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I see a lot of people talking about the bitcoin lightning network but I don't know what it is. I have an idea about it but I don't quite understand much about the whole thing, so I may be wrong.

Can anyone explain me what the Bitcoin lightning network is and what will it do for bitcoin?

http://lightning.network/ (http://lightning.network/)

it will take all the fees generated by low value TX on each block, away from miners and move them to LN CEO.

90% of fees generated on each block come from low value TX.

some say its bitcoins killer app.  :D

The Lightning Network is a proposed payment channel layer for Bitcoin. Basically it allows for cheap transactions, typically small recurring payments, to occur. It is for scalability as it essentially can compress hundreds of transactions into one or two. For example, say for recurring micropayments from a faucet to you, normally, you may receive hundreds of these, and each one requires a specific fee. Instead with lightning, you will still have hundreds of transactions, just that when you want to use that Bitcoin, only one of those hundreds actually ends up on the Bitcoin network and in the blockchain, thus removing hundreds of transactions from the blockchain and saving both you and the faucet hundreds of transactions worth of fees. It essentially tracks balances between two parties.

There is no Lightning Network CEO. In fact, I don't think there are really any fees with Lightning if you use the payment channels. There may be some small fees if you do hops between channels because you have to pay the people you are hopping through.

@adamstgBit I do not think that is true really.  Maybe I am thinking wrong.  If you think about it, you make a single small transaction normally and it gets added to a block with transactions from other users.  That block is solved and the fees are split amongst the miners in whatever system that pool uses.  That block may have multiple fees in it, but the reward is for the block, not the number of transactions within that block.  So, if all of your transactions are saved up and then broadcast as a single transaction, then there is really no difference is the block reward.  The only difference is that your transaction are in one block and not in several.  Each block processed when it hit its number, 25.  The block that held your first transaction still went off with the same reward, just filled with your 1 transaction and many others from other people.

I am making this more complex than I meant.  Now, correct me if I am wrong.  There is a train and it will leave when 25 people are on it.  That train will pay the conductor 10 dollars to leave the station.  You have three people to transport and rather than paying a fee for each one, you wait until they all arrive and then ride on one train, one fee.  The previous car left when it had 25 people and the conductor made his ten bucks.  When all your people arrived you got on the next train and it left, ten bucks for the conductor.  Still two trains, still 50 people moved and still twenty dollars total for the conductor.  It did not matter whether your three were on one car or two cars. 

The ticket master(the exchange) got ripped off because you bought one ticket for three people instead of two, but not the conductor(mining pool).

Am I right or wrong?

No, you are wrong. What lightning does is it reduces however many transactions between you and another person to just two transactions. One transaction funds the payment channel, the other allows you to spend the results of the payment channel. The output transaction is a final state, the final balance of the parties after the channel is closed. Whatever happened in between the opening and closing of the channel doesn't matter and thus have no fees. The only fees paid are for only the two transactions that end up in the blockchain, no matter how many actually occurred in the channel.

The lightning network makes micro payments cheaper than what is currently is with the Blockchain. As I understand this, it's free to use so you do not have to invest in special devices {like with the 21 Inc. implementation} to enable this. In affect they built a technology to make micro payments cheaper.

Now you can buy single cigarettes at a shop, and pay with Bitcoin. No need to buy a pack to save on tx fees. ^smile^

well the problem is not about microtransaction only, the problem may be in the future about fee itself, they could become too big even for medium amount that you want to spend not for only sub $100

why i should pay $40(in the case bitcoin skyrocket to 1000x) for sendind $500? 500 is not a micro payment....hell i would not pay even $10 for sending $500....

rebuttle:

debunk of rebuttle

wait, did the person rebuttling, just debunk himself.. in the same paragraph.

so lets not call them LN CEO. lets call them Payment channel owners. (as i think thats what adamstgBit was insinuating. that the people who own the channels will profit. and it could become such a big business that they make it a business and become CEO's of said business

the next question is who picks who these 'people' who own the channel get to be..

Well fees will have to increase if difficulty increases and block rewards decrease, Centralisation of mining will leave the network vulnerable to control of fees resting in a few hands. One solution would be to provide incentives to full nodes to become small solo miners.

fees need to increase as a SLOW thing over 140 years.. at most and over 20 years atleast. its not something we need to be fighting for doubling fee's right now.

infact more capacity every couple years to allow more micro-fee's will take care of a larger total. and trying to suggest we need to screw up bitcoin with high price fees by making people use sidechains and offchain. is completely making bitcoin itself useless..

which if you look hard enough and see that blockstream want to premine some new coins on sidechains and try to peg it to bitcoin price, that is the same as making counterfeit bannknotes and trying to palm them off as the real thing.

though i do like side chains for its capacity increases. many have not swallowed the wrong pill that leads them down the one way street of blockstream dominance

The Lightning Network for Beginners [previous topic]

https://bitcointalk.org/index.php?topic=1243165.0 (https://bitcointalk.org/index.php?topic=1243165.0)

And to boil it down to a simple example :

2 users (could be more) send money to a multi-sig address, with a special script.

Once the money is at that address, those users can interact with each other, sending txns backwards and forwards up to the amounts they each control. This is off chain, instant, fee-less, and trust free.

At any point, a user can cash out the coins they have.

..

None of this requires a 3rd party, BUT if you want to transact with someone not in your initial group, there are 2 options

1) Start a new 'Lightning' group with that individual included.

2) You can transact via a member of your initial group, who is also in the group with the person you wish to transact with.. This service 'may' have a fee.

Not just micro payments, it is essentially designed for recurring transactions (e.g. daily cup of coffee). This is where it becomes really efficient.

How about you stop spreading (hopefully sarcastic) FUD because someone might take it for real?

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There is a simulation  (https://www.youtube.com/watch?v=RNFt9-lKWyo)on youtube, albeit I'm not sure if it is still relevant.

So let's state this outright. According to the roadmap you support, Bitcoin is not meant for people that make a lot of non-recurring low-to-medium transactions.

Correct?

This is completely false. The Lightning network is not part of Core's roadmap.

Well, it's clearly shown in position 3 of your own thread called "Bitcoin Core Roadmap visualized". Innit?
https://bitcointalk.org/index.php?topic=1349965.0

this might help show how LN would look like on the blockchain

the left side is people making transactions normally onchain.. the right is how those same transactions would look like and how many transactions would appear onchain if the users used LN instead

https://i.imgur.com/IJPYkMX.jpg

Sorry if I wasn't clear, what I meant to say was that there are two ways to use lightning, one of which has no fees, the other some. No fees are if there is a direct payment channel open between two parties. The fees are if there isn't a payment channel open between the two of parties and you have to route your payment through third parties. Those fees will go to the people who own those payment channels and it is up to them whether to charge fees and how much to charge.

so whats stopping these "people" from turning thier utility of being an owner of a payment channel, into a legit business, thus making the owner a CEO of an LN channel, where the fees go to these "people" and not to miners

because if there are no fee's to use LN internally then miners get nothing.. because there are no fees to hand them..

Christ, just when you think adamstgbit's "LN CEO" retort couldn't get any moronic....


....We've Been Franked!







dear me.

It mentions BIP 68 & BIP 112 which are needed for LN to operate. This is the roadmap (https://bitcoincore.org/en/2015/12/23/capacity-increases-faq/):
Do you see the Lightning Network anywhere?

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It is best to ignore before you get brain damage (MaximBady reference). :D You should watch this guy (albeit off-topic suggestion).

Fees from LN don't go to miners anyways.

If the fees in payment channel hops becomes greater than normal transaction fees, then people will just use the good ol blockchain.

This is getting funny.

So why, in your opinion, those 2 BIPs + LN mentioned at all in the roadmap visualisation (in a separate section) if it's "completely false" that LN is part of the roadmap?

But, most of all, what are those "bi-directional payment channels" in the link you provided? Like this one:


Totally not LN?

and finally, welcome to the conversation.
as the other person said. if miners are not getting fee's... so now i think you are finally on the same wavelength and understanding of his point.

if people are using LN miners wont get paid.

So your conclusion is that two BIPs that are needed in order for LN to function (while improving any similar implementation of payment channels) = Lightning Network? It this some joke? Please work on your comprehension skills. LN is not part of the roadmap. How many times do I have to tell you this? There are two groups (the most advanced) that are working on LN:
Do you see here the Core team working on LN? No.

says the guy that knows ZERO about bitcoin code (http://bitcoinstats.com/irc/bitcoin-dev/logs/2016/01/17#l1453062298.0).. (psst, heres a hint, its not java)

how can he claim to know everything about bitcoin and think he knows whats best when he hasnt even read a single line of bitcoin code..

No, miners still get paid. Opening and closing LN channels still requires on-chain transactions, so miners still get paid. There are also payments that are not efficient to use LN for that will still happen on-chain and they get their fees from there.

There is also nothing stopping miners from also becoming payment channel nodes to also make some money from those fees.

Wow...
Thanks guys, now Im much more than informed :P
with all this information it seems like I've taken a course :P

if miners have to diversify to survive over the next 16 years (when fee's actually become important) then say goodbye to bitcoin security as they would jump ship, which i believe is a worry of the other person and many others. the fear of 131 year promise(2009-2140) turning into a 23 year bait and switch(2009-2032) over to other premined side chains that also have LN, is not appealing to long term investors including some of the core fanboys that think of bitcoin as a reserve currency rather than a casual payment currency

I don't see a fundamental problem. Mining will still provide income from on-blockchain fees. The LN just provides an additional opportunity for revenue. If LN fees rise too much then more activity is pushed onto the blockchain, and vice-versa. So there is a competitive environment, which is good for the whole bitcoin ecosystem.

Users of LN's are still motivated to support a robust bitcoin mining community, because an insecure bitcoin network means the value of their holdings within the LN's are at risk.

a small change was required to make this comment more palatable.

May I ask why you are being resentful? Why try and discuss what LN is/isnt emotionally and not rationally?

Why would someone choose to transact over LN if the fees were the same? Also, why wouldnt fees on LN transactions be lower, due to the fact that it would be much cheaper to be a LN node than a miner?

I think It's is a non-blockchain
And it impossible

it basically adjusts the price lower and the transaction is faster.

Here's an article explaining lightning network:
https://coincodex.com/article/1124/what-is-the-lightning-network/

I'm really happy that it's gaining support (https://coincodex.com/article/1477/lightning-network-continues-to-grow-despite-poor-market-conditions/).