Topic: Will the Lightning Network replace on-chain transactions sometime in the future? (Read 263 times)

Very interesting observation. How didn't I've thought of that sooner? It seems to me that the LN won't be able to replace on-chain transactions anytime soon. Being useful for multiple cryptocurrencies, I'd say that the LN is well-suited as an alternative than a replacement of an specific cryptocurrency (in this case, Bitcoin). One way or another, the LN is heavily-dependent on the underlying Blockchain itself for opening/closing channels. Miners won't have nothing to lose in the long run, even with the Lightning Network in play. Who knows what the future of Bitcoin will look like after the LN becomes extremely popular worldwide?

Nonetheless, time will tell us whenever the Lightning Network will become a success or a failed experiment. With so many other cryptocurrencies on the market with greater performance than Bitcoin, people won't have a reason to use the LN in the first place. They could simply use an altcoin like BCH, BSV, or even LTC to enjoy low fees and fast transaction confirmation times. The off-chain scaling solution for BTC will only become a "niche", used by a very small minority in the crypto/Blockchain space. Considering that the LN is not easy to use, mainstream adoption will be at its lowest. Developers are going to have to make the LN more user-friendly, to help solve this problem. Just my thoughts

LN is not unique to bitcoin.
LN is multicurrency

you lock up your 1oz gold($1.7k). you play with banknotes($1.7k). close account collect 65oz silver($1.7k)
only paying $5 in $0.05 out
you vault your 0.03BTC($1.7k). you play with btcmillisat htlcs. you atomic swap for ltcmillisats. you exit paying $0.05 for 8.19ltc($1.7k)

It's the complexity of LN transactions, which stifles the network's growth in the mainstream world. The Lightning Network won't be able to replace on-chain transactions if the average person doesn't know how to use it. Without user friendliness, the Lightning Network will only remain as an alternative than a replacement of on-chain transactions on the Bitcoin blockchain. At least, people have the choice to skip high fees and slow transaction confirmation times. They can either use the LN or an altcoin of their preference. What matters is that Bitcoin remains decentralized in order to maintain censorship-resistance. Unlike cryptocurrencies with on-chain scalability (like Bitcoin Cash and Bitcoin SV), Bitcoin's path to scalability is much safer as everything happens on a separate layer. If the LN fails, Bitcoin will continue to operate as usual.

Nonetheless, no one can predict the future. So far, the LN has been doing well in terms of active development and innovation. As long as it's maintained by the community, it will be able to stand the test of time. For what I know, the LN is still an experiment. Whenever it'll be a success or a failure in the long run, it's yet to be seen. With so many other blockchain networks available on the market, there might be no reason to use the LN in order to enjoy instant transactions and low fees. Just my thoughts

Lightning Network will only ever see utility on times of high-volume transactions on the network. It will not get much of its sought-after mainstream adoption due to its added complication on the transaction process. Either way, I'm pretty sure LN will have its official uses side-by-side with the network, and I'm just not seeing it replacing the network as a whole.

Exactly. Not only that, but the Lightning Network's complexity makes people look elsewhere. They're better off using an altcoin like Litecoin or Bitcoin Cash, than using the Lightning Network for cheap, instant transfers. We could say that the LN is only an experiment that's very unlikely to be used seriously in the mainstream world. Unless developers make the LN easier to use, and ramp up marketing/promotion efforts, I don't see it going anywhere. It'll be another story if the LN becomes extremely popular in the mainstream world. If this happens, I'm afraid the LN could replace on-chain transactions as people will use it more than the main Bitcoin blockchain itself. The only exception would be on-chain transactions related to opening/closing channels on the off-chain scaling solution. Who knows if miner's profits are reduced in the long run because of minimal on-chain activity?

Nonetheless, crypto behaves in strange and bizarre ways. As long as the LN has active development and innovation, there's hope it could reach widespread adoption in the future. There will be no harm done to Bitcoin if the off-chain scaling solution dies in the long run. As I've said before, people could switch to another coin if they feel uncomfortable with Bitcoin's high fees and slow transaction confirmation times. Remember, scaling is something optional for Bitcoin to reach a wider audience. Decentralization is all that matters in order to provide an alternative to the current financial system. Take that away from Bitcoin and you get nothing more than a "glorified banking system". Just my thoughts

Definitely, As you have said, people will put up with either choosing a new altcoin or the lightning network, and since most altcoins in the market aren't that great as a leeway as they were before, the Lightning Network seems to be the most plausible answer to our problems with high transaction fees in the future. Honestly I'm puzzled why not everyone is using it.

Think this is on the mind of developers for sure, but not for at least two more halvings so that gives them and miners 8 years or so to figure things out, meanwhile, privacy is the priority and that's already en route with new clients signalling. Also that's super conservative, because even at 0.75 per block it's still 108 new Bitcoins a day for another 4 years... then 54 a day for the next.

And even if it's just over 1 new Bitcoin every hour 20 years from now, presumably fees and price would be something of a simple mathematical equation of profit.

I realise I'm waffling, I think about it a lot too. I'll be hopefully very retired by then though, telling people war tales of 2017.

I don't think that Lightning Network will ever get mainstream adoption because people see Bitcoin as an asset to store value.

On the other hand, due to the cosmic fees and DeFi, L2 on Ethereum could be adopted very soon as people are sick of paying $50 for a simple transfer.

Imagine what'll happen once the block reward goes to zero. Miners will be earning solely from on-chain fees on the Bitcoin blockchain. If people used the Lightning Network more than the main Bitcoin blockchain, then miners won't have an additional incentive to keep Bitcoin secure against external attacks. Of course, there's the need to open/close a LN channel on-chain. But channels can remain open for a long time, meaning that miners won't be able to earn from fees periodically.

Maybe I'm wrong and Bitcoin will be able to work well with the LN in play. But I'm worried what will happen in the future once people massively adopt the second-layer scalability solution. As long as Bitcoin remains profitable for miners, it'll continue to be the most secure and decentralized blockchain in the world. Rest assured that once mining becomes unsustainable, miners will stop supporting Bitcoin altogether. Who knows what the future will bring as on-chain fees continue to be on the rise? Just my opinion

It has some good growth recent months.

• State of LN network (main net)
• Channels, Capacity, Nodes

I don't think it will happen but it is true that Lightning Network adoption will be increased. It might be increased more and faster if its developments can be boosted up more.

Despite of all future scenarios for Lightning Network, it is not true to say it will replace on-chain transactions

• It is only be alternative
• Altcoins can not replace bitcoin even many people use altcoins for their transactions
• Lightning network can not replace Bitcoin on-chain transactions, now and in future
• No one choose LN or altcoin for transactions if they are moving big funds and serious about safety

One of the major tumbling block to Lightning Network adoption is that miners believe it is a way on their revenue which indeed it is true if we are being sincere but what I found very difficult to believe is the refusal of exchanges to adopt the technology, we know exchange makes  some percentage of their profit from withdrawal fees, if they can charge less than the ridiculous one the are charging and opt for LN it will be win-win for everyone. The area I am being critical of LN team is their slow offering of DEFI services, people want yield for their BTC and if they can start offering yield interms of lending and borrowing service which I believe the market is there to exploit it would be huge, instead of people going for all these Wrapped tokens

I disagree. I cannot afford anymore to pay around $100 in fees for 4 on-chain transactions to get through within the next block. It gets exhausting and, unfortunately, it makes me contemplate moving on from making daily BTC txs to another altcoin that makes things more affordable. As much as I love Bitcoin, if this is what the network will look like when mainstream adoption happens, then it honestly really sucks.

Edit: I wanted to reply to your thread, but I just noticed that the only altcoin that has been mentioned is the one I wanted to mention myself. Monero

There are lot of options though, altcoin is one, but Ethereum is even higher than bitcoin so I doubt that they will choose it. But they have to convert their bitcoin to other altcoin as well, for some this might be tedious.


Nah, LN is design for small payments only, and most bitcoin transactions involved huge amount moving in and out of the blockchain. So it won't replace on-chain transactions in the near future. There are a lot who complain about the fees and yet bitcoin is still the top coins. So there will still be miners, until the last bitcoin is mine.

You won't be able to reliably send large transactions via Lightning, it would be in many cases impossible to find a route with enough funds.

 If you're buying a house or a car, you don't really care about a double-digit fee and 30-60 minute confirmation time. As I see it, on-chain transactions will be used for high-value transfers, Lightning will be used for small consumer purchases. There will always be some balance between them, if on-chain transactions will be cheap, more people will use them, so the fees will go up.

The current fees are a glimpse of what will happen when there will be even more adoption, especially if BTC will be a reserve currency for everyone. So, I wouldn't worry about miners getting no fees.

Therefore history repeats: traders where the ones who helped bitcoin going mainstream and traders will be the ones who will launch some serious Lightning Network adoption. Fine by me.
Anyway, noobs could also jump onboard LN in some easy way as LN wallets are becoming more and more user-friendly (I think of Breez).

On a slightly different note, only to clarify the thread's headline, LN will not replace on-chain transactions as we will always need on-chain txs to fun/close channels. (in fact,  LN is an off-chain 2nd layer scalability solution).

Serious traders will be the first to use Lightning as part of their typical usage of Bitcoin. I'm sure these types are already trying to avoid the high fees during market frenzies, but being confident you can _reliably_ use Lightning to circumvent the mempool will push them towards consituting the main userbase of LN. There's signs of that happening already, Bitfinex reported significant use of their Lightning deposit feature (but apparently not Lightning withdrawals) in the recent run up to $50,000

Ironically, new (not serious) traders will probably do the same, but only once they actually understand that the option is available. It's fairly realistic to imagine this as a recommended workflow:

• New user sends fiat to exchange, buys BTC
• Withdraws to Lightning wallet

If the offline channel maintenance service of the Lightning wallet in question cannot keep the channel from closing, the user's gonna wonder why they tried. That's the initial challenge for these wallet providers, and it depends on the incentives and health of the Lightning network holding up, really. From my experience, it's something like 90-95% reliable right now, which is enough for these experienced traders, but perhaps not enough for newbies to not feel a little burned.

It happens about a hundred years from now and it is not possible to speculate what the situation is going to be like by then or even if bitcoin is still around! The technology changes very quickly, in 50 years we may see a much more efficient and better version of bitcoin introduced.

With that said, you should also know that as I mentioned in my other comment, the second layer still needs on-chain transactions which means people still pay fees on chain to open a channel and those fees cover the mining cost even when the block reward is small or zero.

Off-chain transactions cannot replace on-chain transactions,the blockchain is the foundation of Bitcoin,all the off-chain solutions like the Lightning Network are just an addition to that foundation.
BTC miners cannot be doomed by LN mass adoption.LN is supposed to the help the blockchain,by taking all the small transactions,which are flooding the blockchain.LN can't be considered as competition to the blockchain.
However,mass LN adoption won't happen anytime soon,so we are just fantasizing about possible events and processes that might never occur.

I wouldn't say on-chain fees are increasing towards new heights, such spike in feerate ie experienced anytime there is unusual activity on the network, the current fees are not much different from the one experienced during the dip in March last year or the bull run of 2017. When the price becomes more stable, the fees being paid would reduce as well.

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I wouldn't switch to hold an altcoin simply cause of lower fees and lightening network can not effectively replace the base layer, so miners are not ''doomed"

It's quite far in the future, but would this be an issue decades from now when the block reward is little or zero?

It would replace low value transactions; probably ranging from $1-$200 bitcoin worth of transactions. I'm definitely not an expert with Lightning, but I assume moving those "smaller" value transactions to Lightning and other layer-2 solutions would lighten the load on the mempool by quite a bit.

As for altcoins, meh. I don't recommended it but they're free to do what they like. It's not like because altcoins like DOGE is fast, it doesn't mean that moving all your BTC to DOGE is a good idea (because it's definitely not).