There's a new wave of Lightning FUD hitting the wires, but that's noise. What no one else is talking about is the signal.
Reality is that Lightning faces a massive incentive problem, one it inherits from Bitcoin itself.
The great wave of shitcoins in the early years highlighted this problem way back then, but it's manifesting itself in a new, potentially even more dangerous way today.
Since Bitcoin, and its only real L2 in Lightning, are emergent, truly decentralized, disintermediated and "just work" as money, the profit motive for companies looking to benefit from a growing industry skews towards "inventing" things beyond them; there must always be something "new" to re-brand non-solutions or introduce middlemen.
Enter the newest attack by fake L2s, or shitcoins 2.0 as they should be more appropriately framed. Shitcoining 1.0 has lost its novelty, as over time people realize there is one true coin. Scammers have thus adapted, and are now affinity scamming as Bitcoin projects.
Ark, Spark, Citrea, Stacks, and countless others now... with their astroturf for Covenants that would lend them some perceived legitimacy... solve nothing.
These are all means not to solve problems or enhance UX, but to smuggle trust and centralization for profit.
Lightning wallets can very easily introduce trust and centralization with the same exact trade-offs; fake L2s are no different than zero-conf channels, but this isn't sexy and won't raise a bunch of money or generate hype. Actually enhancing UX is tedious, hard work, to which I can attest, and inherently requires scarce creativity, otherwise the challenges would be solved already.
This is a perfect storm for the scammer class. Unsophisticated users that lack technical discernment, combined with hipsters always ready to jump on the current thing bandwagon, magnify the scammer astroturf. This reinforces investment theses, then more investment yields more scams, which amp up hipsters and the unsophisticated; it's a downward spiral.
**Unlike Shitcoins 1.0, Shitcoins 2.0 presents a Bitcoin contagion.**
Never before have so many disparate scams sought to change Bitcoin itself to pervert the incentives further.
Shitcoins 1.0 sold you a new coin... Shitcoins 2.0 want to exploit YOUR coin.
Shitcoins 1.0 sold your friends and family a new investment thesis; Shitcoins 2.0 stand on the back of your hard-fought orange-pilling.
Covenants are the force multiplier of this attack.
These apps are in chorus over how it enhances the security of their centralized apps, and given their affinity scam nature, the security of Bitcoin. In reality, it has no monetary purpose, only to enable delegation to these centralized middlemen.
If you control your Bitcoin today, you control your Bitcoin, period. Covenants offer you nothing.
Covenants scammers want you to believe, however, that you can control your Bitcoin while someone else, via their fake L2 centralized application, controls your Bitcoin.
New OP_ Codes like CTV, CAT, DRIVECHAIN, and others represent a new era where changes to Bitcoin aren't argued on the merits of Bitcoin as money, but its use as an Ethereum-like stack for centralized applications.
> But aren't VAULTs a monetary use of covenants?
No, just as covenants are a push for centralized remote control, vaults are to CLAW BACK that control. This leaves 2 mutually exclusive scenarios:
* Bitcoin loses its utility as money, as merchants can no longer simply rely on confirmations to conclude a payment is settled.
* A merchant can ensure funds are not encumbered through certain output types, but then so can an attacker, rendering the vault pointless from the start.
> What do?
Incentives are a bitch; we couldn't stop shitcoins... but we did grind them down over time.
The question is whether we can grind down these fake L2s and covenants scammers; fortunately, Bitcoin being hard to change buys us time.
It's imperative that if you value Bitcoin as hard money and wish to defend it as such, you present the same show of force we showed against shitcoins.
Let every investor and user know, in every comment on every blog or Twitter post, that these applications are not Bitcoin, that Covenants are an attack by the Bithereum Industrial Complex, and that whoever advocates them is either a scammer, a paid shill, or a hipster moron.
