Liquid is a Layer 2 Bitcoin network developed by Adam Back's Blockstream.
It is a federated network with around 16 companies - As such, it is fairly centralized, and is to an extent custodial, those are the main downsides.
It mirrors Bitcoin's block mining for TXs, but at a faster rate and cheaper fees.
Transactions are also confidential.
It's much easier to peg Bitcoin to Liquid, hence it's accessible.
I wouldn't use it for custody of large amounts, but it's a good way of breaking tracking between UTXOs and potential wallets on the base-layer chain, because of the confidential TXs as well as it being a layer 2 - You enter(peg-in) with a set of UTXOs and exit (peg-out) with a completely different set of UTXOs. Joined in with good UTXO management practices, and you have a good starting practice for privacy.
Peg-ins by themselves aren't super cheap, but they can be worse if you don't use the peg services directly. Example, instead of using Sideswap directlly, one uses Aqua Wallet, which does use Sideswap but for some reason ends up much more expensive in fees. That's been my experience.
uxellodunum
npub14un…gg48
2024-05-06 14:52:07
in reply to nevent1q…jf9m
Author Public Key
npub14un6d98pa48kleqjjqfe5jqekxpdcwd7lkwc2hm3s2z4gmd60j8sstgg48Published at
2024-05-06 14:52:07Event JSON
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"pubkey": "af27a694e1ed4f6fe41290139a4819b182dc39befd9d855f718285546dba7c8f",
"created_at": 1714999927,
"kind": 1,
"tags": [
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"content": "Liquid is a Layer 2 Bitcoin network developed by Adam Back's Blockstream.\nIt is a federated network with around 16 companies - As such, it is fairly centralized, and is to an extent custodial, those are the main downsides.\n\nIt mirrors Bitcoin's block mining for TXs, but at a faster rate and cheaper fees. \nTransactions are also confidential. \nIt's much easier to peg Bitcoin to Liquid, hence it's accessible.\n\nI wouldn't use it for custody of large amounts, but it's a good way of breaking tracking between UTXOs and potential wallets on the base-layer chain, because of the confidential TXs as well as it being a layer 2 - You enter(peg-in) with a set of UTXOs and exit (peg-out) with a completely different set of UTXOs. Joined in with good UTXO management practices, and you have a good starting practice for privacy.\n\nPeg-ins by themselves aren't super cheap, but they can be worse if you don't use the peg services directly. Example, instead of using Sideswap directlly, one uses Aqua Wallet, which does use Sideswap but for some reason ends up much more expensive in fees. That's been my experience.",
"sig": "c00e4baed7fece34466e383b5cb61850789ec0166964fd3bf7eba86a7e4d65cb24fc3dd1c40ecced8983788b277d71365e04e8ba4e8b62e02b24ea1242a32d3e"
}