Does lightning network really solve the scalability problem?

[user512]

Hello,
I want to ask you if is lightning network potentially enough scalable to achieve stable Bitcoin in the future? If we admit that only new members open a new payment channel (and that LN is fully functionable and save) to connect into lightning network (and the amount of channel closing will be minimal) and set the funding transaction, is it enough little to avoid 8GB blocks and mining centralization?
Can't one hypothetical day the amount of new members per day be too high that the setting funding transactions on the blockchain (soon or later) overloads the network anyway?
Or that way: will be the amount of new participants per day increasing in ratio more than computational power of most computers (nodes)? Sorry, if is this question simple. Admit that not only financial services will run blockchain technology (include autonomous vehicles, factories, robots, smart homes etc. who all need to put a funding transaction on the blockchain).

I think that LN does not really solve the scalability problem at all. What if despite great transaction reduction will one day the amount of funding transactions be simply too high?

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[bitmover]

8gb blocks? Bitcoin block is 1mb

I believe scalability is not a problem yet. It's more a marketing for Bcash chills and other similar shitcoins.
Except in days like this that we are in a crazy bull run , fees are low and transactions are fast.

[odolvlobo]

My assessment is that the Lightning Network goes a long way to providing scaling, but the current Bitcoin implementation cannot support a LN with any significant level of adoption. At some point, the maximum size of a block must be increased, and continue to be increased periodically.

Let's make sure that the political situation does not prevent that from happening. I believe that there is a real danger that without sufficient scaling, the system will be taken over by private networks of custodial wallets (Coinbase, Bitpay, etc.), and will become just another banking system that is just as bad as what we already have.

[Khaos77]

will become just another banking system that is just as bad as what we already have.

Now you catching on to what they planned from the beginning.  

LN was never about scaling ,
it was about introducing a network that could add offchain fractional reserve Banking to Bitcoin while pretending not to.  

Offloading Bitcoin Transactions to Gift Cards or Exchanges do a better job and are easier to use than LN.
And just to be clear LN used incorrectly actually increases BTC onchain transactions instead of decreasing it.
https://bitcointalk.org/index.php?topic=5124663.msg50330030#msg50330030

For your consideration:
If I said the Bus was overloaded and that by you taking a Taxi,
that you increased the scaling capacity of the Bus, hopefully you realize that is bullshit.
Because the actual seating capacity of the Bus did not change, the person just used another form of transportation.

But yet, the people here ,
claim that by offloading transactions from Bitcoin to the LN network , that Bitcoin scaling is increased.
When the actual Number of the BlockSize was only increased to a max of ~1.7Mb from 1 Mb when no further plans to increase more.
In effect , limiting the future growth of the blocksize  to intentionally force high fees to force greater acceptance of LN offchain to those too poor to afford onchain transactions on a regular basis.  

Offloading is not the same as Scaling.

Scaling implies Bitcoin itself could handle the volume,
offloading mean LN can handle the volume and bitcoin can't.

LN is a 3rd party network that can work using any segwit coded coin,
Bitcoin has no monopoly on LN future plans , as litecoin with LN is to have even cheaper fee structures than btc with LN.
https://cryptobriefing.com/litecoin-lightning-network-100-nodes/

Charlie Lee suggested (and Crypto Briefing reiterated) that the comparatively high price of funding Lightning channels with Bitcoin made Litecoin a competitive alternative.

[bones261]

will become just another banking system that is just as bad as what we already have.

Now you catching on to what they planned from the beginning.  

LN was never about scaling ,
it was about introducing a network that could add offchain fractional reserve Banking to Bitcoin while pretending not to.  

The LN network may have a quite a few issues, but there is no way to make it a fractional reserve. Each tx on the lightning network must be able to generate a valid closing tx on the blockchain(s). I suppose that you could do atomic swaps with some other coin that is supposedly redeemable for BTC 1 for 1. However, if people fall for that, they a stupid.

Offloading Bitcoin Transactions to Gift Cards or Exchanges do a better job and are easier to use than LN.
And just to be clear LN used incorrectly actually increases BTC onchain transactions instead of decreasing it.
https://bitcointalk.org/index.php?topic=5124663.msg50330030#msg50330030

With gift cards and debit cards, someone is just going back to the fiat system. We all know the perils of using an Exchange for a wallet. If the exchange doesn't care for your particular transactions, they can just freeze your account and make you go through a bunch of red tape to get your coins back. Also, exchanges are big target and hackers like to go for the big score.

For your consideration:
If I said the Bus was overloaded and that by you taking a Taxi,
that you increased the scaling capacity of the Bus, hopefully you realize that is bullshit.
Because the actual seating capacity of the Bus did not change, the person just used another form of transportation.

 I'm not certain why you chose LN to be the taxi and the blockchain to be the Bus, rather then the other way around. The other way around seems like it makes more sense. However, you probably couldn't get your analogy to show your point if you did that.  

But yet, the people here ,
claim that by offloading transactions from Bitcoin to the LN network , that Bitcoin scaling is increased.
When the actual Number of the BlockSize was only increased to a max of ~1.7Mb from 1 Mb when no further plans to increase more.
In effect , limiting the future growth of the blocksize  to intentionally force high fees to force greater acceptance of LN offchain to those too poor to afford onchain transactions on a regular basis.  

Offloading is not the same as Scaling.

OK, I'll start calling it offloading then. In any event, it will allow people to make more transactions and they can be rest assured that when the close the channel, they will posses every satoshi entitled to them, less the miner fee and less the extra millisatoshis.

Scaling implies Bitcoin itself could handle the volume,
offloading mean LN can handle the volume and bitcoin can't.

What do you suggest BTC do? Have a contentious hard fork every year or so to increase the blocksize? As we can tell, just having a softfork creates tension, much more a hardfork. I suppose BTC could just have one hardfork to obliterate the capacity cap all together. However, I am not certain miners are going to appreciate the low transaction fees that will result. The only solution will be for the miners to set their own minimum fee and ignore all the other transactions.  

LN is a 3rd party network that can work using any segwit coded coin,
Bitcoin has no monopoly on LN future plans , as litecoin with LN is to have even cheaper fee structures than btc with LN.
https://cryptobriefing.com/litecoin-lightning-network-100-nodes/

Charlie Lee suggested (and Crypto Briefing reiterated) that the comparatively high price of funding Lightning channels with Bitcoin made Litecoin a competitive alternative.

I don't see how this is a liability at all. If people prefer to use an altcoin rather than BTC, than that's their freedom to choose.

[mda]

While usually Khaos77 posts nonsense, this time he's spot on. Like a broken clock, I suppose. From the beginning LN has been designed as an hierarchical trap.

[Khaos77]

will become just another banking system that is just as bad as what we already have.

Now you catching on to what they planned from the beginning.  

LN was never about scaling ,
it was about introducing a network that could add offchain fractional reserve Banking to Bitcoin while pretending not to.  

The LN network may have a quite a few issues, but there is no way to make it a fractional reserve. Each tx on the lightning network must be able to generate a valid closing tx on the blockchain(s). I suppose that you could do atomic swaps with some other coin that is supposedly redeemable for BTC 1 for 1. However, if people fall for that, they a stupid.

LN runs offchain, pretending that IOUs are the actual funds, they are merely IOUs.
As such, the IOU value is a pretense of LN code , and code can be modified/updated or tricked in some instances.

1. Code update has already been written, that allows a direct fractional reserve in LN, it is only 1 software update from reality.
    https://www.rene-pickhardt.de/index.html%3Fp=2131.html

2. The top 4 mining pools could 51% attack btc and double spend,
    this would trick LN into loading channels with bitcoins, that would be redirected to another onchain address.
    Basically counterfeiting an LN Funds IOU channels.
    It only needs to be long enough fo LN to consider it valid,
    and there are proposals underway to allow channel creation before funds are even locked,
    so a double spend could be pulled off by anyone smart enough to pay zero fees to fund a LN channel
    and then pay a high fee so the bitcoins are gone before actually locked onchain.

3. Sell Lightning Channels directly for fiat and oversell the number of channels.
    This allows a bypassing of the blockchain in some aspects.
    IE: You buy a Thor Lightning Channel for fiat, and then pay a utility company,
    which you think is being paid from their LN channel,
    however the company running the thor channel pays the utility company with their gift card system instead.
    The directly allows fraction reserves as the company running the thor channels only need enough LN funds to cover payments,
    while using the additional funding for short term money markets earning interest at your expense.
    LN is not like the blockchain , it is like a bank and that gives them lots of ways to play with your funds,
    even as far as loaning it out without your knowledge. Now you can pretend that none of this is happening,
   and as long as they make the payments, then no worries,
   but all fractional reserves eventually have bank runs due to lost faith iin the system.
   Bitcoin Onchain ended fractional reserve banking , LN Offchain restored fractional reserve banking to enslave the future generations.
    

Offloading Bitcoin Transactions to Gift Cards or Exchanges do a better job and are easier to use than LN.
And just to be clear LN used incorrectly actually increases BTC onchain transactions instead of decreasing it.
https://bitcointalk.org/index.php?topic=5124663.msg50330030#msg50330030

With gift cards and debit cards, someone is just going back to the fiat system. We all know the perils of using an Exchange for a wallet. If the exchange doesn't care for your particular transactions, they can just freeze your account and make you go through a bunch of red tape to get your coins back. Also, exchanges are big target and hackers like to go for the big score.

True , but gift cards have the scaling capacity of visa and higher merchant adoption due to ease of use.
True , many exchange are unsafe for large amounts,
what makes you think LN hubs are going to be any safer once they become used on a regular basis.
Hackers go after the money, say a hacker compromised your PC or LN channels, they can send funds out to another LN channel,
data wipe the LN hub, and steal your funds, by buying other coins, atomic swaps or cashing out directly to fiat.
LN transaction does not have a Public open view of transactions like onchain bitcoin does.
Tracking LN funds crimes will be more difficult.
Plus you can always sue any exchange owners that steal your funds,
when your LN funds are stolen or simply lost due to the latest LN code bug, aside from scratching your butt ,
what legal recourse do you have, none.  
https://coinspice.io/news/lightning-network-warning-please-dont-lose-money-learn-from-my-recklessness/

But yet, the people here ,
claim that by offloading transactions from Bitcoin to the LN network , that Bitcoin scaling is increased.
When the actual Number of the BlockSize was only increased to a max of ~1.7Mb from 1 Mb when no further plans to increase more.
In effect , limiting the future growth of the blocksize  to intentionally force high fees to force greater acceptance of LN offchain to those too poor to afford onchain transactions on a regular basis.  

Offloading is not the same as Scaling.

OK, I'll start calling it offloading then. In any event, it will allow people to make more transactions and they can be rest assured that when the close the channel, they will posses every satoshi entitled to them, less the miner fee and less the extra millisatoshis.

Be careful , many in your circle , won't be happy if you upset their PR apple cart with the truth.
Also LN will only decrease transactions , if the LN payments are properly structured.
1. Funding amounts need to be at least $200 or higher per channel
    with payments $20 or less to see any moderate improvement in transactions offloaded.
    Plus the payments need to be with the same individual. (In a real world scenario.)
    Not following a well defined payment structure, could actually cause an increase in onchain Btc transactions not a decrease.

Scaling implies Bitcoin itself could handle the volume,
offloading mean LN can handle the volume and bitcoin can't.

What do you suggest BTC do? Have a contentious hard fork every year or so to increase the blocksize? As we can tell, just having a softfork creates tension, much more a hardfork. I suppose BTC could just have one hardfork to obliterate the capacity cap all together. However, I am not certain miners are going to appreciate the low transaction fees that will result. The only solution will be for the miners to set their own minimum fee and ignore all the other transactions.  

1 hard fork up to a true 8MB block size while allowing a tiny 3% increase in blocksize on a yearly basis built in,
is all that has to be done. And it only has to be done once, this type of thing was proposed in the past to avoid the nonsense argument over blocksize, that non-mining nodes can't keep up. Non-mining nodes that don't earn money to keep up, are irrelevant,  and will fall one day anyway.
(Hard drive and other needed infrastructure is increasing faster than 3% yearly so a 3% increase is literally nothing.)
Funny how LN will make IOUs transactions in milliseconds and non-mining nodes are holding back bitcoin because they are unable to cope with 10 minute intervals blocks.  
Doubtful LN hub operators will whine , they'll just update their hardware.

While usually Khaos77 posts nonsense, this time he's spot on. Like a broken clock, I suppose.
From the beginning LN has been designed as an hierarchical trap.

Luv you too,  

 

[franky1]

a question of many points
A. a solution for everyone?
looking at the UTXO set only 2.5% moved in the last month.
for these users that do spend every month, these users have to plan their LN spending habit, and here is a few reasons.
1. some may only want to:
    buy coffee once a day so only need to lock say $3*30($90)
    be coffee routers for thier 5 friends so need to lock say 5*$3*30($450)
2. knowing not everyone wants to be online 24/7, requires:
    spliting/multiplying funds over more than one channel
    and/or
    finding reliable channel parties- usually ends up as hubs (account managers as the co-signer aka bank2.0)

what this leads to is prep work and also bitcoin transactions of multiple channels(outputs)

again with only a few % of coins moving regularly enough to warrant using LN because only a few % spend more than once a month to get some savings on LN vs just making a straight payment to the destination. LN is not really a full solution for everyone.
EG if you only spend once a month. why lock funds into 5(average) channels and hope their all online to spend all your balance once a month costing you a 500byte tx, where you can just send it direct to the destination whether online or offline in one output onchain for less bytes(less overall fee)

B. a solution thats better?
many argue LN is better. but think about it without the hugs and kisses. ..
users unable to pay/route if other parties are offline
other routers spending your balance leaving you with less holdings in a channel for yourself
requires counter party signing which is less independence
require preplanning or reliance on large services to act on your behalf (bank2.0)

and to add to this. if your funding 5 channels using 500byte tx to open. the counterparty is also funding them channels. thats 1kb for setup and then closing off is combined maybe 500byte. thats 1.5kb of data just to set up a reliable LN system for 2 people, for on average a month. this can be advantageous datawise for users that do more than 6lean transactions a month. but as shown by UTXO thats less than 2% of the network
C. how much scaling does it offer?
based on bytes this could be as much as only 2000 users a block setting up, which is only 288,000 a day or ~8.6m a month IF all tx's were setups and not closings / standard bitcoin onchain transactions.
then closing is again another hoard of transactions needed onchain.
on average if bitcoin was only used for LN to open/close channels based on normal human capability of preplanning their spending one month at a time. only 4-5million people would get to use bitcoin

summary:
with there being 55million UTXO's or 35million blockchain.info wallets. stats 'suggest' there are more than 5m users. so if LN was the 'only way' to make payments in the future for everyone. points A.B.C show LN wont satisfy everyone for many reasons.

[franky1]

The LN network may have a quite a few issues, but there is no way to make it a fractional reserve. Each tx on the lightning network must be able to generate a valid closing tx on the blockchain(s).

you might want to check into channel factories before assuming the above
you might want to check into channels using alternate collateral before assuming the above.

LN is not a community network where the whole community compare a blockhash of thousands of transactions.
each channel is a private agreement between only 2 parties and they can make their own agreements.
they can even agree to use certain wallet brands that handshake differently their agreements and do other different things, like not penalise the whole channel value or do other things that some other wallets dont.
both parties can both edit their own nodes to a new agreement they both can shake on

for instance some wallets accept just a non backed msat based channel balance which they can open and close and split and move around different channels without having to broadcast a bitcoin sat tx

[PrimeNumber7]

LN runs offchain, pretending that IOUs are the actual funds, they are merely IOUs.
As such, the IOU value is a pretense of LN code , and code can be modified/updated or tricked in some instances.

This is not how Lightning works.

If you and I open a Lightning Channel, each with 5 BTC in the channel, there will be a funding transaction on the blockchain totaling 10 BTC. Each time we transact, we will both sign a new closing transaction, that we do not broadcast, that would "settle" the channel with the amount of bitcoins each of us will have upon closing the channel. At no time will the closing transaction reflect either of us having more or less than our respective balance, and the total will never be more or less than 10 BTC (less transaction fees).

1. Code update has already been written, that allows a direct fractional reserve in LN, it is only 1 software update from reality.
    https://www.rene-pickhardt.de/index.html%3Fp=2131.html

Anyone, including you or I can write any proposal we want, and can write any code we want, even if we know it would not be a good idea. That person is proposing in a nutshell a way to make loans via the LN.

2. The top 4 mining pools could 51% attack btc and double spend,
    this would trick LN into loading channels with bitcoins, that would be redirected to another onchain address.

Yes this is a risk. There is this same risk if I were to buy bitcoins from someone in exchange for my cash; I could receive the bitcoins first, wait for a couple of confirmations, give you my cash, leave and realize the transaction is no longer valid after the transaction I received was double spent after a miner orphaned many blocks.

Can't one hypothetical day the amount of new members per day be too high that the setting funding transactions on the blockchain (soon or later) overloads the network anyway?

LN will not allow bitcoin to scale to infinity. The number of channels that can be opened or closed per day is not very high, but once channels are open, a very large number of transactions can take place over the LN network.

Additional technology improvements needs to be done before bitcoin can scale to Visa levels, but there is no need to create a solution that scales this much now because we are far from having that kind of demand. If I am in California, I have no reason to download every transaction someone does in New York, or in Western Europe. Having every transaction recorded on the blockchain is unnecessary.

If the cost to have a transaction confirmed on the blockchain is $2, if I wanted to buy a song on iTunes, or a cup of Coffee at Starbucks, there is no way I would use an on-chain transaction because the cost of a confirmation would be as much as what I am buying. If I already have a LN channel open, I can buy either of these items via a LN invoice that costs small fractions of a cent to pay, or if I do not have a LN channel open, I could pay $2 to open one, pay via a LN invoice, and pay for many other things over time, each costing a small fraction of a penny.

[franky1]

if I do not have a LN channel open, I could pay $2 to open one, pay via a LN invoice, and pay for many other things over time, each costing a small fraction of a penny.

because not all counter parties are guaranteed to b funded or online to make payments for you. you will find you will need to open more than one channel to have a reliable service. so opening costs would be more than $2
also you would have to close the channels eventually.
on average most open 5 channels. so thats $10 upfront with maybe $5 when closing. so thats $15 of fee's just to use LN

now how many transactions in say an average month(average preplan spending habits) do you think you will make
30=average cost $1         60=average cost $0.50        120=average cost $0.25     6000=half(fraction) of a penny
LN is not a solution for everyone as not everyone makes transactions often

...
IOU's can be signed too.. just not settled.
imagine bank cheques untill the cheque is cleared a signed cheque is just an IOU
old bank notes, with signatures from important fed guys are IOU's 'i promise to pay the bearer the sum of..'
credit/mortgage agreements are IOU's

...
as for the whole 2 party sign transaction stuff. seems your reading old 2016 documents about LN. read up about factories, and htlc's. these dont get broadcast.
also realise LN payments themselves are not locked into blocks and community vetted. they are just agreements between 2 parties. we already have cases where parties are opening channels using collateral thats not even bitcoin. but where others if they seen the msat balance would think it was.

...
but getting to the topics point. LN is not a bitcoin network. it is not a feature solely for bitcoin. it actually requires people to drop using bitcoin and use this other network. thus does nothing to scale/adopt bitcoin, but instead to make other networks of commercial gain more attractive
yet people forget the whole fundemental reason for bitcoin
a. independant self control of funding/wealth
b. pay anyone anywhere without barrier
c. no trust required
now lets look at LN
a. requires a counterparty, infact teams of counterparties for routing, all signing get your payment to destination
b. counterparties/routers not online 24/7=barrier.
c counterparty risk they can edit their node to do something unexpected, no guarantee of settlement

[PrimeNumber7]

I don't think someone would need to open 5 channels if they only had 30 transactions per month, or even if they made 150 transactions per month. There are enough well connected nodes so 2-3 open channels will be enough IMO. There are several businesses whose primary service is to open many channels with many people, and collect various fees for doing so.

I also don't see any reason why a user would be closing all their channels after only a month. I believe a more realistic use case would be a person is paid by his employer on the 1st of the month, the person pays their various bills and expenses over the next month, and repeats on the 1st of the following month. I can see a person closing a channel after say 6 months if they accumulate so much money, they no longer have enough inbound capacity to receive their paycheck, but even in this case, the person could elect to receive their salary on-chain, and not close their channels.

 

[d5000]

I want to ask you if is lightning network potentially enough scalable to achieve stable Bitcoin in the future? If we admit that only new members open a new payment channel (and that LN is fully functionable and save) to connect into lightning network (and the amount of channel closing will be minimal) and set the funding transaction, is it enough little to avoid 8GB blocks and mining centralization?

In short: LN won't solve the scaling problem on its own, but it is a very important part of the puzzle.

Today, you can open roughly 100000-200000 channels per day. This would obviously not be enough for a really massive adoption, but is more than enough for current Bitcoin usage "as a currency". There is no reason for not using LN for small transactions up to $100 or so, which make up to about 25% of current BTC on-chain transactions.

For a really massive adoption (millions of new users/day) you need either "big blocks" or an intermediate layer, or both. The "intermediate layer" could be a pegged sidechain or a second Lightning-like layer, like the Channel factory guys are proposing. CFs are multi-user channels, where e.g. 10 users open a LN channel, and all members of the channel can open and close "sub-channels" between individual members with off-chain transactions.

Sidechains are basically independent blockchains pegged to BTC - if there is a reliable mechanism has to be studied.

Even if neither sidechains nor CFs work (I hope that's not the case), a "rough" solution could be simply to use altcoins as alternatives. If we had several relatively price-stable blockchain currencies then this could make up an ecosystem which could have enough capacity for a big part of the world population, and LN could be used for "lightweight" swaps between them.

The sidechain idea as an intermediate layer is however the solution which I consider the best one, at the moment, because it shares most properties with "normal" blockchains, so for example the "offline problem" isn't present. Channel factories could complement them.

Admit that not only financial services will run blockchain technology (include autonomous vehicles, factories, robots, smart homes etc. who all need to put a funding transaction on the blockchain).

I don't see why these things need to be connected to a public blockchain. They can all be connected to a private network with a gateway to the public blockchain. I don't think we need much more than 1 node per household or company.

[bob123]

There is no reason for not using LN for small transactions up to $100 or so, which make up to about 25% of current BTC on-chain transactions.

How did you come to the number of 25% ?

I believe way more transactions are effectively sending less than 100$.


Did you just 'count' all transactions with inputs of less than 100$ ? Because that would have been a mistake.
IMO it is pretty hard to get an accurate number.

If i have 1 UTXO with 1 BTC and want to send 0.001 BTC, the input will still be 1 BTC and probably not count towards your <100$ transactions ?
1 BTC has been transacted, but effectively only 0.001 because 0.999 went back to me.

We won't have this 'problem' of getting an accurate number when using the LN.


Based on this i believe way more than 25% effectively are <100$ transactions.

[franky1]

There is no reason for not using LN for small transactions up to $100 or so, which make up to about 25% of current BTC on-chain transactions.

How did you come to the number of 25% ?

I believe way more transactions are effectively sending less than 100$.

25%??

ever checked the UTXO set.
not even a few percent actually spend funds daily/weekly. so LN will only be useful for a small percentage, while those remaining on the bitcoin network are drastically effected negatively by the whole dev instigated tx limiter and fee war

not only that but:
LN is a niche for people who spam(spend more than once a day)
by the time someone gets paid. works out how much they want to deposit into LN for spending habits of the month. works out of that share which 'channels' would best satisfy having which amounts to have for the best chance of good efficient service. and then pays the fee's to set it up.
if they are not using it daily they wont want to
have to keep the app open to ensure their counterpart is playing by the rules.
accept/deny random requests from routers asking to use them as a path
worry if they autopilot the app or factory/watchtower it, that route raiders wont empty their channel

[d5000]

There is no reason for not using LN for small transactions up to $100 or so, which make up to about 25% of current BTC on-chain transactions.

How did you come to the number of 25% ?

I believe way more transactions are effectively sending less than 100$.

It's a rough estimation based on the observation that the median transaction value is about $400 at this moment. See this graph. This is however a relatively high value compared with the last 6 months, at some days the median was even below $100, in this cases you're right.

LN is a niche for people who spam(spend more than once a day)
by the time someone gets paid. works out how much they want to deposit into LN for spending habits of the month.

I am currently not using LN regularly (besides from a little testing), but even now - when we're far from the frenzy at the end of 2017 - between Monday to Friday I often refrain from spending on-chain BTC even if I wanted, because of the high fees.
So no, it's not only for "spammers". I think LN is useful for everybody who wants to move funds of a value of less than $100 more than once per week.

It definitively has drawbacks like the "have to be online problem", that's why I'm still not regularly using it (other simple reason is that almost no BTC-accepting service I'm using accepts LN, but I may search for alternatives).

[franky1]

LN is a niche for people who spam(spend more than once a day)
by the time someone gets paid. works out how much they want to deposit into LN for spending habits of the month.

I am currently not using LN regularly (besides from a little testing), but even now - when we're far from the frenzy at the end of 2017 - between Monday to Friday I often refrain from spending on-chain BTC even if I wanted, because of the high fees.
So no, it's not only for "spammers". I think LN is useful for everybody who wants to move funds of a value of less than $100 more than once per week.

the https://1ml.com/statistics website has stats of
nodes with active channels: <5k
number of channels: <35k
thats an average of 7 channels per active node.

so if your funding 7 channels (onchain data minimum 1 in 7 out) then the close sessions needed at the end of 2in 2out X7(14in 14out)
again for emphasis doing more than 7 transactions onchain(8-15) just to set up and close,
so if someone is only transacting once a week. they are not really benefiting if they are using monthly channels(4 a month)

as for the under $100 stuff..
the fee war is not some technology limit. its a human imposed and enforced thing by those advocating for fee wars.
implement a fee mechanism into bitcoin. and onchain fee's become respectful and people who dont spam daily can use onchain even for smaller than $100 amounts.

but thank you for proving a point. devs choices to not implement a fee mechanism has made people foolishly think that bitcoin cant cope with low fee's and so think LN is foolishly the solution.. the real solution though is an actual fee mechanism IN BITCOIN

[Wind_FURY]

I think that LN does not really solve the scalability problem at all.

It will scale the Bitcoin Network, but I believe no one knows by how much. 100x? 1000x? Or maybe less? Because of that unknown, then we simply cannot predict how much it will impact the volume of Bitcoin's usage.

[franky1]

I think that LN does not really solve the scalability problem at all.

It will scale the Bitcoin Network, but I believe no one knows by how much. 100x? 1000x? Or maybe less? Because of that unknown, then we simply cannot predict how much it will impact the volume of Bitcoin's usage.

if only windfury had a clue
its like he is saying "uber scales the new york yellow cab company"
.. um no. the yellow cab companies customer base is in DECLINE

scaling a network by deburdening the network of utility (facepalm)
hint to windfury: more research, less echo chamber script reading

[d5000]

average of 7 channels per active node.[...] so if your funding 7 channels (onchain data minimum 1 in 7 out) then the close sessions needed at the end of 2in 2out X7(14in 14out)[...]
so if someone is only transacting once a week. they are not really benefiting if they are using monthly channels(4 a month)

First, the median value would be more relevant for an analysis, because big hubs may be distorting the picture (the last time I checked the network structure it was a mix of the hub-and-spoke and the decentralized model, and there were definitively some big nodes with hundreds of channels).

I don't think that the average person needs more than 2 or 3 channels, often one alone will be sufficient.

Second, why should you open channels monthly if you only transact once a week? Remember that also average persons can receive money via LN, and that's where the potential lies. People would be most likely directly be connected with an exchange so they can "refill" easily, e.g. with their salary.

the fee war is not some technology limit.

It is actually if you want to keep the network decentralized and secure, but I won't like to discuss that now. That has been discussed so many times, and it's not the topic of this thread.

It will scale the Bitcoin Network, but I believe no one knows by how much. 100x? 1000x? Or maybe less?

It depends on "usage patterns", but we can at least do a basic estimation.

Let's say we define an "user persona" that wants to transact one time per day. He normally refills his channel via LN one or two times per month, but each 3 months he needs a "refunding" via an on-chain channel opening transaction.

This would give us approximately x50 scaling (up to roughly about 300-500 tx/s or 25-30 million tx/day): we have about 100 LN transactions each 3 months (3 x 30-31 plus LN refills) and need a new channel opening, whose size approximately doubles a "normal" 1-in-2-out transaction.

With channel factories and taking into account the same "usage pattern", we could reach about ten times more, so we get a potential of hundreds of millions of transactions per day.

However, we have to take into account that we need some space on the blockchain for 1) normal non-LN transactions, and 2) channel closing transactions in the case of scams. I would estimate roughly that this would takes to a capacity of a third to half of the number I wrote above.