Lightning Network: If your whole balance is very low, can you spend it?

[PabloW]

I understand the concept of opening a payment channel were you commit with a fixed amount of BTC, transfer freely between parties, then broadcast to the network. I also understand there will be a minimum amount to of BTC to open a payment channel.

What happens if you just have enough money in your whole balance to buy a coffee for, let's say, 0.00001 BTC?

If you have to use someones elses payment channel to get through, how is it decided how much fee are you paying the channel owner?

If you can't spend small amounts, then how will it solve micro-transactions, or having unusable wallets with amounts smaller than fees?

Thanks!

[1715258776]

1715258776

[achow101]

If you have to use someones elses payment channel to get through, how is it decided how much fee are you paying the channel owner?

The channel owner determines that fee. If you don't like their fee, then you can choose to use a different channel to route your payment through.

If you can't spend small amounts, then how will it solve micro-transactions, or having unusable wallets with amounts smaller than fees?

It isn't really that you spend small amounts, but rather that you can send and receive many small amounts without paying a lot in fees.

[pawanjain]

The lightning network itself is designed in such a way that it solves the users' needs to make small amounts of payments. The user sends the amount through channels created by the receiver. You don't have to pay a lot in fees as it is now since the the amount you send to the receiver is inclusive of the fees. Once the receiver requests a payment you can decide whether to use that channel or not.

[PabloW]

Still don't understand how would you spend 0.00001 if you cant you can't even open a channel with that amount.

Now you can't spend it because fees on chain are bigger than that. Will opening channels be cheaper in the future?

[achow101]

Still don't understand how would you spend 0.00001 if you cant you can't even open a channel with that amount.

Now you can't spend it because fees on chain are bigger than that. Will opening channels be cheaper in the future?

You don't necessarily have to be the one paying the fee. Both parties in the channel can fund the channel in the same funding transaction. So if you only have 0.00001 BTC, you can have the other party be the one who pays the transaction fee. They might do this if the channel is not only for you to buy a coffee but rather that you are also expecting to get paid by this person or route incoming payments through them.

[PabloW]

Still don't understand how would you spend 0.00001 if you cant you can't even open a channel with that amount.

Now you can't spend it because fees on chain are bigger than that. Will opening channels be cheaper in the future?

You don't necessarily have to be the one paying the fee. Both parties in the channel can fund the channel in the same funding transaction. So if you only have 0.00001 BTC, you can have the other party be the one who pays the transaction fee. They might do this if the channel is not only for you to buy a coffee but rather that you are also expecting to get paid by this person or route incoming payments through them.

And what if you have only enough money to buy a coffee, so you go to the coffee store and want to pay them with it. Would it be reasonable for the coffee shop to pay transactions fees for you? Is this supposed to be a common use case scenario?

[achow101]

Would it be reasonable for the coffee shop to pay transactions fees for you?

No it is not. It would be reasonable for you to open a channel with your employer who also has a channel open with that coffee shop. Your employer would pay the transaction fees for you, and then you can pay the coffee shop. Later the employer would pay your through that channel.

Is this supposed to be a common use case scenario?

No. As I said earlier, LN is not for spending from small outputs once but rather spending from large outputs in small amounts many times. The common use case scenario is that you put in (for example) 0.01 BTC into the channel with the coffee shop. Then over the course of months or years, you slowly pay the coffee shop 0.00001 BTC per coffee but without actually making any on-chain transactions and paying their transaction fees.

[Bambangs]

if our balance is too low, we can not spend it because for shopping there is a minimum limit.
Then we have to buy first to be able to spend to the minimum.
so my conclusion that our balance of drinking should be on the lowest sales balance.

[Quickseller]

Still don't understand how would you spend 0.00001 if you cant you can't even open a channel with that amount.

With LN, it will likely be difficult to spend your last 0.00001 BTC, however once you have a channel open, it will be fairly cheep to spend 0.00001BTC if you have a significant additional balance within the channel. This is an improvement from the current state of Bitcoin because it is (and always has been for this specific example) prohibitively expensive to spend 0.00001BTC.

Now you can't spend it because fees on chain are bigger than that. Will opening channels be cheaper in the future?

The cost of on-chain transactions will likely increase.

[penig]

No. As I said earlier, LN is not for spending from small outputs once but rather spending from large outputs in small amounts many times. The common use case scenario is that you put in (for example) 0.01 BTC into the channel with the coffee shop. Then over the course of months or years, you slowly pay the coffee shop 0.00001 BTC per coffee but without actually making any on-chain transactions and paying their transaction fees.

Getting into the LN thing, every answer opens up a new question... so you have to tie an amount (from single address) to a establish a channel.  Sort of staking?  I can see how this can work for regular large payments, say with an exchange, however its a big ask to expect people to do this for small payments.  It seems like putting up a credit tab with the shop/bar and you have to hit a minimum spend to make it worthwhile.

[achow101]

Getting into the LN thing, every answer opens up a new question... so you have to tie an amount (from single address) to a establish a channel.  Sort of staking?  I can see how this can work for regular large payments, say with an exchange, however its a big ask to expect people to do this for small payments.  It seems like putting up a credit tab with the shop/bar and you have to hit a minimum spend to make it worthwhile.

You can route payments through people, and have payments routed to you through people. You don't have to just transact with the other person in the channel.

The cost of on-chain transactions will likely increase.

In the short term on-chain transaction fees will likely decrease. In the long term, if more people use Bitcoin, fees will increase, but less so to levels that they would be without LN.