Lightning Fees > speculation

[nikauforest]

The promise of lows fees?

Ok, so once a payment channel is open and you have sent BTC to the channel you enjoy low fees. We can scale up the transactions with Lightning "IOU's" to Visa like speeds....ok I get it. In the future you will also be able to move your BTC IOU's from one payment channel to another if you choose.

The question I have is what will be the fees just to transfer from the main chain to the payment channel, when Lightning is ready? Will that be a barrier to adoption? Is Blockstream really our friend? So many questions.....

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[hahahafr]

No one knows when it is really going to be released, so better to do not worry too much about this because no one knows when i twill happen.

We only know that it has been already tested on an offline chain, not on the main blockchain.

But yes, they will be faster as HELL, and cheaper as dust.

Just imagine how can it revolutionate the whole crypto ecosystem, btc payments with a low fee of less than $0,25 are going to be incredible.

The question I have is what will be the fees just to transfer from the main chain to the payment channel, when Lightning is ready? Will that be a barrier to adoption? Is Blockstream really our friend? So many questions.....

[exstasie]

The promise of lows fees?

Ok, so once a payment channel is open and you have sent BTC to the channel you enjoy low fees. We can scale up the transactions with Lightning "IOU's" to Visa like speeds....ok I get it. In the future you will also be able to move your BTC IOU's from one payment channel to another if you choose.

The question I have is what will be the fees just to transfer from the main chain to the payment channel, when Lightning is ready? Will that be a barrier to adoption?

The truth is, we don't really know. Bitcoin's monetary policy has been pretty clear from the start: as stated in the whitepaper, transactions fees replace the block subsidy (which is limited by the 21 million coin supply). Bitcoin/fiat markets, like all markets, experience boom and bust cycles. So we can't simply expect that perpetually rising price will sustain miner incentive at a perpetually low on-chain fee.

Is Blockstream really our friend? So many questions.....

Does it matter? No one is your friend here. This is an adversarial environment. If you pay attention to the repository and the mailing lists, Blockstream doesn't control anything, nor do they have anything near majority representation in Core. I think we should drop the conspiracy theories about Blockstream (or Nchain or Bloq) and discuss code and engineering arguments on their own merits.

The biggest problem that nobody saw coming was the centralization of ASIC fabrication. A high concentration of of hash power allows a network spammer to recoup much of their fees. This enables an attacker to artificially inflate fees with network congestion. This problem far outweighs any discussion of fee markets by themselves. Increased competition in the mining sector will hopefully mitigate this by taking market share from Bitmain.

[twobits]

The promise of lows fees?

Ok, so once a payment channel is open and you have sent BTC to the channel you enjoy low fees. We can scale up the transactions with Lightning "IOU's" to Visa like speeds....ok I get it. In the future you will also be able to move your BTC IOU's from one payment channel to another if you choose.

The question I have is what will be the fees just to transfer from the main chain to the payment channel, when Lightning is ready? Will that be a barrier to adoption? Is Blockstream really our friend? So many questions.....

The segwit already implemented in the bitcoin and that was to supporting the lightning network itself. Because the segwit will be halping the offchain solution development like lightning network but about the fees can't be determined. Lightning is not ready right now. it maight ready but for some people are against it and it will never be implemented.

[gentlemand]

More than anything in crypto before, I really have no clue about this. How it's going to work, who's going to operate hubs, how channels will work, whether it'll actually allow more users on board, whether users will actually want to use it.

I've tested the Eclair wallet and that's amazing, but this feels like a roll of the dice that has to land on the right number. Unless it becomes the province of billionaires the pressure on BTC capacity needs to vent somehow even if a lot of what's there currently is artificial pressure.

[exstasie]

More than anything in crypto before, I really have no clue about this. How it's going to work, who's going to operate hubs, how channels will work, whether it'll actually allow more users on board, whether users will actually want to use it.

Indeed, most of the research is over my head. Most Lightning researchers insist that it won't be a hub-and-spoke model. And since LN is often touted as having better privacy, I would hope this is true. If the vast majority of transactions are being routed through only a few centralized entities, it's only marginally more private than on-chain transactions.

Supposedly routing has been significantly improved though, so I'm hopeful. Why wouldn't users want to use it? Paying dust vs. paying hundreds of thousands of satoshis (which is what many wallets are defaulting to and what some exchanges are charging) seems like a no-brainer.

As long as the capacity can scale exponentially (and it can in LN), then the fee to open/close channels can become infinitely smaller (in relative terms).

[hatshepsut93]

My prediction for BTC fees & LN

The current congestion is caused by spikes in price and lots of people are cashing out because they fear that it will crash, which means that they send coins to exchange at rates higher than usual. When you are sending thousands of USD worth of coins, $20-50 fee is nothing. When the price will stabilize a bit, fees will drop. Look at previous congestions here, mentally project the price chart and you'll see the pattern.

The other thing is segwit - it's hardly used today because exchanges refuse to implement it and many users are also not switching to it. Popular exchanges like Coinbase also don't use batched withdrawals which could save a lot of blockchain space. Users also should batch their transactions whenever possible.

If people would start working towards reducing transaction sizes, the fees would be low for some time even with existing network, so opening LN channels would cost a few dollars.

But in very long perspective onchain fees will be high, because they will be used to compensate miners for their PoW that secures the value, and because it's such a limited resource - blockchain space. Blocksize will be slowly increasing, but never enough to make on chain transactions for everyday usage. For LN in 5 to 10 years it would mean that either it will be a payment system with a big entry fee or it will be moved to sidechains.

This is all just my personal opinion, I'm not a big expert so I might be totally wrong here.

[SummerBliss]

The promise of lows fees?

Ok, so once a payment channel is open and you have sent BTC to the channel you enjoy low fees. We can scale up the transactions with Lightning "IOU's" to Visa like speeds....ok I get it. In the future you will also be able to move your BTC IOU's from one payment channel to another if you choose.

The question I have is what will be the fees just to transfer from the main chain to the payment channel, when Lightning is ready? Will that be a barrier to adoption? Is Blockstream really our friend? So many questions.....

Lightening Network provides off-chain solution to Bitcoin's scaling problem. It is not like another exchange where you need to transfer your bitcoin in order to have the transaction. It is built upon the bitcoin network like a second layer. There is no transfer of bitcoin from original blockchain to off-chain and hence includes no fees. Consider it like Segwit.

More than anything in crypto before, I really have no clue about this. How it's going to work, who's going to operate hubs, how channels will work, whether it'll actually allow more users on board, whether users will actually want to use it.

Indeed, most of the research is over my head. Most Lightning researchers insist that it won't be a hub-and-spoke model. And since LN is often touted as having better privacy, I would hope this is true. If the vast majority of transactions are being routed through only a few centralized entities, it's only marginally more private than on-chain transactions.

How LN provides more privacy?
On LN, transactions are never broadcasted and hence, leave no trace on blockchain, offering privacy benefits.

But I am still not into LN being developed for bitcoin. It will take another year or two before coming into reality and requires lots of funds and time. Bitcoin definitely needs a better scaling solution and LN would be a step forward.

[nikauforest]

Lightening Network provides off-chain solution to Bitcoin's scaling problem. It is not like another exchange where you need to transfer your bitcoin in order to have the transaction. It is built upon the bitcoin network like a second layer. There is no transfer of bitcoin from original blockchain to off-chain and hence includes no fees. Consider it like Segwit.

It is my understanding to open a payment channel you need to interact with the main chain ( high fees) and to close a payment channel you must interact with the main chain. (High fees) I say high fees at the moment. There was conjecture earlier in the thread that fees could be lower for on chain transactions. Essentially the Bitcoin ( mainchain ) will act as a validator for the lightning network, when channels are opened and closed.

Am I wrong in my understanding of how this will work?

[figmentofmyass]

On LN, transactions are never broadcasted and hence, leave no trace on blockchain, offering privacy benefits.

yes, it leaves no trace on the blockchain, but it does leave a transaction history that will like be stored by larger "hubs" like exchanges or payment processors. the reason big companies might store this data is for a future bargaining chip, so they can comply with law enforcement agencies when the time comes. this is why even if/when LN is viable, i think it'll be important to use TOR and other methods to obscure physical location, browser cookies and other identifiers.

But I am still not into LN being developed for bitcoin. It will take another year or two before coming into reality and requires lots of funds and time.

fortunately, the price of BTC has appreciated so much that it's created a lot of new funds for development. it also creates more urgent incentive to get LN operational as mainstream adoption hits.