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Update docs/liquid/liquid-part3.md

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@ -159,21 +159,20 @@ You can see that it is *much cheaper* to use L-BTC. In fact its so cheap that it
The ability to open **small + cheap channels** really changes the game. You can choose to keep your funds safely in Liquid UTXOs and then deploy into LN as needed.
This approach encourages you to keep the bulk of your money in BTC and then commit a *staging portion* of funds in L-BTC. From that L-BTC, you can then cheaply open channels as small as 20k and pay less than 200 sats to do that (for reference, currently that would equate to paying .08 to open a $8.50 channel)
[BTCSessions did a great video/review](https://www.youtube.com/watch?v=5kNMJd-Ts2c) of how to use Liquid as a way to very cheaply onboard from fiat as cheap as possible.
[BTCSessions did a great video/review](https://www.youtube.com/watch?v=5kNMJd-Ts2c) of how to use Liquid as a way to very cheaply manage LN channels. Check it out, because its a great review!
## Pegging Out
There are a few different solutions for peg-out, but sadly all require a 3rd party.
There are a few different solutions for peg-out, sadly all require a 3rd party, however there are many non-kyc / atomic-swap options.
* Use a CEX (Bitfinex, Bull Bitcoin, Btcturk, BTSE)
* Bisq (defi)
* TDEX (defi)
* sideswap.io (defi)
* boltz (if you want to go from Liquid to LN)
* Use a wallet that integrates to one of the above (AQUA)
For my case, I will use sideswap.io as a demo.
For my case, I want to go from Liquid -> BTC, so I will use sideswap.io as a demo.
![](4-part3-pegout.png)
@ -233,15 +232,17 @@ In theory, you should now have your own federation on your very own sidechain.
## Final Questions and Thoughts
* Liquid is a good testing ground for new OPCODEs being considered for inclusion into BTC. This allows them to be real-world tested before they make it into BTC. For example many of the advanced OPCODEs that are argued for inclusion into BTC for Covenants / Vaults *already exist* in Liquid[^11]. This transforms Liquid into being something of a "Beta-test" chain for BTC.
* Liquid is a good testing ground for new OPCODEs being considered for inclusion into BTC. Liquid allows these changes to be real-world tested before they make it into BTC. For example many of the advanced OPCODEs that are argued for inclusion into BTC for Covenants / Vaults *already exist* in Liquid[^11]. This transforms Liquid into being something of a "Beta-test" chain for BTC.
* Given the above, proponents of Covenants could use this to help make their case for inclusion into mainchain BTC. The current debate has stalled in a chicken-egg style standoff. One side is saying: *Show us real world use-cases of this solving problems* and the other responding *we first need the OPCODEs to build these things*. A potential solution is for Covenant proponents to go build their use-cases on Liquid.
* Could Fedimints / eCash mints find ways to utilize custom sidechains based on Elements as a way to prove to users that they are not debasing eCash tokens via Frac Reserve? (record eCash issuance as asset issuances on federated sidechain?)
* Could the community spin up our own Federated version of Liquid?
* The community could spin up its own Federated version of Liquid!
* On **Federation Trusting**. The most hotly debated topic around Liquid is can we trust the Federation to not censure us? I think these are reasonable concerns (but largely overblown).
- The group Liquid Members includes some of the most traditionally pro-Bitcoin groups.
- Has there ever been a documented case of censorship in its 6+ year existence?
- Given Confidential Transactions, it seems to be fairly trivial to bypass any censorship attempts. Remember, not even Federation Members can know what is being transacted, nor what is held in any individual address.
* Lastly, let's mention the elephant in the room: *Liquid Derangement Syndrome*. A fair number of complaints against Liquid seem to not based on specific technical or security concerns, but almost seems political in nature. Could this just be hate against Blockstream from other corporate entities? Or is it a fear response, based on the perceived power Blockstream has in the industry? I'm not sure to be honest. There are trade-offs with any L2, and it seems that Liquid offers a very nice balance of security & features for risk taken on. Liquid is not in competition with Bitcoin nor Lightning - rather it is a complimentary. The correct use of Liquid *helps* users utilize LN in smarter and more manageable ways. The Confidential Transactions, enhances privacy for BTC users in that they can "dip into" the sidechain to achieve increased security without needing to leave the Bitcoin ecosystem.
- The more swap services like boltz / sidewap are used, the more pressure it places on the federation to keep behaving
- If all else fails, the community can create their own version of Liquid
[^1]: BlockStream Green, AQUA, Anser (web wallet), Specter, Marina (web wallet)
[^2]: Atomic Swaps allow parties to exchange different tokens directly without the need for a 3rd party, eliminating most of the risk of fraud and counterparty default.In fact, Blockstream has a tool to simplify using it.