Lately I'm hearing this question now and then, or people are just saying this when the confirmation turns to privacy… I think after yesterday I know the answer:
No, it won't…
Liquid is being sold by big Bitcoin names as a Layer 2 privacy solution for Bitcoin that makes Monero obsolete, some of these big Bitcoin names even start using the SHUM-meme, but for L-BTC:
Yesterday it became plain obvious for everyone to see that L-BTC is nothing like Bitcoin or Monero. L-BTC was down for several hours because some hard fork went wrong:
First of all, I always heard from Maxi's that hard-forks are bad because of centralisation, apparently with L-BTC this is not the case anymore? So Monero hardforking = bad, L-BTC hardforking = good…
Second, upon inspection of the report:
Within hours, Liquid's team of developers diagnosed the issue and implemented, tested, and delivered a patch to functionary operators. Due to the number of functionaries and their distribution around the globe, the patch took some coordination to deploy.
I started wondering…
First of all, what are 'functionaries'?
Apparently you have to be a member of a federation to be able to become a functionary… Sounds awfully exclusive, so what is the federation?
The Liquid Federation comprises incorporated companies that have joined as federation members. As part of their role, members have ongoing duties to maintain and secure the network.
So, who are they? You can find this here: https://liquid.net/ Apparently the federation consists of some kind of conglomerate of exchanges, trading desks and brokerage, infrastructure providers etc… There seem to be 57 federation-members in total. But, I thought:
Due to the number of functionaries and their distribution around the globe, the patch took some coordination to deploy.
57 corporate entities shouldn't be too hard to implement a patch? But wait, it's about 'functionaries', so how many of those are there?
15 of the Liquid Federation members run a functionary, which is currently the technical maximum supported by Liquid’s technology.
And what are they?
Members that meet further criteria can gain access to purchase and operate Liquid functionaries, the specialized hardware that generates blocks and secures the bitcoin on the network.
All of this info can be found here: https://help.blockstream.com/hc/en-us/articles/900002163803-What-are-the-different-types-of-participants-in-the-Liquid-Network
So apparently Liquid is some kind of Bitcoin layer 2 run by 57 corporate entities of which 15 are so important that when not updated (a hard fork???? the horror!!!) simultaneously, the network goes down, they also run their own specialised hardware for generating blocks… Sounds awfully centralised to me. Should I dare call it a 'sh*tcoin'?
I just wanted to post this to show that anyone calling Monero a sh*tcoin and Liquid the real deal is full of it. These people rather market a corporate centralised federated L2 than admit Monero is a much better incorporation of what actual private fungible digital cash should be. They'll pretend to fight for higher morality (protect noobs against scams, etc) while they themselves let go of the most basic crypto-principles just because their bags are full…
TL;DR: L-BTC is nothing like Monero, it's a corporate federated centralised sidechain, the definition of a sh*tcoin