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Topic: The Lightning Network FAQ - page 40. (Read 33287 times)

member
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June 25, 2021, 10:43:09 AM
IOUs can be reneged upon.  Cheques can be reneged upon.  

And LN hubs can refuse transactions.

It was one of the attacks listed in my post, that Rath deleted just because LoyceV called me a troll and asked to have my post deleted. If you want to know now, google it.

Any Offchain transaction is an IOU, until confirmed ONCHAIN.
Denying that is intellectually dishonest.

legendary
Activity: 3948
Merit: 3191
Leave no FUD unchallenged
June 25, 2021, 10:08:39 AM
Same old story

I guess it couldn't last, you're back to spouting nonsense again.  There's a crucial distinction you appear to be neglecting.  Whether that's deliberate on your part or not, I suppose only you will know for sure.  

IOUs can be reneged upon.  Cheques can be reneged upon.  This is not the case when you receive a payment via LN.  Once the other channel participant has signed over a transaction and you have acknowledged it, the only way they can possibly back out on that payment is by attempting to spend from an outdated commitment state, which puts them at serious risk of losing their entire balance within the channel.  Provided you are online to monitor it and don't make any mistakes, you will be able to redeem any balance sent to you via LN.

If the other party became unresponsive before signing over their transaction, then that's equivalent to them becoming unresponsive before sending an on-chain transaction.  Either way, you don't get paid.  Yet you keep insinuating other people can use LN to withhold funds from you in a way they can't do on-chain, but this is untrue.  You can close the channel and broadcast it to the blockchain at any time, providing you are using the latest commitment state.

In fact, the bigger issue is if they become unresponsive when you are trying to pay them.  If that situation arises, you may have to wait for the timelock to expire before you use those same funds to make another payment to a different merchant/business/service/whatever.

I'm pretty sure you know all this by now, since I've been telling you the same thing for what feels like half a decade now, so why continue to be so disingenuous with your choice of words?  It's not an IOU.  It's not anything like an IOU.  You can certainly continue to call it one, but I'll continue to insult your intelligence/integrity (still honestly can't tell which one I'm supposed to be calling into question, perhaps you'll clarify that one day?).

No doubt you'll reply with "bUt FaCtOrIeS!!!111", but will once again neglect to mention that those will be completely optional for those who may wish to utilise them.  And "bUt MiLlIsAtS!!!111", but you seem to be the only person who has ever somehow perceived that as a problem in the history of ever, so yeah, who cares?  I'm going to be laughing if we ever do have a hardfork that increases the number of decimal places in the base protocol.  What would you rant about then?

Just stop.  Please.  You're an embarrassment to yourself and the entire community.  
legendary
Activity: 4410
Merit: 4766
June 25, 2021, 07:38:11 AM

..
as for the others debating the concept of IOU
its very simple.
a HTLC is not a bitcoin broadcastable tx.
the denominations will not be understood by bitcoin.
when travelling through routes its not measured in satoshis.

also
if i wrote you a raw tx that was broadcastable. i signed it.. but.. i have yet to broadcast it and thus its not a confirmed transaction on the blockchain.. can you claim the funds are yours now free and clear settled. or that you are possibly waiting and hoping for funds you now think i owe you..
the answer is. your still stuck at the IOU stage until its actually confirmed on the blockchain.


If Lightning transactions are made up of IOU’s, then what entity issued those IOUs? Or is it actually NOT the same as the IOUs in the real world that the issuer can NOT pay the holder of said IOU? Because, you are NOT sending anything worthless in Lightning. They are actually SIGNED TRANSACTIONS that have not been included in the blockchain yet.

when you are at a bar. and to do a favour for a friend.. you and the friend agree on an IOU.
however its an IOU and remains an IOU until its actually 'paid up' and settled..

heck other factors you need to consider(as its obvious you have avoided)
regarding the close session transactions
everything unconfirmed in a mempool is just waiting to be settled but no guarantee it will confirm
again. dont accept zero confirms. is a principal thats been around forever in bitcoin


its like writing a cheque. yes you signed it.... yes you might also have a debit card thats used as a 'cheque guarantee card' to prove you have worth.. but knowing the cheque is not going to be cleared that same hour. allows the other party to mess around and spend his funds elsewhere. making what you are owed.. not arrive in the end
..

now take a breath. because the bit below is about the internal payments within LN. which are not to be confused with the close channel transactions.
..
note:
a close session/commitment transaction or htlc. are not the same thing.
payments within LN use Msat
where they do not conform to the bitcoin network format

where msat units 4 significant figures different than bitcoin sats
and where a payment using msats wont be accepted by the bitcoin network
then you realise that doing payments in msats wont get confirmed. until you later convert the iou into something bitcoin will accept(msat divide by 1000)


if you cannot tell the difference between an Msat and an sat. then dont reply
// MilliSatoshi are the native unit of the Lightning Network. A milli-satoshi
// is simply 1/1000th of a satoshi. There are 1000 milli-satoshis in a single
// satoshi. Within the network, all HTLC payments are denominated in
// milli-satoshis. As milli-satoshis aren't deliverable on the native
// blockchain, before settling to broadcasting, the values are rounded down to
// the nearest satoshi.
msats. aka LN denominated tokens are not bitcoin satoshi's
LN payments on the LN network use Msats
before settling to broadcast.
a LN tokened payment needs to be converted to a bitcoin native sat amount.

in short and in very layman terms
a LN payment in Msat. is an IOU. that needs to be converted into a different 'note' that can then be settled
legendary
Activity: 2898
Merit: 1823
June 25, 2021, 04:49:34 AM

..
as for the others debating the concept of IOU
its very simple.
a HTLC is not a bitcoin broadcastable tx.
the denominations will not be understood by bitcoin.
when travelling through routes its not measured in satoshis.

also
if i wrote you a raw tx that was broadcastable. i signed it.. but.. i have yet to broadcast it and thus its not a confirmed transaction on the blockchain.. can you claim the funds are yours now free and clear settled. or that you are possibly waiting and hoping for funds you now think i owe you..
the answer is. your still stuck at the IOU stage until its actually confirmed on the blockchain.


If Lightning transactions are made up of IOU’s, then what entity issued those IOUs? Or is it actually NOT the same as the IOUs in the real world that the issuer can NOT pay the holder of said IOU? Because, you are NOT sending anything worthless in Lightning. They are actually SIGNED TRANSACTIONS that have not been included in the blockchain yet.
legendary
Activity: 1512
Merit: 7340
Farewell, Leo
June 25, 2021, 03:43:29 AM
the whole point of bitcoin is irreversible, no countersigning, no third party interference payment network.
The whole point of Bitcoin is, as being said by the whitepaper, to prevent payments from being sent through a financial institution. Its point is that two parties can transact without the need of a third party that will move the money. While that sounds like LN, it's not.

Satoshi was very clear with the problem he was struggling to solve.
Quote
The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

The lightning node isn't like bank; you don't trust it your money. The maths speak for themselves. You surely lose a part of your privacy due to the knowledge of the node for every transaction you make, but isn't the same with SPV? Why hasn't this being said for electrum servers too? Not to mention that off-chain transactions aren't publicly announced and no weirdos can analyze your pocket.

I'd also like to read why LN transactions aren't irreversible.
legendary
Activity: 3290
Merit: 16489
Thick-Skinned Gang Leader and Golden Feather 2021
June 25, 2021, 02:58:14 AM
so knowing majority of people wont be full node users and instead rely on factories to deposit to
You've just described how the majority of people use on-chain Bitcoin transactions. They don't run their own full node, but instead rely on centralized nodes to make a transaction.

Quote
the whole point of bitcoin is irreversible, no countersigning, no third party interference payment network.
LN is none of those things.
Maybe I can make you an offer: you send 2 mBTC to my LN wallet, and in return I'll send you 1 mBTC on-chain. Since you believe your 2 mBTC payment can be reversed, you're free to do that, and keep my 1 mBTC too! That's an easy profit, right? Unless of course the LN transaction isn't so easily reversed, in which case I get to keep the 2 mBTC.
Put your money where your mouth is Smiley
legendary
Activity: 4410
Merit: 4766
June 24, 2021, 07:49:30 PM
legendary
Activity: 1512
Merit: 7340
Farewell, Leo
June 24, 2021, 12:34:53 PM
You don't have full control of funds locked in a multi-Sig address for LN.
Isn't this obvious? In a multi-signature address, X out of Y signatures are required to be able to spend. The fact that I lock them under these circumstances doesn't make it centralized. Again, the lightning node can do nothing to my funds; we're just both in agreement of transacting between other people.

If I somehow lose the private key from a 2-of-2 multi-sig address, the funds are gone for good. Will the bank behave similarly if I passed away? Clear it up and stop trolling. The fact that you didn't reply to DooMAD's post makes you a troll.

Stop the BS; you aren't close to the bone if that's your purpose.




Now since you have full control as you claim,
immediately send the bitcoins you locked to another onchain address without asking the hash time lock contracts to close the channel.
Let me ask you a question, if you signed a transaction, but didn't broadcast it, would you feel that you own the funds or that it's an IOU?
legendary
Activity: 3948
Merit: 3191
Leave no FUD unchallenged
June 24, 2021, 12:05:01 PM
but the LN transactions occurs on their LN hubs/ network only.

That's misleading.  It makes it sound as though they are in complete control of the transaction (which is no doubt why you deliberately elect to word it that way).  A more accurate description would be to say that both participants within the channel are in control of their own portion of the funds contained within it.  Maybe that's too technical for you to grasp, though.  If you're still unable to differentiate between a transaction on LN and an IOU, despite several different people having explained to each of your various troll accounts on multiple occasions, there's probably not much more we can do to help you understand.  
legendary
Activity: 1512
Merit: 7340
Farewell, Leo
June 24, 2021, 11:13:13 AM
LN is far from being perfect, but 1) is a choice, not enforced 2) compared to a centralized payment processor still offer some degree of decentralization and possibility of external audit (channel capacity, nodes availability, etc...)
I don't get why it's referred as something “centralized”. Should we define that word? Because when someone calls a payment method centralized I'm thinking that there is an administrator among the rest who is responsible for my funds safety; he holds my money and gives me an IOU. Banks, for example, operate centralizedly.

But, when we talk about a network of computers each one running autonomously without being forced to do anything, I can't call it centralized. So, we can't compare LN to a centralized payment processor, because they're two distinct things. Visa is a company, while LN is a protocol; a set of rules computers around the world follow.

Even if there was only one LN node, the method would still not be centralized. I'd have full control over my funds and no IOUs.

*No different than when the Banks held gold, and their banknotes optionally redeemable in gold. *  Smiley
The bank can do whatever they want with my gold; the lightning node nothing.
legendary
Activity: 3906
Merit: 6249
Decentralization Maximalist
June 24, 2021, 08:14:45 AM
Actually, you might be being too nice in your assessment of anyone attempting to make definitive analysis regarding what a system like lightning network would be or would have been based on when it was first launched..
Maybe (if I understand you correctly). Generally I support this kind of analysis, and at least it could serve to find parameters to understand LN evolution and possible challenges (Edited, here I left an incomplete sentence). But to be clear: the title "Lightning Network: a second path towards centralisation of the Bitcoin economy", is at best a grotesque clickbait and/or overinterpretation of results. At worst, it may be simply trolling using a "scientific" language. Smiley

Personally, I am not against any kind of analysis that attempts to put matters into perspective and even to perhaps show historical developments as compared with current happenings, so surely we can likely appreciate that lightning network remains a ways from mature, yet I see no real reason not to be attempting to analyze what is going on without necessarily drawing inaccurate and misleading conclusions from nonrepresentative data.. such as the first year of lightning network.
Agree. What I would like to see, perhaps, is a real-time (or at least, let's say weekly) update on the centrality measures they established.

Bitcoin Visuals has some measures which may indicate relative centralization, too, or at least connectivity and thus resilience against attacks. For example, the "cut channels" indicator shows channels which cannot be closed safely without disconnecting nodes. The percentage of these channels was rising until May 2021, but since then it is slowly decreasing. This may indicate that people were indeed connecting to few nodes making some routes "irreplaceable", but now alternative routes are opening, and thus connectivity is improving again.

Surely with the recent onboarding in lightning network - perhaps partly fueled by some of the El Salvador news (including realizing that apps like strike actually have utility) seems to bring more attention into creativity that could cause some functionalities and interfaces in the coming years that currently ONLY a few more insightful folks might imagine to be coming...
For sure. The current growth trend in LN seems to have been started before El Salvador's adoption, though - it began to accelerate in March/April, maybe first due to the rising on-chain BTC fees, but then continuing after the May crash, possibly taking advantage of the low fees in this period. But El Salvador is surely a big test for the network, if they really manage to onboard people via Strike/Zap. So maybe at the end of the year we will have a first impression about how LN will look like in case of mass adoption.

it is instead a public hub and spoke model.. as people above are now admitting to but saying thats the natural effect.. even though less than 6 months ago they were arrogantly fighting that its an independent and private 'hop'/'route' network that will never centralise
If you mean me, I was never convinced that LN could be totally interconnected without at least smaller hubs (you can search my post history). The challenge is to reach a structure where the hubs don't get too big (with tens of thousands of channels each, a node may get realistic chances to launch attacks), but currently I see no danger here. But those wanting to bring forward LN have to care for that centralization not to happen, for example, periodically revising tutorials (which may have created some centralization according to the blog post linked above) and always pointing out several alternatives when talking to/writing content directed to beginners.
legendary
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June 24, 2021, 06:26:50 AM
Shower thought, is some degree of centralization in the Lightning Network, to find efficiency, truly bad for you, franky1? If you ask me it’s not. Or are you merely criticizing the people who believe that Lightning is on the far right side of the decentralization spectrum?

Is strange that some people find LN bad while at the same time are ok with other totally centralized transfer systems, such as exchanges (binance BEP20?)

LN is far from being perfect, but 1) is a choice, not enforced 2) compared to a centralized payment processor still offer some degree of decentralization and possibility of external audit (channel capacity, nodes availability, etc...)
legendary
Activity: 2898
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June 24, 2021, 02:51:19 AM
Shower thought, is some degree of centralization in the Lightning Network, to find efficiency, truly bad for you, franky1? If you ask me it’s not. Or are you merely criticizing the people who believe that Lightning is on the far right side of the decentralization spectrum?
legendary
Activity: 4410
Merit: 4766
June 23, 2021, 01:01:07 PM
i would describe a independent user node network as someone (if the network has 21k nodes it would have an 6 degree of separate) with just 6 channels(average 5-7 range)
where the average would be:
6x6x6x6x6x6  to have everyone inter connected within 6 hops and within 6 channels per node to all 21k nodes

whereby the network if it was truly private and independent, individuals couldnt 'map' / 'visualise' the network even if they tried

whereby the max fee should be just 6x of the standard millisat token fee for a hop becasue all it would take is max of 6 hops
...

however this is not how the network is functioning
firstly the biggest lie.. the invisibility/privacy. as debunked by the many visualisations/maps of the network
if private there should be no way to map the network, not voluntarily or spying

secondly
it is instead a public hub and spoke model.. as people above are now admitting to but saying thats the natural effect.. even though less than 6 months ago they were arrogantly fighting that its an independent and private 'hop'/'route' network that will never centralise

even more recently certain people involved in LN are admitting that the centralisation is happening more often with some hubs refusing connections unless they meet minimum channel balance/htlc min. where they become the inner circle of even larger hubs and those with low balance are left to the outer layers

so although certain people are flip-floppy and then trying to deny their own post history of arrogance and ignorance and ow trying to spin the centralisation as a needed positive.. it is a slight relief they are starting to acknowledge that the hop model is not working for LN. and they are slowly acknowledging the centralisation.

the real centralising factor is not just nodes with 100+ channels. but those nodes only accepting channels with peers of certain balance htlc minimums to create a hierarchy of inner circle high channel balance and outer circle descending balance

for me a hub is a node that has far far more then the 'degree of separation' channels required. and its acceptable balance to create a channel or its minimum HTLC is far more than the average
so nodes requiring more then say 0.07btc per channel and having say 60+ channels. would be considered a hub

.. but just wait for the custodials to jump in and see the network really show off its inner outer circles with the el-three stuff like factories
legendary
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Self-Custody is a right. Say no to"Non-custodial"
June 23, 2021, 12:08:50 PM
It should also be noted that the analyzed period is 2018-19, which was in the initial stage of LN. This means that in this period it is expectable that the network became more centralized. At the beginning of 2018, LN was an experimental field, so it was mainly used by experienced users trying out the software. When time passed, "retail" ("pure user") nodes were increasingly added, which naturally try to connect with relatively well-connected, central nodes, increasing their centrality even more, but I can imagine this being a temporary phenomenon.

Actually, you might be being too nice in your assessment of anyone attempting to make definitive analysis regarding what a system like lightning network would be or would have been based on when it was first launched.. maybe giving it a year to come into place might not have been totally accurate in terms of where it might be going, but surely those first 6 months or longer were likely a hodgepodge of scrambling... I remember even the fact that lightning network was launched in January 2017 in quite a premature kind of way as a kind of reaction to the bullshit ongoing spamming attack on the bitcoin network that had been going on for around a couple of months at that time.. and creating stupid-ass narratives for the various shitcoiner pumpers(bcash, ethereum et al) and bitcoin is broken (grampacoin) naysayers. 




In short: I would like to see an analysis of this kind with newer data, but maybe we should wait until LN usage grows a little bit more (LN is currently growing relatively fast) to really draw conclusions, so the proportion between "retail" and "hub" nodes becomes more natural. If the trends towards centralization they claim didn't flat out in this period, then it's time maybe to start worrying, but I don't see any reason for that.

Personally, I am not against any kind of analysis that attempts to put matters into perspective and even to perhaps show historical developments as compared with current happenings, so surely we can likely appreciate that lightning network remains a ways from mature, yet I see no real reason not to be attempting to analyze what is going on without necessarily drawing inaccurate and misleading conclusions from nonrepresentative data.. such as the first year of lightning network.

Surely with the recent onboarding in lightning network - perhaps partly fueled by some of the El Salvador news (including realizing that apps like strike actually have utility) seems to bring more attention into creativity that could cause some functionalities and interfaces in the coming years that currently ONLY a few more insightful folks might imagine to be coming... which the occurrence of actual adoption and usage likely puts the whole damned thing to a kind of test that ends up inspiring creativity and even motivations to make money too.. and if some people might not be motivated by making money, they might end up being motivated by serving a kind of "mover and shaker" role in the whole scheme of lightning network related things.. that may well even inspire some other second layer interfaces/businesses that were beyond the imaginations of folks focusing on the matter from a different angle.
legendary
Activity: 3906
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Decentralization Maximalist
June 23, 2021, 07:37:45 AM
I'm reading it. In my opinion it parts from the unrealistic ideal that LN could be totally interconnected, without any hubs, and what the authors call "centralization" seems to be the natural (and most effective) way for the Lightning Network to operate, i.e. as a hub-and-spoke model with small to medium hubs. What they found out is basically that the network is evolving towards this structure.

They seem to ignore that in LN there are naturally distinct classes of nodes: some who only are users, using LN for payments, or as individual merchants, while others are explicitly trying to support the network as hubs (and get fees for it). Comparing these kinds of nodes with a single Gini coefficient would be basically the equivalent of comparing retail users and businesses with a measure intended only for retail users.

It should also be noted that the analyzed period is 2018-19, which was in the initial stage of LN. This means that in this period it is expectable that the network became more centralized. At the beginning of 2018, LN was an experimental field, so it was mainly used by experienced users trying out the software. When time passed, "retail" ("pure user") nodes were increasingly added, which naturally try to connect with relatively well-connected, central nodes, increasing their centrality even more, but I can imagine this being a temporary phenomenon.

If we look at figure 3 (page 6 of the PDF) then we see also that the trend for the centrality measures they're using (Gini coefficient Gc) is increasing, but the curve is progressively flattening and in some cases lowering. This confirms my suspicion: that the "trend towards centralization" they've claimed to have found is mainly a consequence of the early stage the network was in in 2018-19, and that this trend would not continue in the future - it may even reverse.

In short: I would like to see an analysis of this kind with newer data, but maybe we should wait until LN usage grows a little bit more (LN is currently growing relatively fast) to really draw conclusions, so the proportion between "retail" and "hub" nodes becomes more natural. If the trends towards centralization they claim didn't flat out in this period, then it's time maybe to start worrying, but I don't see any reason for that.
legendary
Activity: 2898
Merit: 1823
June 23, 2021, 06:18:38 AM
There’s an anonymous person who calls himself “StopandDecrypt” who wrote this blog, refuting the “observation” that the Lightning Network is Centralized. It’s a long one and thorough, https://medium.com/hackernoon/them-lightning-network-nodes-sure-do-look-centralized-to-me-what-gives-ee39c9b12ac0

I asked who he was, some people suspect that he is gmaxwell.

Read everything he wrote.
legendary
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Crypto Swap Exchange
June 20, 2021, 03:57:16 AM

Since the meaning of "centralization" is vague, IMO topology of LN network isn't centralized (star/extended star topology), but unevenly distributed (partially connected mesh network).
copper member
Activity: 821
Merit: 1992
June 19, 2021, 05:59:43 AM
Quote
Have you read this paper? What's your opinion?
Of course Lightning Network is centralizing things, mainly because you need on-chain transaction to introduce each and every participant to the system. As long as this problem is not solved and as long as transaction joining is not implemented, you cannot receive coins "in pure LN", without creating on-chain transaction.

Running a HUB is a problematic thing, don't expect some non-technical users to do that kind of things. And similarly as with on-chain BTC, where many people hold them on exchanges, in LN many people hold their coins in custodial or half-custodial wallets, so the consequences are you can see big HUB's accumulating a lot of coins and many small nodes being connected with them.
legendary
Activity: 1512
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Farewell, Leo
June 19, 2021, 04:32:42 AM
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