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bitcoin deposits

bitcoin deposits is a protocol similar to custodial lightning, but:

  • reserves are proven
  • obligations are proven
  • fraud is proven
  • updates are co-signed by the majority of a quorum
  • reserves and collateral are held in a quorum multisig
  • non-conformance results in confiscation
  • confiscated ledgers find new operators
  • disappearance results in "polite" confiscation
  • timely confiscation or proof of absence is required
  • non-conformance as a quorum member results in confiscation

primary roles

alice (node)

  • can run a stable node at home
  • wants to make yield on her bitcoin
  • chooses 3 or 5 established nodes to form a quorum
  • spends R into a multisig of this quorum
  • acts like a bank, with total deposits up to R/2
  • collects fees on balances and transactions
  • can participate in other quorums

bob (wallet)

  • only has a mobile phone
  • is willing to pay a premium for liquid bitcoin
  • finds well connected nodes, possibly near a trust anchor
  • picks alice based on fees or responsiveness
  • opens an empty wallet
  • receives nostr zaps
  • accepts pre-negotiated, periodic fees
  • buys drinks with his zaps

charlie (quorum member)

  • runs large nodes in a datacenter
  • gets yield even when there's no activity
  • serves on alice's quorum
  • receives a pre-negotiated cut of the fees alice collects
  • co-signs her ledger updates
  • participates in quorum confiscations when there is a fraud proof
  • might continue operating a ledger that was confiscated

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a decentralized bitcoin scaling protocol

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