Question about LN routing at 1 Million TPS

[j4k0b]

So, I have been discussing the Lightning Network and I could not counter one argument: The LN uses onion routing, so the sender has to know the exact path the transaction will go through. If the LN has 1 Million TPS isn't it likely that the available routes will have changed once the route has been calculated by the sender?

( Already posted this on /r/bitcoin https://www.reddit.com/r/Bitcoin/comments/8khx5g/question_about_ln_routing_at_1_million_tps/ but didn't get any answers. )

[1714169211]

1714169211

[achow101]

Why would it? Having 1 million tps does not necessarily effect the open channels. Furthermore, calculating a path does not take all that long.

[j4k0b]

Why would it? Having 1 million tps does not necessarily effect the open channels. Furthermore, calculating a path does not take all that long.

Well if we had an open channel and I transfer all my available funds in the channel to you, I wouldn't be able to transfer more funds to you so that path would be blocked, wouldn't it?

Consequently, when a sender would use our channel as part of his route, it could have been blocked before the sender knows about it.

Is there a solution to that or do I have an error on my part here?

[achow101]

Well if we had an open channel and I transfer all my available funds in the channel to you, I wouldn't be able to transfer more funds to you so that path would be blocked, wouldn't it?

Consequently, when a sender would use our channel as part of his route, it could have been blocked before the sender knows about it.

Is there a solution to that or do I have an error on my part here?

This is certainly possible, but I doubt it would be likely or really that big of an issue.

In the event that this happens, the node which has the problem will send an error back to the origin node and then the HTLCs will fail and be removed from the commitment transactions. Then the node will choose a different route and try the payment again. It's trivial to solve and not really a problem, especially with a large, well connected network.

[j4k0b]

This is certainly possible, but I doubt it would be likely or really that big of an issue.

In the event that this happens, the node which has the problem will send an error back to the origin node and then the HTLCs will fail and be removed from the commitment transactions. Then the node will choose a different route and try the payment again. It's trivial to solve and not really a problem, especially with a large, well connected network.

Thank you very much for your answer

[r1s2g3]

From where is you get that LN use the Onion routing (It did not read anything about it that says it uses onion routing).

I think might it be some kind of multiple integrated Bus Network , in which these Bus can interact with each other.

Even if it use onion routing, then instead of giving a single path, why cannot we give a list of node  on each layer and it will transmit from  any one of the healthy nodes available in the path.

[HeRetiK]

From where is you get that LN use the Onion routing (It did not read anything about it that says it uses onion routing).

It wasn't part of the original proposal, but it's mentioned in this Lightning Labs presentation, for example:
https://cyber.stanford.edu/sites/default/files/olaoluwaosuntokun.pdf

Apparently the idea was first brought up here:
https://lists.linuxfoundation.org/pipermail/lightning-dev/2015-July/000019.html

[achow101]

From where is you get that LN use the Onion routing (It did not read anything about it that says it uses onion routing).

It wasn't part of the original proposal, but it's mentioned in this Lightning Labs presentation, for example:
https://cyber.stanford.edu/sites/default/files/olaoluwaosuntokun.pdf

Apparently the idea was first brought up here:
https://lists.linuxfoundation.org/pipermail/lightning-dev/2015-July/000019.html

It is now part of the official Lightning Network specification: https://github.com/lightningnetwork/lightning-rfc/blob/master/04-onion-routing.md

[thecodebear]

Also any given node is not going to be changing its amount of BTC very often, at least for normal users, so if there are millions of LN nodes and your route takes your payment through a handful of nodes, the likelihood that any of them will have performed a transaction and fallen below the amount you are sending in that very small amount of time would be extremely rare. That at least covers nodes that aren't major hubs of activity. But nodes that are major hubs of activity are likely to have a lot of BTC stored in them so again that just won't be a problem.

Also remember that even VISA, the largest transaction processor in the world, only averages like 3000 or 4000 txs/sec. So while the LN may be able to technically handle on the order of 1 million txs/sec, it will never get close to that number, which bring the likelihood of a node on your route making a payment in the time between your payment's route calculation and sending it even that much less likely. This still might occasionally occur, in which case maybe the payment would just take a few extra seconds to go through due to needing to calculate a new route and resend the payment.

[QRC]

Also remember that even VISA, the largest transaction processor in the world, only averages like 3000 or 4000 txs/sec. So while the LN may be able to technically handle on the order of 1 million txs/sec, it will never get close to that number

It can easily get to this number and VISA is not the right example here. LN can handle billing for pay videos, phone calls, ect. on pay per second level. VISA cannot do it.

[thecodebear]

Also remember that even VISA, the largest transaction processor in the world, only averages like 3000 or 4000 txs/sec. So while the LN may be able to technically handle on the order of 1 million txs/sec, it will never get close to that number

It can easily get to this number and VISA is not the right example here. LN can handle billing for pay videos, phone calls, ect. on pay per second level. VISA cannot do it.

Easy to get to a level of 250x or more what the largest payment processor does....that's not easy. It MIGHT eventually happen if micropayments take over for a lot of stuff. But for most things micropayments are not a better solution. Subscription services are a lot better for a lot of things and will never switch to micropayments, because with subscription services you know exactly how much you will be paying, and can get a better deal if you use it a lot, which you probably do if you find it worth paying for, and the company knows exactly how much they will make as well, so for many services the subscription model is much better both for merchant and consumer. Your specific examples for the vast majority of people work better as a monthly subscription service.

No doubt some new kinds of services will spring up around the micropayments option, but to say it will easily go to 1 million tx/s is right now pure fantasy.

[Ned Kelly]

so for many services the subscription model is much better both for merchant and consumer. Your specific examples for the vast majority of people work better as a monthly subscription service.

From merchant perspective, monthly subscription is good, yearly is better, decade is the best. Not sure about consumer perspective. I prefer pay as you go model myself.

[Samarkand]

so for many services the subscription model is much better both for merchant and consumer. Your specific examples for the vast majority of people work better as a monthly subscription service.

From merchant perspective, monthly subscription is good, yearly is better, decade is the best. Not sure about consumer perspective. I prefer pay as you go model myself.

Take a look at the success of companies like Netflix. They are not charging you a micropayment for every
minute of content that you consume, but rather charge a flat monthly fee.

I highly doubt that Netflix would be more successful if they would abandon their current business model.
Micropayments are a viable solution for many other problems, but the subscription model has
several advantages when it comes to stuff that is consumed in large amounts - not only from
the merchant perspective, but also from the consumer perspective.

[Carlton Banks]

Take a look at the success of companies like Netflix. They are not charging you a micropayment for every
minute of content that you consume, but rather charge a flat monthly fee.

I highly doubt that Netflix would be more successful if they would abandon their current business model.

Netflix's business model is to borrow loads of money, then charge users less than their costs. They never made any profit on streaming; they're in huge, ever increasing debt.

(the idea is to establish themselves in the streaming marketplace, then massively ramp up the subscription fees later)


There's no reason why a Netflix-like company wouldn't add pay-per-view to their model, but only when they're sufficiently dominant in the overall pay-TV market (i.e. once they've eclipsed cable providers altogether, and once their customers feel reliant on their service)

[Kakmakr]

Take a look at the success of companies like Netflix. They are not charging you a micropayment for every
minute of content that you consume, but rather charge a flat monthly fee.

I highly doubt that Netflix would be more successful if they would abandon their current business model.

Netflix's business model is to borrow loads of money, then charge users less than their costs. They never made any profit on streaming; they're in huge, ever increasing debt.

(the idea is to establish themselves in the streaming marketplace, then massively ramp up the subscription fees later)


There's no reason why a Netflix-like company wouldn't add pay-per-view to their model, but only when they're sufficiently dominant in the overall pay-TV market (i.e. once they've eclipsed cable providers altogether, and once their customers feel reliant on their service)

Do not underestimate the consumers Carlton. In my country a large franchise pissed off a bunch of consumers and they started to boycott them. <They are bankrupt now> There will always be alternative offerings and companies that would step up to take their place, when they do a Bait and switch strategy like this.  

The internet is already saturated by other "illegal" streaming services, so they are already competing with FREE streamers out there.  

Circle tried the same thing and Bitcoiners left in their droves.  

[Samarkand]

...
Netflix's business model is to borrow loads of money, then charge users less than their costs. They never made any profit on streaming; they're in huge, ever increasing debt.
...

I would agree with you if we were talking about Tesla (Tesla is borrowing a ton of money and is unprofitable).
However, Netflix is growing like crazy and is in a much better situation.

E.g. take a look at this article from last month:
https://www.fool.com/investing/2018/04/22/netflix-will-be-more-profitable-than-you-think.aspx

For the umpteenth time in recent memory, the streaming champ this week blew past earnings estimates...

The first-quarter report featured the usual blowout numbers as revenue surged 40.4% ...

However, the most impressive part of Netflix's earnings report was its rapidly improving profit margin.
Operating margin jumped to 12.1%, due in part to the timing of content spend, and management said
full-year operating margin would be 10%-11%, its best ever. While Netflix's earnings multiple is still
sky-high due to the stock's rapid growth, it's becoming clear that Netflix will be solidly profitable,
with double-digit margin that should continue to get wider.

I know that they are in debt, but this is mainly due to the expensive streaming contracts and licenses.
This is a misleading situation in my opinion for the following reason:
Let´s say Netflix produces a movie like "The Irishman", which costs 140M $. The costs are paid upfront,
but the income due to the movie will show up much later when they actually air the movie.

Netflix current strategy of heavy expansion and expensive productions may be a bit aggressive and fueled
by a huge amount of debt, but it still seems to be working so far.

Irrespective of this, the amount of debt doesn´t even look that high compared to the market capitalization of Netflix.

Companies like Tesla are much more likely to go down due to huge amounts of debt.


edit:
Actually I think that you are right on second thought.

The root cause of all these companies that
are "debt-fueled" (Tesla, Netflix...) is probably the fact that the whole economy is distorted due to the availability
of unprecedented amounts of liquidity at low interest rates.

In an economic environment where central banks couldn´t introduce liquidity to this extent (e.g. in an
economy that is based on sound money like Bitcoin) situations like this wouldn´t be possible.

[Carlton Banks]

We're both wwwwwwwway off topic. Jut throwing that out there