Topic: Can Lightning network work decentralized ? - page 3. (Read 1176 times)

Difference no. 1: LN is a scaling solution for bitcoin. Not for fiat. You are still only transferring 'bitcoins' over which your payment node, the bank, has no control like they have over fiat money.
Difference no. 2: Suddenly if the bank decides to shutdown or goes bankrupt, it won't forefeit your funds as a normal bank can. This changes the whole paradigm of banking as it makes these bitcoin-banks behave much more responsibly to keep their business. They cannot hold your bitcoin ransom like fiat.

Aren't these big enough reasons to support LN?
Moreover, If you see it positively then we can have a future where responsible bitcoiners with enough funds will act as nodes just like they act as escrows now anyways. Its just that they'll be much more trustless than even escrows.

Smaller nodes for smaller, low-fee microtransactions and bigger, wealthier nodes for higher transactions.

I had this idea today regarding the mempool and was wondering why there is only one?
How come it cannot be sectioned of into pools where transactions such as mining distributions with many recipients and high fees(which is always the preferred ones by miners) go into one pool and lower ones into another?
If one can do segwit then surely something like that should technically be possible? Maybe this has been brought up before but obviously most things are drowned out in forums as big as this one.

FWIW I think this is a good honest discussion with a well thought out criticism.

I can see a world where LN becomes a centralized system. Eg I walk into a “bank” and they help me setup a private key then when I deposit FIAT they open up a channel on Ln with my bitcoin account and fund it.

Alternatively my bank could just issue me credit by funding my LN channel -this is basically what Visa does.

At that point I’m on LN/bitcoin but would have gone through a KYC check. I probably wouldn’t need to open many other channels because the bank would have thousands open with other banks and thus millions of users.

I think we need to remember that users will tend towards the easiest path. And something like the above will probably be it.

We could all use cash daily but most of the time we don’t. One of the main reasons banks exist is to make it easier to send/receive payments through things like cards/checks/wires/ach.

Why should we expect LN to be any different then what’s already happened.

My current concern is that if a big merchant like Amazon starts accepting LN payments, the smaller websites are going to have even more troubles trying to get some traffic away from Amazon and convert some sales.

Why? well because if you have to pay an on-chain fee to put money in a channel (im not sure yet if you must pay when oppening, when sending money into the channel and also when clossing, that's 3 different payments that I still don't understand exactly what's happening here) people aren't going to bother opening channels to buy with smaller websites that maybe you only buy once or twice at best, they will all stick to the same Amazon channel because in Amazon you find anything, but sometimes like I said you may test out another website because there's a bit of a price difference no your benefit, maybe an item is in stock there but not in Amazon... etc. People will not bother opening, funding and closing channels if they have to pay on-chain fees and will stick with a couple channels only, effectively centralizing commerce (even more, cause as we know shops are having a hard time competing against the Amazon mammoth)

Please anyone that actually knows how this exactly works like achow101 or nullius I would like some explanation on this practical case. I just don't see how people are going to bother if they can just pay with fiat saving the on-chain fees.

To the OP. You made a newbie account the day coinbase sneaked in BCH. Since then, you have been relentlessly spreading FUD about bitcoin and shrewdly shilling Bcash.
You don't sound like one of the trolls so my closest guess is that you must be one of the earliest faithfuls who were unceremoniously purged from r/bitcoin as well as the forum. That was some major upheaval back in the days of Bitcoin XT i think. A lot of people got hurt and angry because of the policies adopted by Theymos. That name has a sort of Greek mythology ring to it now.
Some of the people who really believed in this thing turned against it. Bitcoin and Bcash are almost like two long feuding brothers. Reconciliation seems pretty far off right now.
Big blocks aren't the only solution if bitcoin has to scale and I guess you people failed to agree on whether to increase first or get SegWit/LN first.There's so much drama in that story.

Back in the days, none of you would have wanted LN or Bitcoin to fail. In the words of King Theoden "Days have gone down in the West". Heck, Lets hear the full lament:

Where now the horse and the rider? Where is the horn that was blowing? 
Where is the helm and the hauberk, and the bright hair flowing?
Where is the hand on the harpstring, and the red fire glowing?
Where is the spring and the harvest and the tall corn growing?
They have passed like rain on the mountain, like a wind in the meadow;
The days have gone down in the West behind the hills into shadow. 
Who shall gather the smoke of the dead wood burning,
Or behold the flowing years from the Sea returning?

Well, that up there was a masterpiece and I hope, AT LEAST ON THAT, we can all agree..

Ok and now you want to pay your rent, your utility bills, your dentist, you car insurance etc etc etc. How do you do that with LN in a decentralized situation ? Or do you really think there are routes with for example 15 people and each can cough up your $1500 rent ?

And how old are these 'snapshots'? If somebody just made a payment that 'snapshot' is worthless. No, this only works when there's a complete map of the network where the network is continually aware of the balance in EVERYBODY's payment channel. Which seems like an extreme data traffic situation.

So? That is the great use case for LN that whole world can use without loading blockchain. Problem solved. 7 tx/sec won't be enough, but if LN flies - it won't be a big deal to increase block size.



In worst case it will be both. In best case it will be what it is now but better. LN is optional that is what important. Like conventional TX? Go ahead!

I think I already covered all the points, like transaction splitting etc.

Note that I'm theorizing here. From the top of my head each full node can have snapshot/map of nearest channels. If full map consists of N overlapping pieces those maps this will be maximum number of hops needed to reach destination. Also if you think about it how much nodes there will be really? Will this map be that large?

Who is talking about millions ? I'm talking about monthly payments, energy bills, rent, things like that already are impossible in a decentralized version of LN. And sure, I can go onchain but look at the extreme costs, even with only VERY few people using it, it got at $60. Now imagine the whole world using BTC to pay for their monthly bills, transaction costs would run thousands of dollars per transaction !

It's just funny, bitcoin was supposed to be an alternate system and now it's really inevitable that it's going to be a banking system in the end.

There has to be an actual route from person A to person B, consisting of people who are A) online, B) connected between you and the person you want to pay and C) EVERYBODY in that route has to have at least the amount that you want to pay, freely available. That's just not a very realistic situation. Only option then is going on chain but then you'll pay hundreds, maybe thousands of dollars, if bitcoin is ever to become big. Pretty much nobody is using it at the moment (compared to fiat) and costs already went over $60. That can easily go 10x, maybe 100x.

Eh? How is that even supposed to work, 'on the fly' ? The network needs to know which user in a route can pay how much, otherwise the transaction can't go through.

You do realize you want me to compare a max number of transactions per second with a money supply (M1) ?

Nah, at least with most fiat I know what I can pay for the next year and I can actually pay somebody when I want and with less costs.

Mind if I pick apart your above statement?


As of now, BTC worth billions and billions. With 7 tx/sec, insane fees and all. LN is likely to reduce load on the network, so in any case it will do good.

So what? LN is a mesh - if you connect to the node that have good up time (read - hub) or have multiple connections you don't need to worry. It's pretty obvious that you need to be online to participate in routing, but you don't have to if you don't want to, really.

First of all since transactions are instant, you can break down your tx to 10 smaller tx (this can work completely under the hood, unnoticed by users). Also with proper routing this won't be a problem. Also, remember - LN is not designed to send millions - for this you will still have your conventional on-chain transactions.

It really changes when you trying to think what word "Centralization" really means, and what scares you in it. Bitcoin was made to fight control imposed by banking, not single point of interaction. If central hubs are trustless, incentivised and have no real control over my funds, I'd say it's not that same centralization Bitcoin was born to fight with. After all you may say Mining pools are "centralizing" bitcoin, when they don't, because even though they can have big share, they don't have real control.

Also you can break 2000$ tx to 2000 1$ tx and happily send them via LN if there are no alternatives.

What?

No. There a ways of routing on the "fly". Most efficient would be to use shared map, but blind routing is possible. How do you think TOR work?



That's probably most valid point of them all. But isn't it what block-chain was made in the first place - so you can check if you wasn't screwed? If you operate lightning node your constant checks will be integrated in your block chain synchronization algo (i.e. every time new block is added - it checks if you have been screwed). If you don't want to host a full node - that's fine, but in absence of block chain you lose advantage of decentralized ledger anyway.


So I think - no, LN is not a joke. Not at all.

Interesting these assertions.

First item. No, bitcoin is not a joke at 7x/sec. Why? Because really, it's about 3/sec and with that lame number, bitcoin is about the 20th largest currency (check M1 numbers) in the world.

Well, maybe that is a joke. It's actually rather funny, isn't it? Or maybe the OTHER FIAT currencies are the joke. What do you think? Must be something going on right there.

Next, you have some issues with the proposed LN network, and I have an answer for that, which is also pretty funny. Get an android phone, download the beta LN interface, start doing some testing and prove up good and bad in the design. You can do this with the testnet.

Other people will be doing this, and it's certainly needed to get the bugs out.

I called it a joke because 7 transactions world wide per second is not even NEARLY enough, even with LN. Heck it's not even enough for a small country. It's a joke because people have to be online 24/7 to be part of a payment route: if one user is offline, he breaks a certain route. It's a joke because the maximum amount you can send is determined by the guy who has the least money in his channel. It's a joke since it will only work centralized and that's going against everything that bitcoin was meant to be (or do you really envision a chain of 30 people processing a $2000 payment, meaning everybody has to have $2000 freely available). It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire. It's a joke since the WHOLE network has to be aware of the exact state of EVERYBODY's channels ALL OF THE TIME, otherwise routes can't be discovered. Imagine the amount of data if you want to do that decentralized! And it's a joke because fraud is possible between 2 users, you continually have to check if people aren't screwing you over.

that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.

Neither of you is right.

On the subject - we simply don't know what will happen when and if LN launch. Theorizing in regards of an impact is speculation at best. But evidently supporters of LN takes phrases like "joke" or "doomed to fail" as tiny bit offensive. You provided valid argument but spiced it probably too much.

On the other hand, referring to the account status is kinda lame argument. I don't know what reasons people have to crate new account and I accept the fact it's not my business. I prefer to think that Established account probably know things, but newbie account may or may not have knowledge. We should not deny people privacy by simply discarding posts from fresh acc. (My acc for example is not my main)

It's ok to have criticism at anyone's post but at least tell me what's wrong with my 'assumptions' so that we can discuss it. Your post is rather useless as it is now, you're only saying that I'm wrong and need to rephrase things. It makes for a better discussion if you mention what you think is wrong. Thanks.

calling this a joke as a newbie here in the forum will not gain you friends. Too many newbies have come here and repeated the "flaws" of Bitcoin design.
Looking at your posts seem to show a misunderstanding of how Bitcoin AND LN can work in the future together. You are looking with limitation glasses (the fees), instead of the options glasses. Your calcs are based on wrong assumptions (well, very limited assumptions to make it appear worse). It might even be that you do it with intention: to show that big blocks are better/faster/lower fees ... this is lame, and there is other forum pages. Especially as there isn't in any visible real value in these big block coins (yet). So be happy in your big block coins, and hope for the future. Those, who know better, stay with bitcoin, segwit, LN and more to come.

Maybe you might want to re-phrase into open questions, so the community can discuss/answer properly, and it helps the community to get along. Without separating between one or the other.
If you continue this way, your comments cannot be taken seriously, and as such don't provide any value.

I kinda agree - much larger blocks will require but not at the stage where LN tested and adopted by at least some significant portion of the community. Even on current network I have a feeling it will ease load on the network. As previous poster noted demand for BTC will rise, dragging all costs in BTC upward, but this process will be relatively slow, hopefully slow enough to upgrade block size.


Regarding refunding channel problem - there are solutions. Since you can receive funds via LN you can simply pay fiat to LN exchange to provide funds via LN and re-fund your channel, effectively buying transactionless BTC. I think for professional traders, holding LN channels opened to several exchanges will open great arbitrage opportunities.
But you not wrong - if you store BTC in cold wallet - your refill tx have to be on chain and probably will be pretty expensive.

I think it's important to note that once the money is depleted in your channel, you will need to refund, which is another on-chain transaction (including the really steep on-chain fees). Every transaction into and out of the payment channel = on chain = huge fees.


Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?

One seemingly inescapable effect of the LN is an increased demand for bitcoin. This is because the LN network is essentially a huge distributed  "HODLer."

If there are 16 million bitcoins and over six months LN absorbs 2 million, more price and fee increases, hello.

It seems you don't fully understand what LN is. Simplified:

1. You post funding transaction on block chain (that locks up your money for the channel lifetime)
2. During channel lifetime (it can be a day, a month or even a year) you are free to exchange off-chain transactions with other LN users. Those TX are same BTC TX messages, however they never got posted to blockchain unless dispute occurs (in case of dispute, person who initiates premature channel closure gets punished) or channel naturally expires.
3. After channel closes - second - settlement transaction being posted to blockchain.

So basically for casual users, with need to move smaller amounts more often it will be virtually unlimited transactions in between those 2 on-chain transactions because transactions are fairly small, and they don't need to be confirmed on blockchain you can send hundreds of thousands/s. In theory on-chain transaction will become much more scarce and used only to move huge amounts or fund payment channels.