Topic: Coinbase Now Offers Cheaper And Faster Bitcoin Via Lightning Network (Read 121 times)

Nobody is stopping you from opening a LN channel, the thing is that Coinbase will not allow you to fund or withdraw from your account coins via LN if you're in NY or Canada.
It's not about bitcoin being decentralized it's about Coinbase choosing on its own who to allow to do what, permissionless and global are meaningless when you deal with a centralized service

.

The issue here as far as I can tell is that although Coinbase has registered with the state of NY as a MSB and has a BitLicense the company they are dealing with to actually run the nodes does not. So, it's probably easier / cheaper for them just to exclude places then either

1) Do it themselves
or
2) Find a LN provider that is in all the locations they need

-Dave

laws cant tell bitcoin what to do. but that does not immunise HUMANS
HUMANS can be caught/charged/penalised.. so PEOPLE can be told what to do via a country/state laws, because country/state laws are aimed at the PEOPLE

also running LN as a "router" (payment path provider) is actually defined as a MSB

if you want to understand lightning differences to bitcoin
if bitcoin is "be your own bank"
lightning is "be/rent/use a credit card company" (depending on how/why you set up channels)

Bitcoin is a permissionless and global currency, fuck restrictions.

Nobody can tell you that you can't open a lightning channel to some node that is based in New York because a lightning channel is not a money service business.


That's not the main reason why. It's because cost of making large transactions on LN is higher than on chain because with LN, after you send a transaction you either need to a) find somebody to pay you by LN or b) open a new channel or do submarine swap with onchain BTC in case you don't have enough for next time.

When you're not running some kind of store that pays you on your LN node to auto replenish your balance then you have to make two or three  onchain transactions to pay someone on LN vs one, when done directly.

i think the reason they say that is LN has had some bugs in the past. For example:

https://www.coindesk.com/markets/2019/09/10/lightning-network-developers-warn-of-bug-that-could-cause-loss-of-bitcoin/
Lightning Network Developers Warn of Bug That Could Cause Loss of Bitcoin
Developers disclosed a security hole in various versions of bitcoin's Lightning Network software that could cause users to lose money.

Another one:

https://protos.com/bitcoin-lightning-network-users-could-have-lost-millions-in-jamming-attack/

I'm not sure if they have any limits now. But maybe they used to.

after all of the bugs i have accidentally become aware of like the ones above, i wouldn't be so keen on using it myself. unless there was a way I could just send bitcoin from LN to any bitcoin address and just pay the standard LN transaction fee which apparently is a penny. i thought that's what CB was going to allow but maybe not.


if you're a business, imagine trying to convince your customers to learn how to use LN just so they can pay you for whatever product you're selling. but for small purchases that's  kind of the only way you could do it with the high transaction costs...i don't know how businesses take bitcoin nowadays for small stuff like a cup of coffee unless their customers know more about bitcoin than they do about coffee beans 

This i the need of the hour especially for those smaller transactions where transaction fee used to eat up the capital amount itself, for huge transactions we can still use the traditional methods but the pain was concentrated around smaller transactions and if this is fixed then it's a win-win situation for everyone. Hope this is utilized properly.

People say lightning network should be used only for "small transactions" but never tell you what that even means.
Is there some kind of limit or specific amount of bitcoin that you should not exceed for each transaction and if so what is that amount?

LN is very confusing and technical. What is even the point of using it when it is even more technical and difficult to use than the base layer of bitcoin?

Time is valuable and if it takes too much time to learn something or to use it than the lower fees are not worth it.

I think the only thing this is good for is transferring between exchanges. But the adoption for lightning is so low, I don’t see it being used heavily, at least for the time being.

Many people like me have moved on to ETH L2 networks such as ARB or Polygon. It’s cheap and fast and you can do large token swaps with little slippage and fees.

This should of been done 5 years ago or so and maybe the adoption would be higher than it is today.

i don't want to pay other LN users. i want to hold my own bitcoin in my own wallet franky!  

i don't know why that would be the case. i know they did some type of settlement with new york but people in new york can still sign up with coinbase they just can't stake. but why they wouldn't be able to use LN that doesn't really make any sense. if you can buy bitcoin using CB you can probably use LN too.


that's not going to happen. coinbase is a publicly traded company now and they have become legitimized in the eyes of the public. through just being on the stock exchange. 

no you cant pay any bitcoiner.. you can only pay other users of LN, paying their LN channel.

LN is not the bitcoin network, dont be fooled into thinking it is
much like other networks that peg/wrap/bridge.. they are not actually bitcoins they are IOU..
remember bitcoin never leaves the bitcoin network. so all other networks making bitcoin claims are not the same thing as the actual bitcoin network


also when you have BALANCE on coinbase its not "your bitcoin" you just has a coinbase BALANCE which suggests they owe you bitcoin which your suppose to withdraw.. (previously and preferably to the bitcoin network so you can actually own your bitcoin)
however
now with LN attached to coinbase, they assume that their BALANCE then moves to another network where THEY HAVE THE KEYS* and give you another form of unsettled IOU amount which again is NOT bitcoin settled to your key..
by staying in LN using their channel renting and balance giving. they hold onto the coin and your playing with IOU credit. which they hope and know due to the liquidity issues people only play with small amounts and know the bitcoin fee to confirm funds out to your bitcoin address is higher, means you are less likely to ever want to actually settle to the bitcoin network thus they keep the actual bitcoin and just wait for you to spend your balance to zero so they can then close out the channel when you get to zero so they never have to pay out

*read the hints in the article about who actually holds the bitcoin

#not-your-key-not-your-coin

But you can't use this LN in New York and other states that have restrictions...
This is good example of fake decentralization and I wouldn't be surprised if Coinbase loses case against SEC, and if they ban all Lightning Network in US soon, just because they can  

Well, wouldn't that still be more convenient because I wouldn't be paying $60 just to transfer $40 worth of bitcoin so I think that it's still a win in my book. Your worry might not be that concerning at all, I feel like it can easily be solved if we just learn the basics of setting up our own Lightning Network node, there's thousands of tutorials about it out there and there's already some here in the forum, not sure what's the excuse there.

Lightning Network is for small and tiny transactions and fees on Lightning Network is very cheap.

The challenge for us to use Bitcoin Lightning Network is we have to open a Lightning Network channel. This step requires an on chain transaction so we need to pay on chain transaction fee that is not cheap.

If we don't want to use Lightning Network with our own channels, we must use centralized services like Coinbase service but "Not your keys, not your bitcoins".

I think that's going to be the case since Lightning Network is much cheaper to use for transactions so yes, your understanding is right. It's a nice touch that Coinbase is supporting Lightning Network now, that's a good thing what they're doing for the network and also for the community as a whole, I really want to see more people getting to use Lightning Network in a much more convenient way, the benefits of stronger privacy, faster and cheaper transactions, and the scalability that comes with it is just too darn tempting to ignore.

"Excited to be live on the Bitcoin Lightning network - let's get every transaction under 1 second and 1 cent to bring in the next wave of adoption," Coinbase Chief Executive Brian Armstrong posted on X after the announcement.

https://www.forbes.com/sites/digital-assets/2024/04/30/coinbase-now-offers-cheaper-and-faster-bitcoin-via-lightning-network/?sh=2ef4b1e43790


Now I know this story is at least a month old since someone mentioned it in the Lightning Network Observer thread: https://bitcointalk.org/index.php?topic=5348270.760

but that thread has a much of LN topics all mixed into it and this seems kind of like a noteworthy story. But I am kind of skeptical. Does this mean for example that if I have BTC on Coinbase I can send it to any bitcoin address for under 1 cent now? Or what exactly do I have to do.

The downside to this whole thing is that you have to be willing to give up the decentralized aspect of bitcoin to be able to use LN now. And subjugate yourself to Coinbase who in my opinion has awful customer service.   Or at least they did the last time I tested it.