The ridiculous complexity of the Lightning Network

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Steve Sokolowski
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Re: The ridiculous complexity of the Lightning Network

Postby Steve Sokolowski » Sat Apr 14, 2018 7:10 am

shyrwall wrote:
shyrwall wrote:People are currently mining on your pool. After getting rewards in lets say LTC they can choose to be paid in Bitcoin instead. Right here you are a currency exchange and a transmitter. You are accepting deposits between you and exchanges since you somehow exchange these coins. And then you are transmitting them to people.

If you think you would require a license to run a Lightning node you would certainly need it for what you are doing already..


As per FinCEN , "any business that exchanges fiat currency for bitcoins – or even one kind of digital currency for another – is a money transmitter."

So your pool. If run in the U.S is currently illegal unless you stop offering to exchange coin A to coin B.


I think you're mistaken. There is no "deposit" button anywhere on the site. We currently rent hashrate from miners and pay them for their hashrate, and there are several agency papers stating that the rental of computing services is not money transmission. If we started accepting deposits of money like a Lightning node does, however, that would indeed introduce the necessity of licensing, which is why we aren't doing that.
alim
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Re: The ridiculous complexity of the Lightning Network

Postby alim » Sat Apr 14, 2018 9:21 am

shyrwall wrote:Huh? That's like Prohashings thing. If I mine multiple different coins I can choose for all to be exchanged to for example BTC. With the mining I am earning shares. But since Prohashing can exchange all those shares to BTC it's an exchange. I've been mining scrypt here on/off for a long time. Sometimes I've choosen to be paid in BTC, sometimes LTC, sometimes BCH. Sometimes I've also let Prohashing hold all the coins for a while.


So coming back to the points you make:

1. YOU determine the coin type you in which you would like your hashpower to earn.
2. Although Prohashing screen shows $ amount earned, you are not paid the $ amount, you are paid in the amount of coin (#1) your hashpower has earned/traded.
3. To reduce transaction costs to you, Prohashing have default "free" level of coin at which you can withdraw - again, you are not paid in $, you are paid in coin. They also have a maximum level which is at a fairly low level - regardless of the value/coin, the amount of the coin will transfer. I believe the $amounts are there only to limit the extent of Prohashing liabilities.
4. Should the value of the coin rise/lower, the amount deposited to your wallet will not change - because it is paid in coin. For BTC, the value indicated in your earnings versus your Coinbase account will differ to take account of any changes in the market value Coinbase are prepared to trade.

FYI, I would prefer to know the amount of coin I am earning rather than the $ amount. For me this is particularly important to understand as the difficulty associated with mining coins increases.
pumaro
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Re: The ridiculous complexity of the Lightning Network

Postby pumaro » Sat Apr 14, 2018 10:14 am

All these bank rejections makes me wonder what is entailed in opening your own crypto friendly bank?
egik
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Re: The ridiculous complexity of the Lightning Network

Postby egik » Sat Apr 14, 2018 11:19 am

pumaro wrote:All these bank rejections makes me wonder what is entailed in opening your own crypto friendly bank?

There are cash stations that exchange cryptocurrency for dollars.
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CSZiggy
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Re: The ridiculous complexity of the Lightning Network

Postby CSZiggy » Sat Apr 14, 2018 1:34 pm

OK, but you aren't getting BTC on monday and then having the service CONVERT what was already paid out in 1 coin into another coin Friday.
THAT'S what they need the money transferring license for it seems, to convert from 1 coin into another after you already have the first coin in your account.

You never got the verge coin you were mining that then got converted into LTC, you earned shares for helping to mine the verge coin, and you got paid out on those shares in the LTC or other coin of your choice. You did work and you got paid in your form of payment type. But you didn't mine a verge coin solo, get the coins and then have the coins traded in for LTC, you never earned the coin, you earned shares towards it that are then paid.

If you soloed a verge and found a block and the pool was able to then convert that verge coin into LTC with a buy-sell price so you could exchange 1 coin for another(change your mind on payout coin after the fact), then I think it might need a money exchange, but as it is now, like the marbles and not having to have a game of chance license to still have a lotto, using CREDITS/SHARES that are placeholders for money earned so you can pick and choose how you want those credits paid out, in what coin payment, means they don't need one.

I still say if the IRS isn't going to list it as money, I would argue the banks have no excuse not to give a business account, in fact I might look into whether they are legally allowed to do that...maybe sue them. Crypto isn't cannabis, where the 1 level says its OK and the other level says it's not. This is an item the IRS has listed as NOT MONEY, at your federal level. So is it, or isn't it? If I cant put it in a bank, then why do I need a money license to move it?
alim
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Re: The ridiculous complexity of the Lightning Network

Postby alim » Sat Apr 14, 2018 4:10 pm

CSZiggy wrote:I still say if the IRS isn't going to list it as money, I would argue the banks have no excuse not to give a business account, in fact I might look into whether they are legally allowed to do that...maybe sue them. Crypto isn't cannabis, where the 1 level says its OK and the other level says it's not. This is an item the IRS has listed as NOT MONEY, at your federal level. So is it, or isn't it? If I cant put it in a bank, then why do I need a money license to move it?


I'm hoping that some financial whale does exactly that. If more financial whizzes pile in then I would expect to see a change in the taxation position - eg if asset managers are looking to invest in crypto, I can't image that they could treat it like a "pool" as there is no mining. They might trade in a repo market, but that would entail ownership in the first place. They might also trade in futures, but I can't see that working very well - the exchanges have very little liquidity that even 1 BTC can tip the market. EG it took less that 1,500 coins to sift GDAX from $7,500 to over $8,000/coin, and even 1 forced sale is enough to send it down $200+.

So about the only thing I see working is spread betting / contract for differences (eg where you are trading on a margin of the net gain / loss) but with no expiry other than your available credit. No doubt many will loose to those who play the game very well.
Slurms
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Re: The ridiculous complexity of the Lightning Network

Postby Slurms » Sun Apr 15, 2018 2:46 am

CSZiggy wrote:I still say if the IRS isn't going to list it as money, I would argue the banks have no excuse not to give a business account, in fact I might look into whether they are legally allowed to do that...maybe sue them. Crypto isn't cannabis, where the 1 level says its OK and the other level says it's not. This is an item the IRS has listed as NOT MONEY, at your federal level. So is it, or isn't it? If I cant put it in a bank, then why do I need a money license to move it?


Trust me, I agree with your mindset. Unfortunately, banks being private businesses, can refuse service to anyone (as long as they aren't a "protected" group).

In saying that, I still feel that a lawsuit could be argued about the fact that every single big bank and credit union I"ve looked at has said no, that a form of collusion is going on. Though, since I'm sure they would call it tacit, it's legal. It's the fact that it's choking off access to funds in a legal industry that gets under my skin. Whereas to use your cannabis example, it would make sense that banks would be afraid to touch it. In the same sense, I've made it clear to banks that if it's risk that is the issue, I wouldn't be needing any loans.
White
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Re: The ridiculous complexity of the Lightning Network

Postby White » Sun Apr 15, 2018 4:40 am

Steve, seams like you are overthinking and overheating the problem that might not be problem in the future.
If your problem is the node license,then dont buy one, you might need to use a third party service that offers lightning to you at very low cost...
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CSZiggy
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Re: The ridiculous complexity of the Lightning Network

Postby CSZiggy » Sun Apr 15, 2018 1:27 pm

Slurms wrote:Trust me, I agree with your mindset. Unfortunately, banks being private businesses, can refuse service to anyone (as long as they aren't a "protected" group).



Title II of the Civil Rights Act of 1964 -- the federal law which prohibits discrimination by private businesses which are places of public accommodation -- only prevents businesses from refusing service based on race, color, religion, or national origin.Feb 26, 2014


Walk into your bank, tell them you are the religious leader of the "Great Crypto Vault" and the GCV would like to open an account here.
Then when they refuse, offer to sue the crap out of them.

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