Topic: Lightning Network Observer - page 37. (Read 14270 times)

I have read this one back around the time it came out.

I think the LN is going to evolve in a way MUCH like the internet.  Is the internet centralized or not?

Yes.

Looking at the profile, it seems this person is posting random quotes from the internet. I shall check for plagiarism later.

Edit: yes, my suspicion was true. He's reported already: https://bitcointalksearch.org/topic/m.58124330

i nearly reported your post. what are you saying? why should primary nodes fail? why should i make a backup plan after looking what develops? if what gets worse?  i am confused...

here is a nice summary of the arcane research which was posted before from my italy dude fillippone

https://cryptonews.com/news/bitcoin-lightning-network-is-growing-faster-than-you-think.htm

A lot of the clustering debate originated from this paper ^{I might have already posted it here?}

Lightning Network: a second path towards centralisation of the Bitcoin economy

Maybe you could find useful insight, even if I am afraid the taxonomy of the network has changed a lot since the publication of the paper.

Thanks for that Arcane Tech link fillippone.  This is good stuff.

I have been thinking a lot about the clustering idea and where it will lead, and what it's natural balances are.

So far the LN is an open protocol that anyone can join and there are different costs and incentives for joining different ways.  As a custodial service customer to a profit seeking node.  But there are also lots of service provider roles we are seeing appear as the network matures.

Take Strike.  They are a service provider that uses the LN as the backbone for really a traditional finance product they offer.  So their incentives for running nodes on the network are different than, say, WoS, Fold, or your average tinkerer like me.  Yet what they do potentially benefits the network. 

It is also possible nodes like Strike's could do net damage to the network (I am not seeing this happening now/yet).    They could sequester traffic or deny traffic etc.

So I am thinking through all the incentive theory etc that we are seeing appear.  I am not sure there has ever been a network like the LN where nodes can benefit from simply participating.  Even the base layer of Bitcoin is much different in it's incentive structure.

But it is natural in systems like this one that traffic (read: information) is going to find the most efficient routes to flow, and the network as a whole will determine what is and is not really advantageous. 

SUPER interesting stuff in my opinion.  I think the LN as a business is where bitcoin mining was before say, Asics.  What i mean is back then mining was unfolding and moving from CPUs to graphics cards, and owning a mining business was an interesting and constantly changing game.  The LN is not the same as this at all... but it's evolution will follow a path, and we are very early still.  What will be the big game changers on this path like ASICS were for the base layer nodes?  What incentives will appear and change for the LN? 

These are the questions that are interesting, and possibly profitable, right now!

Arcane Technologies Posted a very interesting piece of research:



https://twitter.com/arcaneresearch/status/1445442967582302213?s=21


There are so many interesting graphs and updates.
 I will post only one here and it's about Network Centralisation, a widely debated (negative) feature of the LN, everyone has been discussing about, even amongst the authors of the report (Christian Decker wrote about it a few times ago)

Lightning labs is summarising latest LN developement we wintessed this last summer months

The Summer of Lightning: Reaching the Tipping Point 🏔



It's a good recap, covering pretty much all the aspects we already encountered in this thread over the last weeks.

Another day, another Network Capacity ATH.


https://twitter.com/kerooke/status/1441952895486726145?s=21


This graph is seriously becoming vertical!

Observing multiple articles observing Lightning Network Growth:


BITCOIN LIGHTNING NETWORK CHANNEL CAPACITY HITS ANOTHER ALL-TIME HIGH


This is interesting also because it is a free issue of a paid newsletter.
It's always interesting to see how the paid content looks like when dealing with those topics, where critical and technical journalism is required to have effective reporting and provide some added value to the reader.

the news is probably that it goes to print soonish?! at least that is what i heard recently 

Looks like it is not a news at all. It’s a tweet from 2019 I totally overlooked.

Strangely enough, the tweet from an Italian bitcoiner that relaunched this and originated this post has strangely disappeared.
Embarrassment, embarrassment everywhere.

I understand it like that as well. Alex runs a big routing node, one of the largest as far as I remember. By paying those fees, he saved tons of people a multitude of that amount in on-chain fees. If LN wouldn't exist, he would probably just have HODLed the amount that he locked into channels and would thus have paid no fees at all.

I'm excited as well, was looking forward to the book for a long time and checked GitHub from time to time to look up things and see how the state is. Now I'm not sure if they're rewriting it from scratch or just finalizing it together.
The rapid development of LN is surely going to be a challenge. After all, Andreas likes (and I as a reader enjoy) code / command examples to try out etc., which will be difficult if the clients change much. It works well for Bitcoin Core, but not sure about lnd and c-lightning.

I also remember Rene was having big difficulties finding a good paying Bitcoin job, while he's super knowledgeable, so I'm glad to see he has a cool Bitcoin project on his hands now

The other day I hit the hard wall of reality: I didn't get what Bos was talking about:


https://twitter.com/alexbosworth/status/1439605208292593667?s=20

My understanding is this: the activity of my LN nodes has grown so much, that the channel management made me spend a huge amount of money in on-chain fees. If LN didn't exist I would have never spent those fees, so probably LN is helping new business emerge, lowering dramatically the marginal cost of a single transaction, allowing for a whole new class of businesses being run over LN.

---

Wonderful news!


https://twitter.com/aantonop/status/1166762645736738816?s=21

As per Andreas, I bet he's trying the already known framework of rigorous technical writing coupled with easy tu understand explanations.
I am skeptical of the longevity of the book, given the rate of change of the technology of the LN.


As per roastbeef, hope his writing is not as fast of his dialogue ^{As a foreign speaker, I found roastbeef almost unintelligible while speaking. Something like I need to listen to at 0.5x on Youtube.}

[moderator's note: consecutive posts merged]

not according to murch:

source: https://twitter.com/murchandamus/status/1438521484910075919

That was not the only point. The main point is actually the opportunity costs, which might be OK during a bull market. But during a bear market, if someone/a company/service opens 10 Bitcoins or more for different channels, they will be taking a loss, missing out on other opportunities for their capital.


I believe it can only be sustained through incentivization.

I'm beginning to wonder if the growth in Bitcoin Lightning Network transactions correlates to the slump in mempool transactions (and their fees) that we have seen in recent months.

It would explain why the price has stabilized while the number of transactions in the mempool has at the same time appeared to stall.

Just afew Day's old news:


https://twitter.com/btc_ln/status/1438017446330261506?s=21

This news was relaunched also by Bitcoin magazine:

PAXFUL INTEGRATES THE BITCOIN LIGHTNING NETWORK


This recalled an old tweet by Paolo Ardoino:



https://twitter.com/paoloardoino/status/1404724609602232323?s=21

I am wondering how the exponential growth of these last months changed that scenario. I asked him on Twitter, I'll update you if he makes himself heard.

It was already answered above. Basically yes, more fees or just simply more transactions at a low fee, could probably cover the electricity and channel opening costs.
Keep in mind opening a channel isn’t as crazy expensive as you might think, after all it’s just a normal Bitcoin tx that currently costs <1$ to get mined.

I know node operators that have channels open for years at a time and routed thousands of transactions in that time.

What I mean with more transactions: even with a limited number and size of channels, if they’re routing stuff back and forth hundreds of times per day instead of once or twice per week (like on my node at the moment), with a maybe 1-2 sats routing fee, instead of getting 5 sats a week you’re looking at thousands of sats per week.
Routing more transactions doesn’t consume (significantly) more power or need more / bigger channels, so contrary to the underlying blockchain it scales much better and has kind of a fixed running cost with increased revenue the more it is used.

No reply? From anyone? Let me explain. Like the block rewards/fee revenue for miners that should be high enough to maintain Bitcoin’s security, and it success, the Lightning Network’s “liquidity providers” should also he incentivized for the opportunity cost on their capital, to maintain the growth and success of LN. How would this be possible? Charge higher fees.