Topic: The Lightning Network FAQ - page 47. (Read 33677 times)

I've been reading about LN in the last days and I have some queries gathered. I guess that I should asked them here, they're probably frequently asked.

1) The entire system of the LN is based on the node's judgment, as far as I've understood. If both parties remain cooperative, including the node, then they'll successfully transact their money. If one of them becomes uncooperative, then the other party can force-close the channel and both parties will receive their analogous funds. But what happens if the node stops being cooperative? For example, if it stops being online. Isn't the node the one that keeps the channel "alive"? Without it, do both parties own their funds? Can they broadcast the final result to the blockchain?

2) What is the difference between "Close Channel" and "Force-Close Channel"? I don't get it. Is the first one executed by the node and the second one means "uncooperative broadcasting to the blockchain"?

3) Why do we need LN invoices? Couldn't this work with bitcoin addresses? The first party would simply request money on one of his/her addresses and the second one would select an output to spend.

4) Maybe the one that seems the most curious to me. Why is there a "receiving capacity"? I haven't understood this at all and why LN can't work without it. (Swaping on-chain with LN funds)

I may have more queries on my way to fully understand the way LN works, but firstly I'd like to have an answer on these four.

I'll make you a deal: you send me $500 on LN twice, and I'll send you $600 on-chain once in return. Put your money where your mouth is! Deal?

I would appreciate if you could move your "LN is (not) Bitcoin" discussion to a different thread. Feel free to share your concerns about the liquidity here, though.

His criticisms would have been more acceptable if he simply told the truth. Because in his posts, some criticisms are sound but with misinformation to confuse the newbies. If he had said that it’s NOT EASY to be a liquidity provider in Lightning because getting inbound channels isn’t simple, then OK. Sound argument.

I gave up reading franky1's posts after I read this:
It means franky1 isn't using Bitcoin for payments. That's totally fine, but please just let me be when I actually want to use Bitcoin for what it's designed to be: p2p electronic cash!

Fees follow pretty much the standard market mechanisms for a scarce good. Banks also reject users who don't want to pay their fees, but a better example could be a parcel business: if you pay less, your packages takes longer to reach their destination.

Get the context of my post, in response to yours.


I am the self-proclaimed, the most stupid one in the forum, but I’m insulted when you say “learn about LN” when you were the person who said that LN transactions are made of IOUs.


When did I promote LN that it’s as “secure as Bitcoin”? Stop gaslighting.

This is true - it's the miners who are clogging the system up by only cheery-picking the cream transaction fees all the while leaving the lesser paying transactions to wallow and even fall out of the mempool because of how much better bitcoin is to allow transactions to be ignored for so long.

How many times have we heard about the blocks with very few transactions (which incidentally are the highest paying for their ride).

Do you imagine banks would remain open if they told their customers they didn't feel like processing transactions at the moment? (Or, until the recipient of the transaction then on spent those funds and paid a higher fee to do so?)

Stop pretending every brainfart of an idea you have is Bitcoin.  It never will be.  It must grieve you tremendously to know that many people all around the world will continue their efforts working to build upon something you utterly despise, when it's unlikely a single person will ever code any of your precious ideas.  LN will keep growing as you and your fractured mind are forever to be stuck in 2017, living your sad fairytales over and over until they become the only thing you can comprehend, despite not being real.  This is literally the rest of your life now.  Lost in a dream world of your own creation.  You don't know how to move on.  Have fun with that. 

But Bitcoin continues to chug along, functioning, without breaking, without network downtime. It was attacked, socially and technically, it was forked to many different forked-shitcoins, but it continues to be the most valued cryptocurrency, and the most robust network.

Hi franky1 - I always enjoy reading your posts, they're insightful and pose the hard questions that need to be asked (sadly I can't merit you as the DT merit font trolls are on strike at the moment ^{Which in itself means they're not doing the job they signed up to do})

I've got a comment about my own observations concerning the Lightning Network.  On the block-chain, I think small value transactions with small TX fees paid are going to be sooner rather than later a thing of the past as people will either shift to another, cheaper altcoin with negligible fees, or those altcoin TX will be non-existent fees.

While I like the LN and the ease of use it promises, it's klunky at the coal face end.  (It might be good for the coders at the back-end who want to sit and watch every electron that flicker's across their computer screen, but it has a long way to go before the masses adopt it)  I've lost bitcoins via Eclair and Zap and I'm in TX limbo attempting to shift funds from one Zap wallet to a new one since the 6th of March.  (Which means I'm a glutton for punishment)

So, like other people who are buried under an ever growing list of TX that get queued ahead of their own, I was wondering (in a thought bubble kind of way) if you can explain how you would speed up transactions on the block-chain (of any price range) without having to go into a bidding war - surely a level playing field where first in, first served (and all users paying the same fare to ride the TX bus) would be a more appropriate way for the transactions to be processed?

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That said:

Did you know that LN transactions look for the CHEAPEST path to the end user?  Perhaps that's why DaveF's path is seen as golden and is now well trodden - have you considered that?  (either of you?)

Nominally OT here but coinpayments.net can at times have really crappy conversion rates.

I too use LN whenever possible. Do a lot of GC purchases at bitrefill.com and fold for stuff I need in the real world.
Have some channels pending open at the moment I just opened them with a low fee figuring they will open in the next few hours or overnight.
Then I can spend the next few weeks, or months if I keep the 'add to shopping cart' to a minimum.

The problem still is getting people to use it.
I even setup my own BTCPay server to take payments ( https://paydave.lightning.ninja/ ) and almost nobody used it so I stopped posting it when selling stuff here.
I thought that when I was doing some $1 raffles people would hop in and buy a ticket or two for a buck with lightning with the low fees but nope.

-Dave

That's why I stopped using Bitpay My favourite nowadays is Coinpayments.net, which gives a bunch of options including LN and doesn't add an additional fee. But most services use something else.
If, however, a service offers LN payment, I prefer that service over anything else

I would not overly pay a fee for a feel good feeling.
If I believe a service is overcharging me for a transaction fee, I use another service.

For a $2 product, the only economic options in crypto for me are either
using coinbase offchain transaction to another coinbase user without being charged any transaction fees.
Speed is Instant
or
using an altcoin like Dogecoin where the transaction fee is less than 5 cents.
Speed is 1 minute

I have already mentioned, and have always thought that it might have been better for the Lightning Network if it was to be boot-strapped, and started off under a hub and spoke model, than chase the decentralized route. They point here is to increase funcionality for Bitcoin, but without sacrificing decentralization.

Now imagine you buy the same $2 product using on-chain Bitcoin. You'll pay $12 in fees, and the payment service will charge you 0.0002 BTC (or more) because of their own consolidation costs. That's $24 in fees for a $2 product, and the transaction takes much longer.

I'll gladly pay whatever fees LN charges me. It's negligible compared to on-chain transactions.

Why do you hate LN so much? The existence of LN doesn't stop you from using on-chain Bitcoin at high fees.

I don't mind

That’s why I believe, besides the limited capital consideration, with the specialization that comes in running a Lightning node, and maintaining channels, the node operators will be requiring higher fees if LN is adopted as one of the main payment systems for Bitcoin. It would be very debatable if the fees will always be lower than centralized altcoins.

Or it could be the other way around, and routing other transaction created liquidity right where the node owner needed it. If a node doesn't want to route transactions in a certain direction, they can simply raise routing fees up to the point that makes it worth their while again.

I'm not running a node, but I gladly pay a small fee to nodes who provide me the routing I need to make a payment. I also hope LN improves in the future.
I've had transactions that couldn't instantly be sent, but it always worked a bit later again. I consider this LN growing pains, and I hope it will go away eventually.

You're not helping your credibility by talking about "fangirls".

I'm trying to understand what's happening in this:


According to that diagram "D" has routed funds to "B" do technically they aren't his anymore, right? Or am I missing something?

I can't seem to find where D is locked out of his "ooo" funds since it looks like they are at B already.

The "after" funds that A sent to D are locked in (according to my understanding) but they aren't to be sent to B.

I theory there shouldn't be any net loss as the inbound/outbound values should tally up to the same values.

In saying that, I like the abacus analogy where one/some of the counters are shifted from one side of the rod to the other.

Question,
does the big players using your hub as part of their hops drain your funds or require you to add more locked BTC to keep your hub running?