/biz/ - Business & Finance

>>22455154
These were the principles that Bitcoin was constructed with and designed to honor. While its inherent technology stays true to this nature (mining aside), the infrastructure that has been built up around it is flawed by design and sacrifices a good number of strengths and freedoms. Most notably are the many vulnerable points of exchange run by central authorities on trust where funds are at risk to be frozen or stolen, KYC (know your customer) policies, and the traceability, restrictions, and risks that come from these two points.

Shortly after BTC found a value that could be directly pegged to the USD (and with the USD, every global currency), a number of exchanges offering trade between the two opened for business. The first of these exchanges was the infamous Mt. Gox which implemented KYC policies by 2011 before exit scamming in early 2014. KYC policies were initially introduced to comply with the many regulations regarding the exchange of various fiat currencies for crypto in addition to demanding a deeper sense of customer accountability. Up until the point that they were introduced, the only sure way it would have been possible to trace specific addresses is if the recipient publicly disclosed their wallet address. KYC brought a considerably more advanced form of traceability with it. In addition to e-mail addresses and bank accounts, everything from names, addresses, full ID info, and pictures of each and every customer became tethered to their respective deposit and withdrawal history. Though somewhat convoluted with the nature of exchange wallets, there are patterns that can be followed and traced.

As BTC continued to grow, so did the number of its forks and competing cryptocurrencies pegged to its value in satoshis. The forks grew to be numerous and with them, the number of centralized C2C exchanges where you could trade them for BTC. Like the fiat-to-crypto exchange points before them, KYC was implemented on numerous C2C exchanges as well.

>>22455154
>>22455164
Centralized exchanges of all sorts are perhaps the weakest link in entire cryptocurrency space. They have repeatedly proven to be weak in terms of security. This year alone, the following exchanges have been compromised: Binance, Bithumb, Coinbene, Coinbin, Cryptopia, and QuadrigaCX. What’s worse, they’ve sacrificed many of the core principles of the cypherpunks that built Bitcoin in the first place.

How can crypto be censorship-resistant and immutable if exchanges can decide to freeze funds or put a certain wallet into maintenance at whim? How can it be private if every account has every bit of trade, deposit, and withdrawal history it has done tethered to its name? How can it be anonymous at-will if full documentation is demanded, sometimes as a ransom for frozen funds? How can it be secure when billions of dollars have been hijacked from weak security? It could be argued that these exchanges are the antithesis of the cypherpunks: an easily-exploitable honeypot of funds and user data with a central authority.

>>22455154
>>22455164
>>22455179
Consider the efforts of the X9 Developers building Stakenet. True to the nature of the cypherpunks, they have been working to make these numerous vulnerabilities in the cryptocurrency infrastructure obsolete. To strengthen censorship-resistance and decentralization in this space, they have been implementing an immutable and purely decentralized exchange into their network where no central authority can freeze funds, where exit scamming is impossible, and where security is as tight as the blockchain technology it runs atop. To restore the principle of at-will anonymity, their immutable DEX will have no KYC, nor will it require registered accounts. In the interests of privacy, they have built a solution that allows for one-click TOR lightning swaps that strengthen the privacy of every participating coin and the Lightning Network itself. To strengthen the nature of the decentralized exchanges that are already out there, they are working on a DEX aggregator that pools together the offerings of many promising DEXes suffering from low volume or difficulty of use.

>>22455154
>>22455164
>>22455179
>>22455196
Put briefly, this team has the foresight and skill to acknowledge and address the numerous risks and shortcomings that anyone coin may face the second it is sent from a private wallet to any other point in trust. They are compounding these solutions into one streamlined and convenient wallet where funds are firmly secured, trustlessly staked, and instantly tradable from one singular point.

To build up the world of cryptocurrency is to honor the ways of the cypherpunks and carry on their torch. It is to fight for freedom from the intrusiveness and corruption of centralized authorities by obsoleting them. It is preserving the privacy of funds, resisting mutability, and decentralizing any and everything which stands to benefit from it. Whether that be a store of value, the means by which that value is secured and traded, or the platforms on which these mechanisms are discussed. This era of mass-censorship, intrusiveness, digital balkanization, and monopolies from many of the premier digital spaces not only shows how right they were 26 years ago but that there is still a considerable amount of work to do.

If Bitcoin begins to soar again, it's going to need a powerful Lightning solution or it will quickly become lethargic and expensive to send money with.
On-chain tx bandwidth needs to be ruthlessly optimized with priority to large sums of money. Sending $1 million? Do it on-chain and screw the fees. Buying a beer? Lightning.

If done right, Lightning channels can handle the heavy load of small, irrelevant txs, freeing up the pipeline for tx that genuinely need the benefits of on-chain.

For Lightning nodes to do this effectively, they need liquidity. That source of liquidity remains a subject of controversy, and rightly so.
It burdens the end-user to provide their own liquidity in a way that's inconvenient and hardly profitable, which beckons centralization on a massive scale.
In other words, you either have something that's decentralized and doesn't work, or something that's extremely centralized and works well. 1000s of water pumps atop 1000s of drying and shallow wells that can't provide liquidity, or a massive water company that's monopolized the water supply. It could turn a desert green, but it could become corrupt and start ripping off the town.

What's the way forward? You can't change how LN was implemented on Bitcoin, but you can work with it independently.

Masternodes are excellent LN routers, namely because they're
>secure
>run 24/7
>evenly spread out all over the world
>provide collateral - "Alice and Bob" only have to worry about securing their wallets and making good backups

If you put an entire masternode network to the task of doing this, you get heavy collateral that provides serious liquidity for small off-chain Bitcoin tx.

tl;dr - LN flows like liquid, and your options to scale liquidity are
>1000 pumps on 1000 shallow wells
>a water company that holds the town hostage
>a deep underground water reserve that's in one pool, possessed by no one, directly accessible from the surface

This is what Stakenet has been building, /biz/. Don't miss out.

Good reads
>Whitepaper
https://stakenet.io/Stakenet_Whitepaper.pdf
>Quick rundown
https://medium.com/stakenet/multi-currency-wallet-and-lightning-swaps-stakenet-solution-7d0dafe99105
>X9's contributions to LTC
https://medium.com/stakenet/litecoin-foundation-and-x9-developers-announce-collaboration-510ca985b6
>Exertive Proof of Stake
https://medium.com/stakenet/exertive-proof-of-stake-epos-4a999807f9e4
>Great write-up of Cross Chain Proof of Stake (i.e. stake XSN, receive BTC)
https://medium.com/stakenet/posw-weekly-ccpos-cross-chain-proof-of-stake-de1ac87055cd
>The Cypherpunk Standard of Banking
https://medium.com/altcoin-magazine/the-cypherpunk-standard-of-banking-88f84a834180
>Most recent Dev Update
https://medium.com/stakenet/xsn-core-dev-update-july-12-2020-72cac6050377
https://medium.com/stakenet/xsn-core-ledger-update-july-20-2020-a446e7f7af4

Further reads
https://medium.com/stakenet

DEX: $1+
RAIDEN: $10+
HYDRA: $100+

to da moon