Bitcoin Forum

Hello,
I want to ask you if is lightning network potentially enough scalable to achieve stable Bitcoin in the future? If we admit that only new members open a new payment channel (and that LN is fully functionable and save) to connect into lightning network (and the amount of channel closing will be minimal) and set the funding transaction, is it enough little to avoid 8GB blocks and mining centralization?
Can't one hypothetical day the amount of new members per day be too high that the setting funding transactions on the blockchain (soon or later) overloads the network anyway?
Or that way: will be the amount of new participants per day increasing in ratio more than computational power of most computers (nodes)? Sorry, if is this question simple. Admit that not only financial services will run blockchain technology (include autonomous vehicles, factories, robots, smart homes etc. who all need to put a funding transaction on the blockchain).

I think that LN does not really solve the scalability problem at all. What if despite great transaction reduction will one day the amount of funding transactions be simply too high?

8gb blocks? Bitcoin block is 1mb

I believe scalability is not a problem yet. It's more a marketing for Bcash chills and other similar shitcoins.
Except in days like this that we are in a crazy bull run , fees are low and transactions are fast.

My assessment is that the Lightning Network goes a long way to providing scaling, but the current Bitcoin implementation cannot support a LN with any significant level of adoption. At some point, the maximum size of a block must be increased, and continue to be increased periodically.

Let's make sure that the political situation does not prevent that from happening. I believe that there is a real danger that without sufficient scaling, the system will be taken over by private networks of custodial wallets (Coinbase, Bitpay, etc.), and will become just another banking system that is just as bad as what we already have.

Now you catching on to what they planned from the beginning.  ;)

LN was never about scaling ,
it was about introducing a network that could add offchain fractional reserve Banking to Bitcoin while pretending not to.  :P

Offloading Bitcoin Transactions to Gift Cards or Exchanges do a better job and are easier to use than LN.
And just to be clear LN used incorrectly actually increases BTC onchain transactions instead of decreasing it.
https://bitcointalk.org/index.php?topic=5124663.msg50330030#msg50330030

For your consideration:
If I said the Bus was overloaded and that by you taking a Taxi,
that you increased the scaling capacity of the Bus, hopefully you realize that is bullshit.
Because the actual seating capacity of the Bus did not change, the person just used another form of transportation.

But yet, the people here ,
claim that by offloading transactions from Bitcoin to the LN network , that Bitcoin scaling is increased.
When the actual Number of the BlockSize was only increased to a max of ~1.7Mb from 1 Mb when no further plans to increase more.
In effect , limiting the future growth of the blocksize  to intentionally force high fees to force greater acceptance of LN offchain to those too poor to afford onchain transactions on a regular basis.  :P

Offloading is not the same as Scaling.

Scaling implies Bitcoin itself could handle the volume,
offloading mean LN can handle the volume and bitcoin can't.

LN is a 3rd party network that can work using any segwit coded coin,
Bitcoin has no monopoly on LN future plans , as litecoin with LN is to have even cheaper fee structures than btc with LN.
https://cryptobriefing.com/litecoin-lightning-network-100-nodes/

The LN network may have a quite a few issues, but there is no way to make it a fractional reserve. Each tx on the lightning network must be able to generate a valid closing tx on the blockchain(s). I suppose that you could do atomic swaps with some other coin that is supposedly redeemable for BTC 1 for 1. However, if people fall for that, they a stupid.


With gift cards and debit cards, someone is just going back to the fiat system. We all know the perils of using an Exchange for a wallet. If the exchange doesn't care for your particular transactions, they can just freeze your account and make you go through a bunch of red tape to get your coins back. Also, exchanges are big target and hackers like to go for the big score.

 I'm not certain why you chose LN to be the taxi and the blockchain to be the Bus, rather then the other way around. The other way around seems like it makes more sense. However, you probably couldn't get your analogy to show your point if you did that.  :D


OK, I'll start calling it offloading then. In any event, it will allow people to make more transactions and they can be rest assured that when the close the channel, they will posses every satoshi entitled to them, less the miner fee and less the extra millisatoshis.

What do you suggest BTC do? Have a contentious hard fork every year or so to increase the blocksize? As we can tell, just having a softfork creates tension, much more a hardfork. I suppose BTC could just have one hardfork to obliterate the capacity cap all together. However, I am not certain miners are going to appreciate the low transaction fees that will result. The only solution will be for the miners to set their own minimum fee and ignore all the other transactions.  :D


I don't see how this is a liability at all. If people prefer to use an altcoin rather than BTC, than that's their freedom to choose.

While usually Khaos77 posts nonsense, this time he's spot on. Like a broken clock, I suppose. From the beginning LN has been designed as an hierarchical trap.

LN runs offchain, pretending that IOUs are the actual funds, they are merely IOUs.
As such, the IOU value is a pretense of LN code , and code can be modified/updated or tricked in some instances.

1. Code update has already been written, that allows a direct fractional reserve in LN, it is only 1 software update from reality.
    https://www.rene-pickhardt.de/index.html%3Fp=2131.html (https://www.rene-pickhardt.de/index.html%3Fp=2131.html)

2. The top 4 mining pools could 51% attack btc and double spend,
    this would trick LN into loading channels with bitcoins, that would be redirected to another onchain address.
    Basically counterfeiting an LN Funds IOU channels.
    It only needs to be long enough fo LN to consider it valid,
    and there are proposals underway to allow channel creation before funds are even locked,
    so a double spend could be pulled off by anyone smart enough to pay zero fees to fund a LN channel
    and then pay a high fee so the bitcoins are gone before actually locked onchain.

3. Sell Lightning Channels directly for fiat and oversell the number of channels.
    This allows a bypassing of the blockchain in some aspects.
    IE: You buy a Thor Lightning Channel for fiat, and then pay a utility company,
    which you think is being paid from their LN channel,
    however the company running the thor channel pays the utility company with their gift card system instead.
    The directly allows fraction reserves as the company running the thor channels only need enough LN funds to cover payments,
    while using the additional funding for short term money markets earning interest at your expense.
    LN is not like the blockchain , it is like a bank and that gives them lots of ways to play with your funds,
    even as far as loaning it out without your knowledge. Now you can pretend that none of this is happening,
   and as long as they make the payments, then no worries,
   but all fractional reserves eventually have bank runs due to lost faith iin the system.
   Bitcoin Onchain ended fractional reserve banking , LN Offchain restored fractional reserve banking to enslave the future generations.
    


True , but gift cards have the scaling capacity of visa and higher merchant adoption due to ease of use.
True , many exchange are unsafe for large amounts,
what makes you think LN hubs are going to be any safer once they become used on a regular basis.
Hackers go after the money, say a hacker compromised your PC or LN channels, they can send funds out to another LN channel,
data wipe the LN hub, and steal your funds, by buying other coins, atomic swaps or cashing out directly to fiat.
LN transaction does not have a Public open view of transactions like onchain bitcoin does.
Tracking LN funds crimes will be more difficult.
Plus you can always sue any exchange owners that steal your funds,
when your LN funds are stolen or simply lost due to the latest LN code bug, aside from scratching your butt ,
what legal recourse do you have, none.  
https://coinspice.io/news/lightning-network-warning-please-dont-lose-money-learn-from-my-recklessness/


Be careful , many in your circle , won't be happy if you upset their PR apple cart with the truth.
Also LN will only decrease transactions , if the LN payments are properly structured.
1. Funding amounts need to be at least $200 or higher per channel
    with payments $20 or less to see any moderate improvement in transactions offloaded.
    Plus the payments need to be with the same individual. (In a real world scenario.)
    Not following a well defined payment structure, could actually cause an increase in onchain Btc transactions not a decrease.



1 hard fork up to a true 8MB block size while allowing a tiny 3% increase in blocksize on a yearly basis built in,
is all that has to be done. And it only has to be done once, this type of thing was proposed in the past to avoid the nonsense argument over blocksize, that non-mining nodes can't keep up. Non-mining nodes that don't earn money to keep up, are irrelevant,  and will fall one day anyway.
(Hard drive and other needed infrastructure is increasing faster than 3% yearly so a 3% increase is literally nothing.)
Funny how LN will make IOUs transactions in milliseconds and non-mining nodes are holding back bitcoin because they are unable to cope with 10 minute intervals blocks.  :P
Doubtful LN hub operators will whine , they'll just update their hardware.

---

Luv you too,  :-*

 :D

a question of many points
A. a solution for everyone?
looking at the UTXO set only 2.5% moved in the last month.
for these users that do spend every month, these users have to plan their LN spending habit, and here is a few reasons.
1. some may only want to:
    buy coffee once a day so only need to lock say $3*30($90)
    be coffee routers for thier 5 friends so need to lock say 5*$3*30($450)
2. knowing not everyone wants to be online 24/7, requires:
    spliting/multiplying funds over more than one channel
    and/or
    finding reliable channel parties- usually ends up as hubs (account managers as the co-signer aka bank2.0)

what this leads to is prep work and also bitcoin transactions of multiple channels(outputs)

again with only a few % of coins moving regularly enough to warrant using LN because only a few % spend more than once a month to get some savings on LN vs just making a straight payment to the destination. LN is not really a full solution for everyone.
EG if you only spend once a month. why lock funds into 5(average) channels and hope their all online to spend all your balance once a month costing you a 500byte tx, where you can just send it direct to the destination whether online or offline in one output onchain for less bytes(less overall fee)

---

B. a solution thats better?
many argue LN is better. but think about it without the hugs and kisses. ..
users unable to pay/route if other parties are offline
other routers spending your balance leaving you with less holdings in a channel for yourself
requires counter party signing which is less independence
require preplanning or reliance on large services to act on your behalf (bank2.0)

and to add to this. if your funding 5 channels using 500byte tx to open. the counterparty is also funding them channels. thats 1kb for setup and then closing off is combined maybe 500byte. thats 1.5kb of data just to set up a reliable LN system for 2 people, for on average a month. this can be advantageous datawise for users that do more than 6lean transactions a month. but as shown by UTXO thats less than 2% of the network

---

C. how much scaling does it offer?
based on bytes this could be as much as only 2000 users a block setting up, which is only 288,000 a day or ~8.6m a month IF all tx's were setups and not closings / standard bitcoin onchain transactions.
then closing is again another hoard of transactions needed onchain.
on average if bitcoin was only used for LN to open/close channels based on normal human capability of preplanning their spending one month at a time. only 4-5million people would get to use bitcoin

summary:
with there being 55million UTXO's or 35million blockchain.info wallets. stats 'suggest' there are more than 5m users. so if LN was the 'only way' to make payments in the future for everyone. points A.B.C show LN wont satisfy everyone for many reasons.

you might want to check into channel factories before assuming the above
you might want to check into channels using alternate collateral before assuming the above.

LN is not a community network where the whole community compare a blockhash of thousands of transactions.
each channel is a private agreement between only 2 parties and they can make their own agreements.
they can even agree to use certain wallet brands that handshake differently their agreements and do other different things, like not penalise the whole channel value or do other things that some other wallets dont.
both parties can both edit their own nodes to a new agreement they both can shake on

for instance some wallets accept just a non backed msat based channel balance which they can open and close and split and move around different channels without having to broadcast a bitcoin sat tx

This is not how Lightning works.

If you and I open a Lightning Channel, each with 5 BTC in the channel, there will be a funding transaction on the blockchain totaling 10 BTC. Each time we transact, we will both sign a new closing transaction, that we do not broadcast, that would "settle" the channel with the amount of bitcoins each of us will have upon closing the channel. At no time will the closing transaction reflect either of us having more or less than our respective balance, and the total will never be more or less than 10 BTC (less transaction fees).

Anyone, including you or I can write any proposal we want, and can write any code we want, even if we know it would not be a good idea. That person is proposing in a nutshell a way to make loans via the LN.

Yes this is a risk. There is this same risk if I were to buy bitcoins from someone in exchange for my cash; I could receive the bitcoins first, wait for a couple of confirmations, give you my cash, leave and realize the transaction is no longer valid after the transaction I received was double spent after a miner orphaned many blocks.


LN will not allow bitcoin to scale to infinity. The number of channels that can be opened or closed per day is not very high, but once channels are open, a very large number of transactions can take place over the LN network.

Additional technology improvements needs to be done before bitcoin can scale to Visa levels, but there is no need to create a solution that scales this much now because we are far from having that kind of demand. If I am in California, I have no reason to download every transaction someone does in New York, or in Western Europe. Having every transaction recorded on the blockchain is unnecessary.

If the cost to have a transaction confirmed on the blockchain is $2, if I wanted to buy a song on iTunes, or a cup of Coffee at Starbucks, there is no way I would use an on-chain transaction because the cost of a confirmation would be as much as what I am buying. If I already have a LN channel open, I can buy either of these items via a LN invoice that costs small fractions of a cent to pay, or if I do not have a LN channel open, I could pay $2 to open one, pay via a LN invoice, and pay for many other things over time, each costing a small fraction of a penny.

because not all counter parties are guaranteed to b funded or online to make payments for you. you will find you will need to open more than one channel to have a reliable service. so opening costs would be more than $2
also you would have to close the channels eventually.
on average most open 5 channels. so thats $10 upfront with maybe $5 when closing. so thats $15 of fee's just to use LN

now how many transactions in say an average month(average preplan spending habits) do you think you will make
30=average cost $1         60=average cost $0.50        120=average cost $0.25     6000=half(fraction) of a penny
LN is not a solution for everyone as not everyone makes transactions often

...
IOU's can be signed too.. just not settled.
imagine bank cheques untill the cheque is cleared a signed cheque is just an IOU
old bank notes, with signatures from important fed guys are IOU's 'i promise to pay the bearer the sum of..'
credit/mortgage agreements are IOU's

...
as for the whole 2 party sign transaction stuff. seems your reading old 2016 documents about LN. read up about factories, and htlc's. these dont get broadcast.
also realise LN payments themselves are not locked into blocks and community vetted. they are just agreements between 2 parties. we already have cases where parties are opening channels using collateral thats not even bitcoin. but where others if they seen the msat balance would think it was.

...
but getting to the topics point. LN is not a bitcoin network. it is not a feature solely for bitcoin. it actually requires people to drop using bitcoin and use this other network. thus does nothing to scale/adopt bitcoin, but instead to make other networks of commercial gain more attractive
yet people forget the whole fundemental reason for bitcoin
a. independant self control of funding/wealth
b. pay anyone anywhere without barrier
c. no trust required
now lets look at LN
a. requires a counterparty, infact teams of counterparties for routing, all signing get your payment to destination
b. counterparties/routers not online 24/7=barrier.
c counterparty risk they can edit their node to do something unexpected, no guarantee of settlement

I don't think someone would need to open 5 channels if they only had 30 transactions per month, or even if they made 150 transactions per month. There are enough well connected nodes so 2-3 open channels will be enough IMO. There are several businesses whose primary service is to open many channels with many people, and collect various fees for doing so.

I also don't see any reason why a user would be closing all their channels after only a month. I believe a more realistic use case would be a person is paid by his employer on the 1st of the month, the person pays their various bills and expenses over the next month, and repeats on the 1st of the following month. I can see a person closing a channel after say 6 months if they accumulate so much money, they no longer have enough inbound capacity to receive their paycheck, but even in this case, the person could elect to receive their salary on-chain, and not close their channels.

 

In short: LN won't solve the scaling problem on its own, but it is a very important part of the puzzle.

Today, you can open roughly 100000-200000 channels per day. This would obviously not be enough for a really massive adoption, but is more than enough for current Bitcoin usage "as a currency". There is no reason for not using LN for small transactions up to $100 or so, which make up to about 25% of current BTC on-chain transactions.

For a really massive adoption (millions of new users/day) you need either "big blocks" or an intermediate layer, or both. The "intermediate layer" could be a pegged sidechain or a second Lightning-like layer, like the Channel factory guys are proposing. CFs are multi-user channels, where e.g. 10 users open a LN channel, and all members of the channel can open and close "sub-channels" between individual members with off-chain transactions.

Sidechains are basically independent blockchains pegged to BTC - if there is a reliable mechanism has to be studied.

Even if neither sidechains nor CFs work (I hope that's not the case), a "rough" solution could be simply to use altcoins as alternatives. If we had several relatively price-stable blockchain currencies then this could make up an ecosystem which could have enough capacity for a big part of the world population, and LN could be used for "lightweight" swaps between them.

The sidechain idea as an intermediate layer is however the solution which I consider the best one, at the moment, because it shares most properties with "normal" blockchains, so for example the "offline problem" isn't present. Channel factories could complement them.

I don't see why these things need to be connected to a public blockchain. They can all be connected to a private network with a gateway to the public blockchain. I don't think we need much more than 1 node per household or company.

How did you come to the number of 25% ?

I believe way more transactions are effectively sending less than 100$.


Did you just 'count' all transactions with inputs of less than 100$ ? Because that would have been a mistake.
IMO it is pretty hard to get an accurate number.

If i have 1 UTXO with 1 BTC and want to send 0.001 BTC, the input will still be 1 BTC and probably not count towards your <100$ transactions ?
1 BTC has been transacted, but effectively only 0.001 because 0.999 went back to me.

We won't have this 'problem' of getting an accurate number when using the LN.


Based on this i believe way more than 25% effectively are <100$ transactions.

25%??

ever checked the UTXO set.
not even a few percent actually spend funds daily/weekly. so LN will only be useful for a small percentage, while those remaining on the bitcoin network are drastically effected negatively by the whole dev instigated tx limiter and fee war

not only that but:
LN is a niche for people who spam(spend more than once a day)
by the time someone gets paid. works out how much they want to deposit into LN for spending habits of the month. works out of that share which 'channels' would best satisfy having which amounts to have for the best chance of good efficient service. and then pays the fee's to set it up.
if they are not using it daily they wont want to
have to keep the app open to ensure their counterpart is playing by the rules.
accept/deny random requests from routers asking to use them as a path
worry if they autopilot the app or factory/watchtower it, that route raiders wont empty their channel

It's a rough estimation based on the observation that the median transaction value is about $400 at this moment. See this graph (https://bitinfocharts.com/comparison/bitcoin-mediantransactionvalue.html#3m). This is however a relatively high value compared with the last 6 months, at some days the median was even below $100, in this cases you're right.

I am currently not using LN regularly (besides from a little testing), but even now - when we're far from the frenzy at the end of 2017 - between Monday to Friday I often refrain from spending on-chain BTC even if I wanted, because of the high fees.
So no, it's not only for "spammers". I think LN is useful for everybody who wants to move funds of a value of less than $100 more than once per week.

It definitively has drawbacks like the "have to be online problem", that's why I'm still not regularly using it (other simple reason is that almost no BTC-accepting service I'm using accepts LN, but I may search for alternatives).

the https://1ml.com/statistics website has stats of
nodes with active channels: <5k
number of channels: <35k
thats an average of 7 channels per active node.

so if your funding 7 channels (onchain data minimum 1 in 7 out) then the close sessions needed at the end of 2in 2out X7(14in 14out)
again for emphasis doing more than 7 transactions onchain(8-15) just to set up and close,
so if someone is only transacting once a week. they are not really benefiting if they are using monthly channels(4 a month)

as for the under $100 stuff..
the fee war is not some technology limit. its a human imposed and enforced thing by those advocating for fee wars.
implement a fee mechanism into bitcoin. and onchain fee's become respectful and people who dont spam daily can use onchain even for smaller than $100 amounts.

but thank you for proving a point. devs choices to not implement a fee mechanism has made people foolishly think that bitcoin cant cope with low fee's and so think LN is foolishly the solution.. the real solution though is an actual fee mechanism IN BITCOIN

It will scale the Bitcoin Network, but I believe no one knows by how much. 100x? 1000x? Or maybe less? Because of that unknown, then we simply cannot predict how much it will impact the volume of Bitcoin's usage.

if only windfury had a clue
its like he is saying "uber scales the new york yellow cab company"
.. um no. the yellow cab companies customer base is in DECLINE

scaling a network by deburdening the network of utility (facepalm)
hint to windfury: more research, less echo chamber script reading

First, the median value would be more relevant for an analysis, because big hubs may be distorting the picture (the last time I checked the network structure it was a mix of the hub-and-spoke and the decentralized model, and there were definitively some big nodes with hundreds of channels).

I don't think that the average person needs more than 2 or 3 channels, often one alone will be sufficient.

Second, why should you open channels monthly if you only transact once a week? Remember that also average persons can receive money via LN, and that's where the potential lies. People would be most likely directly be connected with an exchange so they can "refill" easily, e.g. with their salary.

It is actually if you want to keep the network decentralized and secure, but I won't like to discuss that now. That has been discussed so many times, and it's not the topic of this thread.

It depends on "usage patterns", but we can at least do a basic estimation.

Let's say we define an "user persona" that wants to transact one time per day. He normally refills his channel via LN one or two times per month, but each 3 months he needs a "refunding" via an on-chain channel opening transaction.

This would give us approximately x50 scaling (up to roughly about 300-500 tx/s or 25-30 million tx/day): we have about 100 LN transactions each 3 months (3 x 30-31 plus LN refills) and need a new channel opening, whose size approximately doubles a "normal" 1-in-2-out transaction.

With channel factories and taking into account the same "usage pattern", we could reach about ten times more, so we get a potential of hundreds of millions of transactions per day.

However, we have to take into account that we need some space on the blockchain for 1) normal non-LN transactions, and 2) channel closing transactions in the case of scams. I would estimate roughly that this would takes to a capacity of a third to half of the number I wrote above.

utility isn't declining. the network is drastically expanding. bitcoin is becoming exponentially more useful all the time. the on-chain micropayment niche might be dead, but why do think that is the only metric? maybe we need to find a better solution for micropayments than to alter bitcoin's economic design just for the sake of them?

you seem to be coming from the perspective that we can wait decades to raise fees. next year, the coinbase reward drops to 12.5% of the original reward. but you seem to think users should continue to pay nothing, doing nothing to replace the falling mining revenues, in order to bootstrap the network.

you really think that's a sustainable approach---to let users pay nothing for decades and then lower block sizes to jack up the fees when hash rate starts plummeting in response to no block rewards? i don't think users will have much interest in that. it's a tough pill to swallow but it'll be a hell of a lot easier to do it now with a fee market (especially since it requires no consensus change) than later.

::) Haha. That's cab companies, we are talking about Bitcoin. Usage has increased. Why, do you believe, are the fees high?


Deburdening on-chain, frees it, and eases the network to scale out.


I believe franky1 really doesn't understand the game theory, and the present dynamic between the network, the miners, and the users/economic majority. Or he's trolling.

gotta love your tone "plummeting"  you sound like over decades things are ok then sudden cliff edge... maybe worth you checking out some sustainable approaches/scenarios yourself that dont come from the echo chamber of certain devs that are paid by VC's that need LN to make ROI

you dont need to lower blocksizes to jack up fee's
jacking up fee's reduces how many people will want to use something
lowering blocksizes +jacking up fee's = even less wanting to use it

bitcoin utility is declining. even LN devs admit that.. its their whole sales pitch. they hope to gain merchants on the LN network because bitcoin is losing merchants

getting people off the bitcoin network is not scaling bitcoin.

its also not about zero fee.. its about useful fee. EG not an hours labour for 3rd world countries.
this can be implemented EASILY using a fee mechanism.

but
the whole 'free market' is not actually a free market because its a suckers buzzword to just say devs cant be assed to code something so leave it open for it to be unruled and wild west and out of control

here is some tips
fee mechanism: utxo confirm count = score. more confirms= better score= pay less. this then makes spammers pay more so spammers are more incentivised to use LN to save but still spam, and normal users are not penalised by spammers as fee rates are not based on everyone paying average. people can then use the score system to plan priority better too.

blocksize: transaction count increase onchain = more users. = less fee per user but the total combined fee of block adds up to MORE
(must have been fun at your birthday parties as a kid. instead of inviting 30 kids all with gifts, you preferred only 2 to come and they had to bring gifts worth 15x the normal gift value just to be allowed to stay at your party)

more users using bitcoin: more people= more opportunities for pools to sell coins. after all if no one is using bitcoin no one will buy it. thus pools wont get to exchange thus pools die. so again deburdening bitcoin does not help pools
(playing pass the parcel at a party is less fun and doesnt last long if you only invited your mom and dad, and there is only 2 gifts to play with)

Lightning network ofcourse solves the scalability problem. We can create a dozen of lightning networks if we need it. It's similar to something coinbase has been using within its platform. They were criticised at first for their model but now the whole bitcoin community is embracing the lightning network.

You are confusing scaling with offloading.

Offloading:
Bitcoin Blocks can hold a Maximum of ~1.7MB [~7200 transactions] so ~12 transactions per second
LN Network [Thousands of IOUs per second] only limited by hardware & bandwidth of the hubs

Now let's say LN is only processing 50 million IOUs,
and
Bitcoin is maxed out at 12 transactions per second.

If only 1% of LN users wanted to cash out in the same block,
that would be 500000 transactions, which would need ~70 bitcoin blocks and take ~11.7 hours to complete.
Causing the Bitcoin Network to be useless for half a day and the onchain fees to skyrocket.

Scaling:
Imagine
Bitcoin Blocks were holding a Max of 8MB[~33600 transactions] so ~56 transactions per second
Now the 1% of LN users wanted to cash out in the same block,
that would be 500000 transactions, which would need ~15 bitcoin blocks and take only 2.5 hours to complete.

As you can see the 8mb block bitcoin achieves greater scaling than the 1.7mb block bitcoin.
The fact that LN's 3rd party network has higher IOUs transactions capacity , does not increase the onchain scaling. In Fact, If their is ever even a minor exodus from LN once it becomes mainstream , odds are high it drives onchain fees and onchain wait times to undreamed of levels.

If Bitcoin was a Bus and could hold 100 passengers,
and the bus was near capacity , and some of the passengers decided to get off at the bus terminal and take a cab for the majority of the trips, and then returned to the bus terminal for the final trip home.
All they are doing is not using the Bitcoin Bus as it was unsatisfactory and paying the cab operators additional fares. Which the Cab operators don't always go the full distance like the bus does, but require multiple cabs and multiple small fares to reach your destination.

Bitcoin Scaling was not increased (as it is exactly the same number of seats either way),
it's adoption/utility was decreased in favor of increasing LN's adoption/utility.  8)

Offloading transactions to LN , or even Altcoins by using Litecoin , Doge or Ethereum are the same thing.
All can take up the artificial transactions limitation imposed on bitcoin by it's core developers, which are more interested in LN than they are bitcoin.  :P  

LN can use modern hardware and process thousands of IOU transactions per second,
while bitcoin using modern hardware is limited to ~12 transactions per second.
Kind of makes you wonder how stupid people are to believe that nonsense.

Scaling can only be done Onchain,
Offloading occurs when you transition to any other network because bitcoin can't fulfill your transactions needs.

FYI:
To increase scaling on a Bitcoin Bus with 100 seats.
Either add 100 extra seats so the Bus has 200 seats
or
Drive the Bus twice as fast , so you can get people to their destination in half the time.

Calling Taxis because you refuse to upgrade your Bus capacity ,
is a sure sign that one day all anyone will do is call the taxis and ignore the Bus.

More social drama from franky1. Stop, you always include your replies with FUD that has nothing to do with the debate.


What?? Confusing "scaling with offloading"?? Hahaha.

Plus what a disingenuous way to slip in that IOUs in Lightning are a fact. ::)

Go play with your crayons, grown ups are talking.  8)

Troll or stupid ?  ::)




No, you can't even calculate your numbers correctly.

A maximum of 12.195 transactions fit into one block.


Go and get some math lessons.




Yes, absolutely.

Doubling something is called scaling..  ::)

You guys amaze me each time, how narrow-minded people can be. That's hilarious.




A cab has nothing to do with the bus.

So.. you are saying the LN has absolutely nothing to do with BTC ?  Please just agree on that and everyone will instantly see that you don't have ANY clue at all.




You can not 'increase scaling'.
Do you even know what scaling means ?

Or do you just use it as a buzzword ?




Absolutely.

LN is protected by bitcoins security mechanisms and some shitty altcoin is not protected at all.

Absolutely the same.


Same question as above:
Troll or stupid ?




That's EXACTLY what everyone (except for your franky troll) is thinking about you.




If that's what you really believe, you are beyond help.




That's really the most retarded comparison i have ever seen.


LN to BTC is not like a cab to a bus, but more like teleporting to a bus.
You can drive each route with the bus.. or you drive once to a teleporter, teleport as much as you want for nearly no money in nearly no time.
And at the end, you drive back with the bus.


You are delusional if you compare BTC/LN with a bus/cab. This literally makes 0 sense.



I understand why you got red trust for shittalking.
Your account here is worthless, and so is your opinion.

Instead of complaining "bla bla bla Lauda is abusing DT bla bla bla" and "omf omf omf forum giving red trust for truth omf omf omf", you should at least TRY to understand that everything you say and think is completely wrong.
Work on yourself. Work on your understanding of BTC / LN.




BTW, regarding your signature:


I had quite a big argument with Lauda regarding security of operating systems.
We had completely different opinions. And we didn't find a common ground.. but somehow.. i didn't receive red trust  :o

So, instead of blaming everyone else, start looking for the reasons in yourself  ;)

You are still wrong.

I don't care what a random site says.

You were talking about the MAXIMUM amount of transactions a block can hold.

Now, since you obvoiusly can't calculate it yourself.. let me help you:

The maximum amount is reached if the transactions are the smallest (Is very obvious to everybody, just not for you).
A smallest transaction has the properties:

• being SegWit
• having 1 input and 1 output

A SegWit transaction with 1 input and 1 output has a size of 85 bytes (non-witness part).
With 1.000.000 Bytes per block, we have 1.000.000 / 85  transactions at a maximum. That's 12.195.


Wasn't that hard, was it ?


In the future you might want to stop posting nonsense / superficial knowledge which you got from somewhere without even thinking about it.


You can, of course, now start arguing like "bla bla a block never has only 1 input 1 output segwit transactions bla bla".. But it doesn't matter..
YOU started talking about the maximum a block can hold. And your statement was wrong.

And instead of accepting it and calculating it yourself, you started justifying yourself. Which obviously just backfired, because you are simply wrong.

And this is not the only statement of you which is plain wrong. Most of the stuff you are mentioning is nonsense.
I don't know whether it is because you misunderstood things, or because you are not capable of understanding it.. and it doesn't matter. Wrong is wrong.

---

Just saw this:

How do you even dare to talk about LN if you don't understand the very basics of cryptography / cryptocurrencies / BTC  ::)

Now, do yourself a favor and first learn the basics. Then educate yourself about the advanced stuff.
THEN start discussing LN and its pros/cons.

Your explanation is a disingenuous way to make it look that Lightning is an IOU system, it's not. Plus we don't know if Lightning will scale Bitcoin to the amount in your example.

I can accept that LN is a software experiment that can fail, but there are no IOUs in Lightning. Stop eating those crayons. Hahaha. 8)

firstly median is just a single number in the middle of a range
1,1,1,1,1,6,7,7,7,7,7
5,5,5,5,5,6,70,70,70,70,70
median is 6. yet using your own analysis of separating users vs hubs.
users only have 1 connections and hubs have 7.
users only have 5 connections and hubs have 70.

making 6 meaningless statistical error. its just some single use case sat amungst more meaningful data
median does not actually provide anything meaningful. as 6 has no relevance to the other numbers. the number 6 has not been derived from calculations nor from analysing other stats. its just a number that exists


when you say hubs have hundreds of channels. who do you think that those hubs are connecting to.....
when you say users have few of channels. who do you think that those users are connecting to.....
hint for each channel there are 2 sides. meaning for every 2 nodes with active channel between them thats a channel.
so adding up the nodes and adding upthe channels and averaging it out is fairer than your 'median'

people pay rent once a week but they get a wage once a month. most live paycheque to paycheque and can only plan/budget one month at a time.
having one channel to an exchange means one channel is funded with the wage. but what about the other channels.
oh and if you think everyone will just have 1 channel with an exchange. then watch that exchange get DDoS'd and
watch the exchange have to lock in a months value with every user.. bank2.0 centralisation i hear you scream.
oh and need i forget not everyone wants their whole wage in bitcoin. because bitcoin cant buy you everything. so then throwing a whole salary into LN is not helpful
oh and if people are locking to one channel with an exchange. watch the exchange ramp up their fee, because they only have the exchange as the only route.

think about scenarios. not the one time utopian perfect experience.
EG did you know when they done the LN pizza promotion, there was only a 10% success rate. not due to any pizza or delivery or settling fiat issues. but the channel issues of LN
actually 32mb was a technical based limit of networking related to packets. but 1mb is a arbitrary limit of human imposition
fee war is a wild west zero control human decided imposition that solves nothing but used to avoid real solutions.


funny part of your maths there is that to avoid onchain refills each fortnight would actually require factories to re balance channels without onchain usage.
so you cant say using factories after already describing a offchain factory scenario would further 10x up the scenario.

also even if there was a one channel user. with only a one onchain setup and one onchain settle.
the 1LN payment a day would be a ~88 deburdening of the bitcoin network.(90 payments done in ln instead of onchain. but then discounting the 2 setup/close onchain)
so not sure where you are getting the whole other random numbers you quote. especially 25-30million a day

but lets take a guess and say that a 3rd of a block is LN reserved. as your scenario suggests
average block ~3k tx so call it 1k LN users a block = 144k a day
but because those users are not transacting onchain on day 2 a fresh set of LN users can use the 1k = another 144k a day,
same for day 3-90=  ~13mill users a quarter before they repeat

where as the 144k a day transactors if doing 1 tx a day onchain. is just 144k which again is ~90x

so based on 1 tx a day with LN sessions of 3 months using only onchain bytes of lean measure (not that many channels)
LN

but if a LN user has 3-5 channels, the onchain bloat means less than the 1000 a block/144k a day.
but if a LN user sessions close sooner than 90 days, the onchain bloat means less than 13mill before ln users refresh

now. to get to the point of transaction numbers.
UTXO stats do not any large percentage of spends happening daily. most bitcoin users are once a week-every couple years
the percentage of daily spenders is low percentile.
so until / unless LN provides access to merchants where people can buy absolutely everything (toilet roll, car fuel, bread)
dont expect many to take advantage of daily activity.
apart from day traders/mixers/spammers

so if you think out of say ~500k transactions a day it some how will equate to 144k users moving over to LN a day.. forget it.
the amount of users desiring LN for daily use would be less.

oh and check visa stats. even when you can buy most things with visa, even they only have their customers do less than 2 tx a day average
so cool down on thinking everyone will jump into LN.
so cool down on thinking everyone will be doing dozens/hundreds of tx a day

Wrong, check those blocks :
1. https://blockchair.com/bitcoin/block/566575 (https://blockchair.com/bitcoin/block/566575)

Size (bytes)	2,377,364
Weight (weight units)	3,993,179
Stripped size	538,605

2. https://blockchair.com/bitcoin/block/367853 (https://blockchair.com/bitcoin/block/367853)

Transaction count

12,239

We could use Box plot in this case

That sounds nice, but can you explain the economics behind it?

Users aren't paying a fixed fee, so we can't simply assume that more transactions = more fees.

If block size limits > demand for block space, then fees will drop close to 0 -- why would anyone pay when there is free space? Miners will include your transaction anyways.

Without fixed fees or a fee market based on full blocks, there is no basis for you to say that increased adoption alone will increase fee revenue for miners. You've suggested keeping a "buffer" between block size limit and observed usage, meaning no one would ever need to pay fees at all. With inflation dropping to nothing and fees dropping to nothing, you must expect miners to secure the network out of charity!

My Bad,  :D
https://www.youtube.com/watch?v=dsUXAEzaC3Q

https://bitcoin.stackexchange.com/questions/59408/with-100-segwit-transactions-what-would-be-the-max-number-of-transaction-confi



@ETFbitcoin,
Interesting enough your reference block exceeded the max of even all segwit only transactions in the above quote and according to the block height was years before segwit was even activated.  ;)
https://www.reddit.com/r/Bitcoin/comments/ail257/interesting_fact_the_most_number_of_transactions/

Also interesting , is this block was useless in clearing the backlog.  2015-08-01 01:06 (4 years ago)
https://www.reddit.com/r/Bitcoin/comments/3fd2a9/f2pool_setting_a_new_record_most_transactions/
 :D

FYI:
@Bob123,
You're still Stupid.  :-*


FYI2:
https://www.blockchain.com/en/charts/n-transactions-per-block?timespan=all
*Average Number Of Transactions Per Block has always been below 3000 transactions per block,
so the max is no where near the average.*  ;)

Plus there are externalities. The costs to keep the network going would transfer to the miners, instead of from the users. The people demanding "big blocks" either never considered it, or know about it but wanted their hard fork anyway because "Satoshi said P2P cash". ::)

There is a false narrative that is always presented about lightning that it is intended to be the only solution to scaling which is false.

Bitcoin must scale in many ways -

1) Onchain with efficiency improvements like MAST and Schnorr sig aggregation

2) Lightning and other payment channels

3) Eltoo

4) statechains

5) sidechains like liquid / bakkt

6) and yes a future HF to increase the blocksize beyond the current 4MB of weight

From a technical/scalability perspective, I am more open to this than I was years ago. But when I consider the social/political issues around it, I'm skeptical a non-emergency hard fork would ever be easy to pull off at this point. You think broad consensus is possible? What kind of timeline and activation process are we talking about, and how would we gauge the risks of a network split?

Even if it's completely irrelevant, because it's an extreme case you're fabricating here - in both cases the median is nearer of the "typical" usage.

Okay, here we have distinct usage patterns in mind. If you want to use LN for a significant part of your wage/salary, then you very likely would transact more than once per week. For me, LN is more comparable with a prepaid card which you would charge once every few months and then use the credit several times a week.

The most "sane" way would be to avoid too big hubs.
1-channel-users (which are very likely to be connected with a hub) would be the typical PayPal/Coinbase user. Not those caring about decentralization. The risks of LN and Coinbase/PayPal are similar in these cases.

My guess is that you would have two big classes of "send-only" LN users: the "PayPal-type" users which would be only connected to an hub, and the "prepaid card-type" users, which would fill their LN channel via on-chain transactions to make online payments, but considerably less than once per month.
Then you have a smaller third class, the "sender/receiver" type, for example, freelancers that are spending money and receiving honoraries for their work. This one would be the most useful for the network, but I completely agree that it will be a relatively small class (maybe 10% of the total).
You have also the "receivers-only", which will be also a smaller class.

Correct, but where did I write that?

A channel factory rebalancing would not add no transactions nor kB to the blockchain.

That number was obviously a maximum number if the behavior of the one-channel user with 1 LN tx/day and 1 onchain tx/3 months was the average and the whole block space was used for LN channel openings and closings. So it's actually even more conservative than you estimation (a third of the block space/13 million LNtx per day).

In theory it could be even higher, if the typical user would use it for "micropayments" several times a day.

That would only be the case if the user refills all his 3-5 channels each 90 days. You could also refill one of your 3-5 channels each 90 days.

Yeah. That's pretty obvious, but then we would have another average "user persona" ;)

Also pretty obvious, but that's not the point I was talking about which was a rough estimation about "maximum scalability".
But I, for example, am currently not using LN, but if fees went up again like they did in 2017, I would do that, even if I transact only roughly 5 times per month. Because LN would allow me to open the channel at a weekend or at night, when fees are almost zero, and then transact in the moment I want, even at 12 o cklock a wednesday when average fees even currently are at 100+ sat/byte.

This possibility to avoid fee volatility, combined with a faster confirmation, is actually very likely a major factor which will drive people to LN. Not massively at first, but gradually.

Haven't I wrote here in this thread that I guess that 1 tx/day per household is actually the maximum demand I estimate for Bitcoin? It may have been at another LN thread, but I never wrote about hundreds or dozens per day per person.

Just like 21 million coin limit is also an arbitrary limit of human imposition. The idea behind it being a simulation of gold's supply is irrelevant, what matters for all intended purposes is that it became an immutable trait of Bitcoin due the game theory involved, just like 1 MB blocksize has become an immutable trait of Bitcoin due the game theory involved, this is called protocol solidification.

At it's inception, any values would have cut it, since satoshi was calling all the shoots. Once the creature was alive, he disappeared, and im sure he was smart enough to know (either planned or in retrospect) that those values would never change. It couldn't go any other way if the project is indeed decentralized. This is the fact only for Bitcoin, no altcoin meets the criteria, which is why all altcoins are overpriced and Bitcoin is undervalued, at any rate.

    I'm don't think satoshi planned for the 1mb size to be immutable. When Garzik suggested a patch to increase block size, satoshi stated this can be phased in later. I'm not certain the segwit work around was quite what satoshi had in mind. https://bitcointalk.org/index.php?topic=1347.0

Correct, and don't be tricked into believing that you're wrong. In statistics, when there are outliers in the data-set that skew in finding the mean, then use the median.

What satoshi said doesn't mean what satoshi knew. He may or not have known that 1 MB blocksize would eventually become yet another value which becomes immutable due protocol maturation, what matters is the results, and the situation is clear: Reaching wide consensus to raise the blocksize at this point is basically as controversial as raising the max cap. You can find arguments on both sides, which as a result, the status quo prevails.

satoshi did at least predict there would be an opposition to raising the blocksize way before the blocksize crisis happened:



He knew. And so, he disappeared when Bitcoin took a life of it's own (impossibility to reach consensus to change it). Contrary to the idiots that think Bitcoin is doomed because you cannot buy coffee on-chain, that realization was the fact that Bitcoin was a success.

A remarkable fact about Satoshi (which is all too often forgotten) is recorded right here on Bitcointalk: sometimes, he got even fairly significant things wrong


Even more remarkable: Satoshi was happy to be wrong, because he wanted to get Bitcoin right. He wasn't jealously guarding the design decisions made in the original Bitcoin 0.1, it was the complete opposite. He fully welcomed and encouraged others to poke holes in Bitcoin, to make it as good as possible.

What would he think now? Who knows (we may never hear from him/them again). We've got to get this right now, not him, and that appears to be exactly what he wanted.

    I thought segwit was a blocksize increase though. From my understanding, the witness data is still part of the blockchain and legacy nodes are provided a stripped version without the witness data. I don't see that as 1 MB being immutable. I'm sure if the developers can implement this work around to increase block size, there will be other work arounds in the future that increase blocksize.

Indeed, although it looks more and more like a very adept compromise every day. 4MB blocks are theoretically possible, but because the Bitcoin ecosystem took so long to support and use segwit addresses, the average block is only ever ~ 1.3MB



sure, but the best limit is the smallest possible. That might mean dozens of megabytes block weight, but it's really impressive to see the work being done to make more efficient use of 4MB. The ideal to me would be if further space utilization improvements renders 4MB too much, and a cut is instituted instead (assuming of course that 4MB is too much for a fully mature Bitcoin market with highest possible adoption)

I believe Satoshi would say that the Core developers are on the right path. It's clearly the fee market structure that's what will make everything stick together.

we're waaay OT, but:

I don't think it's relevant, Satoshi's not here, or perhaps anywhere. To re-iterate, he wasn't perfect anyway, and he was happy to be wrong to make Bitcoin right.

I don't see the point in using something that no longer exists and wasn't always right as any kind of measuring stick