AA on lightning network - 21 Jan 17
- Thread starter halso
- Start date
stan.distortion
Well-known member
He touches on an interesting point from about 17 minutes, the time property of value but he only really covers it from one aspect, reducing delays. The time property of value is something we consider practically every day but evaluate separately to our means of transferring value, money. When we're buying groceries we look at the price and maybe check the best before date, appreciation/depreciation when buying a car or house, electricity is usually priced in KW/Hr but we might think of it in terms of monthly power bills, our wages in how much we might earn per month,week, hour and so on.
Time is just one of the many aspects of value but we don't really have any clear way of evaluating it, supermarket shelves often have a pricer per Kg yet something with only a days shelf life remaining will be the same price as something that expires in a week. That's thinking about it in one direction, the price in fixed units of value that express no other properties but maybe it can work the other way, value/time as a property of money and maybe that's just one of many properties that can be expressed.
Time is just one of the many aspects of value but we don't really have any clear way of evaluating it, supermarket shelves often have a pricer per Kg yet something with only a days shelf life remaining will be the same price as something that expires in a week. That's thinking about it in one direction, the price in fixed units of value that express no other properties but maybe it can work the other way, value/time as a property of money and maybe that's just one of many properties that can be expressed.
halso
Active member
What he missed though was the advantage of having the real time flow of value; i.e. you eliminate the opportunity cost of being owed money.
For every unit of time you are owed money, you could be earning a return on that same amount.
This is a real problem for small business In particular who have to wait 30 to 45 days to get paid. That is why there is a thriving market in the small business sector of selling invoices at significant discounts.
Think of the world wide savings that could be made if businesses no longer had to hold "working capital" or a "float" to tide them over in the period between issuing an invoice and receiving payment.
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stan.distortion
Well-known member
He did touch on it briefly at the very end and the implications of it are huge, when you start adding up just how much friction those kind of delays cause then the effects of reducing it even down to a 1Hr/6 confirmations standard instead of the usual 30 days are staggering. The total effects of a genuine free-flow of value are incomprehensible from our perspective but I don't think it's something we'll see in our lifetime. We'll certainly see networks capable of that, things like high frequency trading do it today but machine to machine transactions mean no matter how much capacity is available it will be filled to the point of cost effectiveness so for the foreseeable future there will be a balance between speed/cost.
That's another point on time, we mostly think of it in fixed intervals and rarely as a variable. Like the point above, ex. "a chain with a one hour transfer time costs x/10 and an instant one costs x" but it could be as easily considered as "I want to pay x/3, that gives me a transfer time of...". Things like trading charts usually give intervals to chose from but I don't think I've ever come across one that treats it as something like a level of zoom, we might think in terms of cost/year but the next step is a month or a quarter, not cost/364 days, 363, 362 ...... 1 second, 1/10th of a second...
It's weird how ideas work too, I was thinking about that mid November and I'd bet AA was giving it some thought around the same time. Maybe something lots of people happened to read around the same time just triggered those thoughts, seems to happen an awful lot though.
That's another point on time, we mostly think of it in fixed intervals and rarely as a variable. Like the point above, ex. "a chain with a one hour transfer time costs x/10 and an instant one costs x" but it could be as easily considered as "I want to pay x/3, that gives me a transfer time of...". Things like trading charts usually give intervals to chose from but I don't think I've ever come across one that treats it as something like a level of zoom, we might think in terms of cost/year but the next step is a month or a quarter, not cost/364 days, 363, 362 ...... 1 second, 1/10th of a second...
It's weird how ideas work too, I was thinking about that mid November and I'd bet AA was giving it some thought around the same time. Maybe something lots of people happened to read around the same time just triggered those thoughts, seems to happen an awful lot though.
The basic idea behind Lightning Network is FUBAR. In order to send funds across it, you need to "deposit" funds in a channel. This is completely unnecessary. Why would I give up complete control of my funds? My funds belong in my control until I send them to somebody else. So let's say you send me 1 BTC on the LN. If I want to buy a cup of coffee in my local shop, I have to close the channel and open another with my "new" partner. I have to wait for confirmations, just like a regular Bitcoin tx. My funds are "stuck" until all of this happens. Then there's the layers of fees upon fees upon fees model. Everybody gets a cut. The Evolution model is much more elegant.
halso
Active member
Thanks for the explanation.
cryptorretje
New member
We need this implemented well in Dash, and soon.
If not dash will become obsolete to coins like veltor already looking like they are gonna explode in price again
If not dash will become obsolete to coins like veltor already looking like they are gonna explode in price again