Quote from: DooMAD on February 06, 2017, 01:23:13 PM

Quote from: kiklo on February 06, 2017, 12:59:05 PM

LN is banking, no way around it ,
BTC onchain network has real BTC on it, on LN you are trading nothing but a representation value of BTC , as being off chain, BTC can not actually be on the LN Network.
IE: Banking Wink

Now, see, I wouldn't go to this extreme either. It's not that black and white. Plus, it is still real BTC, just lifted temporarily off-chain until settled again. There is no fractional reserve in play, nor should there ever be. LN has its place and it should be implemented, that's a reasonable standpoint, but at the same time, it's not a substitute for on-chain scaling and no one should be forced into using it. They're all individual elements of an overall scaling solution. Again, everything and the kitchen sink.

No it is not real BTC on LN,

LN freezes the amount of BTC on the BTC onchain network,
what is transferred on LN (offchain) is a representation of that value.
(No Different that when Banks allowed people to trade cash for gold.
The Gold is held somewhere else and the Cash is a representation of that amount of Gold.
Only redeemable upon request.)
IE: Banking (there is no difference between it & LN)

And here is the kicker, if LN is only a representation of a BTC, it is only a matter of time before a fractional BTC onchain is represented by more offchain on LN.
This becomes possible once LN can calculate how many people never remove their Locks on the BTC frozen on the BTC onchain network.
Study the history of Banking , this is exactly how they started. Wink

FYI: http://economics.stackexchange.com/questions/6970/when-was-fractional-reserve-banking-introduced

Quote

In the past, savers looking to keep their coins and valuables in safekeeping depositories deposited gold and silver at goldsmiths, receiving in exchange a note for their deposit (see Bank of Amsterdam). These notes gained acceptance as a medium of exchange for commercial transactions and thus became an early form of circulating paper money. As the notes were used directly in trade, the goldsmiths observed that people would not usually redeem all their notes at the same time, and they saw the opportunity to invest their coin reserves in interest-bearing loans and bills. This generated income for the goldsmiths but left them with more notes on issue than reserves with which to pay them. A process was started that altered the role of the goldsmiths from passive guardians of bullion, charging fees for safe storage, to interest-paying and interest-earning banks. Thus fractional-reserve banking was born.

LN = Goldsmiths, (which became Banks)
LN Coins = Notes
BTC = Gold

Just History repeating itself. Wink