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Level 7: Inevitable Future

Bitcoin as a universal currency will enable billions of people to buy and sell as easily as they do with cash, no custodians, no intermediaries -- a seamless, privacy-preserving system where everyday users transact, all backed by Bitcoin's security. Imagine an employee working for a sovereign business getting paid sats directly into a non-custodial Lightning wallet like Zeus or Phoenix -- the wallet handles everything, surviving channel closures through off-chain notes or automatic swaps, without the user ever needing on-chain transactions. This fulfills Bitcoin's promise of sound money for all, where most people save and spend in non-custodial wallets, without running nodes or balancing channels, instead just working and stacking sats.

Bitcoin's existing adoption demands inevitable advancements as a currency, solving the "last-mile" problem (providing inbound liquidity to new users) and ensuring wallets remain non-custodial and resilient to closures. Missing pieces like better covenants and federated models will be developed, making Bitcoin the default currency.

How It Will Work

  • Setup: Users install a simple non-custodial wallet (e.g., future versions of Phoenix or Zeus), generating a seed phrase for backup, or leveraging a secure and private account from a trusted family member. No channel funding required — they simply connect to an employer's LSP or mint for automatic liquidity.
  • Payments: Receive sats from work or direct sales, all by sharing a wallet invoice. Send and receive as easily as cash.
  • Sovereignty: A motivated individual saves enough Bitcoin to justify an on-chain transaction, taking their first step into becoming a sovereign.

Strengths

  • Simplicity: Users get paid and spend without complexity — LSPs/mints abstract channels, wallets survive closures via ecash or swaps.
  • Non-Custodial Resilience: Funds remain accessible and spendable even if channels close, with user-held keys ensuring true control.
  • Universal Access: Enables saving/spending in layer 2+ wallets for most, scaling to billions without nodes or liquidity management concerns.

Current Gaps

  • Inbound Liquidity: New users can't receive without channels; LSPs help but are often semi-custodial — there is a lack of non-custodial LSP standards.
  • Channel Closures: Force-closing a channel in high-fee environments risk funds becoming inaccessible to normal users; splicing and "justice transactions" mitigate, but not seamless for all.
  • Privacy Leaks: Routing metadata exposes info; blinded paths needed for full anonymity.
  • User Experience: Many wallets are semi-custodial; true non-custodial wallets like Phoenix/Breez exist but require education — and are definitely not intuitive.

Current Proposals

Future protocols will enable simple, resilient non-custodial wallets:

  • Channel Splicing: Add/remove funds without closing channels, reducing on-chain needs and surviving closures gracefully.
  • Fedimint/Cashu: Mints issue blinded notes backed by BTC; users hold ecash in wallets, spendable off-chain, independent of closures — federated for trust minimization.
  • Ark/Statechains: Off-chain scaling with shared UTXOs or transferable ownership; no user channels, funds survive via unilateral exits or off-chain transfers.
  • Advanced LSPs: Non-custodial LSPs (e.g., ACINQ) provide liquidity swaps; ensuring payments flow with minimal user intervention.

Bitcoin is best understood as the inevitable global currency, where billions transact non-custodially without complexity, leaving the complexity to the true financial sovereigns.