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RE: 🌊 Blockstream's Liquid Network went live 🌊 Bitcoin Side-chain 🤩 Digital Assets, Fast & Anonymous transactions
Decentralized exchanges would not be a part of such a network, I presume. I think the future really lies in DEXs. But maybe not. Maybe it's all moving away from original ideals about decentralization, permissionless and trustless. I have to wonder though, what is it besides just digital money then?
Would it be irrelevant for the world of BTC if L-BTC was in fact shut down by the G-20? Or does the introduction of such a model pose an existential threat to economic freedom of BTC?
Actually I think the intention is to make the participating exchanges actually run on-chain on the Liquid Network. So they would be a DEX, but atop a not-too-decentralized blockchain. Maybe you could say it is like a hybrid model.
As for the second part of your question... it depends.. Realistically if 100% of the Bitcoin users/holders actually use L-BTC to transact and that gets shut down... then it will be catastrophic for Bitcoin even if the original blockchain was never attacked. Similar to Mt.Gox where the majority of BTC holders lost their funds and which had a disastrous effect on the market.
I think there is a danger in using the Liquid Network. It is hidden in the fact that it is probably a LOT better in every aspect than Bitcoin is, and with many participants it will be tempting to just only use Liquid. Much like how nowadays some crypto investors will never take their coins off of an exchange out of convenience, I suppose. In the Liquid-future-world these same people will not bother with their security either.
It's a mixed bag, really.