i have proven the Lightning Network can't provide decentralized scaling.

[jonald_fyookball]

https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800

let the trolling begin...3....2....1....

[ebliever]

Except you didn't, as has been extensively discussed in the other forums you or others are spamming with your latest effort.

You imagine that people will stand around doing nothing to change their behavior as LN nodes become centralized. But if decentralization is worth anything then that is precisely what will not happen. Ironically the UASF for SW that you so fear is evidence that people are not passive in response to threats to their economic well-being.

[d5000]

You may think I begin trolling now ... but I mostly agree with your analysis. I have discussed, above all, the "channel exhaustion" (=channels that lose the "routing power") problem with other users and no solution (that doesn't involve a centralized entity) has been found.

For me, LN was never more than a semi-centralized micropayment solution that is better than a totally-centralized online wallet because the "bank" cannot run away with my money. I would be happy if I can manage all my 0-20USD payments via LN and having at least 10 different hubs to chose from.

[Kakmakr]

" we will prove it is mathematically impossible. / We will divide this document into sections. Here I was thinking you have proven this wrong and that you were behind all this shilling.  What is the difference between 5000 hubs and 5000 nodes again? Is the one less decentralized than the other?

Let the users decide what they want, because we are already being screwed by the miners and the developers. Good last ditch effort to confuse people. ^smile^

[dinofelis]

https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800

let the trolling begin...3....2....1....

I essentially agree with your analysis.  I've said several times that instead of a small "economy of scale" with mining, which has already made mining an oligarchic business, the "economy of scale" in lightning is essentially proportional  to the amount of funds you can put into your links.  Which makes a HUGE advantage for whales, becoming central hubs: your bank.

In fact, the lightning network is PERFECT for your connection to your favourite exchange, which can act as one of the few central hubs in the world.  It has the advantage that the central exchange cannot run with your funds, like it does now, with an IOU.  Big exchanges can have bidirectional channels between them (the "banking back bone", swift-like), and as such, you can pay anyone through your channel to your exchange (you only need 1 channel with all your funds !), your exchange can transmit your funds to the exchange where your target is a customer, and that exchange will "push" the coins on your target's channel.  3-hop LN.

Of course, your exchange is now your bank, that can charge you with fees for using their banking service, can block payments to certain other people, knows all you do with your funds, etc.... but at least, compared to a normal bank, cannot run with your funds.... unless they can spam you out of the block chain for the time it takes to settle...

The LN is the missing technology that will turn centralized exchanges into world banks.

[dinofelis]

You may think I begin trolling now ... but I mostly agree with your analysis. I have discussed, above all, the "channel exhaustion" (=channels that lose the "routing power") problem with other users and no solution (that doesn't involve a centralized entity) has been found.

For me, LN was never more than a semi-centralized micropayment solution that is better than a totally-centralized online wallet because the "bank" cannot run away with my money. I would be happy if I can manage all my 0-20USD payments via LN and having at least 10 different hubs to chose from.

Amen.  Indeed, the HUGE difference between a LN P2P network and another P2P network, is that connecting, and disconnecting, is expensive.  The whole strength of decentralized P2P networks protocols is the easiness of setting up tunnels and breaking them ; but with the LN, your funds are engaged (with lock up time, and fees to unlock them).

Moreover, the LN is dangerous if the block chain is limited, because there cannot be "simultaneous settling".  In the case of an exchange that goes down for instance, all customers will want to settle their channels simultaneously, and that will be so many transactions, that a hard limited block chain like bitcoin will push a lot of transactions over the lock out time, meaning that the exchange can, after all, run with their funds.

[gentlemand]

I'm not going to pretend to have the slightest clue how it pans out until there are a few actually up and running.

You imagine that people will stand around doing nothing to change their behavior as LN nodes become centralized. But if decentralization is worth anything then that is precisely what will not happen.

Whisper it, but most people would choose convenience over decentralisation most days of the week. Look at Coinbase.

[dinofelis]

Whisper it, but most people would choose convenience over decentralisation most days of the week. Look at Coinbase.

Indeed, the tragedy of decentralisation.  Everyone can set up his own web page, but we all run to centralized Facebook to share our social interaction.  Usenet was a decentralized discussion platform, but we all run to centralized fora.  We could have built an internet with 'cables and links from house to house', but we all use centralized internet service providers.

[ebliever]

I'm not going to pretend to have the slightest clue how it pans out until there are a few actually up and running.

You imagine that people will stand around doing nothing to change their behavior as LN nodes become centralized. But if decentralization is worth anything then that is precisely what will not happen.

Whisper it, but most people would choose convenience over decentralisation most days of the week. Look at Coinbase.

Yes, exactly. And then look at all the alternatives. I'm not saying there won't be an unequal distribution of channels. I expect the efficient and good LN operators to dominate. But just as there are many smaller exchanges catering to people who have reason to reject or look beyond Coinbase, there will be alternatives to using major LN channels. We (as a community) just need to make sure the protocol is not co-opted to raise barriers to entry in handling Bitcoin TX, such as when miners try to prevent off-chain TX.

[Carlton Banks]

We (as a community) just need to make sure the protocol is not co-opted to raise barriers to entry in handling Bitcoin TX

Best example: massive increases to the blocksize.


With small blocks and conservative blocksize increases, Lightning is much more conducive to a decentralised network topology. And at the end of the day, as long as the blocks are small enough for any small business to have sufficient cash flow that they can run their own hub, then that's exactly what small businesses will do: be their own bank. Business people instinctively want control over their livelihoods.

Whereas the alternative is the various Bitcoin takeovers (that never seem to quit with new coup attempts, disguised as a "technology upgrade"), which all mysteriously give all the control to miners by design (did I mention that the miners always push the community to adopt their wonderful takeover plan?). Lightning could end up like that, but doesn't have to be, if the blocksize stays conservatively small.

[dinalo]

I'm not going to pretend to have the slightest clue how it pans out until there are a few actually up and running.

You imagine that people will stand around doing nothing to change their behavior as LN nodes become centralized. But if decentralization is worth anything then that is precisely what will not happen.

Whisper it, but most people would choose convenience over decentralisation most days of the week. Look at Coinbase.

There is no point to decentralisation if it doesn't improve our lives in some way. If its more difficult and more expensive then I don't want decentralisation.

[gentlemand]

There is no point to decentralisation if it doesn't improve our lives in some way. If its more difficult and more expensive then I don't want decentralisation.

It improves your life by denying others control over you.

Achieving that can be costly, irritating and a little clunky sometimes but it's one of those things you'll moan about until you truly need it. At that point it all makes perfect sense.

There are many wonderful centralised options ready for you right now. Give 'em a whirl.

[Carlton Banks]

If its more difficult and more expensive then I don't want decentralisation.

Do you want Bitcoin, then?


Bitcoin is difficult and expensive, and decentralised (although to be fair, Lightning will make it easier and cheaper, at least in terms of transaction fees).

It seems that the increasing number of people joining the Bitcoin holders and the Bitcoin network disagree with you. But by all means, make your own choice.

[HeRetiK]

Interesting read, but does a settlement layer really need to be fully distributed to remain permissionless? Isn't a strongly decentralized network enough (ie. any user with a sufficient amount of Bitcoin acting as a LN hub)? Or is there something I miss that could prevent the latter from effectively happening?

[jonald_fyookball]

Interesting read, but does a settlement layer really need to be fully distributed to remain permissionless? Isn't a strongly decentralized network enough (ie. any user with a sufficient amount of Bitcoin acting as a LN hub)? Or is there something I miss that could prevent the latter from effectively happening?

In the 2-layer model, the base letter is the settlement layer.  The problem is that if you force people not to use that base layer, it doesn't really matter what the layers on top will look like, because institutions become gatekeepers. 

It may be that things like sidechains are logistically much better than LN...but they will have all the same economic problems.

It just so happens that on top that (no pun intended), LN just can't work.

[d5000]

In the 2-layer model, the base letter is the settlement layer.  The problem is that if you force people not to use that base layer, it doesn't really matter what the layers on top will look like, because institutions become gatekeepers.

There are however designs like Drivechains where the "gatekeepers" are the same institution that secures the base layer - miners. In these designs I don't see, for example, possible censorship problems because game theory forces miners to work as expected.

In LN, that's a bit different, above all because the operation cost of a LN "hub node" is lower - and so pressure is lower on hub operators to work censorship-free.

[Yakamoto]

https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800

let the trolling begin...3....2....1....

I like the article and the argument presented, although I thought that everyone was under the impression that any sort of LN system would have to have centralized nodes in order for something like that to work. You can't have a bunch of LNs running and get them to all go through as transactions without some sort of node that connects everything together, let it be a completely centralized node or a set of centralized nodes spread out which interact with each other.

I didn't realize you wrote articles, good job m8. I'm gonna see if I can read more of them in the future.

[cpfreeplz]

I'm not going to pretend to have the slightest clue how it pans out until there are a few actually up and running.

You imagine that people will stand around doing nothing to change their behavior as LN nodes become centralized. But if decentralization is worth anything then that is precisely what will not happen.

Whisper it, but most people would choose convenience over decentralisation most days of the week. Look at Coinbase.

Lol. ^ This. It's so true. People just love keeping their money on exchanges and they love their Web wallets. They're the credit cards of the bitcoin world. Easy to hack, easy to get another.

[HeRetiK]

In the 2-layer model, the base letter is the settlement layer.  The problem is that if you force people not to use that base layer, it doesn't really matter what the layers on top will look like, because institutions become gatekeepers.

Define institutions. LN hub node operators? Also, wouldn't you still be able to use the raw Bitcoin protocol, albeit at a higher transaction cost?

In LN, that's a bit different, above all because the operation cost of a LN "hub node" is lower - and so pressure is lower on hub operators to work censorship-free.

Wouldn't the lower operation cost of a LN hub node also mean that it's easier to become one, meaning more hub nodes, meaning a lesser chance of censorship?

[Carlton Banks]

In the 2-layer model, the base letter is the settlement layer.  The problem is that if you force people not to use that base layer, it doesn't really matter what the layers on top will look like, because institutions become gatekeepers.

Define institutions. LN hub node operators? Also, wouldn't you still be able to use the raw Bitcoin protocol, albeit at a higher transaction cost?

Why would main-chain settlement be more expensive, when billions of transactions are happening on the Lightning network? Moving billions of transactions onto a higher, more efficient network layer would free space on the main-chain, not congest it.