Topic: Can Lightning network work decentralized ? - page 2. (Read 1204 times)

The idea is that everybody who functions as a hub in a route gets a small fee for it. So you gain like 'interest' on your money that serves as a hub. I don't see a problem in this part.

So would you let a total stranger borrow $1 from you even if you know you are 100% guaranteed to get it back
which you are in this case like

Me ----------$1.00 -------> You ------$500 ----->Bank One.........>

if you act as a hub/bank for me then your deposit at the banks goes down to $499 which is not a big deal and you could even swap banks
without any trouble if another bank offered you lower fees or the old bank kept going off-line without upsetting me as shown below

Me ----------$1.00 -------> You ------$155 ----->Bank Two.........>

Just opening yourself up as free hub would have you flooded in seconds so it would have to be some type of manual
process you would need to use when deciding who to let people in but yes it works but what if this then happens

Me <----------$49.00 ------- You <------$205 -----Bank Two<------ $50 --------- My Mum

Your balance with the banks goes up to $205 and now your balance with me becomes a credit of $49 to me
and I then close the channel and your left holding the baby and having to pay the $30 transactions costs

Do you think a bank is going to let you pump 100 transactions a hour through them given that they too are
forced to pay fees and won't charge you this fee plus a profit margin and you might be nice and don't mind
lending your BTC out in the private ledger with me for free but banks don't work like that so in effect deposits of
opening a channel do not pass up the chain so even if I deposited $1000 with you then it does not mean that
you can spend $1499 with bank one.

Forget the development team programming and testing this "thing" because they have not even put out a document
that crosses all the dots and signs the tee's that anyone can understand so all we get is wishful thinking and visual
propaganda from Lightning being fast and yes it could speed it up but this is no racing car that's for sure

This routing issue through a decentral random network is a NP hard and unsolved math issue.

It is trivial in a few big clearing hub central mesh...

Easy to see where this will end.

Guess its not NP hard to educate enough on this but if media get this soon... wtf

Sorry if I misunderstand you but it seems you don't understand the concept of LN (maybe you do but then I don't understand your post). The money doesn't move 'on chain' from Bob to alice. Both deposit 0.1 BTC into their channel, THAT is an on-chain transaction. When everything is settled the money needs to move from the channel to, in this case, Alice. What I don't know though is how these fees are divided. Do both pay $30 for opening the channel (when they both wire money into the channel) ? I think this might be the case since both move money into the channel, so that's 2 transactions on-chain (one on-chain transaction from Alice and one on-chain from Bob, both into the channel). When closing 1 transactions from the channel to Alice takes place, but who pays for this one ?

Well money needs to move from Bob to Alice on the main block-chain so Bob picks up the $30 miners fee and Bob has no option but to settle the bill
because he (His wallet really) signed the micro transactions that happened on the private ledger to agree to payments and the $30 fee comes out
his BTC on the public block-chain

in this case Bob's 0.1BTC was lock on the main BC and is sent to Alice and at the same time her original 0.1BTC also gets unlocked on the BC
as an atomic transaction so maybe Bob and Alice were forced to leave $30 in the main BC for each new channel they open to cover the $30
miners fees, sorry not sure.

YES I CAN. Yesterdays crypto rebels and pioneers are becoming todays pirates and profiteers. Greed and the lust for money and material things is the root of all evil. But if the masses participate in the LN and keep their own hubs online, then the banks will at least have some competition, keeping the network in check

You make a very good point that with LN there is no need to close a payment channel once opened. While videos like https://www.youtube.com/watch?v=UYHFrf5ci_g&feature=youtu.be are spreading the FUD that banks and Blockstream inc will become the payment hubs, in reality the LN opens the possibility for anyone to become a hub if they so choose. In effect the LN will make bitcoin further decentralized but ONLY if Bitcoin holders choose to participate in a bigger way. If the people are too busy or have no interest in acting as hubs then the LN will just be another vehicle for the power elite to control and create more wealth for themselves. The same as throughout history.

Wait, I'm not following you. Let's say Alice and Bob open a channel, both put 0.1 BTC in it. They both do some payments and then Bob is broke, and Alice still has 0.02 BTC. They want to close the channel, now what's the rule regarding who pays the miner fee to close/settle the channel? I always assumed they'd just split the miner fee automatically? But since Bob lost all his money already he doesn't care about settling so unless he's forced to pay, then the payment will be for Alice ?

Thanks for the like and it says

This is quite logical and deal with inter bank movement of money between banks and if the software is smart it might even
enable more liquidity between the banks in cases where the ledger between banks has become exhausted because the movement
of money has all been in one direction and for all I know the banks could reduce the transaction fee being charged if they need to fill the
buffer of BTC back up to the top.

I have absolutely no trouble with this at all but anyone lending "sufficient funds" and charging a fee is a bank and will incur costs
as they make a profit from you the customer so lets call "Channels" lines of credit and hubs by the rightful name of "Banks" with
routeing being inter bank settlement which really become settlement with central banks much like the FED or BoE

Can no one see why I am screaming

During settlement with the hub/bank the balance left in the private ledger gets release so even if you
have $0.01 left in credit then it gets written to the BTC public block-chain and the hub has to pay the
$30 to the miners and locks are then released in the BC that were created when you made a deposit

Remember they are selling lightning to us as if Bob , Alice and David create these money conduits that they call
channels and you better hope that Alice is happy to act as a charity hub for you when she gets hit with having to pay
the miners this $30 transaction fee.

if you on the other hand owe $0.01 to the Alice then you get to pick up the $30 bill and believe me I have
not even started to blow holes in this deception that they have planned for us.

Yes sure anyone can become a hub if they keep the software running all day, have lots of hardware
and tons of BTC to finance the private ledger plus high speed internet connections so that will be the
current miners becoming bankers won't it then

This article was just posted, pretty much what I've been saying too: https://www.coindesk.com/lightning-network-may-not-solve-bitcoins-scaling-trilemma/

OK, this simplified explanation is very approachable. I have few questions though.

1. I'm opening my own LN channel. Funding it with 1BTC and the fee for it is 100satoshi(simplified)
1a. Need to send bitcoins to new address on specially prepared software?
2. During channel operation, my laptop with LNnode works as an escrow between people and blockchain.
2a. I would have to make my 100satoshis back, so I set[?] fixed[?] fee for people to pay.
3. Channel closes and my "mini block" is sent in to chain. Do I pay another fee for this?
3a. Channel closes because of dispute, will I get my 100sats back? What if disputer has less than 100sats?
     Who pays for "unused" bitcoins TX, that will have to be returned from my channel to me?

Yes i want to go deep into this but given your public key I think it is quite possible for me to locate you
to become my hub but it would require a type of internal distributed DNS system that might suite
specialist nodes on the system. Better and faster than just broadcasting and it would be a star type
structure with say 100 nodes, this is not centralization and major hubs on the system could be given
human readable name and feedback could be left, dare I even say have a "Trust Rating"  along with Up/Down time

That's not my major concern but the finances of these hubs is because they sure do look
like banks to me who then tie up there own BTC on the main block-chain (Central bank) so they can act
as conduits (Regional banks) and charge the likes of me and you fees.

My argument is not about inflation at this time but about fees because I've heard this
"Virtually free transaction fees" story once too often and yet we have a monopoly of miners ripping
us off and the chances are they become the major hubs and will rip us off even more because they
are organised, we are not and they have lots of BTC and we don't

Banks remember are a free market and just like miners they have both stitched us up like kipper
and it is my public duty to ensure this does not happen again or we end up with even more scams
using Bitcoin than we already have.

Please stick with me on this because i could do with a few partners to represent the public
which is not happening with the development team who now seem like dedicated banker puppets to me.

Once i have a full understanding of what and how they say it works then I want to look at some case studies
because the propaganda about setting up a channel with a coffee shop and buying a coffee a day for
a month and then settling up (Back on block) is not washing with me

Yes agree but they need to lock money in the main BC as i understand it so you cannot owe a hub more than
you have on deposit in the main BC and this also happens between Hubs

Anyone can become a hub but for the conversation lets stick to saying wallet if only one channel opened even if Tor type routing is involved
and uses wallets to achieve this. (think South Korea here)


Major hubs that have many channels open can find a route but opening a channel effectively locks money on
main BC so they can both used set amount in private ledger

Bob----->HubUK<><><><>HubUSA<><><><>HubIndia<------Alice
or
Bob----->HubUK<><><><>HubEurope<><><><>HubIndia<------Alice

Both HubUK and HubUSA would each lock $1m on main BC so they have working
capital flows which could well shift backwards and forwards $100m over a month
but on settlement (close a channel) both locks are removed and if HubUK owes say $50,000
balance to HubUSA then UK gets to pay the BTC miners fees.

Hub discovery is going to be like node discovery and each hub keeps a private ledger
so what happens if HubUK goes down or can the hubs be configured star shape to offer
redundancy  ?

Bob already has a channel open to HubUK and has locked $1000 on BC, sent $500 out, received no payment
so has a balance of $500 with HubUK but Bobs friend Paul uses Bob as a hub and wants to send $2000 to
Ebay but this would not be possible because Bobs channel does not have the balance to cover Paul's purchase

Are we in agreement so far ?

If lightning network works decentralized this will be a nice thing but I highly doubt it.   

What would you consider micro? Id argue that paying rent isn't a "large" amount. If we are saying that LN can only be used for super small transacitons, say < 0.001 btc, then im not sure how much it value it will have given the complexity of managing channels.

this is kind of an amusing thread. 
people    complain that bitcoin has too high fees, that you can't pay your coffee.

So everyone is preaching, bitcoin shall be used for high values, and lightning for micro payments.

People seem to get this, but in this thread they complain, lightning cannot be used cause when one puts large amounts in it, it can hardly be afforded over a longer period of time.

How stupid will this go?

Yeah that's why I think people are just going to open mega channels with central institutions (ala coinbase).

I also think the is a business in extending people credit on LN. As long as its cheaper then the fees most people will do it.

Exactly, very good point. Nobody is going to open a payment channel with his landlord and put 3 years of rent in it. Most people already have difficulty coughing up next month's rent! So effectively this would mean they'd need to wire EACH month money into their LN. Why then would they even do that ? Why not just wire the monthly rent directly on-chain ?

Yes I know LN scales bitcoin, but for the user, the currency ultimately doesn’t matter. If I buy bitcoin from Coinbase and they send the bitcoin to my payment channel that looks very similar to a checking account to the layperson. They won’t really understand the perceived nuance you are talking about -though it’s fundamentally what makes the blockchain valueable.

In the example I outlined the banks would have control since they could just close my channel allowing the balances to settle. If they are the super nodes (which I think they will be) and they won’t allow me to open a channel the network will be very hard to use day to day since I would be severely constrained by the size of channels I have open with others.

Ie. I wouldn’t really want/need to open a large channel with the random coffee shop that I visit 3 times a month.

Let’s take another example. Say I have a roommate that pays me .1 btc/mo for rent we would need to open a 3month channel (.3 btc) to make it worth it because that would mean we could bundle 3 transactions into 2 blockchain transactions.

It’s going to be hard for most people to fork over that level of cash. Especially if you need to open multiple channels like that -ie do I really have the btc to open a 3 month payment with my landlord? Probably not because I have a roommate to begin with.

Think about a business that employs 100 people. The business would need to have a lot of cash on hand to open up direct channels. So they will probably just open up one mega chan with their bank. The “bank”surely will require KYC to do this.

I’m a strong proponent of a decentralized store of value but my point is that ultimately the user won’t care if it’s btc+ln/ach/wire/visa/mpesa. They qjust need to be able to store value and send it to someone and will take the easiest path which I think will be centralization.

It’s not like the tech requires this, it’s more of a human nature thing.