⚡ Lightning has not failed

On today’s Supply Shock podcast, Pete Rizzo and Lightning dev Mike Tidwell cut through the noise on four hot buttons: Lightning, quantum, mempool policy, and the accelerating Core–Knots rift.

Tidwell rejects the “failed project” meme about Lightning. He says Lightning is great B2B and best today with a custodian in the loop; pure P2P UX is the hard, slow part. 

The real allocation question is whether extra dev time should go to Lightning or other L2s (BitVM still theory-heavy; ARK has early demos; Drivechains is Peter Sztorc’s hill).

About the quantum computing threat to Bitcoin: Most engineers worry more about the marketing than the machines right now, Tidwell says. Reliable logical qubits aren’t here. 

Still, walking into Q-day without a plan risks a centralized mess with regards to potential emergency governance scenarios. 

However, pre-committing to specific post-quantum schemes could age badly. So Bitcoin should prepare sanely and not panic.

As for the mempool drama encapsulated by the Core vs. Knots debate, Tidwell says arguments stall because no one agrees what “effective filtering” even means.

Even if just a minority of nodes don’t actively filter transactions, miners still see them. Core did restore data-carrier knobs, but critics then shifted to “the default is wrong.” So, the arguments persist.

Cypherpunk legend Nick Szabo (who is on team Knots, for now) has re-emerged of late to join in the debate, and he’s been quite vocal about the potential for easily-readable CASM and other abhorrent content making it to the chain.

Rizzo had this to say: Consensus always allowed data, so upgrades that improve Bitcoin also trivially improve bad uses — but that’s not a basis for collective liability at the network layer.

Full episode on YouTube, Spotify, Apple Podcasts and X.

This newsletter was created with assistance from AI tooling.

• Steak ‘n Shake is celebrating five months of BTC payments with a limited edition Bitcoin Steakburger.

• Bad Bully: Tom Lee says the digital asset treasury bubble has burst.

• How did the US gain control of LuBian’s $15-billion BTC stash? (Protos)