Could the lightning network solve the block size problem?

[SebastianJu]

How is the anonymity of the users compared to bitcoin with the lightning network? Or is it that the lightning network would work with a website, service or exchange only anyway so that those know their customers?

If this really would happen and leading to higher fees fees because of too small blocks then what about personal transactions? Can payment channels be established for private person to private person and without high fees?

[Lauda]

How is the anonymity of the users compared to bitcoin with the lightning network? Or is it that the lightning network would work with a website, service or exchange only anyway so that those know their customers?

If this really would happen and leading to higher fees fees because of too small blocks then what about personal transactions? Can payment channels be established for private person to private person and without high fees?

I do not understand why people think that the lightning network is going to have high fees? Luke-jr even said somewhere that it would have lower fees than using the blockchain. Yes, you can create payment channels with anyone that you want. You can find many simple explanations by clicking on this link.

[bitgolden]

How is the anonymity of the users compared to bitcoin with the lightning network? Or is it that the lightning network would work with a website, service or exchange only anyway so that those know their customers?

If this really would happen and leading to higher fees fees because of too small blocks then what about personal transactions? Can payment channels be established for private person to private person and without high fees?

I do not understand why people think that the lightning network is going to have high fees? Luke-jr even said somewhere that it would have lower fees than using the blockchain. Yes, you can create payment channels with anyone that you want. You can find many simple explanations by clicking on this link.

Lowers fees?  That's great to hear. But new worries are : need of third party intervention makes us slightly go away from bitcoins prime motto. But scaling the block size would be great solution we can enjoy from this lightning network. So, we need to compromise a little thing.

[MarketNeutral]

I still don't really understand how a channel works under dispute, e.g. both party claim different truth. I think that is not possible without a judge-like third party involved

And the traditional approach is also trustless: Bitpay have a 1000 btc account at Coinbase, Coinbase have a 1000 btc account at Bitpay, if Bitpay run away, his account at Coinbase will belong to Coinbase, vice versa

LN are no more of a learning curve than what Bitcoin was 4 years ago.

In the case of a dispute, then the most resent tx is sent (with a big fee) to the Bitcoin network. LN work by constantly trading would-be-valid Bitcoin transactions, these transactions never need to go on the Bitcoin network unless one of the parties doesn't respond.

In the case that one of the parties doesn't respond, then after a timeout, the latest Bitcoin tx is released on the network, spending both the anchors, and thus closing the channel. -  Everything was agreed upon up-to that point, so very little to Bitcoin was lost (maybe a few cents in fees).

Think about it: it works in the opposite way to how things work atm:

1. You go to the cafe, and buy a coffee with Bitcoin.
2. The cafe gets a Bitcoin TX, and has to wait for a block for it to be confimed.
3. Everything is settled after the tx is in the block chain. (about 10 min or more).

(with lightning):
1. You go to the cafe, and buy a coffee with LN.
2. You update the anchor TX to the cafe, and send the updated TX to the cafe. (instant).
3. No need for settlement since you come in every day.

- See in the general case, nothing ever touches the blockchain. - there is no 'confirmation times'

- Only in the case where there is disagreement dose the 'confirmation time' matter - only to resolve things back to the 'last known good state'.

- It isn't possible to double-spend a LN transaction, since the lock time is longer than the time for the Cafe to release the last know tx.

- if the Cafe goes out of business, then you can get your Bitcoin back, maybe after 6 weeks.  But you only put 20$ at a time, so this doesn't bother you so much.

Underrated post. This is one of the most succinct descriptions of the LN I've read. Thank you, da2ce7.

[Come-from-Beyond]

After skimming over LN whitepaper I noticed that it doesn't analyze conditions in which necessity to update channels will become a bottleneck. Have I just missed them because skipped some too technical parts?

[SebastianJu]

How is the anonymity of the users compared to bitcoin with the lightning network? Or is it that the lightning network would work with a website, service or exchange only anyway so that those know their customers?

If this really would happen and leading to higher fees fees because of too small blocks then what about personal transactions? Can payment channels be established for private person to private person and without high fees?

I do not understand why people think that the lightning network is going to have high fees? Luke-jr even said somewhere that it would have lower fees than using the blockchain. Yes, you can create payment channels with anyone that you want. You can find many simple explanations by clicking on this link.

Then you say it is not true that most of the developers are heavily invested into the network and others too? Can you explain where they expect the return of investment from if not by fees? Or do you say that they did not invest at all?

[brg444]

Lightning transactions are going to be cheaper & more private than regular blockchain transactions.