[2018-02-01] Coinfinity shows first lightning transaction on a Bitcoin ATM

[laurenB7742]

Coinfinity shows first lightning transaction on a Bitcoin ATM

What is the lightning network?

It’s a technology which is seen as a very promising solution for the scalability problem of bitcoin, although it is still in an early stage of development. It could potentially process millions of transactions each second, fast and almost without a fee.

Usually each bitcoin-transaction gets written directly in the blockchain. The lightning network works as a second-layer solution, participants are connected through payment channels and routes via multiple hops can be established on the lightning network.


A lightning transaction on a Bitcoin ATM

To get in touch with this new and promising technology, our CTO Daniel Weigl launched one of the first lightning full nodes. There currently are only a couple of hundred lightning full nodes, which are essential for the functionality of the network.

The following video shows how this first lightning transaction has been executed at a Lamassu Bitcoin ATM in our office in Graz:
https://www.youtube.com/watch?v=jBHYWtd-b9g

To establish a connection to the lightning network, a payment channel was funded through this transaction. For this early demonstration, we purposely set a fixed amount of 50 Satoshi as the actual payment.

Even though the lightning network still is in an experimental stage, we made a big step towards mass suitability of bitcoin. The next months will be extremely exciting!

Whole article: https://coinfinity.co/first-lightning-transaction-on-a-bitcoin-atm/

[Lancusters]

It seems to me that this system has great potential. Know about whales. Now they reduce the price of coins to buy coins to those users who panic. After the system lightning will be part of the system, I am sure that the price of the coins rises. But I don't understand how this system takes into account the interests of the miners. No financial interest, they can stop mining.

[Carlton Banks]

But I don't understand how this system takes into account the interests of the miners. No financial interest, they can stop mining.

Even if Lightning could completely supplant all on-chain transactions (and it can't with the present protocol), the block reward is always valuable. This is fundamental supply-demand economics: if supply contracts, and demand remains the same (or not less than the magnitude of the supply increase), then the price equilibrium point is forced up.

[Bolt Brownie]

But I don't understand how this system takes into account the interests of the miners. No financial interest, they can stop mining.

Even if Lightning could completely supplant all on-chain transactions (and it can't with the present protocol), the block reward is always valuable. This is fundamental supply-demand economics: if supply contracts, and demand remains the same (or not less than the magnitude of the supply increase), then the price equilibrium point is forced up.

From what I know, and I understand it's little right now, the transaction will only be written on the blockchain as soon as a payment channel is closed. So would miners still get a fee when a channel is closed right? Also, I understand that you pay a fee to open a channel and then fund it. Is that fee going to the miners as well, or to the ones running the LN node?

Finally, if the fees get to low (because they are only paid when a channel closes, or something like that), and there is no block reward, because there are no more bitcoins to mine, what would be the incentive to support the network? Would miners keep verifying transactions and at the same time would try to run LN nodes with big limits so that a lot of payments would pass their node? (assuming they get small fees when a payment passes their nodes, which I believe they do).

[CyberKuro]

It's been a long time since the first time I've heard about lightning network and yes it's a  good thing if we can transact faster and just pay a low fee, especially for daily transactions or applied by exchanges (but exchanges maybe don't want it due to they want anything to maximize their income).
But the lightning network still not implemented or core developers thinks it is not ready? or it will going through all the drama such as Segwit did. don't know about it.

[richardsNY]

From what I know, and I understand it's little right now, the transaction will only be written on the blockchain as soon as a payment channel is closed. So would miners still get a fee when a channel is closed right? Also, I understand that you pay a fee to open a channel and then fund it. Is that fee going to the miners as well, or to the ones running the LN node?

The way I understand it (anyone correct me if I'm wrong), both opening and closing channels result in you paying a miner fee. All transactions and their fees made when channels are open will then be distributed to the node(s) from there, which basically means that miners don't get anything for the transactions you make and take. That is the main reason miners don't like lightning network -- for them it feels like missing out on so much more income for their work. I personally think they still have nothing to complain about due to how the price will keep going up, where on top of that not everyone is forced to make and take transactions with lightning network. They will still get regular transaction fee income.

[Vektrum]

About the network of lightning write for a long time and, as I recall, they said that this network will be introduced into bitcoin immediately after the new year. However, January passed, and the lightning network has not yet been implemented. Meanwhile, the course of bitcoin, including through its shortcomings, continues to fall and fall. The impression is that to introduce a network of lightning simply do not hurry. As the information comes in from time to time, this would be a good solution for bitcoin and it would immediately recover in price.

[BitcoinPanther]

Just wow!  At last the long awaited Lightning Network update is implemented and tested on a Bitcoin ATM.  This is just great news! A light in bitcoin current status.  After all the FUD and negative news about Bitcoin, I believe this somehow will turn the table.  I wonder what will be the effect of this news on the falling bitcoin market.  Does this update enough to push the price up again? 

[Carlton Banks]

the transaction will only be written on the blockchain as soon as a payment channel is closed. So would miners still get a fee when a channel is closed right?

Yes.

Also, I understand that you pay a fee to open a channel and then fund it. Is that fee going to the miners as well

Yes, to the miners.

Finally, if the fees get to low (because they are only paid when a channel closes, or something like that), and there is no block reward, because there are no more bitcoins to mine, what would be the incentive to support the network? Would miners keep verifying transactions and at the same time would try to run LN nodes with big limits so that a lot of payments would pass their node? (assuming they get small fees when a payment passes their nodes, which I believe they do).

Indeed, no incentive to run the blockchain itself would exist, but only if Lightning (or some other 2nd layer tech) had developed to the point where using the on-chain network wasn't needed for anything.

And if the on-chain network wasn't needed for anything, there's no need to mine blocks so that transactions can be sent. Everyone would keep a copy of the final state of the blockchain to ensure people were sending valid BTC over Lightning/2nd-layer-of-the-future. Or maybe there would be a way of avoiding that, bear in mind that we're talking about the year 2140, when it's more likely than not that we'll all be dead, and vast improvements in computer science and cryptography are likely to have taken place.