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October 08, 2017, 11:31:56 PM |
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I would like to point out that I am not opposed to any solution that would scale the transaction capacity of the Bitcoin network. If we are going to go for market depth with the people that have heard of Bitcoin at this point, we need way more transactions per second that the current network allows for.
That being said, after some research into the proposed solution of the Bitcoin core team, a couple of questions arose that I feel they did not answer with sufficient clarity. For example, even though in the whitepaper for Lightning Networks (LNs) the development team specified that a blocksize increase is still needed, why is there so much resistance to using it now to mitigate full blocks? It is not a problem as of writing this post, but we have seen in recent months that it could very well be and it therefore cannot be used as a reason to not research and implement bigger blocks.
Secondly, as they described their version of the second layer network, it contained certain technical aspects that required larger ''hubs'' to exist within the network to provide the liquidity to be able to settle the contracts. These providers of liquidity would be incentivised by a fee that is internal to the network. This creates a new and powerfull actor in the Bitcoin economy: these liquidity hubs. They can broadcast, or not broadcast when they want to the main chain. This allows them to maximise their profit, whilst reducing that of the main chain miners. It also presents us with the prospect of a system that feels more like a better legacy payment system than anything revolutionary. It would still not be censorable or anything like that, but we would all be paying a bunch of rich people for using a payment system. Furthermore, the most experienced and trusted source of LNs will become Blockstream who can therefore probably build the best LN. Big whales will naturally gravitate towards their LN, making them the most profitable operation. Their LN would be the best and probably the cheapest on all LNs so acounting for rational actors they will receive all new Bitcoins users and vendors. In the best case scenario there will be a handfull of these LN providers, is this desirable? Blockstream would be behind core, the main LN and could have influence over miners through non-broadcasting, is this desirable?
These are just a couple of things that spring to mind. I do not intend to sound cynical about Bitcoin, I think there are many good Use Cases for what they described in their whitepaper. In fact, I think it might be 99% of what users realistically want out of a payment system. It is just that I have felt like Bitcoin in the past was more of an anarchistic, give-the-power-to-the-people type of project.
tl;dr: I have two concerns about LNs: they still need a blocksize increase so why the delay/refusal and it requires large liquidity hubs which introduces powerfull players (BTC rich people) into the Bitcoin mining economy and development
I hope that someone will convince me that I am wrong about all of my points.
Kind regards and thanks for reading
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