who will open LN channels and make 1000's of payments to each other? poeple like CoinBase and Bitpay.
The funny thing about this comment is that the vast majority of onchain merchant commerce is processed through Coinbase and Bitpay. I would posit that for the majority of commerce-related transactions, both buyers and merchants would be happy to connect to Coinbase and Bitpay on LN. Are you suggesting that moving this activity off-chain is bad for bitcoin? Bad for scaling? I'm at a loss.
its a problem... when coinbase realizes it always has about 10X more user deposits then it does user funds tied up in the lighting network, and can easily start fractional reserve operation.
That's possible when people use Coinbase as a custodian for their bitcoins, as is commonly done now. Your exchange balance is an IOU for bitcoins.
It's impossible on the Lightning Network since spenders on LN can recoup their money if/when Coinbase can't cover its channel obligations. That's the point of time-locked contracts.
IMO LN will fosters this type of scheme were coinbase behaves like a bank, and blockchain is a settlement layer the users dont have direct access to.
LN users have direct access to the blockchain as they always do; onchain fees may be higher than when there was no demand for bitcoin transactions, yes. That's why a channel-open onchain transaction + negligible fees on LN thereafter is preferable to one onchain transaction.
also, I might not be able to send a 5$ donation to wikileaks because coinbase is a regulated entity and i am forced to deal with coinbase for TX <25$ because its to costly to do <25$ payments directly on the blockchain.
If your speculation about prohibitive onchain fees and the limits of LN to a hub-and-spoke model, maybe. Neither of those scenarios are entirely clear. In any case, LN is a proposed solution for micropayments. There was never any implicit guarantee of perpetually free/cheap bitcoin transactions. If LN routing is not as robust as planned, bitcoin continues to function as intended.
how to regulate the blockchain payments.
step 1, regulate large bank like bitcoin entities
step 2, prohibit users from using the blockchain directly by imposing high fees.
DONE!
Fees are not a novel concept in bitcoin, Adam. Your comments merely boil down to whining about not wanting to pay the costs of a confirmed onchain transaction.
The danger of reliance on centralized entities is well known. The beauty of LN is that user funds are not subject to the dangers of such centralization, as LN users are still the custodians of their own money.
I might be exaggerating the level of fees. fees might very well come down to 2012 levels once LN makes all the TX happening between bitpay coinbase bitfinex stamps etc etc all of chain, allowing users to keep making direct payment on the blockchain and leverage the LN to quickly move funds between coinbase and stamps or whatever. but i can see how eventually ( should the 1MB limit never be raised ) the blockchain will be over runned by LN open and close TX's and since millions of dollars will be transacted in these channels fees for opening and closing these channels could be 10's if not 100's of dollars.
That's possible. Probable? Who knows. It doesn't sound like the worst problem to have. Such demand for bitcoin and bitcoin transactions only suggest very good things for investors. For those of us who look to bitcoin as a store of value, and not primarily as a payment method for everyday purchases, this is a very good thing.
a fee of 50$ to transact the main chain means individuals payments MUST go through payment gateways which is a bad thing, which is what bitcoin was meant to avoid.
You're just pulling numbers out of your ass. If a typical onchain fee = $50, what value of transactions are we talking about?