Topic: Will the Lightning Network Solve ALL Scalability Issues? - page 4. (Read 1235 times)

In my opinion, LN is "only" a part of the scalability puzzle, but a pretty big one. LN can rise the Bitcoin capacity safely by 1000x or more, without any fundamental disadvantages for small-to-medium transactions.

But I write safely for a reason, because if LN adoption becomes too high, a point could be reached where attacks could have a success probability of higher than 1, because the closure of all affected channels by the attacker would take longer than the timelocks expiration. This point would be reached earlier if the network becomes relatively centralized (hub-and-spoke model), and later if there are lots of well-connected hubs.

What we must aim for, thus, is to not let grow the biggest LN nodes too much - ideally there should be lots of medium hubs of a few thousand channels each. This is of course currently not an issue, as the whole LN has only about 50.000 channels, which could all be closed in 2 hours given the current blockchain capacity. But once there are nodes with more than 100K channels each, things could become more critical, as if a 100K node decides to try out an attack, the closure transactions would compete with regular transactions, and if the blockchain is quite full, then it may take several days to close them and consume lots of transaction fees.

Anyway, I think we are far away from that situation. The other parts of the puzzle may be:

1) altcoins/alternative blockchains - let's face it, they will always exist, and if there are a few strong ones of them, it's better for the resilience of the cryptocurrency ecosystem as a whole, because not everything would be concentrated on a single blockchain. But I'm also quite sure that no (decentralized) altcoin will be able to scale fundamentally better than BTC, all "big block" and "zero fees" models come with tradeoffs.
2) pegged BTC coins on alt chains, either centralized (wBTC) or fairly decentralized (BitBTC)
3) maybe pegged sidechains - I had big hopes on that in the past, but I'm not so sure it will ever get massively adopted, as for example the Drivechain project is taking longer than I expected, but there may be a surprise breakthrough.
4) centralized solutions, like Bitcoin debit cards, which will be ok for smaller transactions in many cases.

So I believe the scalability problem will probably be solved fully, but without LN it would be difficult. I also don't think that fiat money will disappear, so Bitcoin will not need to have a capacity for all monetary transactions which are made in the world.

I don't know whether it will be ALL. But it can solve a lot of problems for sure. It could remove the slowness on high amount of transactions on a large scale. And the fees can be much cheaper than this I believe.

With the price as high as you are suggesting ^{(thank you for doing the calculations too by the way - it's appreciated)} I feel people will either turn to products that offer small transaction fees in built ^{(cue the Lightning Network theme song)} or, they will wise up to paying higher than necessary fees and, fed up with those high fees, turn to something like coin control and drop the fee down to 1 satoshi (not one satoshi per byte, but *just* one satoshi) themselves.

Were bitcoin to reach One Million Dollars US, then one satoshi would be worth one cent, so a five cent transaction would be *just* five satoshis.

Coin Control as we know it would have to be modified.

for the next couple decades miners dont need to rely on fee's. its still defined as a bonus. not the salary
the block reward is still the salary. so on that premiss of the nest 5 years, this is what happens

imagined a settled average mining cost is ~ $220k per block. today ($35k/btc)
with a yearly 1.5x of (hashpower, difficulty, cost)
meaning 2022 they will need $330k
meaning 2023 they will need $500k
meaning 2024 they will need $750k
meaning 2025 they will need $1.125m
(without having to care about any tx fee bonus)

in 2024 each block changes from 6.25 to become 3.125
so 1btc would need to be $240k to achieve block reward of $750k

this means if the minimum onchain fee was 1sat/byte
and average tx was 250bytes
thats 250sat
with LN needing 2 onchain fee's to open then close so 500sat
0.5btc=$120k
0.005=$1.2k
0.00005=$12
0.000005=$1.20

so the very minimum and i mean minimum cost onchain to use LN from start to end is $1.20 a session

here is the thing though.
fee's are hardly ever 1sat/byte
the average is min 6 max 60
meaning $7.20-$72

people will just stop using bitcoin alltogether to make settlement transactions. if its going to cost $10+

after all.. imagine it.. what if paypal started charging people a monthly subscription of $10+ just to use paypal account for a month..  then micropenny fee once in. people will start using other fiat wallet services like venmo, cashapp, dwalla which have no subscription and no fees

bitcoin WILL NEED to increase its onchain transactions AND change to things like 10byte/sat to keep the onchain fee's low

any dev or altnet fangirl that thinks that bitcoin will still have purpose if it costs say min of $20 to use.. is in some fantasy land or they hope to kill bitcoin utility to force people to play on other networks.

LN is not the saviour of bitcoin.. its the segregation of bitcoiner and eventual displacement of bitcoin. because devs refuse to allow cheap utility on bitcoin..
bankers played this game over 100 years with gold-fiat and we all know how that ended.

It will not solve all the issues but it's definitely will be a good thing. And it will solve as many problrems as it will give.
And it's definitely not a game over for altcoins. There are plenty of good ones.

Old Reference
Deposit Gold in a Bank
Banks let you transfer value using their BankNotes/IOUs

Deposit Bitcoin in LN Factory
LN Factories let you transfer value using their channels (IE: LN notes/IOUs)  

*Look for the following to be added to LN Factories/Banks at a Future Date*
Custodial Fees, and seizures after certain lengths of inactivity

Actually the Bank does need the pretense of a legal reason to control your funds,
and you can sue them to retrieve any funds they put on hold.

Who will you sue, if the LN factory/Bank locks up and loses your funds?  Blockstream?

 

FYI:
If the LN Factory/Banks decreases the onchain transaction fees to miners,
it may induce miners to start taking bribes to earn more to cover their energy costs.

If the LN hubs bribe miners, a DoS attack may be performed on a transaction (by not mining it).
This transaction must be mined within a given number of blocks or else a portion of BTC that was locked in a channel may be forfeited to a LN hub.
https://lists.linuxfoundation.org/pipermail/lightning-dev/2016-March/000500.html

forfeited /seizure 

I think that even if the LN solved the scalability issues, altcoins would still be popular for trading and as a form of a long-term investment. Moreover, the LN is not exclusively for Bitcoin, so altcoins can also benefit from it. But honestly, I don't think it'll become the mainstream solution that we need because it had years to do so and didn't. Plus, people who open the channels do pay significantly, right? And there are centralization issues due to which some are against it, and then there are many crypto users for whom it's just too difficult to start using the LN.

It seems to me that you don't understand the difference between a bank and a lightning node. The bank can transfer your money whenever they want; they just attempt not to. The lightning node cannot move your bitcoins same like I cannot move your bitcoins from your address.

I guess that the “C” in your username stands for “Chatter”?

You are welcome to your wrong opinions.  You've been trying to claim "LiGhTniNg = bAnKiNg 2.0" for years now.  It's not like you've had any great success with convincing people of that myth.  Maybe find a hobby you're actually good at?

IMO,
It seems more , like people are afraid to call a Bank a Bank.  

It sounds like you don't understand what Channel Factories are. Your bitcoin are not locked anywhere - they are in a mutlisig address, which you can broadcast the settlement transaction for at any time and withdraw them from the factory, just like in a normal Lightning channel.

it's centralized we know that. maybe they'd find solutions to it as well.

LN is being used that's very important though there are limitations to these channels we haven't heard of some issues yet that actually happened. but there are already speculations as to what's to come. the solution is also coming.  so let's just wait for what could the devs bring.

Hmm,

You deposit/lock your Bitcoins with the Factory, and then the Factory creates the channels for you.

Has anyone told them the so called Factory is now a Bank.   

All of which you are opposed to as it is not done on the block-chain where it can be verified.

devs are in the process of making lightning 2.0 (layer 3)
its where you dont vault up funds into a channel. but instead deposit funds into a factory multisig
the factory then offchain creates channels below it in millisats.
so users cant broadcast, but can close session with the factory and so the factory aggregates the channel balances and recreates new channels to rebalance the channels.

thus even less onchain transactions as it wont require onchain broadcasts/settlement to close/reopen

the devs have removed the maximum limits on channels and sends for most Lightning node software, so it's possible to send large amounts. All lightning software will remove send/channel size limits eventually.

Still, it's better if you're careful how much money you put on your node. It's a good opportunity to learn how to run a secure server, which can only be done slowly/carefully.

LN is designed for small trades/transactions that's why this is not widespread , but i know that there comes a time that this will be the answer for all that we need in terms of scalability and bitcoin usage.

Not all scalability issue but it will solve some that are the most bothersome like the speed and network congestion that's plaguing bitcoin for a long time now, hopefully it will catch because LN has been here for awhile now and it seems to me that people is making it underrated.

You either. 

I suggest you explore https://www.algorand.com/  since you have nothing better to do. 

So you can see for yourself how lame bitcoin and LN are to a true 3rd generation blockchain design.

Let's assume the improvements Carlton Banks mentioned, let's assume that not everybody in the world will use LN, more like, 100 million at maximum and probably half of that to be realistic and when we're considering this we arrived at the point when we might have to ask ourselves if LN won't be solving a problem that's no longer there and will come to hunt us more likely in a distant future!

4 years since the last spike in price and the activation of segwit and despite periods of high fees look where we are now, it's the middle of the week, blocks are coming in at 90% of the pace , 44 blocks behind in 3 days, and the mempool is empty, less than an hour ago a 700kb block was mined, even if we have been experienced 1-3 sat/vbyte days for almost a month now, with the difficulty finally not taking those damn swings usage is at the lowest. Of course, the usage might grow again if we're entering in a bull run but those that rush coins then won't be using LN, until the thought of making 10x with our coins in a year won't fade away I don't see the demand for transactions growing that much, especially with a lot of users opting for centralized solutions, debit cards, internal wallets off-chain transfers, and many more.

So, I guess we have quite a lot of time to seek improvements, and if those problems arise when a 12TB ssd costs 200$ and nobody produces drives with capacity counted in GB, I can see how this will be solved.