Topic: Criticisms of the Lightning Network - page 2. (Read 1471 times)

It's not as difficult as you think. Some nodes automatically open a channel back if one opens a big enough channel to them. There are also services from which you cant rent the inbound capacity.


Mobile wallets are fairly easy to use, but there is still a lot of room for improvement. Eclair Mobile and BlueWallet (a custodial wallet) seem to be the best choices for now. The latter might be a bit more intuitive.

For me several problems came up:

1) Its really complicated to use at the moment. Installation very hard, first fund then open channel, do the tx itself.
Need to be integraded in a standart bitcoin full node to use

2) Creating inbound channel even harder

3) Because of the upper parts very less people use so it will take years to establish

4) I dont see any advantage agains Masternode of DASH working for years

That's still an F, in spite of the effort. Try harder newbie.


Yes! LN is, in some sense, more like a "serialized mempool" - credit to Bitrefill's CCO.


I already said this before, I believe Lightning might be better adopting a hub and spoke model for efficiency. My opinion, I might be wrong.

every state is a channel close transaction, that was negotiated, but not broadcast. the blockchain doesn't know that other more recent states exist, so it's as valid as any other.

that's the point of going off-chain when you think about it; the blockchain only needs to know aggregations of every little transaction together as 1 larger transaction, not every detail of every little transaction.

I'd like to see older channel states but Eclair doesn't show them. I guess I'll have to dig into the backups made on Google Drive for those?
As a proof of concept, it would be interesting to see if I could actually use an older transaction to steal funds (and if I succeed give them back to the node, but that's not the point here). I currently have a channel (opened by me) with only just over 3000 satoshi on my side. If I'm the only one paying for fees, I don't expect any of this money back in my wallet. But even all of it is used as fee, it won't be a high fee. So: what if I wait until fees go up, then close the channel, which won't confirm, and after the right amount of time, I broadcast an older state (which at the time might have been signed with a higher fee)?

It's still a mystery to me how the older signed transactions would work, given the fact they can't be broadcasted instantly but only a certain amount of time after trying to close the channel.

You're mistaken though You made a LN transaction with me, but you didn't have a direct LN channel to me. I don't even run a node! I was using a light wallet, just like you, and you opened/closed the channel with another node.

It might help to wait until fees are low for a while, then close the channel. I would expect a lower fee that way (but haven't tested it yet).

I understand what you said, but that wasn't the case. The other party of the channel wasn't in hurry, it was loycev.
It really was a lack of transparency and fee control. Eclair wallet is a good wallet for testing, but it has many problems, and fee customization is one of them.

There was no way to customize the fees and choose how many sat/byte I would like to pay.

In my experience, actually using LN has been no more difficult/complex than using a light bitcoin client. What happens in the background is much more complex, however as a user, I have no need to understand the backend if I have already made the decision to use LN.

When you close a LN channel, some of the coin belongs to you, and some belongs to the other party to the channel. If the other node does not want to potentially wait days to access their coin, it will not sign a cooperating closing tx with a low fee. If the other node is not cooperating and you want to unilaterally close the channel, you must use a previously signed tx, including whatever fee rate was set.

It is possible to keep your keys in a 'warm' wallet not contained on the same computer as your LN node. You can also keep it in cold storage, however you will need to be signing multiple transactions every time you want to spend coin, so this is not ideal.

An adversary who is closely monitoring the state of various LN channels can potentially conclude that channel x paid (belonging to node x) 0.xx btc to channel y (belonging to node y),  could conclude that channel y belongs to bitrefill for example, and could use blockchain analysis to conclude that channel x belongs to you. The adversary could conclude this because exactly one channel belonging to your node had its outbound capacity decline by 0.xx btc at approximately the same time several other nodes had exactly one channel both decrease and increase outbound capacity by 0.xx btc, and node y had exactly one channel decrease its outbound capacity by 0.xx btc. The adversary would need to be watching the LN network in real time, and must take very frequent snapshots of the various states of channels; without these snapshots, the adversary will not be able to make these conclusions.

Merriam Webster defines an IOU as something that 'is given as an acknowledgement of debt'

If you open a LN channel with inbound capacity, and receive a transaction, when the channel closes, you will receive an on-chain tx for the amount of the transaction plus the amount you funded the channel with (less any payments you sent). For this reason, I understand why some people may believe that LN channels are IOUs, however if you were to stipulate they are IOUs, you must also state that it operates very differently than traditional debt.

With a LN channel, you always have a signed transaction enabling you to receive the full amount you are "owed" at any time, and there are safeguards in place to prevent the other party from taking any of the amount you are "owed".

The term "debt" implies there is a chance you may not receive what you are due, but with LN, this is simply not the case.

---

My biggest concern about LN is the inability to find a node to open a channel with who will provide capacity for you to receive a payment. In order to receive a payment via LN, you must have an open channel with capacity to receive the amount of the payment; this means you must have either already spend a similar amount on other LN payments, or someone else has opened a channel with you and funded the channel with their own money in amount at least that of the payment. Today, there are several services that charge a few percent of the inbound capacity they provide, but this is not ideal unless you will be both receiving and spending many transactions on that channel.

There's no other reason why Jack Dorsey would endorse Lightning in Roger Ver's alternate-reality.

But I can imagine the franky1 fist pump. Hahaha.


You are moving further away from the point. There's no debt/IOU in Lightning. Those "values" in the channels are signed transactions by both parties of the channel. They are Bitcoins in a "serialized mempool", waiting to be broadcasted on-chain anytime the user decides.

Sorry for interrupting your IOU discussion, but the Lightning Network criticism has just been taken to a whole new level. Even franky1 can't beat that.



Source: https://twitter.com/rogerkver/status/1160286347002695680

you could, but unlike an IOU, the debtor cannot stiff the creditor. As I say, that is where the comparisons end

and I reiterate, saying "Lightning is an IOU" is a psychological tactic, designed to make people think they're trusting money put into Lighting channels can be returned to the on-chain. That's not what's happening. You can control whether your money is returned, providing that you understand how to do so.



no

channels are like IOUs, but they are not IOUs. Manipulating subtle differences in the meaning of words, or exaggerating something are typical tactics of someone trying to twist reality.

Can't you say it's an IOU from the channel to both parties involved? Neither of the parties has a debt, but the Lightning channel owes them money.

The "IOU comparison" is something difficult for me to agree with, because an IOU is something that acknowledges debt. There are no debts in Lightning.

Am I wrong in this? Was franky1 actually right that the transactions in Lightning are made up of IOUs? Hahaha.

goods in an IOU are signed by the issuer, and haven't been delivered to the recipient yet

Lightning channels are just contracts to deliver valid on-chain funds, but not to actually confirm the transaction. If it can be confirmed, then it's nigh-on identical to actually owning it on-chain, you have the signed transaction that delivers the BTC to an address own by you

(that's why Eltoo/sighash_noinput is so important, the big obstacle is unexpectedly high on-chain fees preventing you from settling a channel balance, no_input lets you change the transaction fee when you initiate a channel close, whereas with today's Lightning you must choose the transaction fee when you update the channel, which may be a while before you close)


The "IOU" thing is a psychological trick; IOU's have a bad reputation for being worthless and easy to abuse, whereas as you say, Lightning is not like that. That doesn't mean it's any less like a non-legal contract, it is a non-legal contract. Lightning channels are better guaranteed than even a legal contract, maybe we should call them cryptographic or algorithmic contracts to reflect this difference. I find "smart" contract to be an irritating expression

But Lightning is nothing "like" an IOU system. "Coins" sent in Lightning are actually signed transactions that haven't been broadcasted, and included in the blockchain yet.

As a side note this is what people should be pushing for when it comes to contracts with anything. Unbreakable contracts by either party which are enforced by a system such as the Blockchain. The Lightning Network is no doubt a good move even if its not perfect in itself, its a movement that will hopefully lead onto better things. Whether that's The Lightning Network or something different.

Well put. I think a lot of misconceptions regarding LN stem from mistaking the latter for the former. They seem to believe that LN smart contracts are governed by laws similar to legal laws (ie. a social construct based on trust and thus easily broken) while the laws smart contracts are governed by are more akin to the laws of physics.

another way to look at it :-

• IOU's are informal contracts, that have a reputation for being easy to break
• Lightning channels are contracts too, but they're enforced by the Bitcoin blockchain. You can't break these contracts

future improvements (i.e. Eltoo / sighash_noinput) will tidy up the corner case where old copies of channel updates are put on-chain.

I'm not sure what you're getting at. It's obvious you can't send Bitcoins without making an on-chain transaction. That statement is true with or without Lightning Network.

No IOUs in Lightning. They are signed transactions made by the participants of the channel that have not been broadcasted on-chain yet. No one is holding your coins, and issued something worthless in Lightning.

it's conceptually similar, so you can see how someone could make such a mistake (or deliberately state the falsehood as fact in order to bash Lightning)


the similarities end in the redemption; if you redeem an IOU, the issuer might just refuse (or make an excuse). But the issuer of funds in a Lighting channel is the Bitcoin blockchain, and so when you "redeem", it accepts no matter what.

i.e. payment channels have the advantages of an IOU without the drawbacks