Or, more simply put, in order to move 1btc from exchangeA to exchangeB, I'd need to have 1btc on exchangeA and be *already* holding 1btc in my own wallet to send to exchangeB. If exchanges have channels between each other, this reduces the liquidity issue by having the funds only travel through one channel, and if there are many users sending funds back and forth, they cancel each other out, providing even more liquidity.

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Gabriel ⚡️⚡️⚡️ - @GabrielDVine

RT @timevalueofbtc: What are all the ways an ETF manager could fraudulently provide verifiable NAVs by public key disclosure? Trying to frontrun all the shenanigans they might try to pull... https://t.co/Zgxs6k1bUO

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Matt Odell - @matt_odell

RT @timevalueofbtc: “Bitcoin doesn’t need any ETFs or legacy custodians in order to survive. In fact, bitcoin thrives because it didn’t closely interact with traditional financial institutions in its early years and thus cemented its decentralization.” https://t.co/TXYOiR6zO8

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Marty Bent - @MartyBent

RT @timevalueofbtc: I just published “Bitcoin ETFs, Custodians, and Collateral” tl;dr verifiable NAVs via public key disclosure are essential for a symbiotic relationship between bitcoin and traditional financial institutions https://t.co/Q0hmg1kohf

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Henry Brade ⚡ - @Technom4ge

RT @timevalueofbtc: I specifically call out @Bakkt and @vaneck_us in my latest article “Bitcoin ETFs, Custodians, and Collateral.” We need to hold accountable the firms that explicitly declare fully reserved investment vehicles. https://t.co/29F5M663Zp

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Ragnar Lifthrasir ⚑ - @Ragnarly

RT @ydemombynes: A very interesting synthesis on the financialization of #bitcoin: « custodians and ETFs might become some of the largest holders of bitcoin in the world » @timevalueofbtc⁩ https://t.co/U0DekO0oSY

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Christopher Wheeler - @Stocktrader

Bitcoin ETFs, Custodians, and Collateral – Nik Bhatia – Medium https://t.co/yaU8OFl8qn

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Dennis Parker⚡️ - @Xentagz

RT @timevalueofbtc: I specifically call out @Bakkt and @vaneck_us in my latest article “Bitcoin ETFs, Custodians, and Collateral.” We need to hold accountable the firms that explicitly declare fully reserved investment vehicles. https://t.co/29F5M663Zp

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Pierre Rochard - @pierre_rochard

RT @timevalueofbtc: I just published “Bitcoin ETFs, Custodians, and Collateral” tl;dr verifiable NAVs via public key disclosure are essential for a symbiotic relationship between bitcoin and traditional financial institutions https://t.co/Q0hmg1kohf

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Ragnar Lifthrasir ⚑ - @Ragnarly

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Santi - @santisiri

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Michael Goldstein - @bitstein

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Marty Bent - @MartyBent

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Francis Pouliot ⚡️ - @francispouliot_

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Christopher Wheeler - @Stocktrader

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Wayne Vaughan - @WayneVaughan

RT @NickSzabo4: Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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Nick Szabo⚡️ - @NickSzabo4

Ralph Merkle's role in the public discovery of public key cryptography: "he showed the possibilities of how two keys could be created: one to lock & the other to open..." On top of that he invented hash trees (Merkle trees), a key data structure in Bitcoin, git, BitTorrent, etc. https://t.co/VxxMrZnouP

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