Bitcoin Forum

Fundamental problem: Lightning Network leads to centralization and less security

http://www.wallstreettechnologist.com/2016/10/03/lightning-network-will-it-save-bitcoin-or-break-it/

Since LN is supposed to be a payment layer on top of the Bitcoin network, LN has no effect whatsoever on Bitcoin security, centralization, or fungibility.

This.

The LN protocol can only lead to centralization of the LN network.
If we find it too centralized, we can use another network based on another protocol, such as Tumblebit, which also provides payment hubs and payment channels.

In any protocol stack, there are layers that are more centralized than others. Decentralization is not a state, it's a process.

Wrong, centralization is placement of process occurring and decentralization is making it mobile or remote and scattered, who will run and maintain LN?

That's certainly the sales pitch, the theory and the hope, but in practice, it's honestly too early to tell for sure.  There are questions around things like the expiration of a timelock if the transaction takes too long to confirm when attempting settling, which opens up the potential to counterparty theft.  Also considerations of how an infinite number of transactions back and forth without a fee might have a bearing on miner revenues over time as the block reward diminishes.  We also want to be certain that "layer 0" is still economically viable for the average person and that they aren't forced to transact off-chain due to excessive costs.  In something as complex and uncertain as LN, there are bound to be wide ranging implications.  That's not to say we shouldn't explore such potential, of course.  The benefits are absolutely worth it.  But at the same time, we shouldn't be too dismissive when people raise issues like this.

There is a fundamental relationship between speed and security.

Fast encrypted WIFI is always less secure than WIFI utilizing slower & more secure encryption.

The same paradigm applies to bitcoin transactions where you can have greater speed, but only at the expense of reduced security.

Spamming unconfirmed transactions could be a deliberate scheme to herd bitcoin users towards an uncertain future where they demand greater speed and sacrifice their security to obtain it.

If I understand this correctly, most of these transactions will not be public? The payment hubs will process the tx's and then show the bundled result of that on the Blockchain? Who do you contact if something went wrong with your tx's and are these entities not a single point of failure, when they come under attack?

Many of us still need these types of questions answered, before we will switch. We will rely on miners fees in future, and we are uncertain if this will diminished our income, if this is implemented. ^hmmmmmm^

Logical fail - "If I build a sturdy house, anything I build on top of it will be sturdy".

Analogy fail - computer networks aren't like a horse

To wit: the multiple protocols operating on top of the TCP/IP network that you used to post your incorrect statement to this website

Hold your horses. The analogy works, the Bitcoin network is not a protocol, and can't easily be built on top of in a way that is guaranteed to be secure.  Computer networks are very much like houses with a foundation layer and subsequent layers built on top of it.

The TCP/IP protocol and network don't offer security (and it's not even an efficient protocol BTW). Now that IS a bad analogy. If you mean TLS, maybe.

And are you stalking my post history?

As far as i believe their are at least 3 different projects working on a form of lighting,  which means users will have a choice as to which one to use.  Even Kim dotcom is creating Bitcache which is along the lines of some sort of Lightning network.  If this is the case then it wont be centralised as you have stated.

I'm almost sure that both TumbleBit and Lightning network are two different and separated things even though they both use payment channels. LN is meant to make transactions faster while TumbleBit is something supposed to make bitcoin transaction more anonymous, think of it as a mixer or Darkwallet that was never released.

from the article:

Right now, I believe that altcoins are a viable alternative to solutions like Lightning, which are several years away. Bitcoin devs even say, "if you don't like the bitcoin fees, use something else". And in fact, that is what many people are doing. Using altcoins while exchanging to bitcoin also creates some anonimity. Services like Shapeshift are taking off, exchanges are supporting hundreds of alt cryptocurrencies, and their market caps are skyrocketing. Money is pouring into the alts as bitcoin becomes less and less useful, and the core devs sit there muttering about quadratic hashing with their thumbs up their asses...

I believe that layers built on top of bitcoin won't be adopted on a large scale.

Somebody correct me if i'm wrong, but LN does not effect Bitcoin directly. Nobody is forced to use LN. Even with LN we can all just use Bitcoin. So LN is not a risk to Bitcoin.
But what would be bad is to neglect the development of Bitcoin, because there is LN. Also People might get bullied by peer pressure to use LN or otherwise you will not be able to use a certain service. A possible reason would be that the service provider doesn't want to wait to long for confirmation.
Once everybody uses LN we will not only see centralization but also have a hard time to switch to another second layer service. So i understand some concerns people have with LN, but as usual it will depend on how we use the technology and in which direction the developers will further develop it (if enough people would care the users would have some influence here).

The whole idea of second layers and in this case lightning network on top of bitcoin, is to guarantee that if the second layer  crumbles, the sturdy base (core of the network protocol) will remain decentralized. This is achieved by not having big blocks.

You are saying, that if LN fails all the transactions will have to happen on the Bitcoin block chain. And if this happens the blockchain needs to be decentralized, which we can assure with small blocks.
Maybe i got you wrong, but i see a problem here. LN is supposed to carry a lot of the transaction and if it fails and all the LN transactions have to be done on chain, then we will have more transactions then Bitcoin can handle. To me it seems like big blocks would help here.
It sounds like with small blocks we would stay decentralized but Bitcoin might fall apart due to the overwhelming number of transactions.
Or with big blocks we might handle the number of transactions, but risk to be centralized.
To be fair i have to add that there is also no guarantee that Bitcoin using big block could handle all LN transactions, just as there is no guarantee that LN will not end up centralized.   

None of that makes any sense, because:

a) Lightning transactions aggregate the net amount of multiple Bitcoin transactions, on-chain settlement will never be 1:1 offchain:onchain, your scenario is exagerrated to the point of being ridiculous

b) You provided zero reasoning, just an entire paragraph of false assertions

Tell me exactly where i'm wrong.
Let's assume LN makes 1000 transactions, where only the opening and closing need to be on chain. If LN fails and the transaction still need to be done, then they will happen on chain. This means 1000 more transactions on chain. I don't know if Bitcoin can handle that, but with bigger blocks i see a better chance.

Can't you read? I've answered this already, you're a time-waster

I was just trying to understand BillyBobZorton point/logic. He suggested a scenario where the 2nd layer crumbles and the transaction have to be on the Bitcoin block chain.
Your point a) shows that you didn't read or understand my post.
and your point b) isn't helpful, as you only claim that i'm wrong without saying where.
Feel free to use the ignore button if i waste your time. Just like everybody else can do who feels the same. In the meantime i will try to have an productive discussion. I'm always glad to learn something new or be corrected, but expect that this happens in a civilized and helpful manner.

You have little idea how Lightning works, and are incapable of either understanding or even reading very simplistic explanations to aid your broken understanding. Please stop wasting our time until you can demonstrate you are willing to learn

That is true, but there is a possible drawback: It wouldn't help adoption if users must choose between different payment methods, all with different potential security models. The on-chain mechanism is still fairly easy to understand, LN adds a lot of complexity - which can be hidden, obviously, but the users must understand the underlying ideas at least a bit to be able to calculate risks. The more methods that are competing, the higher the barrier to enter the system for new users.

That doesn't mean I only would approve on-chain methods. For me, (pegged) sidechains are the most interesting way to scale because the on-blockchain transaction method is only slightly modified and the concept is easy to understand, and so are the risks (51% attack on weak sidechains). LN in my opinion is more a kind of prepaid card replacement for very small micropayments - I would use it this way even if it lead to more centralization, as it would be still better than a fully centralized third-party-service.

If we find LN to centralized, then we could change to another service provider. At least in theory. First of there need to be other services we could use and secondly they should be on more or less on the same level. If there are alternatives but they are not sophisticated enough, then they are no help.
We can often see that we end up with two or three market leaders. For credit cards it Visa, MasterCard and American Express. How about smartphone OS? We only use Apple or Android.
I don't see more then three big 2nd layer solutions. What if they all centralize? Once they are established it'll be even hard for a good product to enter the market. Why? I think it will be the network effect. If you have all the users they will be unhappy but still stay with you. Look at Facebook. There are alternatives, but nobody uses them. Why? Because all my friends are at FB.
If all my merchants and friends use LN then i will not switch to an alternative where i can not pay them, because they all just use LN.

And yes, this might cause just a little drawback in Bitcoin adoption. If people have to choose it's always a tiny bit harder then only having one option and deciding to join. But right now we have a whole bunch of Wallets to chose from and it is not stopping people from using Bitcoin. Also i don't think people will chose because of the technical underlining or security. They will chose depending on what they friends use, the costs and maybe some convenient features, which tend to be less safe. They won't care about centralization.

No it isn't


Please either bring articulable knowledge to the discussion about the topic, or do us all a favour and be quiet. You're not backing your statement up with any facts, and you're saying things that aren't true

Either you're trolling again, Carlton, or your bias is now so strong that you're selectively quoting out of context without even realising it.  Stop jumping down someone's throat over your own failure at reading comprehension.  Let's try that quote you replied to again without the twisted bias on your part:



That's how anyone with an open mind will be reading d5000's reply.  But keep being the mindless, rabid attack dog that you are, Carlton, frenzied at the slightest misunderstanding.  It continues to do nothing for your credibility.

Just like the rest of your ilk, you're still obsessed with individuals (mostly me) and personalities, incapable of arguing straightly or honestly about technical points.


You're wrong, that little exchange between d5000 and Boussac was not clear at all. I provided clarity.


Is there something wrong with the content of what I said? There is not, which is why, ironically, you can only attack my character. Who's the real troll :)

You were warned (https://bitcointalk.org/index.php?topic=1784837.msg17841324#msg17841324) that you were now on my shitlist and that you would now be singularised for the brunt of my wrath because you insist on constantly being a pernicious dick.  I'm afraid you've brought this on yourself.  People were trying to discuss technical points before you stormed in to go for the throat.



You jumping to the wrong conclusion isn't clarity.  It might look a bit clearer if bias wasn't clouding your vision.



You insulted someone because you misunderstood something.  You literally just attacked d5000's character and intelligence for no reason.  So yes, there's something wrong with the content of what you said.  There's evident justification for attacking your character.  You are the troll.

Back to the topic:


One would hope that the way LN is implemented would mean that it's not an either/or style choice.  It should just be another part of Bitcoin.  An option to open a channel, send your transactions back and forth without any delays, and then settle when you're done.  It's also best to not think of LN as a "service provider" as such.  There may well be service providers that utilise LN and those services would obviously be fairly centralised, but LN itself is closer to a protocol and should hopefully remain as neutral and impartial as Bitcoin's existing protocol.  But we need to be careful how it's implemented to ensure that happens.

Some are saying that Blockstream is deliberately keeping the blocksize small to force people onto LN. I haven't seen proof of this theory, but they are the primary developers of LN, and they've received $75 million based on their assertion that people will need to use LN. If it's true, it would be a major risk for bitcoin.

There are multiple implementations of LN in ongoing development, 5 the last time I checked. Blockstream are only 1 of that 5.

You cannot qualify your statement that 5+ organisations developing their own form of Lightning protocol is a risk to Bitcoin.

The truth is the opposite: healthy competition in LN implementations can only help to improve Bitcoin's transaction capacity by orders of magnitude higher than any workable blocksize increase ever could, and provide strength in diversity should one of the many designs develops a problem.

That is a good point. I tend to have a picture in my mind where LN will end up controlled by a few hubs. Opening a payment channel between two parties is already possible with Bitcoin as far as i know.
The more interesting part is that all participants of a channel can interact. So everybody using Amazon or Apple would be potentially connected. I would expect Amazon and Apple to run there own Hubs. Which would them give certainly a lot of power and they might even decide to charge a fee. I also can not see how google is missing out on collecting a huge amount of data running own Hubs. Wouldn't that be a further compromise to privacy?

Lightning is peer to peer in essence. That means there is no hub/node distinction, everyone is a node, anyone can start a node.

Sure, some nodes will be more popular than others, but everyone can decide for themselves whether to use a cheap high volume channel (suitable when you don't care about privacy), or a more expensive low volume channel (suitable for privacy sensitive payments), or anything in between as you choose.

The main point is that because Lightning is p2p, it's a platform for a diversity of needs. Choose your own compromise/trade-off.

There can't be a proof because this theory is wrong. segwit allows more transactions per block than the current system.

I need one more thing to be clarified.
Alice and Bob opened a LN channel between them. So did Carol and Dan.
Know i was under the impression that Alice could not send funds to Dan, since the two channels are not connected. Just because they all use LN doesn't mean that they are connected or is this assumption wrong?
But if for example Bob and Carol would also have an open channel, then this would link the two channels (A-B and C-D), so that Alice could finally send funds to Bob.
Alice would send funds through Bob and then Carol to Dan. As i heard they all would have to be online to do this. Is this correct?

Yes.

Routing through others connected to your LN node is part of what makes Lightning attractive, a high quality of privacy can be established that way (better than on-chain Bitcoin, only the parties directly connected to you are aware of your transactions, unlike when published on the public blockchain)

They don't have to be permanently online necessarily, but it's ideal if they are. There is at least one way to exploit channels to steal from others when one party goes offline, but not if they stay online. This is a significant flaw IMO, but it's not impossible that a p2p solution could be found for this also (a 3rd party solution has been devised). It's all still a work in progress.

I stand corrected about Blockstream's LN implementation. Is it fair to say that their LN code is the most popular version given that they are a $75 million corporation and the prime mover for the technology?

LN could be a threat to bitcoin in that the main cheerleaders for it are also blocking bitcoin from working properly. If LN worked and solved all of the problems, I'd be happy. As I said before, I doubt LN will ever see widespread use, and altcoins will simply take more and more market share until if/when core wakes up and smells the coffee.  Isn't it obvious that the majority isn't interested in LN based on the massive resistance to Segwit? LN will likely go the way of Segwit - another over-complicated dorky solution that never got off the ground...


"Anyone" can run a bitcoin node as well, but only ~5000 do... You're forgetting that people need to be tech-savvy and security-conscious, which eliminates 99.9% of the population off the bat. Also they need to be prepared to spend money on hosting and spend time adminstering the node.


Finally, I don't want to open a payment channel with anyone, I just want to pay them and get paid by them, and that technology exists today and is(was) working until recently. As others have said, with LN we could well be headed toward using the mega-corporate channels with the corporations data mining and spying. All sounds very familiar to me...

Segwit compatible nodes are 51% of the network. And rising every day. If that's the majority of users rejecting it, I don't know what would convince you. 101% segwit nodes, maybe?


Bitcoin nodes are ~ 6000. And rising every day. You're in favour of changes that endanger that trend.


Which part of "anyone can start a p2p Lightning node" don't you understand?

If you check who wrote the article, he is a big blocker. Then of course his opinions will be biased against Segwit and the Lightning Network. He is more willing to take the risks of a hard fork to Bitcoin Unlimited than take a safer path in Segwit. What does that tell you about him? This is more politics than a technical argument.

Nice try, miner support for Segwit is 25.6%  Keep on wishing for that 101% and keep on ignoring the giant mempool and borderline-unusable-for-normal-transactions bitcoin network.

First of all, don't put words in my mouth. If I'm a critic of Core/Segwit/LN, that doesn't automatically make me a BU/Hard Fork fanboi. BTW the Chinese introduced a synthetic fork proposal that was completely ignored here on this echo-chamber forum. Study, learn, and think for yourself.

Second, if you're claiming 6000 bitcoin nodes then you're stretching a bit, and you're including the 700+ Unlimited nodes, LOL. I've heard anectodally that the total number of bitcoin nodes was at 20k at one point, but fell as the blockchain size increased dramatically.  Do you think that 6000 LN nodes would make the network secure and allow payments to be process at the claimed rates?


"Anyone can swap the engine in their Honda Civic".
"Anyone can become an astronaut"

I find it frightening that you're proposing that random fools should run a node in this secure network. Imagine the security implications...

Segwit compatible nodes are 51% of the network. You didn't ask about miners, you stated that a majority of users had rejected it.


If you really think moving the goalposts is how to win the game, you must be more stupid than the audience you believe you can fool



They're all Bitcoin nodes, because they have to behave like Bitcoin nodes to participate in the network, by definition. Anything that doesn't observe the rules is rejected, you're arguing non-pertinent semantics, not technical details


More concerned that you believe using the Bitcoin software "isn't for everyone". There are no security implications, it only strengthens the network. Stop using unqualified statements to discourage people to run a node, it's a highly irresponsible falsehood

Sorry, "the game" is already lost for you and Core as well. Segwit requires 95% consensus by miners and nodes and therefore won't happen. No need to move any goalposts. No need to split hairs about who supports what - it's over and neither Segwit nor BU will be adopted. However, it's the first time a Core release has been soundly ignored. For some reason they have become more shrill, rather than more humble.




Now you're just getting ridiculous, my friend - can you not see that there is a distinction between bitcoin users and bitcoin node operators?

Paying for and running a server 24/7 that processes financial tranasactions isn't for everyone. Can you at least agree with that?

More than 50% of the nodes can use segwit transactions. Nearly 100% of the nodes are segwit compatible.


No. There is no need to allow 3-4 hostile pool owners to block all further development of the system. As a first step the nodes could no longer relay blocks of the hostile pool owners. In the second step it is possible to head for an user activated soft fork (https://bitcointalk.org/index.php?topic=1805060.0).

Let's do it. Antminer can get bricked IMO

It's not about a certain person/pool. The criteria for relaying or not relaying a new blocks should be the BIP9 support flag.

You're treading into very dangerous and contentious territory here... Trying to do a soft fork behind the miners' backs is sure to cause an uproar. I mean, if you're worried about a hard fork, this would be hundreds of times worse.

If core goes through with this user-driven soft fork, I think it will be the final end of their credibility, and thus they will be done setting the roadmap for bitcoin. Gavin and Garzik would have to pick up where they left off, and we'd all be registering at a new forum.

If this gets bad enough, at some point Satoshi might even come back and bitch-slap the shit out of you fools...

Not if a change is user-driven.

Just to pick up on a technicality, where is the source that confirms this UASF was indeed Core's idea?  As far as I could see in the thread, it was just some community members on this forum (albeit prominent ones like the admins).  To the best of my knowledge, no developers have commented on it yet, unless they're posting under a username I wasn't aware is one of the devs.

I didn't say that it's Core's idea. It was posted from a brand new account with no post history, so obviously that person seeks to remain somewhat anonymous. Theymos posted a response fairly quickly. that he believes UASF is a good idea.

I'm not going to draw any conclusions, but this looks fishy to me.

Shaolinfry appears to be a Litecoin dev, so that's innocuous enough:  https://github.com/shaolinfry/litecoin

It's just the way you phrased it, as if Core had any role to play at all in the decision.  Their credibility isn't on the line if they aren't involved.  Core themselves seem to be either impartial or undecided on the whole idea.  No one in Core has made any response at all to it that I can see, so they aren't "going through with" anything.  This is all users and node operators looking to play hardball to break the deadlock.

OK, that seems comforting. Wouldn't a litecoin dev running a github fork have an account on bitcointalk though? Also, who's to say that is the same person?

We haven't heard from Core so we don't know their stance. If there is any forward movement on this, I don't think "users and node operators" will be the people who will write the code lol.  I think it's an understatement that this one of the most controversial proposals in the past several years.

Honestly I think core is being smart not to say anything. There is very little they could say that wouldn't be taken the wrong way and used as fuel.

I don't believe they are willing to try this.

It's always good to know details about a person with technical proposals. Much easier to throw mud. Plus you can start discussing the person instead of the proposal.

The proposal has essentially no redeeming qualities, no need to throw mud.

it's contentious and ethically dubious
It's technically incompetent and poorly thought out
it's downright dangerous to bitcoin as we know it

The fact that some anon-troll posted it is just icing on the cake.