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Author Topic: Why some people think Lightning Network centralizes BTC?  (Read 1730 times)
AtheistAKASaneBrain
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November 15, 2015, 11:45:48 PM
 #1

As far as I know, isn't it just a clever usage of Bitcoin script to process the transactions? It's not like we are talking about it requiring centralizing servers or something right? Because on that case it would suck, but afaik like I said before its just a cool way to deal with the scaling problem without centralizing nodes (big blocks).
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November 16, 2015, 12:17:56 AM
 #2

Why do some people think vaccines cause Autism? Why are people fighting over the Starbucks coffee cup change? (some examples of not using common sense) If you have seen people claiming centralization without providing proper evidence, then they are trying to spread disinformation and delude people. In any case, it would centralize it less than going for gigabyte blocks.


It's not like we are talking about it requiring centralizing servers or something right?
No. Someone might be talking about lightning hubs but those don't require such either.

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brg444
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November 16, 2015, 12:37:58 AM
 #3

because it has relations with Blockstream therefore it must be evil.

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November 16, 2015, 02:19:32 AM
 #4

because it has relations with Blockstream therefore it must be evil.
This^^

People think that because the lightning network is something that Blockstream produced which is supposedly some company that is conspiring to keep the block sizes small so that all of the transactions go through their (not) proprietary lightning network and they can make profits off of that (somehow) and then they will somehow control Bitcoin because the lightning network is theirs.

Except that the above is completely false. Blockstream does not have proprietary control over lightning and sidechains, both are all open source projects. And they aren't against block size increases, some developers with blockstream are just against BIP 101's method of a fixed schedule, and others are thinking of different ways to increase the block size. And I don't even think there is a business model with lightning that they could make profits off of (I'm not sure about that though).
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November 16, 2015, 03:39:21 AM
 #5

because it has relations with Blockstream therefore it must be evil.
This^^

People think that because the lightning network is something that Blockstream produced which is supposedly some company that is conspiring to keep the block sizes small so that all of the transactions go through their (not) proprietary lightning network and they can make profits off of that (somehow) and then they will somehow control Bitcoin because the lightning network is theirs.

Except that the above is completely false. Blockstream does not have proprietary control over lightning and sidechains, both are all open source projects. And they aren't against block size increases, some developers with blockstream are just against BIP 101's method of a fixed schedule, and others are thinking of different ways to increase the block size. And I don't even think there is a business model with lightning that they could make profits off of (I'm not sure about that though).

Keep drinking their Kool-Aid.  They want you to believe they are not taking over.  But what do you think those guys who put up $20 million are thinking?  Do you think they don't want to get that money back?  Or, maybe they are actually thinking of getting it back with a huge multiple?  Gee, I wonder what is more likely? 

Dude, Blockstream will make every effort to cripple bitcoin with 1MB, so they can sell you a solution 'for a small fee'.  Blockstream has bad intent.  Don't believe their promotions of 'for the good of the blockchain'.  That is today.  Everything free.  Then, we everyone depends upon the new system - BAM!!!  Here come the fees!!!  No way to go back now.  So you will pay it.

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November 16, 2015, 03:45:23 AM
 #6

Lightning transactions go through a centralized node, and settle to the actual blockchain.

Not saying it's a bad idea, and it may be absolutely necessary for exponential scaling... but it's certainly nothing like an actual bitcoin transaction.

I look at a lightning node as a transaction aggregating machine. The spread between the fees they aggregate and what they pay to settle on the blockchain would be their motivation for existence. In a sense, they live by eating a bite out of the miner's lunch. Intentionally and artificially scarce block space... higher fees... higher competitive advantage for LN and SC... more bites of the lunch.  
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November 16, 2015, 04:00:55 AM
 #7

because it has relations with Blockstream therefore it must be evil.
This^^

People think that because the lightning network is something that Blockstream produced which is supposedly some company that is conspiring to keep the block sizes small so that all of the transactions go through their (not) proprietary lightning network and they can make profits off of that (somehow) and then they will somehow control Bitcoin because the lightning network is theirs.

Except that the above is completely false. Blockstream does not have proprietary control over lightning and sidechains, both are all open source projects. And they aren't against block size increases, some developers with blockstream are just against BIP 101's method of a fixed schedule, and others are thinking of different ways to increase the block size. And I don't even think there is a business model with lightning that they could make profits off of (I'm not sure about that though).

Keep drinking their Kool-Aid.  They want you to believe they are not taking over.  But what do you think those guys who put up $20 million are thinking?  Do you think they don't want to get that money back?  Or, maybe they are actually thinking of getting it back with a huge multiple?  Gee, I wonder what is more likely? 

Dude, Blockstream will make every effort to cripple bitcoin with 1MB, so they can sell you a solution 'for a small fee'.  Blockstream has bad intent.  Don't believe their promotions of 'for the good of the blockchain'.  That is today.  Everything free.  Then, we everyone depends upon the new system - BAM!!!  Here come the fees!!!  No way to go back now.  So you will pay it.
Contrary to popular belief, people who support Blockstream are not against block size increases. I am not against increasing the block size limit, in fact, I want it to happen. I prefer BIP106, not BIP101. I am also not against Blockstream and sidechains. The people who work at Blockstream and on their projects are good people. They are recognized developers and many are part of the Core Dev team. Many of them have also suggested other block size increase proposals. There are other ones besides BIP101 that are potentially viable.

Even if blockstream charges people to use sidechains, the project for that is open source. All of that code is publicly available and people can use it, fork it, and do their own stuff with it. You don't have to use blockchain. Someone can fork the source code (and many have) in case they decide to pull it down. Even if they decide to make the sidechains stuff closed source, people will take what they previously published and create own sidechains implementations off of that. We don't have to use blockstream.
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November 16, 2015, 04:02:19 AM
 #8

Lightning transactions go through a centralized node, and settle to the actual blockchain.

Not saying it's a bad idea, and it may be absolutely necessary for exponential scaling... but it's certainly nothing like an actual bitcoin transaction.

I look at a lightning node as a transaction aggregating machine. The spread between the fees they aggregate and what they pay to settle on the blockchain would be their motivation for existence. In a sense, they live by eating a bite out of the miner's lunch. Intentionally and artificially scarce block space... higher fees... higher competitive advantage for LN and SC... more bites of the lunch.  

Does it not then make sense for miners to run lightning hubs, as it looks like vertical integration is the best fit here? Sounds ok; if the blockspace is being packed more effectively, then a leaner chain and lower bandwidth requirements makes it easier for new entrants to the mining market to compete against established big miners.

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Cconvert2G36
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November 16, 2015, 04:19:33 AM
 #9

Lightning transactions go through a centralized node, and settle to the actual blockchain.

Not saying it's a bad idea, and it may be absolutely necessary for exponential scaling... but it's certainly nothing like an actual bitcoin transaction.

I look at a lightning node as a transaction aggregating machine. The spread between the fees they aggregate and what they pay to settle on the blockchain would be their motivation for existence. In a sense, they live by eating a bite out of the miner's lunch. Intentionally and artificially scarce block space... higher fees... higher competitive advantage for LN and SC... more bites of the lunch.  

Does it not then make sense for miners to run lightning hubs, as it looks like vertical integration is the best fit here? Sounds ok; if the blockspace is being packed more effectively, then a leaner chain and lower bandwidth requirements makes it easier for new entrants to the mining market to compete against established big miners.

They probably should to protect themselves from outside entities taking artificially limited tx fee revenue... The question was "Why do people think that it could lead to centralization?". Largely, the answer to that question is: "Because it does."
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November 16, 2015, 04:30:39 AM
 #10

Lightning transactions go through a centralized node, and settle to the actual blockchain.

Not saying it's a bad idea, and it may be absolutely necessary for exponential scaling... but it's certainly nothing like an actual bitcoin transaction.

I look at a lightning node as a transaction aggregating machine. The spread between the fees they aggregate and what they pay to settle on the blockchain would be their motivation for existence. In a sense, they live by eating a bite out of the miner's lunch. Intentionally and artificially scarce block space... higher fees... higher competitive advantage for LN and SC... more bites of the lunch.  

Does it not then make sense for miners to run lightning hubs, as it looks like vertical integration is the best fit here? Sounds ok; if the blockspace is being packed more effectively, then a leaner chain and lower bandwidth requirements makes it easier for new entrants to the mining market to compete against established big miners.

They probably should to protect themselves from outside entities taking artificially limited tx fee revenue... The question was "Why do people think that it could lead to centralization?". Largely, the answer to that question is: "Because it does."

That wasn't my answer. If the miners process Lightning transactions as well as standard transactions on the network, and Lightning is just an open-access protocol, then there's no centralising pressure (adding an extra dimension to mining profitability has the potential to improve competition in mining).

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Cconvert2G36
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November 16, 2015, 04:49:09 AM
 #11

Lightning transactions go through a centralized node, and settle to the actual blockchain.

Not saying it's a bad idea, and it may be absolutely necessary for exponential scaling... but it's certainly nothing like an actual bitcoin transaction.

I look at a lightning node as a transaction aggregating machine. The spread between the fees they aggregate and what they pay to settle on the blockchain would be their motivation for existence. In a sense, they live by eating a bite out of the miner's lunch. Intentionally and artificially scarce block space... higher fees... higher competitive advantage for LN and SC... more bites of the lunch.  

Does it not then make sense for miners to run lightning hubs, as it looks like vertical integration is the best fit here? Sounds ok; if the blockspace is being packed more effectively, then a leaner chain and lower bandwidth requirements makes it easier for new entrants to the mining market to compete against established big miners.

They probably should to protect themselves from outside entities taking artificially limited tx fee revenue... The question was "Why do people think that it could lead to centralization?". Largely, the answer to that question is: "Because it does."

That wasn't my answer. If the miners process Lightning transactions as well as standard transactions on the network, and Lightning is just an open-access protocol, then there's no centralising pressure (adding an extra dimension to mining profitability has the potential to improve competition in mining).

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.
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November 16, 2015, 05:02:47 AM
 #12

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.

That description is equally true of miners v.s. wallet nodes. Symmetric vs asymmetric. So, the bitcoin network is asymmetrical already, Lightning hubs just add another layer of node types that serve as a promotion of the role for the miners (or could just be seen as an extra role).

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Cconvert2G36
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November 16, 2015, 05:07:13 AM
 #13

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.

That description is equally true of miners v.s. wallet nodes. Symmetric vs asymmetric. So, the bitcoin network is asymmetrical already, Lightning hubs just add another layer of node types that serve as a promotion of the role for the miners (or could just be seen as an extra role).

A more apt analogy would be a full node client vs a SPV client? Full node interacting directly with the network, and the SPV (partly) relying on a trusted intermediary.
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November 16, 2015, 05:11:32 AM
 #14

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.

That description is equally true of miners v.s. wallet nodes. Symmetric vs asymmetric. So, the bitcoin network is asymmetrical already, Lightning hubs just add another layer of node types that serve as a promotion of the role for the miners (or could just be seen as an extra role).

A more apt analogy would be a full node client vs a SPV client? Full node interacting directly with the network, and the SPV (partly) relying on a trusted intermediary.

Not really, because using SPV does indeed involve some trust in full nodes, but using Lightning channels will provide the full extent of the privacy and veracity of standard Bitcoin transactions, i.e. trustless.

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November 16, 2015, 05:43:17 AM
 #15

A lightning node is more centralized than a distributed network of Bitcoin nodes. Symmetric vs asymmetric. Pretty simple really, and not a bad thing in and of itself.

That description is equally true of miners v.s. wallet nodes. Symmetric vs asymmetric. So, the bitcoin network is asymmetrical already, Lightning hubs just add another layer of node types that serve as a promotion of the role for the miners (or could just be seen as an extra role).

A more apt analogy would be a full node client vs a SPV client? Full node interacting directly with the network, and the SPV (partly) relying on a trusted intermediary.

Not really, because using SPV does indeed involve some trust in full nodes, but using Lightning channels will provide the full extent of the privacy and veracity of standard Bitcoin transactions, i.e. trustless.

If a party of the lightning payment channel misbehaves, funds will be locked down for a period of time until a set timeout occurs. You see full privacy(?) and veracity of standard Bitcoin transactions, I see a complexity machine (for a use small blockers see as superfluous to global reserve digital gold tokens) that takes away from the miners who actually secure the network.

I have no problem with free individuals using lightning type payment channels, and it probably would be required for actual Bitcoin scaling. I just don't want to artificially cripple the real network to create greener pastures for it.
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November 16, 2015, 09:02:26 AM
 #16

Keep drinking their Kool-Aid.  They want you to believe they are not taking over.  But what do you think those guys who put up $20 million are thinking?  Do you think they don't want to get that money back?  Or, maybe they are actually thinking of getting it back with a huge multiple?  Gee, I wonder what is more likely?  

Dude, Blockstream will make every effort to cripple bitcoin with 1MB, so they can sell you a solution 'for a small fee'.  Blockstream has bad intent.  Don't believe their promotions of 'for the good of the blockchain'.  That is today.  Everything free.  Then, we everyone depends upon the new system - BAM!!!  Here come the fees!!!  No way to go back now.  So you will pay it.
Everyone should ignore this shill. All that you've just said is wrong and you're the one who's spreading misinformation not them. The lightning network does not work like a sidechain and neither does it require paying fees (to them; it's supposed to be cheaper than on chain transactions). The lighting network also needs much bigger blocks in order to be really effective (e.g. ~150MB to match Visa volume). In other words, an increase of the block size will come sooner or later. Also it is not possible for "everyone to depend on the new system". The transactions have to eventually settle on the blockchain which would not make sense if the fees there were unreasonably high. Now go back to your Bitcoin CEO and stay there.


I have no problem with free individuals using lightning type payment channels, and it probably would be required for actual Bitcoin scaling. I just don't want to artificially cripple the real network to create greener pastures for it.
Nothing is being crippled.

-snip-
Even if blockstream charges people to use sidechains, the project for that is open source. All of that code is publicly available and people can use it, fork it, and do their own stuff with it. You don't have to use blockchain. Someone can fork the source code (and many have) in case they decide to pull it down. Even if they decide to make the sidechains stuff closed source, people will take what they previously published and create own sidechains implementations off of that. We don't have to use blockstream.
As said above, just ignore him. Sidechains have nothing to do with LN.

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November 16, 2015, 10:40:11 AM
Last edit: November 16, 2015, 10:50:14 AM by franky1
 #17

ok guys, lets get back to basics..

imagine we were on the scale of visa 200million transactions a day.

LN locktime tx is 500bytes minimum compared to bitcoins 250bytes minimum..

thats 100GB of tx's just sitting on the mempool because LN wont use blocks, it just uses the mempool (the unconfirmed unmined database of tx's) until the channel is closed

now imagine people using the locktime for 30 days.. and doing 1tx per day on LN (using the mempool)
3terrabytes of LN tx's sat in the mempool.

now imagine the processing power needed to tally up all the balances of the closed channels to be able to produce a final minable tx for the blockchain..

if you think that tx's are only stored locally, ud be wrong. they need to be in the main bitcoin mempool to ensure bitcoins are locked and unspendable on the blockchain whilst people play around making LN transactions within the mempool..

now the problem is not only mempool storage worries for all them locked bitcoins (unconfirmed). but also whats stopping miners purging them. after all miners are already ignoring Tx's without fee's.. so why store 3TB of locked tx's that wont get them a fee because the transactions are all happening for free in the mempool.

and don't get me started on the end resulting tx the blockchain will finally receive.
imagine 5 customers with 1btc are buying coffee (0.01btc) each from starbucks and then starbucks paying 1 employee's whilst starbucks keeps 50% of customers funds for profit.
remember that bitcoin needs to settle all users balances so that the 5 customers are left with 0.99each starbucks has 0.025 and employee has 0.025.



i dont really see it as reducing much bloat. especially at the expense of large mempool requirements for upto a month, miners wont see the advantage. of holding data for a month for just 1 tx fee

re-empt knitpickers.
dont knitpick the numbers, they are just examples.. instead look at the idea as a whole, tell me the advantages using real life scenarios, demonstrations of what LN can do that will revolutionize bitcoin

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November 16, 2015, 10:58:50 AM
 #18

thats 100GB of tx's just sitting on the mempool because LN wont use blocks, it just uses the mempool (the unconfirmed unmined database of tx's) until the channel is closed

Maybe you should just read the paper instead of telling us fairy tales?!
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November 16, 2015, 11:03:09 AM
 #19

thats 100GB of tx's just sitting on the mempool because LN wont use blocks, it just uses the mempool (the unconfirmed unmined database of tx's) until the channel is closed

Maybe you should just read the paper instead of telling us fairy tales?!


you do need to lock your bitcoins, that way LN would trust you to then do offchain tx's. otherwise. whats stopping me paying starbucks using LN but then using the actual blockchain to pay myself(moving funds).. while starbucks does transmit a tx for 30 days..
thus the locked funds need to be in the mempool for starbucks to trust, and for blockchain miners to not mine until starbucks is happy..

i also did read the white paper, and watched their videos, and the presentations.. but that is all theory.. i put their theory into practice using real examples..

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November 16, 2015, 11:14:44 AM
 #20

You do not lock anything in the mempool.
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