First Bitcoin Lightning Network Transaction Tested Successfully

[Chronobank]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

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[shinratensei_]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

This is will be a good thing for us, and so bitcoin is got their ways for fixing the problem about the confirmation. Using lightning network system. this about the mixing of large escrowed system and bitcoin.

[philiveyjr]

Would this be aimed to make fast confirmations ? Do we know when this might be rolled out to the bitcoin network ?

[Wind_FURY]

I was doing some research about the Lightning Network solution and I have question and I hope to get an answer from the more learned people in the community.

The question is about fungibility, so let us assume that the Lightning Network is already operational and I open a channel in it and have locked Bitcoins days ago when the price is at $615. Then today we see that the price is already going up around $625 - $630. Won't this discourage the people from using the network because their purchasing power is weaker using it than using a regular Bitcoin transaction? So in a way it is affecting fungibility. The value of the coin inside Lightning could go higher or lower than the value of the coin outside.

[Hazir]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

This is will be a good thing for us, and so bitcoin is got their ways for fixing the problem about the confirmation. Using lightning network system. this about the mixing of large escrowed system and bitcoin.

It is a big news for every bitcoin user.

I don't care if Lighning Network is in fact implementation huge escrow system and mixing it with bitcoin transactions.
And I am sure that ass long as it can reduce bitcoin confirmation times, majority of bitcoin users won't care about technicalities of this project either.

[Wind_FURY]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

This is will be a good thing for us, and so bitcoin is got their ways for fixing the problem about the confirmation. Using lightning network system. this about the mixing of large escrowed system and bitcoin.

I don't care if Lighning Network is in fact implementation huge escrow system and mixing it with bitcoin transactions.

It is interesting that you look at it that way. I look at it as a repetition of what happened to the past. Remember the time when gold and silver coins were used to transact with each other? Those coins are considered sound money. Then the banks stepped in and held all the gold, which is sound money, and issued IOU's to be used in its place. History is repeating itself in the Bitcoin world it seems.

[1Referee]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

This is will be a good thing for us, and so bitcoin is got their ways for fixing the problem about the confirmation. Using lightning network system. this about the mixing of large escrowed system and bitcoin.

It is a big news for every bitcoin user.

I don't care if Lighning Network is in fact implementation huge escrow system and mixing it with bitcoin transactions.
And I am sure that ass long as it can reduce bitcoin confirmation times, majority of bitcoin users won't care about technicalities of this project either.

It will indeed reduce that confirmation times, which on its own is a fantastic thing for Bitcoin in the "offline" world. I am sure that if I buy a $1000 TV from a local store and pay for it in Bitcoin, that they will force me to wait for at least 1 confirmation. If with LN it's possible to walk out as soon as you have completed the transaction, it's definitely a huge step forward for Bitcoin.

[jacafbiz]

Good news, I just hope this will reduce the clamour for hard fork by some people that have money and think they can bully their way through to get the wish implemented

[Carlton Banks]

I look at it as a repetition of what happened to the past. Remember the time when gold and silver coins were used to transact with each other? Those coins are considered sound money. Then the banks stepped in and held all the gold, which is sound money, and issued IOU's to be used in its place. History is repeating itself in the Bitcoin world it seems.

It's not a deposit based system though. So none of that analogy applies to Lightning, the user controls their funds. Maybe talk of multi-sig use has caused you to assume otherwise

[gentlemand]

History is repeating itself in the Bitcoin world it seems.

There is no Lightning Network transaction without real Bitcoin being attached to it. It wouldn't attract a puff of attention if it was set up to be like that.

There's definitely the possibility of people being duped into using non LN systems but it's easy enough to know where you're at.

[franky1]

I look at it as a repetition of what happened to the past. Remember the time when gold and silver coins were used to transact with each other? Those coins are considered sound money. Then the banks stepped in and held all the gold, which is sound money, and issued IOU's to be used in its place. History is repeating itself in the Bitcoin world it seems.

It's not a deposit based system though. So none of that analogy applies to Lightning, the user controls their funds. Maybe talk of multi-sig use has caused you to assume otherwise

it is a deposit system though. watch the video!!
you have to get an address from a lightning hub to deposit funds into
this address is created using the hub. (hub and user make a multisig beginning with 2Mxzw...)
this address is the locking mechanism of the funds and requires lightnings authorisation to unlock, to avoid replay attacks/double spends onchain.
EG if the 2Mxzw address used in the demo solely belongs to the user.. then the user can buy 20 ASCII cats.. offchain. and simultaneously move funds out onchain.
but due to lightning needing to sign too, it locks funds in so that users can then make requests offchain using offchain 'coins'/units (millisats) and not able to touch the onchain funds.

the hub has a fee. and even funnier the hub is creating more "units" (3 extra decimals called millisats) where 0.04000000btc becomes 4000000000 milisats (0.04000000000) btc
as shown by
0.03924280000 millisat amount held (0.03924280 sat deposited)
0.00067600000 millisat fee taken (0.00067600 sat fee)

lightning has potential to help people who spend often. but lets not "do a carlton" and pretend its gods solution to everything bfore its even proven itself, before its removed its issues, bugs, flaws.
and before people like him have yet to understand it.

the video is just a phase 1 demo. im sure when they fix the flaws (big one is the extra 3 decimals which will cause issues) that in a few months it will become more clearer to people like carlton to 'maybe' understand it better.

also it has to be noted its the first TESTNET transaction.. not bitcoin.
because if its not involving bitcoins blockchain, its not bitcoin. (testnet is just an altcoin emulating bitcoin to act as a sandbox)

[Carlton Banks]

If it was what WindFURY meant, then the Hub controls your money. Not the case. That's all I was saying.

Not sure how you managed to interpret it your meandering way. Not that interested in the "explanation" tbh

[franky1]

If it was what WindFURY meant, then the Hub controls your money. Not the case. That's all I was saying.

Not sure how you managed to interpret it your meandering way. Not that interested in the "explanation" tbh

is the case. deposit real bitcoin into a multisig requiring dual signatures. just like a bank. without their permission you cant withdraw.


then play around with IOU "millisats" which are not bitcoin. obviously due to the 3 extra decimals,
where those funds are then only 'representing' real bitcoins, under the pretence they convert back when settling and rounding down,

as the other person said. all thats left is in a few years people dont deposit into a dual signature address anymore, but a single signature address wholely owned by the hub. "and....... its gone"

[shinratensei_]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

This is will be a good thing for us, and so bitcoin is got their ways for fixing the problem about the confirmation. Using lightning network system. this about the mixing of large escrowed system and bitcoin.

It is a big news for every bitcoin user.

I don't care if Lighning Network is in fact implementation huge escrow system and mixing it with bitcoin transactions.
And I am sure that ass long as it can reduce bitcoin confirmation times, majority of bitcoin users won't care about technicalities of this project either.

It will indeed reduce that confirmation times, which on its own is a fantastic thing for Bitcoin in the "offline" world. I am sure that if I buy a $1000 TV from a local store and pay for it in Bitcoin, that they will force me to wait for at least 1 confirmation. If with LN it's possible to walk out as soon as you have completed the transaction, it's definitely a huge step forward for Bitcoin.

That's right, i mean the zero confirmation will be a safe way....  so that's will giving a good impact totally for implementing the bitcoin into the real or offline merchant. especially if you're wanna for buying a cup of coffee with bitcoin.

[Wind_FURY]

If it was what WindFURY meant, then the Hub controls your money. Not the case. That's all I was saying.

Not sure how you managed to interpret it your meandering way. Not that interested in the "explanation" tbh

is the case. deposit real bitcoin into a multisig requiring dual signatures. just like a bank. without their permission you cant withdraw.


then play around with IOU "millisats" which are not bitcoin. obviously due to the 3 extra decimals,
where those funds are then only 'representing' real bitcoins, under the pretence they convert back when settling and rounding down,

In my reading and googling about the Lightning Network, I believe franky1 and I have the same understanding of the system. Now this is how it will usually go when payment hubs are set up, it will encourage centralization gravitating towards the larger ones to have more efficiency since they will have more "free BTC" and open channels. In other words the Lightning Network system will tend to have as minimum number of hubs possible with these larger hubs containing larger amounts of free BTC to maintain more channels. In the real world the institution that holds a lot of free capital are the banks. So in a way banks could be the perfect candidate to run payment hubs.  

[AgentofCoin]

If it was what WindFURY meant, then the Hub controls your money. Not the case. That's all I was saying.

Not sure how you managed to interpret it your meandering way. Not that interested in the "explanation" tbh

is the case. deposit real bitcoin into a multisig requiring dual signatures. just like a bank. without their permission you cant withdraw.


then play around with IOU "millisats" which are not bitcoin. obviously due to the 3 extra decimals,
where those funds are then only 'representing' real bitcoins, under the pretence they convert back when settling and rounding down,

In my reading and googling about the Lightning Network, I believe franky1 and I have the same understanding of the system. Now this is how it will usually go when payment hubs are set up, it will encourage centralization gravitating towards the larger ones to have more efficiency since they will have more "free BTC" and open channels. In other words the Lightning Network system will tend to have as minimum number of hubs possible with these larger hubs containing larger amounts of free BTC to maintain more channels. In the real world the institution that holds a lot of free capital are the banks. So in a way banks could be the perfect candidate to run payment hubs.  

First, there is no "free btc". Are you thinking the "free btc" will exceed the 21 million coin limit?
Bitcoin exists past eight decimal places right now, ex: 0.0000,0000,0000,0001,
it is just that the current protocol only needs to go to 0.0000,0001 (aka 1 satoshi).
We can go below 1 satoshi if needed to facilitate "micro fees" for "micro txs".

Second, please explain in detail why centralization will occur due to micro fee accumulation,
whether prior to or after the LN settlement action back onto the bitcoin blockchain.
If banks run LN hubs in the future, why would they have "free btc" or "free capital"?

Please elaborate, I do not understand.

[Wind_FURY]

First. I did not mean free as in free without paying for it. When I said "free" it means the payment hub is liquid so that it can be used by the users who decide to open a channel to that hub.

Second. That is just a speculation on what I think could happen. A small payment hub can only handle a smaller number if open channels because it has smaller "free" Bitcoins, while a larger one can handle more channels and is therefore more efficient because it can route more transactions from point A to point B. So users would then tend to go for larger hubs. So the result of this would be fewer larger hubs in operation.

So in modern society today, what institution has the most liquidity or "free capital". Banks.

[Yakamoto]

Developers at Blockstream has successfully conducted tests on the Lightning Network using Bitcoin testnet coins.

In the test, the developers used an ASCII cat picture as a demo product. The developer below can be seen manipulating a combination of bitcoind and lightningd, the Bitcoin daemon and Lightning daemon respectively, to instantly purchase a cat picture that developer Rusty Russell has up for sale. Some of the information in the video may be hard to understand, so we’ll do our best here to make it simpler.

http://bitcoinagile.com/8A1D4B/first-bitcoin-lightning-network-transaction-tested-successfully_stream

Good news. I hope to see this start to develop more and I hope to hear more news about it sooner rather than later. If this is seen by the market as a favourable event and it means we might be seeing the lightning network rolling out sooner, then I am quite ready to see this get tested more, and I want to see what their progress is.

[AgentofCoin]

First. I did not mean free as in free without paying for it. When I said "free" it means the payment hub is liquid so that it can be used by the users who decide to open a channel to that hub.

Ah. I thought you meant "free btc" in association with franky's reference to "milisats".
Meaning that those bitcoins are illusionary.

Second. That is just a speculation on what I think could happen. A small payment hub can only handle a smaller number if open channels because it has smaller "free" Bitcoins, while a larger one can handle more channels and is therefore more efficient because it can route more transactions from point A to point B. So users would then tend to go for larger hubs. So the result of this would be fewer larger hubs in operation.

So in modern society today, what institution has the most liquidity or "free capital". Banks.

When you are saying "free" bitcoins, you are really referring whether that hub operator has a
large (100s of btc) or a little (1 btc) amount of bitcoins locked in that specific hub for the escrow handoffs.

What you are saying about "larger hubs" is true in theory, but it is important to remember that systems like LN
are not meant for individual txs over a value of 50 to 100 USD or so, those should still remain on bitcoin blockchain.
LN allows for rapid and numerous micro txs that will allow Bitcoin to scale for small daily purchases, while still allowing
the underlying blockchain system to remain resistant to numerous pitfalls, attacks, regulations, and legal or governmental
enemies. In theory, the majority of LN channels should be opened and immediately closed since most tx will involve simple
purchases that don't need complex arbitration, such as a coffee, petrol, simple food shopping, and etc.

Also, if you have a LN hub (or multiple ones) and you are locking 100s of btc within it, that is potentially very
risky and it would be wiser to have many hubs with low amounts of btc locked within. Large hubs with large amount of btc,
which may have become "centralized" over time are a major point of failure. They will be prone to attack either for their btc or
outright ddosed to hurt that "large centralized" operator. IMO LN hubs or other types of "second layer bitcoin transaction system"
should be small to spread the risk over the whole LN network. Just like Bitcoin node operators.

If in the future banks become the major and largest LN hub operators, they will need to own large amounts of bitcoin.
Possibly even more than they can afford to purchase and attempt to make a profit from. It would be more reasonable if
everyone who has 10 btc or less to start up a hub, lock 2 btc into it and make a small fee here and there like an interest account.
When the LN hubs system is done and working properly and as "envisioned", bank "capital" will not be needed, just any bitcoin holder.
If banks are willing to purchase such large amount of btc, then they should also start exchanging and holding them within their
own "trusted" and government insured second layer systems (ex: like the coinbase's private ledger), and if they started doing that,
they won't need to be a LN hub, since Bitcoin would then be a legal form of tender throughout world financial systems.

[Kakmakr]

A stupid question : If the LN is supposed to alleviate the load from the Blockchain, by having less transaction on the Blockchain, would these transaction still generate miners fees? Where are the fees going?

We all hope that in the future these fees will replace the block rewards, but if we implement <off-chain solutions> we are going to reach a point, where it would not be profitable for miners to continue mining, because the fees and the block rewards are too low.

Are these hubs still doing on-chain tx's and who is getting these fees? Is this like Xapo, where the host gets the fees, and only once tx's goes over to the Blockchain, then miners fees are generated.

I apologize in advance for the stupid question, but I do not grasp the whole concept yet. ^hmmmm^