Blockstreams Liquid Bitcoin -- Double Edged Sword?
After doing some breakfast reading about Blockstream's Liquid and complaints about flaws in Lightning Network something hit me. Is there a second hidden reason for Liquid that Blockstream plans to make money off of? Some estimates had 50-60% of bitcoin being locked up in Liquid Bitcoin but it is it truly locked? What's to prevent Blockstream from lending that bitcoin? A major issue with Lightning Network is that you have to have money to receive money. There are 2 ways to do this. Fund your own channel or get another party called a swap provider to do it for you. What is to prevent Blockstream from becoming a swap provider and use that huge pool to make money by lending it to those that can't afford to fund their own channels? Now they are making money 2 ways.
Maybe I'm missing something here but it seems plausible.
I guess it depends on if they are using a locking mechanism that really works or not. I imagine it's just a multi-sig key that requires both Blockstream and their customer to sign. AFAIK Bitcoin doesn't have anything more sophisticated than that available.
Well with a proprietary product we may never know how or if they are locked.
Even if it's not open source, we'll likely be able to determine it from the on-chain settlement transactions over time.
It's also funny that Liquid is not entirely Open Source; Adam Back's "can't be evil" statement back when Blockstream was founded was based on the idea that it was all Open Source and permissionless. So by his own logic, Blockstream can now be evil?