Fundamental problem: Lightning Network leads to centralization and less security

[Technologov]

Fundamental problem: Lightning Network leads to centralization and less security

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

[Yogafan00000]

Fundamental problem: Lightning Network leads to centralization and less security

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

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

[Boussac]

This.

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

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

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

[ImHash]

This.

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

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

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

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

[DooMAD]

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

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

[Hydrogen]

There is a fundamental relationship between speed and security.

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

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

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

[Kakmakr]

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

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

[classicsucks]

Fundamental problem: Lightning Network leads to centralization and less security

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

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

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

[Carlton Banks]

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

Analogy fail - computer networks aren't like a horse

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

[classicsucks]

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

Analogy fail - computer networks aren't like a horse

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

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

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

And are you stalking my post history?

[calkob]

Fundamental problem: Lightning Network leads to centralization and less security

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

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

[MadGamer]

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

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

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

[classicsucks]

Fundamental problem: Lightning Network leads to centralization and less security

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

from the article:

"Sounds familiar? It should, as it mirrors how your bank operates today."

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

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

[Senor.Bla]

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

[BillyBobZorton]

Fundamental problem: Lightning Network leads to centralization and less security

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

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

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

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

[Senor.Bla]

Fundamental problem: Lightning Network leads to centralization and less security

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

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

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

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

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

[Carlton Banks]

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

None of that makes any sense, because:

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

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

[Senor.Bla]

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

None of that makes any sense, because:

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

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

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

[Carlton Banks]

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

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

[Senor.Bla]

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

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

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