The Lightning Network FAQ

[jackg]

On the bitcoin acceptance by the mainstream before, I've just been quoted a balance to the 16th decimal place (could this be the step in moving to using the lightning network or have I just ignored them doing this)? By coinbase pro.

Afaik the lightning network currently supports the 15th decimal place...

[Chlotide]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?
Does that have a practical use case besides being a proof of concept?

[jackg]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?
Does that have a practical use case besides being a proof of concept?

I mean I'm just saying they have it for compatibility?

I don't care about what it actually implies sending such small amounts.

[philipma1957]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?
Does that have a practical use case besides being a proof of concept?

yeah it could allow for more transactions per day which would help btc scale as a currency.

Is it my preferred solution no.

I prefer

 btc to be like a 10000 USD treasury bill
 LTC for 500-10000 USD transactions
 Doge for smaller USD transactions

I am willing to do some LN support as a hedge against my preferred monetization of BTC+LTC+DOGE

I am in the position to do it so why not.

[Wind_FURY]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?

Apps in Lightning for streaming data, and paying by the minute/3 minutes/5 minutes? Plus the macro-economics of Bitcoin does point it to a price-discovery to 6 digits, and maybe 7 digits.

Does that have a practical use case besides being a proof of concept?

It didn't stop Bitcoin from being developed. Here we are.

[LoyceV]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?

Apps in Lightning for streaming data, and paying by the minute/3 minutes/5 minutes?

I found a great answer to the question why Ethereum uses 18 decimal places:

Allowing for 18 decimal places was the only way to move forward. This will allow ethereum to one day achieve it's true market cap and be utilized within our known universe by all species capable of building a computer and communicating through the inter-web to participate in universal-commerce without fear of being scammed.

In all seriousness though, I don't see much point in that many decimals. As far as I know LN "only" uses 11 decimal places (up to millisatoshi), which is already smaller than anything I'll ever care about no matter how mainstream Bitcoin will become.
I sure hope "Pay by the minute" won't reach the point where I have to make a transaction every few minutes, but I also doubt it would be that low if it is going to happen. Why would anyone want to make millions of billing transactions just to earn a fraction of a cent, while uploading videos on Youtube can earn you up to several cents per view already.

[jackg]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?

Apps in Lightning for streaming data, and paying by the minute/3 minutes/5 minutes?

I found a great answer to the question why Ethereum uses 18 decimal places:

Allowing for 18 decimal places was the only way to move forward. This will allow ethereum to one day achieve it's true market cap and be utilized within our known universe by all species capable of building a computer and communicating through the inter-web to participate in universal-commerce without fear of being scammed.

In all seriousness though, I don't see much point in that many decimals. As far as I know LN "only" uses 11 decimal places (up to millisatoshi), which is already smaller than anything I'll ever care about no matter how mainstream Bitcoin will become.
I sure hope "Pay by the minute" won't reach the point where I have to make a transaction every few minutes, but I also doubt it would be that low if it is going to happen. Why would anyone want to make millions of billing transactions just to earn a fraction of a cent, while uploading videos on Youtube can earn you up to several cents per view already.

Afaik the lightning network uses 12dp (so a decimilli Satoshi or a pico bitcoin).

I thought it was a number followed by the exponent so 1m (by example) would be 0.001 BTC...

But if you made a channel on YouTube and were being paid in bitcoin, surely you'd just have a channel directly open with them and not have to have your transactions on the chain... And they'll be wanting to save on fees.

[PrimeNumber7]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?
Does that have a practical use case besides being a proof of concept?

This is something that will keep fees down.

If a txn has to pass through many 'hops' to get to its destination, each node will compete to have the txn pass through the node. The cost for one hop is low, but as LN matures, it will be more common for txns to have many (20, 50, or 100+) hops, especially to merchants with low transaction volume, and the cost to make the txn can add up. This plus the possibility that bitcoin goes up by 10, 100 or 1000x.

[Wind_FURY]

Afaik the lightning network currently supports the 15th decimal place...

Cute, but unless BTC is worth $10 million what does that realistically achieve? Where are you going to spend $0.0000000002?

Apps in Lightning for streaming data, and paying by the minute/3 minutes/5 minutes?

I found a great answer to the question why Ethereum uses 18 decimal places:

Allowing for 18 decimal places was the only way to move forward. This will allow ethereum to one day achieve it's true market cap and be utilized within our known universe by all species capable of building a computer and communicating through the inter-web to participate in universal-commerce without fear of being scammed.

In all seriousness though, I don't see much point in that many decimals. As far as I know LN "only" uses 11 decimal places (up to millisatoshi), which is already smaller than anything I'll ever care about no matter how mainstream Bitcoin will become.
I sure hope "Pay by the minute" won't reach the point where I have to make a transaction every few minutes, but I also doubt it would be that low if it is going to happen. Why would anyone want to make millions of billing transactions just to earn a fraction of a cent, while uploading videos on Youtube can earn you up to several cents per view already.

Millisats might not be a feature we need now, or something we can't think that we would need tomorrow, but in my opinion, it might be a feature that we might be thankful for, and thank the developers, for having the vision, IF in case Bitcoin "goes to the moon" of a different solar system. Haha.

[DooMAD]

Millisats might not be a feature we need now, or something we can't think that we would need tomorrow, but in my opinion, it might be a feature that we might be thankful for

I suppose the only question remaining would be "Are there any downsides from a technical perspective"?  If there's no harm in future-proofing, it seems like an obvious thing to do.  So I can't help but think that if there were no cost to doing it, it might have been implemented before now.  I'm guessing that perhaps it makes transactions larger if we have to store extra digits in the blockchain?  Another 4 characters to go from 8 to 12 decimal places may not sound much, but ideally we want transaction sizes smaller to aid with scaling.

[LoyceV]

So I can't help but think that if there were no cost to doing it, it might have been implemented before now.

This explains the choice for 8 decimals:

Finney, Satoshi, and I discussed how divisible a Bitcoin ought to be.  Satoshi had already more or less decided on a 50-coin per block payout with halving every so often to add up to a 21M coin supply.  Finney made the point that people should never need any currency division smaller than a US penny, and then somebody (I forget who) consulted some oracle somewhere like maybe Wikipedia and figured out what the entire world's M1 money supply at that time was.  

We debated for a while about which measure of money Bitcoin most closely approximated; but M2, M3, and so on are all for debt-based currencies, so I agreed with Finney that M1 was probably the best measure.  

21Million, times 10^8 subdivisions, meant that even if the whole word's money supply were replaced by the 21 million bitcoins the smallest unit (we weren't calling them Satoshis yet)  would still be worth a bit less than a penny, so no matter what happened -- even if the entire economy of planet earth were measured in Bitcoin -- it would never inconvenience people by being too large a unit for convenience.

Of course this ignores the possibility of micropayments, which could be in-game, on-demand, or pay-per-second. But even if a service would offer to pay a fraction of a cent, they could use their internal calculation system (kinda like LN is doing). For example: if an in-game sword costs $0.001, you can deposit $0.01 and still have $0.009 left.. And since it's less than a penny, even though you can't withdraw it, you wouldn't care.
I don't think I've ever paid anything less than $0.01 though.

A VoIP provider might be a better example: they often charge fractions of a cent per minute, and just take it off your balance. You can't deposit $0.01, but once it's in your balance, you can pay fractions of a cent.

[Wind_FURY]

Millisats might not be a feature we need now, or something we can't think that we would need tomorrow, but in my opinion, it might be a feature that we might be thankful for

I suppose the only question remaining would be "Are there any downsides from a technical perspective"?  If there's no harm in future-proofing, it seems like an obvious thing to do.  So I can't help but think that if there were no cost to doing it, it might have been implemented before now.  I'm guessing that perhaps it makes transactions larger if we have to store extra digits in the blockchain?  Another 4 characters to go from 8 to 12 decimal places may not sound much, but ideally we want transaction sizes smaller to aid with scaling.

What? But I thought it doesn't include the extra 4 decimal places onchain after closing of the channel because the extra 4 are unenforeable. I'm currently confused. Hahaha.

[DooMAD]

Millisats might not be a feature we need now, or something we can't think that we would need tomorrow, but in my opinion, it might be a feature that we might be thankful for

I suppose the only question remaining would be "Are there any downsides from a technical perspective"?  If there's no harm in future-proofing, it seems like an obvious thing to do.  So I can't help but think that if there were no cost to doing it, it might have been implemented before now.  I'm guessing that perhaps it makes transactions larger if we have to store extra digits in the blockchain?  Another 4 characters to go from 8 to 12 decimal places may not sound much, but ideally we want transaction sizes smaller to aid with scaling.

What? But I thought it doesn't include the extra 4 decimal places onchain after closing of the channel because the extra 4 are unenforeable. I'm currently confused. Hahaha.

I think the confusion is mine.  I thought you were talking about having millisats on-chain at some point in future.  Seems I misinterpreted your post.

[DaveF]

The other issue is we are talking USD and such. There are some currencies out there that are worth a lot less then that. And people might need to send what is a fraction of a US penny to someone because where they are that is all they need to do in the local fiat.

-Dave

[jackg]

The other issue is we are talking USD and such. There are some currencies out there that are worth a lot less then that. And people might need to send what is a fraction of a US penny to someone because where they are that is all they need to do in the local fiat.

-Dave

People in 3rd world countries will use alts not LN.
Because LN still has the deposit and withdrawal transaction fees of BTC, which for some of those people $5 is a month's wages.

Altcoins offer faster confirmations and overall lower costs of usage than BTC's LN combo service.

 

Afaik the idea Satoshi had was 1 Satoshi being $1.

Already you need 2 significant figures to handle cents. Then what if someone from Sweden wants the more accuracy down to a hundredth of a króna? 1 Swedish króna = 0.12 us dollar. So thats already 0.001 Satoshi?

Then there's rupees which need even more sf.

Edit: by sf and significant figures I mean the numbers after the decimal point.

[LoyceV]

People in 3rd world countries will use alts not LN.
Because LN still has the deposit and withdrawal transaction fees of BTC, which for some of those people $5 is a month's wages.

You can use LN without going back on-chain. I feel like I'm mentioning my favourite mobile LN wallets too much already (BlueWallet and Phoenix), but it just works well. The former is custodial, the latter creates a channel for you. With both, you can receive and send LN funds without worrying about on-chain transactions by yourself. So $5 will be 42,000 sats, and transactions will cost (much) less than 1% in fees.

Afaik the idea Satoshi had was 1 Satoshi being $1.

I'm pretty sure the idea was that 1 satoshi would never be worth more than a penny

[jackg]

Afaik the idea Satoshi had was 1 Satoshi being $1.

I'm pretty sure the idea was that 1 satoshi would never be worth more than a penny

This is considering inflation of the fiat currency doesn't exist and deflation of bitcoin due to lost funds also doesn't exist.

I get that it makes less sense but even if a Satoshi is 0.1 cents, you might still want more accuracy - and it's free on the lightning network.

[Wind_FURY]

The other issue is we are talking USD and such. There are some currencies out there that are worth a lot less then that. And people might need to send what is a fraction of a US penny to someone because where they are that is all they need to do in the local fiat.

-Dave

People in 3rd world countries will use alts not LN.
Because LN still has the deposit and withdrawal transaction fees of BTC, which for some of those people $5 is a month's wages.

Altcoins offer faster confirmations and overall lower costs of usage than BTC's LN combo service.

 

Afaik the idea Satoshi had was 1 Satoshi being $1.

Already you need 2 significant figures to handle cents. Then what if someone from Sweden wants the more accuracy down to a hundredth of a króna? 1 Swedish króna = 0.12 us dollar. So thats already 0.001 Satoshi?

Then there's rupees which need even more sf.

Edit: by sf and significant figures I mean the numbers after the decimal point.

I believe the problem with using altcoins is they're not as secure, not as robust, and not as valuable as Bitcoin. They can use it as a MOE, but most of the time, convert back to Bitcoin for safe-keeping. How much would the costs of conversion be?

[LoyceV]

Afaik the idea Satoshi had was 1 Satoshi being $1.

I'm pretty sure the idea was that 1 satoshi would never be worth more than a penny

This is considering inflation of the fiat currency doesn't exist and deflation of bitcoin due to lost funds also doesn't exist.

The fiat inflation won't be a problem, there still won't be much use for the current equivalent of a penny, even if it's called a dollar by then.
I don't expect Bitcoin deflation due to lost funds to reach an order of magnitude any time soon, so that shouldn't be much of a problem either.

[jackg]

I believe the problem with using altcoins is they're not as secure, not as robust, and not as valuable as Bitcoin. They can use it as a MOE, but most of the time, convert back to Bitcoin for safe-keeping. How much would the costs of conversion be?

Yeah there's a limit to security with a lot of altcoins for sure and the only two I've looked into that have similar security or theoretically better were litecoin (and decred if the PoS part works).

Hey, nice to see this, but can any one elaborate the on chain bitcoin?? am a newbie didnt know about them.

thanks..

There's going to be a short answer and a long answer herevand I'll go with the shorter.
So when you receive a transaction the sender signs a receiving transaction identifier of their own in order to spend the funds to you. They then broadcast this transaction to the network so miners can take a look at it and confirm it.

When you want to spend your bitcoin you do the same steps again and sign your input transaction identifier.