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Author Topic: Can Lightning network work decentralized ?  (Read 943 times)
sjefdeklerk
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January 02, 2018, 05:58:01 PM
Merited by EcuaMobi (1)
 #1

I really don't see how LN is supposed to work decentralized. In this scenario there would be a huge chain of people where everybody lends his money to the next guy in the chain, up the guy at the end of the chain who wants to pay for something. The maximum payment amount in this scenario is determined by the guy who has the least amount of money freely available in that chain. This effectively would mean that it can only work decentralized for very small payments. Even payments bigger than a few dollar could already be problematic.

Whereas in a centralized scenario, it could perfectly work, but it would effectively turn into a regular banking relationship as people have now, just with a different name (account at your bank vs payment channel with your bank). Or am I missing something here?
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January 02, 2018, 07:50:07 PM
Merited by EcuaMobi (3)
 #2

everybody lends his money to the next guy in the chain, up the guy at the end of the chain who wants to pay for something.
There is no lending of money. It is not an IOU system, there is no lending. All money exists and is accounted for on the blockchain.

The maximum payment amount in this scenario is determined by the guy who has the least amount of money freely available in that chain.
It isn't a chain, it is a route. The graph of nodes is not the extremely degenerate case of a linked list or hub and spoke model. Sure the maximum amount is limited by the smallest amount in the route, but if that amount is too small, another route can be chosen that allows for more money to be transferred if necessary. Furthermore, each route is for one use only, they aren't permanent and do not always have to be used for payments to the same person.

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January 02, 2018, 07:59:13 PM
Last edit: January 02, 2018, 08:45:10 PM by sjefdeklerk
 #3

everybody lends his money to the next guy in the chain, up the guy at the end of the chain who wants to pay for something.
There is no lending of money. It is not an IOU system, there is no lending. All money exists and is accounted for on the blockchain.

If person A wants to buy something, person B is in the middle and Person C is the receiver, then B first pays C, so he actually 'lends' money to A


Quote
It isn't a chain, it is a route. The graph of nodes is not the extremely degenerate case of a linked list or hub and spoke model. Sure the maximum amount is limited by the smallest amount in the route, but if that amount is too small, another route can be chosen that allows for more money to be transferred if necessary. Furthermore, each route is for one use only, they aren't permanent and do not always have to be used for payments to the same person.

But the key here is that average Joe doesn't have a lot of money to finance payments for others (average Joe takes credit, he doesnt give it). So that's a huge problem in the decentralized mesh. I honestly don't see how this could work without any big centralized nodes like banks. In fact I think that's just the natural way it will evolve: people will open payment channels with big parties (=banks) to ensure that they can actually pay people. You don't want to divide your money over 20 channels and only have 5% of your money per channel. So it seems only natural that banks would become central in LN, it's both more efficient and effective.

Just trying to grasp this whole concept. The whole idea of bitcoin was decentralization and now with LN it seems it's going the other way again.
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January 02, 2018, 09:33:15 PM
 #4

If person A wants to buy something, person B is in the middle and Person C is the receiver, then B first pays C, so he actually 'lends' money to A
Actually he doesn't. B pays C at the exact same time that A pays B. So there is no lending as B is never short of his money. As soon as the hash preimage for an HTLC is known to the world, all parties in a route are instantly paid because the HTLCs can be then settled at the same time.


But the key here is that average Joe doesn't have a lot of money to finance payments for others (average Joe takes credit, he doesnt give it). So that's a huge problem in the decentralized mesh. I honestly don't see how this could work without any big centralized nodes like banks. In fact I think that's just the natural way it will evolve: people will open payment channels with big parties (=banks) to ensure that they can actually pay people. You don't want to divide your money over 20 channels and only have 5% of your money per channel. So it seems only natural that banks would become central in LN, it's both more efficient and effective.
Joe can pay the same person using multiple channels.

If I have two BTC total split across 4 channels and I want to buy something for 2 BTC, I can send 0.5 via Channel 1 to merchant A, 0.5 BTC via Channel 2 to Merchant A, and so on. Merchant A will get 2 BTC from either one channel or from multiple channels, Either way, he gets paid 2 BTC and I spent 2 BTC and the transactions are guaranteed.

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January 02, 2018, 10:33:11 PM
 #5

If person A wants to buy something, person B is in the middle and Person C is the receiver, then B first pays C, so he actually 'lends' money to A
Actually he doesn't. B pays C at the exact same time that A pays B. So there is no lending as B is never short of his money. As soon as the hash preimage for an HTLC is known to the world, all parties in a route are instantly paid because the HTLCs can be then settled at the same time.


But the key here is that average Joe doesn't have a lot of money to finance payments for others (average Joe takes credit, he doesnt give it). So that's a huge problem in the decentralized mesh. I honestly don't see how this could work without any big centralized nodes like banks. In fact I think that's just the natural way it will evolve: people will open payment channels with big parties (=banks) to ensure that they can actually pay people. You don't want to divide your money over 20 channels and only have 5% of your money per channel. So it seems only natural that banks would become central in LN, it's both more efficient and effective.
Joe can pay the same person using multiple channels.

If I have two BTC total split across 4 channels and I want to buy something for 2 BTC, I can send 0.5 via Channel 1 to merchant A, 0.5 BTC via Channel 2 to Merchant A, and so on. Merchant A will get 2 BTC from either one channel or from multiple channels, Either way, he gets paid 2 BTC and I spent 2 BTC and the transactions are guaranteed.

If I funded a channel with say 0.5 bitcoin, how long might it operate independent of the blockchain? because whenever there is a clearing of the transaction routes back to the blockchain, there is a nightmare of a fee to pay.
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January 02, 2018, 11:04:28 PM
 #6

Actually he doesn't. B pays C at the exact same time that A pays B. So there is no lending as B is never short of his money. As soon as the hash preimage for an HTLC is known to the world, all parties in a route are instantly paid because the HTLCs can be then settled at the same time.
Ok the traditional definition of lending wouldn't apply here, agreed. However that doesn't change the problem that everybody in the route needs to have the amount of money that you are sending in his account, freely available.




If I have two BTC total split across 4 channels and I want to buy something for 2 BTC, I can send 0.5 via Channel 1 to merchant A, 0.5 BTC via Channel 2 to Merchant A, and so on. Merchant A will get 2 BTC from either one channel or from multiple channels, Either way, he gets paid 2 BTC and I spent 2 BTC and the transactions are guaranteed.

That is if all your channels are connected to the Merchant AND everybody in those channels has at least the amount freely available that you want to send.
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January 02, 2018, 11:10:36 PM
 #7

Ok the traditional definition of lending wouldn't apply here, agreed. However that doesn't change the problem that everybody in the route needs to have the amount of money that you are sending in his account, freely available.
...
That is if all your channels are connected to the Merchant AND everybody in those channels has at least the amount freely available that you want to send.
With a well connected graph, that's not a problem. And based on current use on testnet, it looks like it is going to be a fairly well connected graph.

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January 02, 2018, 11:21:53 PM
Last edit: January 02, 2018, 11:32:16 PM by sjefdeklerk
 #8

With a well connected graph, that's not a problem. And based on current use on testnet, it looks like it is going to be a fairly well connected graph.

But let's say I want to pay an airline ticket for $1200. I have 4 channels with 4 friends. Two of them have $350 freely available each and two of them have $250 available each. However one of them has a route with friends who only have $200 available. Now I can't pay for the ticket even though I'm a frikkin' (bitcoin) millionaire myself Smiley It would make SO much more sense for me to just open 1 channel with a big bank, but some cash in it and I'm done! I can now at least determine myself how much I can pay and I'm not dependent on the wealth of my friends (or their friend's friends). It just seems so logical that it's going to evolve into that. So not this 'ideal decentralized' mesh some people dream about but a centralized system. It just seems inevitable to me
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January 02, 2018, 11:34:16 PM
 #9

But let's say I want to pay an airline ticket for $1200. I have 4 channels with 4 friends. Two of them have $350 freely available each and two of them have $250 available each. However one of them has a route with friends who only have $200 available. Now I can't pay for the ticket even though I'm a frikkin' (bitcoin) millionaire myself Smiley It would make SO much more sense for me to just open 1 channel with a bank, but some cash in it and I'm done! I can now at least determine myself how much I can pay and I'm not dependent on the wealth of my friends (or their friend's friends).
That's completely untrue. You are then dependent on the wealth of that "bank", how many channels it has open, and how much it owns on each channel. You are not done, and there is no guarantee that said "bank" will be any better than your 4 friends. Suppose that bank is just like friends, but with more channels that lead to dead ends and not the airline you want to pay. Now you're stuck. It's exactly the same as with your friends, and not any better nor any worse.

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January 02, 2018, 11:37:23 PM
 #10

That's completely untrue. You are then dependent on the wealth of that "bank", how many channels it has open, and how much it owns on each channel. You are not done, and there is no guarantee that said "bank" will be any better than your 4 friends. Suppose that bank is just like friends, but with more channels that lead to dead ends and not the airline you want to pay. Now you're stuck. It's exactly the same as with your friends, and not any better nor any worse.

Well I rather depend on the wealth of a bank than on the wealth of my friends (and their friend's friends wealth) Wink But yeah even then you're indeed not guaranteed of a good route and it's not even a guarantee I can pay my ticket. But isn't that an awful system then ? Of course I can always choose to bypass LN and just cough up the $55 (or way higher) transaction fee ... But still it just seems so far from perfect that I wonder if this thing is going to make it.
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January 03, 2018, 02:15:31 AM
Last edit: January 03, 2018, 02:42:00 AM by sjefdeklerk
 #11

If I have two BTC total split across 4 channels and I want to buy something for 2 BTC, I can send 0.5 via Channel 1 to merchant A, 0.5 BTC via Channel 2 to Merchant A, and so on. Merchant A will get 2 BTC from either one channel or from multiple channels, Either way, he gets paid 2 BTC and I spent 2 BTC and the transactions are guaranteed.

BTW does BTC even supply for such a mechanism that it can cancel all payments if one fails ? Otherwise nobody would use it (who wants to pay 80% of a product and thus not receive the product) and your example isn't even valid
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January 03, 2018, 02:37:44 AM
 #12

Actually he doesn't. B pays C at the exact same time that A pays B. So there is no lending as B is never short of his money. As soon as the hash preimage for an HTLC is known to the world, all parties in a route are instantly paid because the HTLCs can be then settled at the same time.

Actually I don't think this is correct. In A -> B -> C then C first finalizes payment from B by sending the pre-image to B. Then B does the same with A, exactly like explained here: https://en.bitcoin.it/wiki/Hashed_Timelock_Contracts  How is this different from a lending situation ? You ask your friend to pay for the pizza and after he paid for the pizza, you pay him.
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January 03, 2018, 05:55:53 AM
 #13

BTW does BTC even supply for such a mechanism that it can cancel all payments if one fails ? Otherwise nobody would use it (who wants to pay 80% of a product and thus not receive the product) and your example isn't even valid
Yes, there is a mechanism to cancel a payment. Anyways, currently it isn't even possible to have a partial payment. The way that routing works is that the sender chooses the nodes to send through and will only initiate the process if it knows that the payment will happen (barring circumstances involving malicious actors or unforseen circumstances).

Actually I don't think this is correct. In A -> B -> C then C first finalizes payment from B by sending the pre-image to B. Then B does the same with A, exactly like explained here: https://en.bitcoin.it/wiki/Hashed_Timelock_Contracts  How is this different from a lending situation ? You ask your friend to pay for the pizza and after he paid for the pizza, you pay him.
No, that's not how it actually works on the technical level.

At the technical level, every node in the route first creates an HTLC offered output and HTLC received output in the channels that the payment is being routed through. This effectively locks in the coins and the order of those outputs being created is not guaranteed. I.e. A could offer the HTLC to B before B offers to C, in which case B owes A money. But just as likely is B offers C the HTLC output before it receives the HTLC from A, in which case A owes B money. In either case, neither party actually gets any money, so no money actually exchanged hands nor is anything actually owed. If B fails to offer the HTLC C, A will get his money back when the HTLC times out and B will not be able to have gotten any of that money at all. When the preimage is passed down the route from D to A (let's add one additional hop for this example), none of the parties in the route is able to get more money than they are supposed to even if they don't reveal the preimage to the next person. With lending money, the lender can steal the money, but in LN, the "lenders" (i.e. nodes in the route) cannot.

The reason for this is slightly complicated. In a route A -> B -> C -> D, D must reveal the preimage R in order to be paid. He can do this by either broadcasting the C -> D Commitment transaction and the HTLC success transaction (so he spends the HTLC output from the commitment tx) or by telling C what R is (and thus keep the channel open). If he broadcasts the HTLC success, then both B and C know what R is since R is in that HTLC success and can immediately broadcast their HTLC success transactions, so they are paid and pay money at exactly the same time.

If D gives C R and they settle off chain (to keep the channel open) but C refuses to give B R, he is actually out money since he has already settled the HTLC offered output but not his HTLC received. C is now short the money that he gave to D. Note that this is different from lending because this is not B refusing to give C his money but rather C refusing to take it. The only way C can take that money is if he gives B R or if he broadcasts the commitment transaction and HTLC success transaction. Either way, B will get R and he will end up paying the money to C as that is how HTLCs work.

The payment of the HTLCs is guaranteed because of the commitment transactions. HTLCs are part of the commitment transaction which is signed by both parties in the channel. In the B -> C channel, B cannot revert his HTLC without C agreeing to revert it. If he chose to broadcast an old commitment which did not have this HTLC, then he will be subject to C's revocation transaction which can take all of B's money. The way that HTLCs work is that if you can show that you know R, then the payment is guaranteed because you can spend that output. So once C knows R, his payment is guaranteed unless he waits too long and the HTLC times out. But then that is still not lending as B did not refuse to pay C but rather C refused to take money from B.

So in no way is this actually lending. No node has more money than they are supposed to. HTLCs are not a promise that you will give them the money (as it is with lending) but rather a guarantee that they will get the money. Nodes must forward R down the route otherwise they will be losing money. There is no situation where a node can get more money than they are supposed.

Note that this only works when R goes from D -> A. If it went from A -> D, then it would be lending and a node could defraud the next node in the route. But LN goes the other way, so that is not a problem.

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January 03, 2018, 02:05:40 PM
 #14

Thanks, great explanation! I probably should not have used the term lending because the risks inherent in traditional lending clearly don't apply here. However the point remains that everybody in the route needs to have the money freely available that you want to pay. Personally I feel that this is why LN will never really work decentralized as some envision it. Time will tell.
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January 03, 2018, 10:02:58 PM
 #15

I think that it will not be a centralized doom scenario like some people think.

Nods do not have to be very big. Most small buy coffee amounts don't need much of backup from supper nodes.

You still can choose to send using the main chain wich have by then lower fee as the load is gone

Right now we have massive mining farms and small home miners that work in harmony to a certain level

Instad of mining pools we should see super nodes that are funded by average john using some smart contracts

I think that development team have think about al this points.

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January 04, 2018, 01:45:28 PM
 #16

No one knows how the LN graph will look like until it's widely used. Most people will use LN for micro-payments, this means that people with low amount of BTC will still get used, so you won't need to open a channel with a big hub for you to pay your $3 coffee, because most people will have an open channel with an amount greater than $3.

Even in the worst case scenario where we have centralized hubs, it's a different centralization compared to say Ripple, where for example they can blacklist you and you can't send any XRP in the whole Ripple network, so you effectively have lost your XRP. In the case of a centralized LN network, you can just open a channel with a person that is already connected to a big hub and send all your transactions through that person if the hub refuses to accept your payment, and for small payment, I guess you won't even need a hub, just route your transaction through normal users.

centralization and decentralization can't be measured in absolute terms, all that a centralized network of hubs can do is refuse to route your payment, whereas in other centralized networks like Ripple or Paypal, they can actually freeze your funds.

Even if we have big hubs that most people use, can you really call it a centralized network when you still have the option to choose a route that doesn't involve these big hubs?
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January 04, 2018, 02:12:33 PM
Last edit: January 04, 2018, 03:32:15 PM by sjefdeklerk
 #17

I've been reading some more and there are even more important arguments against decentralization:

1) Users need to be online all the time! If somebody is offline he can NOT process a transaction for you, this means that that person breaks the route, which is a huge problem. Banks on the other hand will of course be online 24/7
2) Monetary incentives for centralization! Everybody who helps processing your transaction gets a small fee. So if there's a route with 10 people in it, then a bank with a direct route can charge 9.99x the fee for one hub and still be cheaper! So the bigger a hub becomes, the smaller the routes will become and the more they can charge. This of course works as a huge snowball for size and is a huge incentive to become as big as possible.
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January 05, 2018, 01:39:00 AM
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 #18

1) Users need to be online all the time! If somebody is offline he can NOT process a transaction for you, this means that that person breaks the route, which is a huge problem. Banks on the other hand will of course be online 24/7
Not necessarily. If only one node's HTLC success transaction is broadcast, then all nodes in the route can take their payment and make their payment simultaneously even if one or more of them is offline.

2) Monetary incentives for centralization! Everybody who helps processing your transaction gets a small fee. So if there's a route with 10 people in it, then a bank with a direct route can charge 9.99x the fee for one hub and still be cheaper! So the bigger a hub becomes, the smaller the routes will become and the more they can charge. This of course works as a huge snowball for size and is a huge incentive to become as big as possible.
I don't think the fee will be a centralization pressure. It will be a race to the bottom because there will be competition and it will be easy for new nodes to compete. So sure your "bank" charges 9.99 as their fee for one route. Now I create my own node and I get a couple of channels, not as much, but still many. If you route through me, you may still have to go through 4 other nodes. I can then charge 5 as the so the total route fee is 9 (5 + 4*1). Now that "bank" has to lower his fee to remain competetive, and so on and so forth. It will be difficult for any one node to get a monopoly and maintain it and make LN centralized. Even then, anyone can still make their own node and make channels without the permission of the "central nodes". So there will certainly be lots of competition and that makes it decentralized. You can close a channel without the other party agreeing to it, so you can switch to using a competitor at any time. You can even close your channel and fund the opening of a channel with someone else at exactly the same time in the same transaction, so you won't have to pay more in transaction fees.

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January 06, 2018, 01:50:37 AM
 #19

Not necessarily. If only one node's HTLC success transaction is broadcast, then all nodes in the route can take their payment and make their payment simultaneously even if one or more of them is offline.
From my understanding when a user is offline he won't even get elected as possible node.

I don't think the fee will be a centralization pressure. It will be a race to the bottom because there will be competition and it will be easy for new nodes to compete. So sure your "bank" charges 9.99 as their fee for one route. Now I create my own node and I get a couple of channels, not as much, but still many. If you route through me, you may still have to go through 4 other nodes. I can then charge 5 as the so the total route fee is 9 (5 + 4*1). Now that "bank" has to lower his fee to remain competetive, and so on and so forth.
Hmm I find this a weird answer. Of course the guy with just one node can always charge less because he doesn't have to divide the profit.
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January 06, 2018, 06:19:45 PM
 #20

1) Users need to be online all the time! If somebody is offline he can NOT process a transaction for you, this means that that person breaks the route, which is a huge problem. Banks on the other hand will of course be online 24/7
Not necessarily. If only one node's HTLC success transaction is broadcast, then all nodes in the route can take their payment and make their payment simultaneously even if one or more of them is offline.

2) Monetary incentives for centralization! Everybody who helps processing your transaction gets a small fee. So if there's a route with 10 people in it, then a bank with a direct route can charge 9.99x the fee for one hub and still be cheaper! So the bigger a hub becomes, the smaller the routes will become and the more they can charge. This of course works as a huge snowball for size and is a huge incentive to become as big as possible.
I don't think the fee will be a centralization pressure. It will be a race to the bottom ...


Wait, so we can fund the entire LN with less than the current BTC miner fees?

Smiley
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January 07, 2018, 04:26:24 PM
 #21

Some simple math.
Assume we have 30 mil bitcoin users.
Every user should open a LN channel and close LN channel.
Bitcoin can handle 300 000 transactions per day.
30 mil users should wait for 100 days so every one can open a channel, and 100 days to close a channel if there is no other transactions besides LN settlements in bitcoin network.
300 mil users should wait 1000 days, so every user can have openned LN channel.
Bitcoin can't even adopt Lightning Network without big blocks. LN official release will lead just to another huge fee spike, and since LN channels should be restarted regularly bitcoin network can be clogged by LN settlements.
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January 08, 2018, 11:35:32 AM
 #22

I think that it will not be a centralized doom scenario like some people think.

Nods do not have to be very big. Most small buy coffee amounts don't need much of backup from supper nodes.

You still can choose to send using the main chain wich have by then lower fee as the load is gone

Right now we have massive mining farms and small home miners that work in harmony to a certain level

Instad of mining pools we should see super nodes that are funded by average john using some smart contracts

I think that development team have think about al this points.


It's gonna be economically, technically, ideally, name it why  -> most efficient to have ONE central hub :

https://www.youtube.com/watch?v=3pd6xHjLbhs&feature=youtu.be&t=1h17m00s

So it's not hard to figure out, where open markets will tend to!

AND it will be regulated as a payment processor in most countries.

-> Not my bitcoin.

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January 08, 2018, 03:31:13 PM
 #23

That's completely untrue. You are then dependent on the wealth of that "bank", how many channels it has open, and how much it owns on each channel. You are not done, and there is no guarantee that said "bank" will be any better than your 4 friends. Suppose that bank is just like friends, but with more channels that lead to dead ends and not the airline you want to pay. Now you're stuck. It's exactly the same as with your friends, and not any better nor any worse.

Well I rather depend on the wealth of a bank than on the wealth of my friends (and their friend's friends wealth) Wink But yeah even then you're indeed not guaranteed of a good route and it's not even a guarantee I can pay my ticket. But isn't that an awful system then ? Of course I can always choose to bypass LN and just cough up the $55 (or way higher) transaction fee ... But still it just seems so far from perfect that I wonder if this thing is going to make it.
This is the worst thing i find in lightening network that the amount of transaction is limited on network and depends on channels(and group).
Even if the "bank" which is going to receive have enough funds but still we have to depend on the group which are connected to the pool of that bank with different channels.

I think Lightning network would be great for smaller payments/transactions but will be the worst for large scale transactions, we will need huge group with maximum channels for big transactions.

P.S : Correct me if i am wrong.

 
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January 08, 2018, 07:52:30 PM
 #24

Some simple math.
Assume we have 30 mil bitcoin users.
Every user should open a LN channel and close LN channel.
Bitcoin can handle 300 000 transactions per day.
30 mil users should wait for 100 days so every one can open a channel, and 100 days to close a channel if there is no other transactions besides LN settlements in bitcoin network.
300 mil users should wait 1000 days, so every user can have openned LN channel.
Bitcoin can't even adopt Lightning Network without big blocks. LN official release will lead just to another huge fee spike, and since LN channels should be restarted regularly bitcoin network can be clogged by LN settlements.
It's extremely unlikely that every single user is going to attempt to open lightning channels simultaneously on the day that a fully released software for LN is available. It is extremely unlikely that every single user is going to attempt to close their lightning channels simultaneously. As with literally every other release of a new technology in Bitcoin, it's going to take months, probably years, before LN is actually widely used. Just look at how long it took for P2SH to become widely used. And how long it has taken for segwit. This situation you are describing is extremely unlikely to happen.

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January 09, 2018, 05:17:15 AM
 #25

Some simple math.
Assume we have 30 mil bitcoin users.
Every user should open a LN channel and close LN channel.
Bitcoin can handle 300 000 transactions per day.
30 mil users should wait for 100 days so every one can open a channel, and 100 days to close a channel if there is no other transactions besides LN settlements in bitcoin network.
300 mil users should wait 1000 days, so every user can have openned LN channel.
Bitcoin can't even adopt Lightning Network without big blocks. LN official release will lead just to another huge fee spike, and since LN channels should be restarted regularly bitcoin network can be clogged by LN settlements.
It's extremely unlikely that every single user is going to attempt to open lightning channels simultaneously on the day that a fully released software for LN is available. It is extremely unlikely that every single user is going to attempt to close their lightning channels simultaneously. As with literally every other release of a new technology in Bitcoin, it's going to take months, probably years, before LN is actually widely used. Just look at how long it took for P2SH to become widely used. And how long it has taken for segwit. This situation you are describing is extremely unlikely to happen.

So is there any limit to how many transactions LN can handle. It seems like opening and closing channels would count as two transactions and theirs a limit for how much data that can fit in a bitcoin block. I am just trying to wrap my head around the LN it's confusing to me.

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January 09, 2018, 08:29:26 AM
 #26

I really don't see how LN is supposed to work decentralized. In this scenario there would be a huge chain of people where everybody lends his money to the next guy in the chain, up the guy at the end of the chain who wants to pay for something. The maximum payment amount in this scenario is determined by the guy who has the least amount of money freely available in that chain. This effectively would mean that it can only work decentralized for very small payments. Even payments bigger than a few dollar could already be problematic.

Whereas in a centralized scenario, it could perfectly work, but it would effectively turn into a regular banking relationship as people have now, just with a different name (account at your bank vs payment channel with your bank). Or am I missing something here?

I both agree and disagree with your conclusions.

Yes, the system designed to work as a mesh but it will in fact look more like a star with exchanges/payment processors/large fund holders in the middle. And it looks a lot like centralization. However we should not forget that payment hubs won't ever have any control over your funds (i.e. they won't be able to hold your transaction hostage, impose KYC, manage fees). It's trustless middleman, that is important for the process, rewarded in proportion for it's importance, yet does not own or control the process in any significant way.
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January 09, 2018, 08:38:04 AM
 #27

Some simple math.
Assume we have 30 mil bitcoin users.
Every user should open a LN channel and close LN channel.
Bitcoin can handle 300 000 transactions per day.
30 mil users should wait for 100 days so every one can open a channel, and 100 days to close a channel if there is no other transactions besides LN settlements in bitcoin network.
300 mil users should wait 1000 days, so every user can have openned LN channel.
Bitcoin can't even adopt Lightning Network without big blocks. LN official release will lead just to another huge fee spike, and since LN channels should be restarted regularly bitcoin network can be clogged by LN settlements.
It's extremely unlikely that every single user is going to attempt to open lightning channels simultaneously on the day that a fully released software for LN is available. It is extremely unlikely that every single user is going to attempt to close their lightning channels simultaneously. As with literally every other release of a new technology in Bitcoin, it's going to take months, probably years, before LN is actually widely used. Just look at how long it took for P2SH to become widely used. And how long it has taken for segwit. This situation you are describing is extremely unlikely to happen.

So is there any limit to how many transactions LN can handle. It seems like opening and closing channels would count as two transactions and theirs a limit for how much data that can fit in a bitcoin block. I am just trying to wrap my head around the LN it's confusing to me.

It seems you don't fully understand what LN is. Simplified:

1. You post funding transaction on block chain (that locks up your money for the channel lifetime)
2. During channel lifetime (it can be a day, a month or even a year) you are free to exchange off-chain transactions with other LN users. Those TX are same BTC TX messages, however they never got posted to blockchain unless dispute occurs (in case of dispute, person who initiates premature channel closure gets punished) or channel naturally expires.
3. After channel closes - second - settlement transaction being posted to blockchain.

So basically for casual users, with need to move smaller amounts more often it will be virtually unlimited transactions in between those 2 on-chain transactions because transactions are fairly small, and they don't need to be confirmed on blockchain you can send hundreds of thousands/s. In theory on-chain transaction will become much more scarce and used only to move huge amounts or fund payment channels.
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January 09, 2018, 12:33:32 PM
 #28

Some simple math.
Assume we have 30 mil bitcoin users.
Every user should open a LN channel and close LN channel.
Bitcoin can handle 300 000 transactions per day.
30 mil users should wait for 100 days so every one can open a channel, and 100 days to close a channel if there is no other transactions besides LN settlements in bitcoin network.
300 mil users should wait 1000 days, so every user can have openned LN channel.
Bitcoin can't even adopt Lightning Network without big blocks. LN official release will lead just to another huge fee spike, and since LN channels should be restarted regularly bitcoin network can be clogged by LN settlements.
It's extremely unlikely that every single user is going to attempt to open lightning channels simultaneously on the day that a fully released software for LN is available. It is extremely unlikely that every single user is going to attempt to close their lightning channels simultaneously. As with literally every other release of a new technology in Bitcoin, it's going to take months, probably years, before LN is actually widely used. Just look at how long it took for P2SH to become widely used. And how long it has taken for segwit. This situation you are describing is extremely unlikely to happen.

One seemingly inescapable effect of the LN is an increased demand for bitcoin. This is because the LN network is essentially a huge distributed  "HODLer."

If there are 16 million bitcoins and over six months LN absorbs 2 million, more price and fee increases, hello.
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January 09, 2018, 04:12:10 PM
 #29

1. You post funding transaction on block chain (that locks up your money for the channel lifetime)
2. During channel lifetime (it can be a day, a month or even a year) you are free to exchange off-chain transactions with other LN users. Those TX are same BTC TX messages, however they never got posted to blockchain unless dispute occurs (in case of dispute, person who initiates premature channel closure gets punished) or channel naturally expires.
3. After channel closes - second - settlement transaction being posted to blockchain.

I think it's important to note that once the money is depleted in your channel, you will need to refund, which is another on-chain transaction (including the really steep on-chain fees). Every transaction into and out of the payment channel = on chain = huge fees.


One seemingly inescapable effect of the LN is an increased demand for bitcoin. This is because the LN network is essentially a huge distributed  "HODLer."

If there are 16 million bitcoins and over six months LN absorbs 2 million, more price and fee increases, hello.

Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?
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January 09, 2018, 04:25:40 PM
 #30

1. You post funding transaction on block chain (that locks up your money for the channel lifetime)
2. During channel lifetime (it can be a day, a month or even a year) you are free to exchange off-chain transactions with other LN users. Those TX are same BTC TX messages, however they never got posted to blockchain unless dispute occurs (in case of dispute, person who initiates premature channel closure gets punished) or channel naturally expires.
3. After channel closes - second - settlement transaction being posted to blockchain.

I think it's important to note that once the money is depleted in your channel, you will need to refund, which is another on-chain transaction (including the really steep on-chain fees). Every transaction into and out of the payment channel = on chain = huge fees.


One seemingly inescapable effect of the LN is an increased demand for bitcoin. This is because the LN network is essentially a huge distributed  "HODLer."

If there are 16 million bitcoins and over six months LN absorbs 2 million, more price and fee increases, hello.

Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?

I kinda agree - much larger blocks will require but not at the stage where LN tested and adopted by at least some significant portion of the community. Even on current network I have a feeling it will ease load on the network. As previous poster noted demand for BTC will rise, dragging all costs in BTC upward, but this process will be relatively slow, hopefully slow enough to upgrade block size.


Regarding refunding channel problem - there are solutions. Since you can receive funds via LN you can simply pay fiat to LN exchange to provide funds via LN and re-fund your channel, effectively buying transactionless BTC. I think for professional traders, holding LN channels opened to several exchanges will open great arbitrage opportunities.
But you not wrong - if you store BTC in cold wallet - your refill tx have to be on chain and probably will be pretty expensive.
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January 09, 2018, 08:31:08 PM
 #31

Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?

calling this a joke as a newbie here in the forum will not gain you friends. Too many newbies have come here and repeated the "flaws" of Bitcoin design.
Looking at your posts seem to show a misunderstanding of how Bitcoin AND LN can work in the future together. You are looking with limitation glasses (the fees), instead of the options glasses. Your calcs are based on wrong assumptions (well, very limited assumptions to make it appear worse). It might even be that you do it with intention: to show that big blocks are better/faster/lower fees ... this is lame, and there is other forum pages. Especially as there isn't in any visible real value in these big block coins (yet). So be happy in your big block coins, and hope for the future. Those, who know better, stay with bitcoin, segwit, LN and more to come.

Maybe you might want to re-phrase into open questions, so the community can discuss/answer properly, and it helps the community to get along. Without separating between one or the other.
If you continue this way, your comments cannot be taken seriously, and as such don't provide any value.
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January 09, 2018, 09:08:19 PM
 #32

Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?

calling this a joke as a newbie here in the forum will not gain you friends. Too many newbies have come here and repeated the "flaws" of Bitcoin design.
Looking at your posts seem to show a misunderstanding of how Bitcoin AND LN can work in the future together. You are looking with limitation glasses (the fees), instead of the options glasses. Your calcs are based on wrong assumptions (well, very limited assumptions to make it appear worse). It might even be that you do it with intention: to show that big blocks are better/faster/lower fees ... this is lame, and there is other forum pages. Especially as there isn't in any visible real value in these big block coins (yet). So be happy in your big block coins, and hope for the future. Those, who know better, stay with bitcoin, segwit, LN and more to come.

Maybe you might want to re-phrase into open questions, so the community can discuss/answer properly, and it helps the community to get along. Without separating between one or the other.
If you continue this way, your comments cannot be taken seriously, and as such don't provide any value.

It's ok to have criticism at anyone's post but at least tell me what's wrong with my 'assumptions' so that we can discuss it. Your post is rather useless as it is now, you're only saying that I'm wrong and need to rephrase things. It makes for a better discussion if you mention what you think is wrong. Thanks.
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January 09, 2018, 09:16:36 PM
 #33

Exactly. Even with LN, the current 7 transactions/sec world wide is a joke, not even close enough to make this a viable solution. It's doomed to fail, unless they improve the onchain throughput rate. But if they do that, why do they need LN in the first place ?

calling this a joke as a newbie here in the forum will not gain you friends. Too many newbies have come here and repeated the "flaws" of Bitcoin design.
Looking at your posts seem to show a misunderstanding of how Bitcoin AND LN can work in the future together. You are looking with limitation glasses (the fees), instead of the options glasses. Your calcs are based on wrong assumptions (well, very limited assumptions to make it appear worse). It might even be that you do it with intention: to show that big blocks are better/faster/lower fees ... this is lame, and there is other forum pages. Especially as there isn't in any visible real value in these big block coins (yet). So be happy in your big block coins, and hope for the future. Those, who know better, stay with bitcoin, segwit, LN and more to come.

Maybe you might want to re-phrase into open questions, so the community can discuss/answer properly, and it helps the community to get along. Without separating between one or the other.
If you continue this way, your comments cannot be taken seriously, and as such don't provide any value.

It's ok to have criticism at anyone's post but at least tell me what's wrong with my 'assumptions' so that we can discuss it. Your post is rather useless as it is now, you're only saying that I'm wrong and need to rephrase things. It makes for a better discussion if you mention what you think is wrong. Thanks.

Neither of you is right.

On the subject - we simply don't know what will happen when and if LN launch. Theorizing in regards of an impact is speculation at best. But evidently supporters of LN takes phrases like "joke" or "doomed to fail" as tiny bit offensive. You provided valid argument but spiced it probably too much.

On the other hand, referring to the account status is kinda lame argument. I don't know what reasons people have to crate new account and I accept the fact it's not my business. I prefer to think that Established account probably know things, but newbie account may or may not have knowledge. We should not deny people privacy by simply discarding posts from fresh acc. (My acc for example is not my main)
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January 09, 2018, 10:42:51 PM
 #34

On the other hand, referring to the account status is kinda lame argument. I don't know what reasons people have to crate new account and I accept the fact it's not my business. I prefer to think that Established account probably know things, but newbie account may or may not have knowledge. We should not deny people privacy by simply discarding posts from fresh acc. (My acc for example is not my main)
that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.
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January 10, 2018, 12:29:54 AM
Last edit: January 10, 2018, 01:07:15 AM by sjefdeklerk
 #35

that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.

I called it a joke because 7 transactions world wide per second is not even NEARLY enough, even with LN. Heck it's not even enough for a small country. It's a joke because people have to be online 24/7 to be part of a payment route: if one user is offline, he breaks a certain route. It's a joke because the maximum amount you can send is determined by the guy who has the least money in his channel. It's a joke since it will only work centralized and that's going against everything that bitcoin was meant to be (or do you really envision a chain of 30 people processing a $2000 payment, meaning everybody has to have $2000 freely available). It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire. It's a joke since the WHOLE network has to be aware of the exact state of EVERYBODY's channels ALL OF THE TIME, otherwise routes can't be discovered. Imagine the amount of data if you want to do that decentralized! And it's a joke because fraud is possible between 2 users, you continually have to check if people aren't screwing you over.
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January 10, 2018, 04:09:42 AM
 #36

that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.

I called it a joke because 7 transactions world wide per second is not even NEARLY enough, even with LN. Heck it's not even enough for a small country. It's a joke because people have to be online 24/7 to be part of a payment route: if one user is offline, he breaks a certain route. It's a joke because the maximum amount you can send is determined by the guy who has the least money in his channel. It's a joke since it will only work centralized and that's going against everything that bitcoin was meant to be (or do you really envision a chain of 30 people processing a $2000 payment, meaning everybody has to have $2000 freely available). It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire. It's a joke since the WHOLE network has to be aware of the exact state of EVERYBODY's channels ALL OF THE TIME, otherwise routes can't be discovered. Imagine the amount of data if you want to do that decentralized! And it's a joke because fraud is possible between 2 users, you continually have to check if people aren't screwing you over.

Interesting these assertions.

First item. No, bitcoin is not a joke at 7x/sec. Why? Because really, it's about 3/sec and with that lame number, bitcoin is about the 20th largest currency (check M1 numbers) in the world.

Well, maybe that is a joke. It's actually rather funny, isn't it? Or maybe the OTHER FIAT currencies are the joke. What do you think? Must be something going on right there.

Next, you have some issues with the proposed LN network, and I have an answer for that, which is also pretty funny. Get an android phone, download the beta LN interface, start doing some testing and prove up good and bad in the design. You can do this with the testnet.

Other people will be doing this, and it's certainly needed to get the bugs out.

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January 10, 2018, 09:24:16 AM
 #37

that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.

I called it a joke because 7 transactions world wide per second is not even NEARLY enough, even with LN. Heck it's not even enough for a small country. It's a joke because people have to be online 24/7 to be part of a payment route: if one user is offline, he breaks a certain route. It's a joke because the maximum amount you can send is determined by the guy who has the least money in his channel. It's a joke since it will only work centralized and that's going against everything that bitcoin was meant to be (or do you really envision a chain of 30 people processing a $2000 payment, meaning everybody has to have $2000 freely available). It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire. It's a joke since the WHOLE network has to be aware of the exact state of EVERYBODY's channels ALL OF THE TIME, otherwise routes can't be discovered. Imagine the amount of data if you want to do that decentralized! And it's a joke because fraud is possible between 2 users, you continually have to check if people aren't screwing you over.

Mind if I pick apart your above statement?

Quote
I called it a joke because 7 transactions world wide per second is not even NEARLY enough, even with LN.

As of now, BTC worth billions and billions. With 7 tx/sec, insane fees and all. LN is likely to reduce load on the network, so in any case it will do good.

Quote
It's a joke because people have to be online 24/7 to be part of a payment route: if one user is offline, he breaks a certain route.
So what? LN is a mesh - if you connect to the node that have good up time (read - hub) or have multiple connections you don't need to worry. It's pretty obvious that you need to be online to participate in routing, but you don't have to if you don't want to, really.

Quote
It's a joke because the maximum amount you can send is determined by the guy who has the least money in his channel.
First of all since transactions are instant, you can break down your tx to 10 smaller tx (this can work completely under the hood, unnoticed by users). Also with proper routing this won't be a problem. Also, remember - LN is not designed to send millions - for this you will still have your conventional on-chain transactions.

Quote
It's a joke since it will only work centralized and that's going against everything that bitcoin was meant to be (or do you really envision a chain of 30 people processing a $2000 payment, meaning everybody has to have $2000 freely available).
It really changes when you trying to think what word "Centralization" really means, and what scares you in it. Bitcoin was made to fight control imposed by banking, not single point of interaction. If central hubs are trustless, incentivised and have no real control over my funds, I'd say it's not that same centralization Bitcoin was born to fight with. After all you may say Mining pools are "centralizing" bitcoin, when they don't, because even though they can have big share, they don't have real control.

Also you can break 2000$ tx to 2000 1$ tx and happily send them via LN if there are no alternatives.

Quote
It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire.
What?

Quote
It's a joke since the WHOLE network has to be aware of the exact state of EVERYBODY's channels ALL OF THE TIME, otherwise routes can't be discovered.
No. There a ways of routing on the "fly". Most efficient would be to use shared map, but blind routing is possible. How do you think TOR work?


Quote
And it's a joke because fraud is possible between 2 users, you continually have to check if people aren't screwing you over.

That's probably most valid point of them all. But isn't it what block-chain was made in the first place - so you can check if you wasn't screwed? If you operate lightning node your constant checks will be integrated in your block chain synchronization algo (i.e. every time new block is added - it checks if you have been screwed). If you don't want to host a full node - that's fine, but in absence of block chain you lose advantage of decentralized ledger anyway.


So I think - no, LN is not a joke. Not at all.





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January 10, 2018, 02:01:05 PM
Last edit: January 10, 2018, 02:14:34 PM by sjefdeklerk
 #38

First item. No, bitcoin is not a joke at 7x/sec. Why? Because really, it's about 3/sec and with that lame number, bitcoin is about the 20th largest currency (check M1 numbers) in the world.
You do realize you want me to compare a max number of transactions per second with a money supply (M1) ?

Quote
Well, maybe that is a joke. It's actually rather funny, isn't it? Or maybe the OTHER FIAT currencies are the joke. What do you think? Must be something going on right there.
Nah, at least with most fiat I know what I can pay for the next year and I can actually pay somebody when I want and with less costs.

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January 10, 2018, 02:07:25 PM
 #39

Also, remember - LN is not designed to send millions - for this you will still have your conventional on-chain transactions.
Who is talking about millions ? I'm talking about monthly payments, energy bills, rent, things like that already are impossible in a decentralized version of LN. And sure, I can go onchain but look at the extreme costs, even with only VERY few people using it, it got at $60. Now imagine the whole world using BTC to pay for their monthly bills, transaction costs would run thousands of dollars per transaction !

Quote
It really changes when you trying to think what word "Centralization" really means, and what scares you in it. Bitcoin was made to fight control imposed by banking, not single point of interaction. If central hubs are trustless, incentivised and have no real control over my funds, I'd say it's not that same centralization Bitcoin was born to fight with. After all you may say Mining pools are "centralizing" bitcoin, when they don't, because even though they can have big share, they don't have real control.
It's just funny, bitcoin was supposed to be an alternate system and now it's really inevitable that it's going to be a banking system in the end.

Quote
It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire.
Quote
What?
There has to be an actual route from person A to person B, consisting of people who are A) online, B) connected between you and the person you want to pay and C) EVERYBODY in that route has to have at least the amount that you want to pay, freely available. That's just not a very realistic situation. Only option then is going on chain but then you'll pay hundreds, maybe thousands of dollars, if bitcoin is ever to become big. Pretty much nobody is using it at the moment (compared to fiat) and costs already went over $60. That can easily go 10x, maybe 100x.

Quote
No. There a ways of routing on the "fly". Most efficient would be to use shared map, but blind routing is possible. How do you think TOR work?
Eh? How is that even supposed to work, 'on the fly' ? The network needs to know which user in a route can pay how much, otherwise the transaction can't go through.


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January 10, 2018, 03:14:33 PM
 #40

Also, remember - LN is not designed to send millions - for this you will still have your conventional on-chain transactions.
Who is talking about millions ? I'm talking about monthly payments, energy bills, rent, things like that already are impossible in a decentralized version of LN. And sure, I can go onchain but look at the extreme costs, even with only VERY few people using it, it got at $60. Now imagine the whole world using BTC to pay for their monthly bills, transaction costs would run thousands of dollars per transaction !

Quote
It really changes when you trying to think what word "Centralization" really means, and what scares you in it. Bitcoin was made to fight control imposed by banking, not single point of interaction. If central hubs are trustless, incentivised and have no real control over my funds, I'd say it's not that same centralization Bitcoin was born to fight with. After all you may say Mining pools are "centralizing" bitcoin, when they don't, because even though they can have big share, they don't have real control.
It's just funny, bitcoin was supposed to be an alternate system and now it's really inevitable that it's going to be a banking system in the end.

Quote
It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire.
Quote
What?
There has to be an actual route from person A to person B, consisting of people who are A) online, B) connected between you and the person you want to pay and C) EVERYBODY in that route has to have at least the amount that you want to pay, freely available. That's just not a very realistic situation. Only option then is going on chain but then you'll pay hundreds, maybe thousands of dollars, if bitcoin is ever to become big. Pretty much nobody is using it at the moment (compared to fiat) and costs already went over $60. That can easily go 10x, maybe 100x.

Quote
No. There a ways of routing on the "fly". Most efficient would be to use shared map, but blind routing is possible. How do you think TOR work?
Eh? How is that even supposed to work, 'on the fly' ? The network needs to know which user in a route can pay how much, otherwise the transaction can't go through.




Quote
Who is talking about millions ? I'm talking about monthly payments, energy bills, rent, things like that already are impossible in a decentralized version of LN. And sure, I can go onchain but look at the extreme costs, even with only VERY few people using it, it got at $60. Now imagine the whole world using BTC to pay for their monthly bills, transaction costs would run thousands of dollars per transaction !

So? That is the great use case for LN that whole world can use without loading blockchain. Problem solved. 7 tx/sec won't be enough, but if LN flies - it won't be a big deal to increase block size.


Quote
It's just funny, bitcoin was supposed to be an alternate system and now it's really inevitable that it's going to be a banking system in the end.

In worst case it will be both. In best case it will be what it is now but better. LN is optional that is what important. Like conventional TX? Go ahead!

Quote
Quote
It's a joke because you have ZERO guarantee you can pay the person you would like to pay, even if both have open channels and you're a billionaire.
Quote
What?
There has to be an actual route from person A to person B, consisting of people who are A) online, B) connected between you and the person you want to pay and C) EVERYBODY in that route has to have at least the amount that you want to pay, freely available. That's just not a very realistic situation. Only option then is going on chain but then you'll pay hundreds, maybe thousands of dollars, if bitcoin is ever to become big. Pretty much nobody is using it at the moment (compared to fiat) and costs already went over $60. That can easily go 10x, maybe 100x.
I think I already covered all the points, like transaction splitting etc.

Quote
Eh? How is that even supposed to work, 'on the fly' ? The network needs to know which user in a route can pay how much, otherwise the transaction can't go through.
Note that I'm theorizing here. From the top of my head each full node can have snapshot/map of nearest channels. If full map consists of N overlapping pieces those maps this will be maximum number of hops needed to reach destination. Also if you think about it how much nodes there will be really? Will this map be that large?
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January 10, 2018, 03:40:06 PM
 #41

So? That is the great use case for LN that whole world can use without loading blockchain. Problem solved. 7 tx/sec won't be enough, but if LN flies - it won't be a big deal to increase block size.
Ok and now you want to pay your rent, your utility bills, your dentist, you car insurance etc etc etc. How do you do that with LN in a decentralized situation ? Or do you really think there are routes with for example 15 people and each can cough up your $1500 rent ?

Quote
Note that I'm theorizing here. From the top of my head each full node can have snapshot/map of nearest channels. If full map consists of N overlapping pieces those maps this will be maximum number of hops needed to reach destination. Also if you think about it how much nodes there will be really? Will this map be that large?
And how old are these 'snapshots'? If somebody just made a payment that 'snapshot' is worthless. No, this only works when there's a complete map of the network where the network is continually aware of the balance in EVERYBODY's payment channel. Which seems like an extreme data traffic situation.
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January 12, 2018, 09:42:48 AM
 #42

To the OP. You made a newbie account the day coinbase sneaked in BCH. Since then, you have been relentlessly spreading FUD about bitcoin and shrewdly shilling Bcash.
You don't sound like one of the trolls so my closest guess is that you must be one of the earliest faithfuls who were unceremoniously purged from r/bitcoin as well as the forum. That was some major upheaval back in the days of Bitcoin XT i think. A lot of people got hurt and angry because of the policies adopted by Theymos. That name has a sort of Greek mythology ring to it now.
Some of the people who really believed in this thing turned against it. Bitcoin and Bcash are almost like two long feuding brothers. Reconciliation seems pretty far off right now.
Big blocks aren't the only solution if bitcoin has to scale and I guess you people failed to agree on whether to increase first or get SegWit/LN first.There's so much drama in that story.

Back in the days, none of you would have wanted LN or Bitcoin to fail. In the words of King Theoden "Days have gone down in the West". Heck, Lets hear the full lament:

Where now the horse and the rider? Where is the horn that was blowing?  Cry
Where is the helm and the hauberk, and the bright hair flowing?
Where is the hand on the harpstring, and the red fire glowing?
Where is the spring and the harvest and the tall corn growing?
They have passed like rain on the mountain, like a wind in the meadow;
The days have gone down in the West behind the hills into shadow.  Sad
Who shall gather the smoke of the dead wood burning,
Or behold the flowing years from the Sea returning?


Well, that up there was a masterpiece and I hope, AT LEAST ON THAT, we can all agree.. Cheesy

 
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January 12, 2018, 06:01:24 PM
 #43

My current concern is that if a big merchant like Amazon starts accepting LN payments, the smaller websites are going to have even more troubles trying to get some traffic away from Amazon and convert some sales.

Why? well because if you have to pay an on-chain fee to put money in a channel (im not sure yet if you must pay when oppening, when sending money into the channel and also when clossing, that's 3 different payments that I still don't understand exactly what's happening here) people aren't going to bother opening channels to buy with smaller websites that maybe you only buy once or twice at best, they will all stick to the same Amazon channel because in Amazon you find anything, but sometimes like I said you may test out another website because there's a bit of a price difference no your benefit, maybe an item is in stock there but not in Amazon... etc. People will not bother opening, funding and closing channels if they have to pay on-chain fees and will stick with a couple channels only, effectively centralizing commerce (even more, cause as we know shops are having a hard time competing against the Amazon mammoth)

Please anyone that actually knows how this exactly works like achow101 or nullius I would like some explanation on this practical case. I just don't see how people are going to bother if they can just pay with fiat saving the on-chain fees.
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January 15, 2018, 05:59:38 AM
 #44

FWIW I think this is a good honest discussion with a well thought out criticism.

I can see a world where LN becomes a centralized system. Eg I walk into a “bank” and they help me setup a private key then when I deposit FIAT they open up a channel on Ln with my bitcoin account and fund it.

Alternatively my bank could just issue me credit by funding my LN channel -this is basically what Visa does.

At that point I’m on LN/bitcoin but would have gone through a KYC check. I probably wouldn’t need to open many other channels because the bank would have thousands open with other banks and thus millions of users.

I think we need to remember that users will tend towards the easiest path. And something like the above will probably be it.

We could all use cash daily but most of the time we don’t. One of the main reasons banks exist is to make it easier to send/receive payments through things like cards/checks/wires/ach.

Why should we expect LN to be any different then what’s already happened.
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January 15, 2018, 08:10:33 AM
 #45

I had this idea today regarding the mempool and was wondering why there is only one?
How come it cannot be sectioned of into pools where transactions such as mining distributions with many recipients and high fees(which is always the preferred ones by miners) go into one pool and lower ones into another?
If one can do segwit then surely something like that should technically be possible? Maybe this has been brought up before but obviously most things are drowned out in forums as big as this one.
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January 15, 2018, 03:16:34 PM
 #46

FWIW I think this is a good honest discussion with a well thought out criticism.

I can see a world where LN becomes a centralized system. Eg I walk into a “bank” and they help me setup a private key then when I deposit FIAT they open up a channel on Ln with my bitcoin account and fund it.

Alternatively my bank could just issue me credit by funding my LN channel -this is basically what Visa does.

At that point I’m on LN/bitcoin but would have gone through a KYC check. I probably wouldn’t need to open many other channels because the bank would have thousands open with other banks and thus millions of users.

I think we need to remember that users will tend towards the easiest path. And something like the above will probably be it.

We could all use cash daily but most of the time we don’t. One of the main reasons banks exist is to make it easier to send/receive payments through things like cards/checks/wires/ach.

Why should we expect LN to be any different then what’s already happened.
Difference no. 1: LN is a scaling solution for bitcoin. Not for fiat. You are still only transferring 'bitcoins' over which your payment node, the bank, has no control like they have over fiat money.
Difference no. 2: Suddenly if the bank decides to shutdown or goes bankrupt, it won't forefeit your funds as a normal bank can. This changes the whole paradigm of banking as it makes these bitcoin-banks behave much more responsibly to keep their business. They cannot hold your bitcoin ransom like fiat.

Aren't these big enough reasons to support LN?
Moreover, If you see it positively then we can have a future where responsible bitcoiners with enough funds will act as nodes just like they act as escrows now anyways. Its just that they'll be much more trustless than even escrows.

Smaller nodes for smaller, low-fee microtransactions and bigger, wealthier nodes for higher transactions.

 
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January 15, 2018, 04:15:34 PM
 #47

FWIW I think this is a good honest discussion with a well thought out criticism.

I can see a world where LN becomes a centralized system. Eg I walk into a “bank” and they help me setup a private key then when I deposit FIAT they open up a channel on Ln with my bitcoin account and fund it.

Alternatively my bank could just issue me credit by funding my LN channel -this is basically what Visa does.

At that point I’m on LN/bitcoin but would have gone through a KYC check. I probably wouldn’t need to open many other channels because the bank would have thousands open with other banks and thus millions of users.

I think we need to remember that users will tend towards the easiest path. And something like the above will probably be it.

We could all use cash daily but most of the time we don’t. One of the main reasons banks exist is to make it easier to send/receive payments through things like cards/checks/wires/ach.

Why should we expect LN to be any different then what’s already happened.
Difference no. 1: LN is a scaling solution for bitcoin. Not for fiat. You are still only transferring 'bitcoins' over which your payment node, the bank, has no control like they have over fiat money.
Difference no. 2: Suddenly if the bank decides to shutdown or goes bankrupt, it won't forefeit your funds as a normal bank can. This changes the whole paradigm of banking as it makes these bitcoin-banks behave much more responsibly to keep their business. They cannot hold your bitcoin ransom like fiat.

Aren't these big enough reasons to support LN?
Moreover, If you see it positively then we can have a future where responsible bitcoiners with enough funds will act as nodes just like they act as escrows now anyways. Its just that they'll be much more trustless than even escrows.

Smaller nodes for smaller, low-fee microtransactions and bigger, wealthier nodes for higher transactions.

Yes I know LN scales bitcoin, but for the user, the currency ultimately doesn’t matter. If I buy bitcoin from Coinbase and they send the bitcoin to my payment channel that looks very similar to a checking account to the layperson. They won’t really understand the perceived nuance you are talking about -though it’s fundamentally what makes the blockchain valueable.

In the example I outlined the banks would have control since they could just close my channel allowing the balances to settle. If they are the super nodes (which I think they will be) and they won’t allow me to open a channel the network will be very hard to use day to day since I would be severely constrained by the size of channels I have open with others.

Ie. I wouldn’t really want/need to open a large channel with the random coffee shop that I visit 3 times a month.

Let’s take another example. Say I have a roommate that pays me .1 btc/mo for rent we would need to open a 3month channel (.3 btc) to make it worth it because that would mean we could bundle 3 transactions into 2 blockchain transactions.

It’s going to be hard for most people to fork over that level of cash. Especially if you need to open multiple channels like that -ie do I really have the btc to open a 3 month payment with my landlord? Probably not because I have a roommate to begin with.

Think about a business that employs 100 people. The business would need to have a lot of cash on hand to open up direct channels. So they will probably just open up one mega chan with their bank. The “bank”surely will require KYC to do this.

I’m a strong proponent of a decentralized store of value but my point is that ultimately the user won’t care if it’s btc+ln/ach/wire/visa/mpesa. They qjust need to be able to store value and send it to someone and will take the easiest path which I think will be centralization.

It’s not like the tech requires this, it’s more of a human nature thing.
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January 15, 2018, 07:12:20 PM
 #48


Let’s take another example. Say I have a roommate that pays me .1 btc/mo for rent we would need to open a 3month channel (.3 btc) to make it worth it because that would mean we could bundle 3 transactions into 2 blockchain transactions.

It’s going to be hard for most people to fork over that level of cash. Especially if you need to open multiple channels like that -ie do I really have the btc to open a 3 month payment with my landlord? Probably not because I have a roommate to begin with.


Exactly, very good point. Nobody is going to open a payment channel with his landlord and put 3 years of rent in it. Most people already have difficulty coughing up next month's rent! So effectively this would mean they'd need to wire EACH month money into their LN. Why then would they even do that ? Why not just wire the monthly rent directly on-chain ?
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January 16, 2018, 02:28:21 AM
 #49


Exactly, very good point. Nobody is going to open a payment channel with his landlord and put 3 years of rent in it. Most people already have difficulty coughing up next month's rent! So effectively this would mean they'd need to wire EACH month money into their LN. Why then would they even do that ? Why not just wire the monthly rent directly on-chain ?

Yeah that's why I think people are just going to open mega channels with central institutions (ala coinbase).

I also think the is a business in extending people credit on LN. As long as its cheaper then the fees most people will do it.
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January 16, 2018, 06:25:42 PM
 #50

this is kind of an amusing thread.  Grin
people  Huh  complain that bitcoin has too high fees, that you can't pay your coffee.

So everyone is preaching, bitcoin shall be used for high values, and lightning for micro payments.

People seem to get this, but in this thread they complain, lightning cannot be used cause when one puts large amounts in it, it can hardly be afforded over a longer period of time.

How stupid will this go?
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January 17, 2018, 09:31:21 PM
Last edit: January 17, 2018, 10:33:54 PM by jsfour
 #51

this is kind of an amusing thread.  Grin
people  Huh  complain that bitcoin has too high fees, that you can't pay your coffee.

So everyone is preaching, bitcoin shall be used for high values, and lightning for micro payments.

People seem to get this, but in this thread they complain, lightning cannot be used cause when one puts large amounts in it, it can hardly be afforded over a longer period of time.

How stupid will this go?


What would you consider micro? Id argue that paying rent isn't a "large" amount. If we are saying that LN can only be used for super small transacitons, say < 0.001 btc, then im not sure how much it value it will have given the complexity of managing channels.

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January 17, 2018, 11:26:37 PM
 #52

If lightning network works decentralized this will be a nice thing but I highly doubt it.   Smiley
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January 18, 2018, 12:28:03 AM
 #53

There is no lending of money. It is not an IOU system, there is no lending. All money exists and is accounted for on the blockchain.
Yes agree but they need to lock money in the main BC as i understand it so you cannot owe a hub more than
you have on deposit in the main BC and this also happens between Hubs

Anyone can become a hub but for the conversation lets stick to saying wallet if only one channel opened even if Tor type routing is involved
and uses wallets to achieve this. (think South Korea here)

Quote
It isn't a chain, it is a route. The graph of nodes is not the extremely degenerate case of a linked list or hub and spoke model. Sure the maximum amount is limited by the smallest amount in the route, but if that amount is too small, another route can be chosen that allows for more money to be transferred if necessary. Furthermore, each route is for one use only, they aren't permanent and do not always have to be used for payments to the same person.

Major hubs that have many channels open can find a route but opening a channel effectively locks money on
main BC so they can both used set amount in private ledger

Bob----->HubUK<><><><>HubUSA<><><><>HubIndia<------Alice
or
Bob----->HubUK<><><><>HubEurope<><><><>HubIndia<------Alice

Both HubUK and HubUSA would each lock $1m on main BC so they have working
capital flows which could well shift backwards and forwards $100m over a month
but on settlement (close a channel) both locks are removed and if HubUK owes say $50,000
balance to HubUSA then UK gets to pay the BTC miners fees.

Hub discovery is going to be like node discovery and each hub keeps a private ledger
so what happens if HubUK goes down or can the hubs be configured star shape to offer
redundancy  ?

Bob already has a channel open to HubUK and has locked $1000 on BC, sent $500 out, received no payment
so has a balance of $500 with HubUK but Bobs friend Paul uses Bob as a hub and wants to send $2000 to
Ebay but this would not be possible because Bobs channel does not have the balance to cover Paul's purchase

Are we in agreement so far ?

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 18, 2018, 01:05:33 AM
 #54

If lightning network works decentralized this will be a nice thing but I highly doubt it.   Smiley
Yes i want to go deep into this but given your public key I think it is quite possible for me to locate you
to become my hub but it would require a type of internal distributed DNS system that might suite
specialist nodes on the system. Better and faster than just broadcasting and it would be a star type
structure with say 100 nodes, this is not centralization and major hubs on the system could be given
human readable name and feedback could be left, dare I even say have a "Trust Rating"  along with Up/Down time

That's not my major concern but the finances of these hubs is because they sure do look
like banks to me who then tie up there own BTC on the main block-chain (Central bank) so they can act
as conduits (Regional banks) and charge the likes of me and you fees.

My argument is not about inflation at this time but about fees because I've heard this
"Virtually free transaction fees" story once too often and yet we have a monopoly of miners ripping
us off and the chances are they become the major hubs and will rip us off even more because they
are organised, we are not and they have lots of BTC and we don't

Banks remember are a free market and just like miners they have both stitched us up like kipper
and it is my public duty to ensure this does not happen again or we end up with even more scams
using Bitcoin than we already have.

Please stick with me on this because i could do with a few partners to represent the public
which is not happening with the development team who now seem like dedicated banker puppets to me.

Once i have a full understanding of what and how they say it works then I want to look at some case studies
because the propaganda about setting up a channel with a coffee shop and buying a coffee a day for
a month and then settling up (Back on block) is not washing with me








Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 19, 2018, 10:19:24 PM
 #55


It seems you don't fully understand what LN is. Simplified:

1. You post funding transaction on block chain (that locks up your money for the channel lifetime)
2. During channel lifetime (it can be a day, a month or even a year) you are free to exchange off-chain transactions with other LN users. Those TX are same BTC TX messages, however they never got posted to blockchain unless dispute occurs (in case of dispute, person who initiates premature channel closure gets punished) or channel naturally expires.
3. After channel closes - second - settlement transaction being posted to blockchain.
OK, this simplified explanation is very approachable. I have few questions though.

1. I'm opening my own LN channel. Funding it with 1BTC and the fee for it is 100satoshi(simplified)
1a. Need to send bitcoins to new address on specially prepared software?
2. During channel operation, my laptop with LNnode works as an escrow between people and blockchain.
2a. I would have to make my 100satoshis back, so I set[?] fixed[?] fee for people to pay.
3. Channel closes and my "mini block" is sent in to chain. Do I pay another fee for this?
3a. Channel closes because of dispute, will I get my 100sats back? What if disputer has less than 100sats?
     Who pays for "unused" bitcoins TX, that will have to be returned from my channel to me?

 
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January 20, 2018, 02:17:47 PM
 #56

This article was just posted, pretty much what I've been saying too: https://www.coindesk.com/lightning-network-may-not-solve-bitcoins-scaling-trilemma/
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January 20, 2018, 04:47:58 PM
 #57

3. Channel closes and my "mini block" is sent in to chain. Do I pay another fee for this?

During settlement with the hub/bank the balance left in the private ledger gets release so even if you
have $0.01 left in credit then it gets written to the BTC public block-chain and the hub has to pay the
$30 to the miners and locks are then released in the BC that were created when you made a deposit

Remember they are selling lightning to us as if Bob , Alice and David create these money conduits that they call
channels and you better hope that Alice is happy to act as a charity hub for you when she gets hit with having to pay
the miners this $30 transaction fee.

if you on the other hand owe $0.01 to the Alice then you get to pick up the $30 bill and believe me I have
not even started to blow holes in this deception that they have planned for us.

Yes sure anyone can become a hub if they keep the software running all day, have lots of hardware
and tons of BTC to finance the private ledger plus high speed internet connections so that will be the
current miners becoming bankers won't it then


Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 05:17:21 PM
 #58

This article was just posted, pretty much what I've been saying too: https://www.coindesk.com/lightning-network-may-not-solve-bitcoins-scaling-trilemma/

Thanks for the like and it says
Quote
Lightning developers are designing a routing facility that identifies which network nodes have sufficient funds to make a payment, calculates the shortest viable route to the payment destination across those nodes, and sends the payment. If this works, it would resolve the bitcoin trilemma.

This is quite logical and deal with inter bank movement of money between banks and if the software is smart it might even
enable more liquidity between the banks in cases where the ledger between banks has become exhausted because the movement
of money has all been in one direction and for all I know the banks could reduce the transaction fee being charged if they need to fill the
buffer of BTC back up to the top.

I have absolutely no trouble with this at all but anyone lending "sufficient funds" and charging a fee is a bank and will incur costs
as they make a profit from you the customer so lets call "Channels" lines of credit and hubs by the rightful name of "Banks" with
routeing being inter bank settlement which really become settlement with central banks much like the FED or BoE

Can no one see why I am screaming

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 05:40:38 PM
Last edit: January 20, 2018, 05:55:25 PM by sjefdeklerk
 #59

3. Channel closes and my "mini block" is sent in to chain. Do I pay another fee for this?

During settlement with the hub/bank the balance left in the private ledger gets release so even if you
have $0.01 left in credit then it gets written to the BTC public block-chain and the hub has to pay the
$30 to the miners and locks are then released in the BC that were created when you made a deposit

Remember they are selling lightning to us as if Bob , Alice and David create these money conduits that they call
channels and you better hope that Alice is happy to act as a charity hub for you when she gets hit with having to pay
the miners this $30 transaction fee.

if you on the other hand owe $0.01 to the Alice then you get to pick up the $30 bill and believe me I have
not even started to blow holes in this deception that they have planned for us.

Yes sure anyone can become a hub if they keep the software running all day, have lots of hardware
and tons of BTC to finance the private ledger plus high speed internet connections so that will be the
current miners becoming bankers won't it then


Wait, I'm not following you. Let's say Alice and Bob open a channel, both put 0.1 BTC in it. They both do some payments and then Bob is broke, and Alice still has 0.02 BTC. They want to close the channel, now what's the rule regarding who pays the miner fee to close/settle the channel? I always assumed they'd just split the miner fee automatically? But since Bob lost all his money already he doesn't care about settling so unless he's forced to pay, then the payment will be for Alice ?
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January 20, 2018, 07:36:23 PM
 #60

On the other hand, referring to the account status is kinda lame argument. I don't know what reasons people have to crate new account and I accept the fact it's not my business. I prefer to think that Established account probably know things, but newbie account may or may not have knowledge. We should not deny people privacy by simply discarding posts from fresh acc. (My acc for example is not my main)
that's kind of an elegant way to express acceptance, that (n)etiquette can be ignored. Maybe no, or not in my humble opinion.... I'd rather see newbies to introduce, observe, understand (! - and show, that an effort was made to understand!), then comment (open questions), discuss, and then (if progress in knowledge is proven) allow to critisize. And of course don't insist others have to prove, how far they are wrong.
I think I am looking more at reputation not privacy.

On the technology: bitcoins must not be the only ramp on/off to the lightning network. Once I have coins in lightning, there is no reason to close the channel after every transaction. Au contraire, I could develop new business models around "my" coins in the channel. Last recently I discussed the value of having coins in the channel, while someone else needs to quickly send funds, but current congestion and fees prevent him to do so... And looking at the fees that large exchanges pay as per today, I guess they would be the first candidates to think about lightning channels (or cost reduction). Also bitcoin faucets, marketing hubs and regular payment services come to mind. I consider this to be the mesh network, which is clearly decentralized. Only commies would want to have lightning centralized:-)
Whereas I can't predict the future, I would think that reducing tx costs is a driver for moving to technology, in this case to Lightning.

You make a very good point that with LN there is no need to close a payment channel once opened. While videos like https://www.youtube.com/watch?v=UYHFrf5ci_g&feature=youtu.be are spreading the FUD that banks and Blockstream inc will become the payment hubs, in reality the LN opens the possibility for anyone to become a hub if they so choose. In effect the LN will make bitcoin further decentralized but ONLY if Bitcoin holders choose to participate in a bigger way. If the people are too busy or have no interest in acting as hubs then the LN will just be another vehicle for the power elite to control and create more wealth for themselves. The same as throughout history.
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January 20, 2018, 07:41:32 PM
 #61

This article was just posted, pretty much what I've been saying too: https://www.coindesk.com/lightning-network-may-not-solve-bitcoins-scaling-trilemma/

Thanks for the like and it says
Quote
Lightning developers are designing a routing facility that identifies which network nodes have sufficient funds to make a payment, calculates the shortest viable route to the payment destination across those nodes, and sends the payment. If this works, it would resolve the bitcoin trilemma.

This is quite logical and deal with inter bank movement of money between banks and if the software is smart it might even
enable more liquidity between the banks in cases where the ledger between banks has become exhausted because the movement
of money has all been in one direction and for all I know the banks could reduce the transaction fee being charged if they need to fill the
buffer of BTC back up to the top.

I have absolutely no trouble with this at all but anyone lending "sufficient funds" and charging a fee is a bank and will incur costs
as they make a profit from you the customer so lets call "Channels" lines of credit and hubs by the rightful name of "Banks" with
routeing being inter bank settlement which really become settlement with central banks much like the FED or BoE

Can no one see why I am screaming


YES I CAN. Yesterdays crypto rebels and pioneers are becoming todays pirates and profiteers. Greed and the lust for money and material things is the root of all evil. But if the masses participate in the LN and keep their own hubs online, then the banks will at least have some competition, keeping the network in check
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January 20, 2018, 08:39:40 PM
 #62

Wait, I'm not following you. Let's say Alice and Bob open a channel, both put 0.1 BTC in it. They both do some payments and then Bob is broke, and Alice still has 0.02 BTC. They want to close the channel, now what's the rule regarding who pays the miner fee to close/settle the channel? I always assumed they'd just split the miner fee automatically? But since Bob lost all his money already he doesn't care about settling so unless he's forced to pay, then the payment will be for Alice ?

Well money needs to move from Bob to Alice on the main block-chain so Bob picks up the $30 miners fee and Bob has no option but to settle the bill
because he (His wallet really) signed the micro transactions that happened on the private ledger to agree to payments and the $30 fee comes out
his BTC on the public block-chain

in this case Bob's 0.1BTC was lock on the main BC and is sent to Alice and at the same time her original 0.1BTC also gets unlocked on the BC
as an atomic transaction so maybe Bob and Alice were forced to leave $30 in the main BC for each new channel they open to cover the $30
miners fees, sorry not sure.

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 09:01:26 PM
 #63

Wait, I'm not following you. Let's say Alice and Bob open a channel, both put 0.1 BTC in it. They both do some payments and then Bob is broke, and Alice still has 0.02 BTC. They want to close the channel, now what's the rule regarding who pays the miner fee to close/settle the channel? I always assumed they'd just split the miner fee automatically? But since Bob lost all his money already he doesn't care about settling so unless he's forced to pay, then the payment will be for Alice ?

Well money needs to move from Bob to Alice on the main block-chain so Bob picks up the $30 miners fee and Bob has no option but to settle the bill
because he (His wallet really) signed the micro transactions that happened on the private ledger to agree to payments and the $30 fee comes out
his BTC on the public block-chain

in this case Bob's 0.1BTC was lock on the main BC and is sent to Alice and at the same time her original 0.1BTC also gets unlocked on the BC
as an atomic transaction so maybe Bob and Alice were forced to leave $30 in the main BC for each new channel they open to cover the $30
miners fees, sorry not sure.

Sorry if I misunderstand you but it seems you don't understand the concept of LN (maybe you do but then I don't understand your post). The money doesn't move 'on chain' from Bob to alice. Both deposit 0.1 BTC into their channel, THAT is an on-chain transaction. When everything is settled the money needs to move from the channel to, in this case, Alice. What I don't know though is how these fees are divided. Do both pay $30 for opening the channel (when they both wire money into the channel) ? I think this might be the case since both move money into the channel, so that's 2 transactions on-chain (one on-chain transaction from Alice and one on-chain from Bob, both into the channel). When closing 1 transactions from the channel to Alice takes place, but who pays for this one ?

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January 20, 2018, 09:03:48 PM
 #64

Wait, I'm not following you. Let's say Alice and Bob open a channel, both put 0.1 BTC in it. They both do some payments and then Bob is broke, and Alice still has 0.02 BTC. They want to close the channel, now what's the rule regarding who pays the miner fee to close/settle the channel? I always assumed they'd just split the miner fee automatically? But since Bob lost all his money already he doesn't care about settling so unless he's forced to pay, then the payment will be for Alice ?

Well money needs to move from Bob to Alice on the main block-chain so Bob picks up the $30 miners fee and Bob has no option but to settle the bill
because he (His wallet really) signed the micro transactions that happened on the private ledger to agree to payments and the $30 fee comes out
his BTC on the public block-chain

in this case Bob's 0.1BTC was lock on the main BC and is sent to Alice and at the same time her original 0.1BTC also gets unlocked on the BC
as an atomic transaction so maybe Bob and Alice were forced to leave $30 in the main BC for each new channel they open to cover the $30
miners fees, sorry not sure.

This routing issue through a decentral random network is a NP hard and unsolved math issue.

It is trivial in a few big clearing hub central mesh...

Easy to see where this will end.

Guess its not NP hard to educate enough on this but if media get this soon... wtf

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January 20, 2018, 09:23:47 PM
 #65

But if the masses participate in the LN and keep their own hubs online, then the banks will at least have some competition, keeping the network in check

So would you let a total stranger borrow $1 from you even if you know you are 100% guaranteed to get it back
which you are in this case like

Me ----------$1.00 -------> You ------$500 ----->Bank One.........>

if you act as a hub/bank for me then your deposit at the banks goes down to $499 which is not a big deal and you could even swap banks
without any trouble if another bank offered you lower fees or the old bank kept going off-line without upsetting me as shown below

Me ----------$1.00 -------> You ------$155 ----->Bank Two.........>

Just opening yourself up as free hub would have you flooded in seconds so it would have to be some type of manual
process you would need to use when deciding who to let people in but yes it works but what if this then happens

Me <----------$49.00 ------- You <------$205 -----Bank Two<------ $50 --------- My Mum

Your balance with the banks goes up to $205 and now your balance with me becomes a credit of $49 to me
and I then close the channel and your left holding the baby and having to pay the $30 transactions costs

Do you think a bank is going to let you pump 100 transactions a hour through them given that they too are
forced to pay fees and won't charge you this fee plus a profit margin and you might be nice and don't mind
lending your BTC out in the private ledger with me for free but banks don't work like that so in effect deposits of
opening a channel do not pass up the chain so even if I deposited $1000 with you then it does not mean that
you can spend $1499 with bank one.

Forget the development team programming and testing this "thing" because they have not even put out a document
that crosses all the dots and signs the tee's that anyone can understand so all we get is wishful thinking and visual
propaganda from Lightning being fast and yes it could speed it up but this is no racing car that's for sure









Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 09:29:13 PM
 #66

Do you think a bank is going to let you pump 100 transactions a hour through them given that they too are
forced to pay fees and won't charge you this fee plus a profit margin and you might be nice and don't mind
lending your BTC out in the private ledger with me for free but banks don't work like that so in effect deposits of
opening a channel do not pass up the chain so even if I deposited $1000 with you then it does not mean that
you can spend $1499 with bank one.
The idea is that everybody who functions as a hub in a route gets a small fee for it. So you gain like 'interest' on your money that serves as a hub. I don't see a problem in this part.
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January 20, 2018, 09:50:28 PM
 #67

Sorry if I misunderstand you but it seems you don't understand the concept of LN (maybe you do but then I don't understand your post). The money doesn't move 'on chain' from Bob to alice. Both deposit 0.1 BTC into their channel, THAT is an on-chain transaction.

Correct and it locks an amount for Bob and Alice on the chain (I assume that will be free, lock manager)

Quote
When everything is settled the money needs to move from the channel
It was never in the channel as such, just locked on the main block-chain to ensure each party
had money to cover settlement so what really went between Bob and Alice was IOU's backed by insurance if you like

Quote
Do both pay $30 for opening the channel (when they both wire money into the channel) ?

No they are free to open, real BTC on the BC never moved and the $30 miners cannot be split because
money on the BTC block is always sent and the sender pays the costs to send just like sending a letter

Think about it this way. We walk into a casino and both deposit $100 each with the cashier and she gives us both
100 cheap plastic tokens each so we pick a table and play flick the coin but it's only a two player game (Private ledger) and I end up with 190 tokens
and your only left with 10 so then we return to the cashier and the nice lady give me $190 cash and you $10 (Our original
money back) and she then looks at you and says it's custom here for the loser to pick up the settlement charge for us lending
you the table and you now owe the nice lady $30 please (Miners transaction fees)








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January 20, 2018, 10:00:46 PM
 #68

Correct and it locks an amount for Bob and Alice on the chain (I assume that will be free, lock manager)

Nothing is locked on the chain. A payment channel is really nothing more than a specific type of a BTC address. So when you open a channel, you simply wire money from your own BTC address into that BTC address, that's all there is to it.
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January 20, 2018, 10:11:36 PM
 #69

The idea is that everybody who functions as a hub in a route gets a small fee for it. So you gain like 'interest' on your money that serves as a hub. I don't see a problem in this part.

Well to be a useful hub/bank you need to open lots of channels, have the hardware and money to fill the buffers (Trading Capital)
and a 24/7 program running plus network bandwidth and this set up shown blow just won't achieve anything

Claire--David--Pam--You--Harry--Deb--Peter--and Paul

Because if Deb runs out of money on deposit then "You" cannot spend even if your in credit with Harry and
even if we ignore internal fees on the private ledgers we are still in lots of trouble because Pam can close the channel
with you when she is in credit with you for just $1 and you then get to pay the $30 miners fees

Your combined deposits don't propagate up the channels only your spending or earnings propagate


Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 10:23:18 PM
 #70

Nothing is locked on the chain. A payment channel is really nothing more than a specific type of a BTC address. So when you open a channel, you simply wire money from your own BTC address into that BTC address, that's all there is to it.

No, no and no because the only way you can move money on the block-chain is to pay the fees and
this then results in a transaction on the block-chain which then solves nothing.

it has to be locked to ensure that you can settle with the private ledger later.

what your suggesting would in fact result in two transactions on the BC if you spent $50

Bob-BC ---------------> Temp address ----------->Alice-BC
                Monday                                Friday

                                                   


Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 10:30:27 PM
 #71

what your suggesting would in fact result in two transactions on the BC if you spent $50

Bob-BC ---------------> Temp address ----------->Alice-BC
                Monday                                Friday


That's how LN works. A payment channel is really nothing more than a specific type of a BTC address: it's 'multisig' which means it needs more than 1 signature. And there is a contract stating how much in the channel is mine and how much is yours. Think of it as an escrow account that gets released after, say, 1 month, but in this 1 month both users can change the percentage in the escrow that belongs to me and how much belongs to you.

An example: Let's say we both open a payment channel and we both wire 1 BTC into it. That's 2 onchain transactions, 1 from me into the payment channel and one from you. Now the channel is open, we have 2 BTC in it and the relationship is 50/50. Now we do a bet for 0.25 BTC. You win the bet. So now 1.25 BTC in the payment channel money is yours and 0.75 is mine. We both sign that 'transaction', so we agree that that's the new status of our common money. We keep on betting and I lose time after time. Now 100% of the payment channel is yours. Now we close the payment channel and one ON CHAIN transaction takes place, where the 2 BTC from the payment channel is transfered to your BTC wallet. That's all there is to it.

So in this case there were 3 on chain transactions and we've betted several times, these were free each time. But in the end our bets did cost 3x miner fee.
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January 20, 2018, 10:40:03 PM
 #72

This routing issue through a decentral random network is a NP hard and unsolved math issue.
It is trivial in a few big clearing hub central mesh...
Easy to see where this will end.
Guess its not NP hard to educate enough on this but if media get this soon... wtf

Any banking hub holding private ledgers is centralization unless all wallets open up ten
alternative channels they can use so forget propagating my IP-Address or the hubs
public address around 20,000 mining nodes because they are not only burning CPU's out
these days but the bandwidth is massive already

Star type topology of a number of specialist nodes to act as a type of cluster DNS servers
has got to be baked into this cake and I don't really object to that much but they are not
doing this or are but are not being honest about it. Others may not agree with me here

20 billion pings a hour to act as beacons would suit the designers because they are into
complexity, and wasting CPU's, energy and bandwidth as it is so please don't suggest this
to the team.

Come on it now costs 90KWH just to process one transaction and I ran the numbers myself
and came up with 70KWH but forgot to add ISP network  switches into the calculation so yes
it does seem right

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 10:53:22 PM
 #73

That's how LN works. A payment channel is really nothing more than a specific type of a BTC address: it's 'multisig' which means it needs more than 1 signature. And there is a contract stating how much in the channel is mine and how much is yours. Think of it as an escrow account that gets released after, say, 1 month, but in this 1 month both users can change the percentage in the escrow that belongs to me and how much belongs to you.

An example: Let's say we both open a payment channel and we both wire 1 BTC into it. That's 2 onchain transactions, 1 from me into the payment channel and one from you. Now the channel is open, we have 2 BTC in it and the relationship is 50/50. Now we do a bet for 0.25 BTC. You win the bet. So now 1.25 BTC in the payment channel money is yours and 0.75 is mine. We both sign that 'transaction', so we agree that that's the new status of our common money. We keep on betting and I lose time after time. Now 100% of the payment channel is yours. Now we close the payment channel and one ON CHAIN transaction takes place, where the 2 BTC from the payment channel is transfered to your BTC wallet. That's all there is to it.

So in this case there were 3 on chain transactions and we've betted several times, these were free each time. But in the end our bets did cost 3x miner fee.

I am trying to follow you so where physical are you saying these private ledgers are held ?
20,000 servers all replicating 10,000,000 private ledgers and trying to keep in sync or
one copy in my wallet and a copy in yours if we are working without middle men (Banks)

The private ledger is 'multisig' so you can prove that I agreed to send you $1 worth in the IOU's we
are using in the private ledger and these IOU's are as good as gold because they are backed
by real BTC on the block-chain that are now locked (Cannot be moved)

Yes just read what you said again and that's three transactions at a cost of $90 instead of one so I
am sure the miners would love you. Locks replace the first two you mention and when the channel
settles the BTC moves on the BC and the miners get $30 at this stage.

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 20, 2018, 10:56:15 PM
 #74

I am trying to follow you so where physical are you saying these private ledgers are held ?
20,000 servers all replicating 10,000,000 private ledgers and trying to keep in sync or
one copy in my wallet and a copy in yours if we are working without middle men (Banks)

The private ledger is 'multisig' so you can prove that I agreed to send you $1 worth in the IOU's we
are using in the private ledger and these IOU's are as good as gold because they are backed
by real BTC on the block-chain that are now locked (Cannot be moved)

You really overcomplicate things. Really, from the bitcoin ledger perspective there is NO difference if you send money to me or to a payment channel. Both are just transactions from your BTC wallet to another BTC wallet.
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January 20, 2018, 11:19:39 PM
 #75

You really overcomplicate things. Really, from the bitcoin ledger perspective there is NO difference if you send money to me or to a payment channel. Both are just transactions from your BTC wallet to another BTC wallet.

You did not answer my questions and I love KISS so maybe you need to go back and read what I said again
to understand it because from what you just said I cannot work out if your saying we need one, two or three
blocks of data changed on the BC even if we do play a game of dice over the channel and we roll the dice
700 times

See this link and watch the video about Bob buying Coffee from the coffee shop every day for a month
https://bitcointalk.org/index.php?topic=2776719.msg28395400#msg28395400

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 21, 2018, 01:29:31 AM
Last edit: January 21, 2018, 01:48:09 AM by sjefdeklerk
 #76

You really overcomplicate things. Really, from the bitcoin ledger perspective there is NO difference if you send money to me or to a payment channel. Both are just transactions from your BTC wallet to another BTC wallet.

You did not answer my questions and I love KISS so maybe you need to go back and read what I said again
to understand it because from what you just said I cannot work out if your saying we need one, two or three
blocks of data changed on the BC even if we do play a game of dice over the channel and we roll the dice
700 times

See this link and watch the video about Bob buying Coffee from the coffee shop every day for a month
https://bitcointalk.org/index.php?topic=2776719.msg28395400#msg28395400

I just watched your video. The problem is that a lot of articles/video's do explain the basics but don't explain it all so that's what can be confusing. When I started learning about LN I had to read several articles and piece the info together to really figure out what's going on.

This is the key though:

"A payment channel is a method to make off-chain transactions between two parties. To build up one you need to transact Bitcoins on a 2-of-2-Multisig address. For example, 0.1 bitcoin. 2-of-2 means that both you and the other party have to sign a transaction to make a payment. Like with bank accounts used for your rent deposit.

After both parties have transacted bitcoins to the multisig-address, they build a new transaction – for example, one who pays 0.1 bitcoin to each of them – and sign them. Now the tricky part starts; this transaction is not propagated to the Bitcoin network and not confirmed by the miners, but just shared between both parties involved in the payment channel. Instead of sending it to the network, they can modify the transaction as often as they want. These modifications of the transaction, signed by both parties, can be used to make off-chain payments."

https://btcmanager.com/lightning-network-primer-pt-i-building-payment-channels/

So again, the 'payment channel' is really just a BTC address. So from the ledger perspective, there's no difference if I transfer money to you directly or to the payment channel. It's just a transfer from BTC address 1 to BTC address 2. So the ledger just registers

                       1 BTC
BTC address A ----------> BTC Address B

Where BTC address B could be my wallet but it could also be a multisig address (= payment channel). This is why LN can be integrated because from the ledger perspective nothing even changes.

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January 29, 2018, 09:47:24 PM
 #77

Andreas here said that there are no incentive to become a huge hub because you must keep your private keys with a lot of fund exposed. 
https://www.youtube.com/watch?v=D-nKuInDq6g

then he said (min 8:28) that LN tends to rebalance with some tecniques, if use route just in 1 direction and your balance is gone, then ln tends to rebalance using route in opposite direction.
seems that ln automatically open new channel. Someone can explain me this better?
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January 30, 2018, 12:00:02 PM
 #78

Andreas here said that there are no incentive to become a huge hub because you must keep your private keys with a lot of fund exposed. 
https://www.youtube.com/watch?v=D-nKuInDq6g

then he said (min 8:28) that LN tends to rebalance with some tecniques, if use route just in 1 direction and your balance is gone, then ln tends to rebalance using route in opposite direction.
seems that ln automatically open new channel. Someone can explain me this better?

Yes banker hubs will sort of balance out because money flows backwards and forwards in both directions and they have huge
amounts of BTC in the ledgers that becomes very liquid unlike me and you who's just have flows going out

See the network map https://lnmainnet.gaben.win/

This is not mamma and papa banking like they were trying to make out and just now the sub-branch, main branch banks
are getting setup ready for fee paying customers

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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January 30, 2018, 03:31:46 PM
Merited by nullius (1)
 #79


This is not mamma and papa banking ...
[/quote]
no its not, sounds more like a childish behaviour trying to hijack every lightning thread here. 
Anti-Cen! Already me and others complained... You try to put your fud and propaganda in every lightning thread. Nobody believes it, but that's a different topic. I propose to open a new task, where you state, that lightning is the piece of shit that you think it is, and explain at a very detailed level, why this is what you think it is. And of course, you can put all your weird assumptions into it (like paying high amounts of pounds/dollars/Euros), and also your excellent predictions of the future. And for sure the funny banksters comparisons.

The advantage of doing so is that you just need to put one comment into all the lightning threads, with a link to your thread ("I already described here, why..."). That gives you a special level of reputation as well. And it doesn't pollute all threads, reduces others from being diverted with funny explanations, which hampers reading experience.  So community would really benefit from a grouping of your arguments into a single thread.

Also, it reduces network traffic, and especially saves space. If you continue to comment on each and every task, it is like bitcoin storing only 227 bytes of tx data on thousands of servers, and based on your own argumentation, this is highly inefficient.

Help us here in the forum to get also more efficient!
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January 30, 2018, 04:02:56 PM
 #80

This is not mamma and papa banking ...
no its not, sounds more like a childish behaviour trying to hijack every lightning thread here. 
Anti-Cen! Already me and others complained... You try to put your fud and propaganda in every lightning thread. Nobody believes it, but that's a different topic.

Anti-Cen tries to use 512-bit RSA for Bitcoin keys (archive) (again!).  I suggest that his credibility on any technical topic whatsoever is absolutely zero.

I propose to open a new task, where you state, that lightning is the piece of shit that you think it is, and explain at a very detailed level, why this is what you think it is. And of course, you can put all your weird assumptions into it (like paying high amounts of pounds/dollars/Euros), and also your excellent predictions of the future. And for sure the funny banksters comparisons.

And for sure, explanation of how 512-bit RSA is used in the Lightning Network because Bitcoin developers are ignorant doofuses who lack Anti-Cen’s deep experiential knowledge of distributed databases.

(Your suggestion is excellent, pebwindkraft, as would be known to anybody who knows how to successfully argue a point in a persuasive manner—instead of just starting pointless arguments everywhere.)

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April 01, 2018, 01:48:55 PM
Last edit: April 01, 2018, 02:02:13 PM by sjefdeklerk
Merited by Anti-Cen (1)
 #81

Sooo... it seems that we have a verdict. EXACTLY like I predicted, LN = centralization, it's easy to see now: https://lnmainnet.gaben.win/ There are almost no 'client to client' channels, like the LN enthusiasts predicted. It's just client-to-hub. It's so ironic, people wanted Bitcoin for decentralization and now it's going to get centralized around 'banks' again.
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April 01, 2018, 04:35:07 PM
 #82

Sooo... it seems that we have a verdict. EXACTLY like I predicted, LN = centralization, it's easy to see now: https://lnmainnet.gaben.win/ There are almost no 'client to client' channels, like the LN enthusiasts predicted. It's just client-to-hub. It's so ironic, people wanted Bitcoin for decentralization and now it's going to get centralized around 'banks' again.

Yes and I am in 100% agreement with these words before the thugs get sent in as usual to protect the other members of the congregation
and maybe it's time to see some good faith coming from the miners who thought they could rip us off for transactions fees and let them
provide lightning free of charge until a real fix by the development team is put in place to make on-block transactions scale.

We did not change the rules and forget about the excuse of China, Korea or Putin, it was fees that crashed Bitcoin price, plot it on a
graph to get a prognosis of what went wrong.

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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April 01, 2018, 06:00:32 PM
 #83

Sooo... it seems that we have a verdict. EXACTLY like I predicted, LN = centralization, it's easy to see now: https://lnmainnet.gaben.win/ There are almost no 'client to client' channels, like the LN enthusiasts predicted. It's just client-to-hub. It's so ironic, people wanted Bitcoin for decentralization and now it's going to get centralized around 'banks' again.

Yes and I am in 100% agreement with these words before the thugs get sent in as usual to protect the other members of the congregation
and maybe it's time to see some good faith coming from the miners who thought they could rip us off for transactions fees and let them
provide lightning free of charge until a real fix by the development team is put in place to make on-block transactions scale.

We did not change the rules and forget about the excuse of China, Korea or Putin, it was fees that crashed Bitcoin price, plot it on a
graph to get a prognosis of what went wrong.

If fees were in any way correlated to price action, you would have expected BTC to have pumped in March. It did not. Furthermore, many of the alts and Bitcoin Cash have even lower fees than BTC; however, they all fared worse, for the most part.
Also, we really need to get away from this need for total decentralization being necessary. It's never going to happen. There is never going to be a homogeneous distribution of resources, wealth, talent and luck. Someone is always going to have some kind of advantage. BTC is still indeed P2P digital cash.
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April 01, 2018, 06:25:05 PM
Merited by bones261 (1)
 #84

If fees were in any way correlated to price action, you would have expected BTC to have pumped in March. It did not. Furthermore, many of the alts and Bitcoin Cash have even lower fees than BTC; however, they all fared worse, for the most part.

No not at all because the damage had been done and what will go down in our history books written next to the
section on Tulip Mania is that fees peeked at $55 and following this logic the BTC price should had been £500k
eight years ago.

Took years for main stream to trust digital coins, that trust has been destroyed completely for short term
miner greed and unfortunately BTC has dragged other coins  down instead of upwards like in the past and ETH
had a scaling problem but the miners acted sensible and didn't hike up fees to deal with it.

Any currency used for the exchange of good needs a stable price and the days of 1000% p.a returns will be over as
crypto-coins mature so I will look for a phoenix to rise that might for all I know be bound to the physical price of
gold or oil and not just paper oil/gold that's worth nothing to me.

Mining is CPU-wars and Intel, AMD like it nearly as much as big oil likes miners wasting electricity. Is this what mankind has come too.
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April 02, 2018, 09:45:07 AM
 #85

maybe offtopic but still.

I just want you to know i will run ln node with near zero fees and will connect it to nodes who do the same. It costs me nothing and i will contribute/give back to bitcoin and its community. Least i can do.

Bitcoin forever <3

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April 02, 2018, 01:48:53 PM
Merited by bones261 (1)
 #86

Sooo... it seems that we have a verdict. EXACTLY like I predicted, LN = centralization, it's easy to see now: https://lnmainnet.gaben.win/ There are almost no 'client to client' channels, like the LN enthusiasts predicted. It's just client-to-hub. It's so ironic, people wanted Bitcoin for decentralization and now it's going to get centralized around 'banks' again.

Each business that accepts payments via Lightning will understandably have lots of nodes connected to it.  Each customer they have may elect to open a channel with them if that turns out to be the most convenient and cost-effective option.  It doesn't necessarily imply 'banks'.  

If you count the average number of times each week you buy something from a company versus the number of times you buy or sell something privately with another individual, it's likely that businesses will be the higher number.  So it stands to reason that more channels will be open with businesses than with other individuals.

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