We Study Billionaires - The Investor’s Podcast Network BTC090: Risk Free Rates on Bitcoin's Lightning Network w/ Joe Consorti (Bitcoin Podcast)
Aug 10, 2022
Joe Consorti, an expert on Bitcoin's Lightning Network, shares his insights into securing risk-free rates within the Bitcoin ecosystem. He discusses the significance of the Time Value of Lightning and predicts future rates for Lightning channels. The conversation delves into the implications of recent bear market trends and how they might signal exhaustion. Joe also highlights the innovations of Magma in liquidity leasing and evaluates the driving forces behind Bitcoin cycles, linking macroeconomic factors to Bitcoin's valuation and market dynamics.
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Risk-Free Rates on Lightning Network
- Bitcoin's Lightning Network allows for earning yield with minimal default risk.
- It's underwritten by Bitcoin, an asset without counterparty risk when self-custody.
Opening a Lightning Channel
- Opening a Lightning channel involves holding Bitcoin in escrow between two parties.
- Balances are updated on a personal ledger, not the main Bitcoin blockchain, enabling scalable transactions.
Risks of Lightning Channels
- Risks of operating a Lightning channel include hot wallet risk and inactive peer risk.
- Lightning banks might emerge to manage these risks due to their technical expertise, similar to goldsmiths.