Several discussions here and there regarding two Simple Bitcoin Wallet account tweets triggered me to write this post. The tweets warned users about disabling Lightning Network wallet feature in next releases. It might be seen as LN critics but in fact it is not really entirely based on failed expectations.
As Coindesk shows 404 in Alex Gladstein’s video “Bitcoin as an Economic Lifeline Amid Russia-Ukraine War” it is time to write an explanatory piece for English-speaking community about Bitcoin’s place in this war. It may be seen as a serious talk about limitations of Lightning Network and challenges for Bitcoin users which they likely need to take into consideration in similar situation. On the other hand, some stories may push bitcoiners to be more empathic to people of Ukraine. Because today significant part of Bitcoin community tries to represent themselfs as independent thinkers while successfully re-broadcasting Russian propaganda and serving as useful idiots for dictator who literally takes blood baths (in russian).
This is not a rage quit
Our friends bitcoiners have a tradition: every bear market someone declares rage quit. Anton Kumaigorodski is a legendary developer behind Bitcoin Lightning Wallet (BLW) and Simple Bitcoin Wallet (SBW). Besides the SBW itself he also developed Scala IMMORTAN library which allows building mobile-optimized applications on top of the Lightning Network client. As opposed to many Lightning Network critics he perfectly knows why LN as a technology remains challenging. Before approaching SBW and IMMORTAN he had strong doubts regarding potential adoption nonetheless LNBIG guy funded his efforts for building wallet and library essentially making his work a full-time job.
The SBW wallet is great in many ways. The project has been officially abandoned for a year but the app just kept working. All custodial hosted channels were closed and funds returned on onchain adresses. Those who didn’t have any hosted channels could continue working in Lightning Network unless their channels were opened with Motherbase node. After a while I got used to BLW and SBW interface. Since then, I almost always had worse user experience in other wallets. I collected similar feedback from others. “What feature should I add next?” asked Anton once in Theoretical Lightning Institute Telegram chat, and I replied “batching and coin control will make your wallet exclusive”. It turned to be that even experienced users overlooked at least batching. However general user experience and User interface made SBW a causal convenient onchain wallet for them. In spring 2022 Anton started talking about Lightning like a not really serious thing and that eventually all that matters is onchain coins. He had reasons for that.
In 2014 Russia started a war and Anton entered his service in AFU in 2022 when it became the largest military conflict in Europe since the Second World War. Russians began using cluster munitions from day one: this is how my friend in Kiev got lightly shell-shocked and injuried. The genocidal war of conquest culminated in blowing up a dam and flooding massive area, leaving local population without water supply and destroying agriculture in the place known for its watermelons even outside of Ukraine. These are just few details.
The network is under attack
About two years ago I noticed that Russian-speaking Bitcoin community has some substantial amount of people for Ukrainian cities. It is easy to remember because in some current research works of that time about adoption of Bitcoin, Ukraine was among top countries with highest rates. Besides, it is known, that IT services and products make meaningful contribution into its GDP. Consequently, my node had some channels opened from Ukrainians who ran their node on self-hosted fashion. That means their node was physically reachable, perhaps somewhere in their homes or offices.
In the LN community running routing node on the cloud is generally considered as unsafe. However, cloud deployment is an actual trade-off. In Autumn of 2022 Russia decided to attack quite specific civil infrastructure objects related to power grid. That led to irregular power supply and prolonged blackouts in Ukrainian cities. Several channels have been going offline for hours and days on regular basis.
You can look at the channel closing history of this node which is not operational anymore. Intermittent force closes (thanks to LN unreliability) follow one after another since the beginning of October 2022. With high degree of confidence I may conclude that node became unusable in that period. It may be even more complicated: LND is designed to blacklist unreliable channels.
In Standard Sats we also had a large routing node for providing the best possible successful rates for our Valet users. This node was located in secure location in Moscow and maintained by Standard Sats co-founder and lead Valet developer. When the war begun Standard Sats project had really high chances to be closed forever but we decided to continue thanks to our angel investor. Besides just funds safety, potential cut-off of the node from the Internet, we also ran into risks of physical safety of the node operator. And it is really hard to move equipment around the world when some countries cancel residence permits or banks block accounts.
Another side of Bitcoin adoption is general volatility of an asset in its monetization stage. We could see it as almost natural phenomena but the existence of such people like 3 Arrows Capital or Alameda Research and FTX managers make it even worse. It is also true that despite general transformation of business cycles into fraud cycles on cryptomarket those who bought bitcoins at the top have high chances to be even after 5 years of holding coins in safe place (not an exchange). In Autumn of 2022 the market experienced such big negative price impact that for people who are struggling getting some more resources for their survival would have had become impossible. Thankfully we have low adoption and simultaneously relatively well educated users who understand how to use stablecoins or able to figure it out. It shows generally positive influence of Bitcoin-related knowledge.
There are many reasons to think positively about development of the Lightning Network. Just look at this list of ongoing circular economy projects around the world:
- Original Bitcoin Beach from El Salvador
- Bitcoin Lake in Guatemala
- Praia Bitcoin in Brazil
- Esposende Bitcoin in Portugal
- Bitcoin Ekasi in SAR
- Bitcoin Beach in Danang, Vietnam
- Bitcoin Jungle in Costa Rica (wallet link)
- Bitcoin Island in the Philippines
- Montelibero project from Montenegro
Only one of them is not Bitcoin-specific and all of them rely on LN payments. Speaking about economy, smaller Lightning Network may be more important than hundreds of thousands of bitcoins existing on Ethereum. I am sure that when ex-KGB agent, pathologic liar, sociopath, and a war criminal Vladimir Putin will loose the war, I will see one or more of similar projects inside Ukraine.
Unfortunately, along this way I will likely see many Useful idiots among bitcoiners. They are very different and live all across the world. They usually disagree with the government they have in their respective part of the world and topics may be really specific. These topics are being used by Russian propaganda as a gateway into more serious matters like supporting Ukraine. Apparently this war takes its toll even among Bitcoin projects. And the largest one is El Salvador Bitcoin City project and its Bitcoin bonds: they were late for about a year.
This post adds context to the really special project among other Lightning Projects. It might be considered as the project of the “first wave” because SBW somehow relied on BLW legacy. It didn’t raise multiple rounds of investments and didn’t pivoted from anything to everything, including AI. It just worked.
If you like this post here is my LNURL for tips.