In the promotional video shown below Bob wants to buy Coffee from a Coffee shop at $1.50 a day for the next month
(As if that's going to happen very often) so a channel is created between Bob and the Coffee shop and Bob
deposits (Locks coins in BTC Block chain) $40 in BTC into a multi signature account (Private off block ledger) that they both now share.
See
https://www.youtube.com/watch?v=rrr_zPmEiMEBob buys twenty cups of Coffee during the month and they both agree that Bob now owes the shop $30 so at the end
of the month the channel get closed and $30 is sent from Bob's BTC account to the Coffee shop but then Bob gets hit
with the miners transaction fee of $30 so each cup of Coffee has now cost Bob $3.00 a cup instead of $1.50
Being a modern day Bitcoin Lover Bob would also need to open Channels with his local grocery shop, food bar, Newspaper store
and at today's costs of $30 in transaction fees his expenses has gone up by $120.00 for the month.
if the bitcoin prices goes down during the month then all over sudden Bob the builder does not have enough finances in the
off block private ledger to cover the bills so by the end of the month he is having to go without his morning Coffee.
Now the propaganda really starts to pile on in the video because Bob has a friend called Alice who lives in the same street
and she also like to drink Coffee from the same Coffee shop as Bob and as miraculous as it sounds she purchased Bob's old TV
for $70 but because both Bob and Alice know each other she over pays Bob $30 for the TV so the channel between the two was kept open
for the whole month.
Alice ---------------------------- > Bob -------------------------> Coffee shop
Deposit $100 $50
This will now allow Alice to purchase Coffee from the shop but she likes breakfast at the same time so once again Bob
is out of luck long before the end of the month and now the BTC miners have managed to earn themselves $60 in fees
instead of the two just using regular cash and was Alice not to over deposit money in the Bob channel then this arrangement
becomes null and void.
Clearly the
"Lightning Network" (LN) designers want this to look like a peoples bank (Bank of China is more like it) but for
obvious reasons it is not practical to use LN in the way they are suggesting it and they must think that the world of full of Bob the builders and Wendy's
so in the next part of the article we will cover Hubs and how they are really banks that will be charging fees on top of the crazy BTC miner transaction fees
Also read the link below from Coindesk if not totally convinced by now.
https://www.coindesk.com/lightning-network-may-not-solve-bitcoins-scaling-trilemma/