Topic: Why some people think Lightning Network centralizes BTC? (Read 1751 times)

People just have their opinions. I doesn't necessarily means that they are right or wrong!

As Antonopoulos has said, when people realize the true potential of Bitcoin technology and when they massively start using it and adopting it, we will need every possible solution. We will need bigger blocks, higher fees, lightning network, etc, to be able to scale to the users needs!

For certain I don't think LN makes sense to use for "one off purchases" unless those are in the form of "streaming audio/video" where you are paying per second (so payment channels are not the answer to all scalability issues at least in how I have understood that they will work).

so if the locked tx IS in the blockchain.. then those 5 customers, 1 starbucks =6 locked tx's in the blockchain (500byte each=3,00bytes)..(ignoring employee as he just a recipient)

then when starbucks finally closes the channel.. another tx appears in the blockchain 30 days later (1,250byte as the example on the right of my diagram).
so now 5 purchases of coffee are not 1,500bytes(old way left diagram) to pay everyone in order and give change.

but now 4,500bytes to cover the 5 locked tx's and the 1 settlement tx to pay 7people (5customers change, starbucks, employee).


i think LN has its uses to finally create more secure means to handle bitstamp day trade or a poker room 'pot'. but im still trying to analyze the benefit for the one off retail market.

nice diagram, don't know about your conclusion.

If you use the poker room example instead of the retail outlet example, one particular output could change hands a dozen times or more in one evening, but that gets reported as just one line in the tx, not 12. That's a credible nearly 12-fold reduction under some circumstances. A retailer (or any business) could engender something similar; take customer payments over Lightning, and make payments to suppliers/contractors also using the same Lightning hub. Any efficiency's in the way those transactions get settled on-chain can be exploited.

Also, there's more work going on right now to make the fundamentals of multisig as used by Lighning even more space efficient. Seems to me like the devs know where they're going with this overall approach to scaling up.

That locking would be done using CLTV not using the mempool (so the locked funds *are* in the blockchain as a tx output).

Using the mempool would be rather silly as that isn't in any way guaranteed.

You do not lock anything in the mempool.

you do need to lock your bitcoins, that way LN would trust you to then do offchain tx's. otherwise. whats stopping me paying starbucks using LN but then using the actual blockchain to pay myself(moving funds).. while starbucks does transmit a tx for 30 days..
thus the locked funds need to be in the mempool for starbucks to trust, and for blockchain miners to not mine until starbucks is happy..

i also did read the white paper, and watched their videos, and the presentations.. but that is all theory.. i put their theory into practice using real examples..

Maybe you should just read the paper instead of telling us fairy tales?!

ok guys, lets get back to basics..

imagine we were on the scale of visa 200million transactions a day.

LN locktime tx is 500bytes minimum compared to bitcoins 250bytes minimum..

thats 100GB of tx's just sitting on the mempool because LN wont use blocks, it just uses the mempool (the unconfirmed unmined database of tx's) until the channel is closed

now imagine people using the locktime for 30 days.. and doing 1tx per day on LN (using the mempool)
3terrabytes of LN tx's sat in the mempool.

now imagine the processing power needed to tally up all the balances of the closed channels to be able to produce a final minable tx for the blockchain..

if you think that tx's are only stored locally, ud be wrong. they need to be in the main bitcoin mempool to ensure bitcoins are locked and unspendable on the blockchain whilst people play around making LN transactions within the mempool..

now the problem is not only mempool storage worries for all them locked bitcoins (unconfirmed). but also whats stopping miners purging them. after all miners are already ignoring Tx's without fee's.. so why store 3TB of locked tx's that wont get them a fee because the transactions are all happening for free in the mempool.

and don't get me started on the end resulting tx the blockchain will finally receive.
imagine 5 customers with 1btc are buying coffee (0.01btc) each from starbucks and then starbucks paying 1 employee's whilst starbucks keeps 50% of customers funds for profit.
remember that bitcoin needs to settle all users balances so that the 5 customers are left with 0.99each starbucks has 0.025 and employee has 0.025.



i dont really see it as reducing much bloat. especially at the expense of large mempool requirements for upto a month, miners wont see the advantage. of holding data for a month for just 1 tx fee

re-empt knitpickers.
dont knitpick the numbers, they are just examples.. instead look at the idea as a whole, tell me the advantages using real life scenarios, demonstrations of what LN can do that will revolutionize bitcoin

Everyone should ignore this shill. All that you've just said is wrong and you're the one who's spreading misinformation not them. The lightning network does not work like a sidechain and neither does it require paying fees (to them; it's supposed to be cheaper than on chain transactions). The lighting network also needs much bigger blocks in order to be really effective (e.g. ~150MB to match Visa volume). In other words, an increase of the block size will come sooner or later. Also it is not possible for "everyone to depend on the new system". The transactions have to eventually settle on the blockchain which would not make sense if the fees there were unreasonably high. Now go back to your Bitcoin CEO and stay there.

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Nothing is being crippled.

As said above, just ignore him. Sidechains have nothing to do with LN.

If a party of the lightning payment channel misbehaves, funds will be locked down for a period of time until a set timeout occurs. You see full privacy(?) and veracity of standard Bitcoin transactions, I see a complexity machine (for a use small blockers see as superfluous to global reserve digital gold tokens) that takes away from the miners who actually secure the network.

I have no problem with free individuals using lightning type payment channels, and it probably would be required for actual Bitcoin scaling. I just don't want to artificially cripple the real network to create greener pastures for it.

Not really, because using SPV does indeed involve some trust in full nodes, but using Lightning channels will provide the full extent of the privacy and veracity of standard Bitcoin transactions, i.e. trustless.

A more apt analogy would be a full node client vs a SPV client? Full node interacting directly with the network, and the SPV (partly) relying on a trusted intermediary.

That description is equally true of miners v.s. wallet nodes. Symmetric vs asymmetric. So, the bitcoin network is asymmetrical already, Lightning hubs just add another layer of node types that serve as a promotion of the role for the miners (or could just be seen as an extra role).

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.

That wasn't my answer. If the miners process Lightning transactions as well as standard transactions on the network, and Lightning is just an open-access protocol, then there's no centralising pressure (adding an extra dimension to mining profitability has the potential to improve competition in mining).

They probably should to protect themselves from outside entities taking artificially limited tx fee revenue... The question was "Why do people think that it could lead to centralization?". Largely, the answer to that question is: "Because it does."

Does it not then make sense for miners to run lightning hubs, as it looks like vertical integration is the best fit here? Sounds ok; if the blockspace is being packed more effectively, then a leaner chain and lower bandwidth requirements makes it easier for new entrants to the mining market to compete against established big miners.

Contrary to popular belief, people who support Blockstream are not against block size increases. I am not against increasing the block size limit, in fact, I want it to happen. I prefer BIP106, not BIP101. I am also not against Blockstream and sidechains. The people who work at Blockstream and on their projects are good people. They are recognized developers and many are part of the Core Dev team. Many of them have also suggested other block size increase proposals. There are other ones besides BIP101 that are potentially viable.

Even if blockstream charges people to use sidechains, the project for that is open source. All of that code is publicly available and people can use it, fork it, and do their own stuff with it. You don't have to use blockchain. Someone can fork the source code (and many have) in case they decide to pull it down. Even if they decide to make the sidechains stuff closed source, people will take what they previously published and create own sidechains implementations off of that. We don't have to use blockstream.