The Lightning Network FAQ

[NotATether]

The lightning network whitepaper (the one you can download from lightning.network) says this, in chapter 5 page 41:

...
For instance, Alice pre-generates one million keys, each key being a child of the previous key. Alice allocates which keys to use according to some deterministic manner. For example, she starts with the child deepest in the tree to generate many sub-keys for day 1. This key is used as a master key for all keys generated on day 1. She gives Bob the address she wishes to use for the next transaction, and discloses the private key to Bob when it becomes invalidated. When Alice discloses to Bob all private keys derived from the day 1 master key and does not wish to continue using that master key, she can disclose the day 1 master key to Bob. At this point, Bob does not need to store all the keys derived from the day 1 master key. Bob does the same for Alice and gives her his day 1 key.
When all Day 2 private keys have been exchanged, for example by day 5, Alice discloses her Day 2 key...

Is there any particular reason why the keys used are grouped by day with no structure of the derivation path? Instead of several hundred keys that look like m/0, m/1, ... m/1000 and then having to store state about which keys were used in what days, wouldn't it be better to use different paths each time a new RSMC is made?

Giving an example using the whitepaper's terminology, C1a&b, and all HLTCs branching off of them, use path m'/1'/i', C2 uses m'/2'/i', and so on. The hardened derivation is so that keys used in other contracts cannot be guessed if one is leaked, or in this case, intentionally revealed (which is a flaw in using the first kind of paths above).

Do any LN clients actually follow the whitepaper and make contracts using keys grouped per day, or do they use different paths for different contracts as I described?

[Timelord2067]

I keep getting a "bandwidth exhausted" notice every time I try to open a channel via Zap to this node:

Code:

0331f80652fb840239df8dc99205792bba2e559a05469915804c08420230e23c7c@34.200.181.109:9735

It's a fresh install of the latest Zap (and my bandwidth is OK) so there shouldn't be any issues.



(I'm trying to open a channel for BTC 0.0026 plus tx fees)

[DaveF]

I keep getting a "bandwidth exhausted" notice every time I try to open a channel via Zap to this node:

Code:

0331f80652fb840239df8dc99205792bba2e559a05469915804c08420230e23c7c@34.200.181.109:9735

It's a fresh install of the latest Zap (and my bandwidth is OK) so there shouldn't be any issues.



(I'm trying to open a channel for BTC 0.0026 plus tx fees)

What LN node do you have Zap connected to?
The only time I have seen that error it was a node.js issue and had nothing to do with the actual problem.
Something else was causing an issue and node went into a loop, sorry I can't help more but you might want to take a look at your LN install more then the wallet.

-Dave

[DaveF]

OK, this is just really odd now.
Back in January I posted about a bunch of small repeated transactions being routed though my node from walletofsatoshi.com to opennode.com
https://bitcointalk.org/index.php?topic=5158920.msg56082955#msg56082955
Just a bit of oddness.
Earlier this month I had a bunch going from coingate to walletofsatoshi.com


Now all 3 of these node are major players in the lightning world. All are in the top 20 nodes in terms of capacity.
They are all also fairly well connected.

Why would they be routing through me #3700+ in terms of capacity and worse then that for just about every other lightning ranking too?

Just really odd. From Bob's home node to Alice's home node fine. But big players? Weird.

-Dave

[DaveF]

and there was the LN naive community thinking that middlemen were not suppose to know the sender/receiver of long routes. or of any route (promotion:private untracable untrackable network)
strange because he seems to be able to see and log all payments not meant for him personally(he not intended final destination)

That's how it works I know this provider paid that provider.
I have no idea if coingate was the 1st hop or the 7th hop
I have no idea if WoS is the final destination or it goes past that.
I also know nothing about the payment other than the amount.

im guessing DaveF has a direct channel with coingate and a direct channel with walletsofsatoshi. and thus he is their direct route to each other.
im guessing DaveF didnt turn off his autopilot or didnt turn off his 'routing' to not allow them to abuse him

Yes to the 1st
No autopilot I setup all my channels myself and routing payments is no big deal, just odd that 2 of the larger providers would need me.

im guessing this tactic means DaveF has to close his channels and reaggregate his funds into new channels quite often if they are pushing payments via him so often. (well more often than he likes as he seems to be complaining that he is being used as a middleman)

maybe he should up his fees.. to take advantage of his predicament.. or sway them away from using him as a middleman

Not complaining just trying to understand why people are doing some things and if what I am doing to facilitate them doing it is the proper way.

-Dave

[LoyceV]

maybe he should up his fees.. to take advantage of his predicament.. or sway them away from using him as a middleman

It didn't strike me as if DaveF has a problem with this, he's just curious why it happens. I'd say this is exactly how LN is supposed to work, so let them! They pay a 1 sat fee for each transaction, I don't see a problem there

if what I am doing to facilitate them doing it is the proper way.

Seems okay to me. If they didn't appreciate your service, they wouldn't use it.

[DooMAD]

im guessing this tactic means DaveF has to close his channels and reaggregate his funds into new channels quite often if they are pushing payments via him so often. (well more often than he likes as he seems to be complaining that he is being used as a middleman)

maybe he should up his fees.. to take advantage of his predicament.. or sway them away from using him as a middleman

Not complaining just trying to understand why people are doing some things and if what I am doing to facilitate them doing it is the proper way.

-Dave

It's probably not worth the effort providing justification for your choices to the resident LN Troll-in-Chief there.  They won't accept it anyway, it contradicts the voices in their head who tell them what to do.  He's a headcase. 
There are some who just despise the fact that people are free to use LN if they choose to, so they feel the need to seize every opportunity to attack it.  Nothing will placate them.  

It certainly looks as though you're doing things properly.  You simply happened to be the most economical route available on this occasion.  It's possible, if they've been sending lots of payments recently, that some of the other channels they've used previously are now unbalanced and don't have sufficient capacity to route anything else at the moment.
 
Keep doing what you're doing.  Your very existence proves franky1's false narratives wrong.  You don't have to be one of the "big players" to contribute.  Individuals are just as important to the overall utility and usability of the network.

[TangentC]

Not complaining just trying to understand why people are doing some things and if what I am doing to facilitate them doing it is the proper way.

-Dave

Question,
does the big players using your hub as part of their hops drain your funds or require you to add more locked BTC to keep your hub running?

[Timelord2067]

I theory there shouldn't be any net loss as the inbound/outbound values should tally up to the same values.

In saying that, I like the abacus analogy where one/some of the counters are shifted from one side of the rod to the other.

[NotATether]

I'm trying to understand what's happening in this:

before: A|ooo-----| D |ooo-----| B
after:   A|-----ooo| D |-----ooo| B

According to that diagram "D" has routed funds to "B" do technically they aren't his anymore, right? Or am I missing something?

I can't seem to find where D is locked out of his "ooo" funds since it looks like they are at B already.

The "after" funds that A sent to D are locked in (according to my understanding) but they aren't to be sent to B.

[LoyceV]

so other people have now locked him out of D->B
and if he wanted to pay B he has to go back through A and hope A has another path around to reach B

Or it could be the other way around, and routing other transaction created liquidity right where the node owner needed it. If a node doesn't want to route transactions in a certain direction, they can simply raise routing fees up to the point that makes it worth their while again.

but thats the hope method. not the guarantee method. you hope A has a back way round to B

I'm not running a node, but I gladly pay a small fee to nodes who provide me the routing I need to make a payment. I also hope LN improves in the future.
I've had transactions that couldn't instantly be sent, but it always worked a bit later again. I consider this LN growing pains, and I hope it will go away eventually.

many fangirls

You're not helping your credibility by talking about "fangirls".

[Wind_FURY]

I theory there shouldn't be any net loss as the inbound/outbound values should tally up to the same values.

In saying that, I like the abacus analogy where one/some of the counters are shifted from one side of the rod to the other.

using a abacus idea..
the issue is

before: A|ooo-----| D |ooo-----| B
after:   A|-----ooo| D |-----ooo| B

although D has 'ooo'.. somewhere
D cant then spend his own funds to B direct anymore..
so other people have now locked him out of D->B
and if he wanted to pay B he has to go back through A and hope A has another path around to reach B
A-Z-Y-X-W-V-U-T-S-R-Q-P-O-N-M-L-K-J-I-H-G-F-E-C-B

well if A had to go through D then chances are A hasnt got another path. or if they do its obviously going to cost more, else A woulda used it in the first place

so now D has to close channels and re-aggregate the 2 channels back in his favour of the path D prefers.

so its not the fantasy promotion that 'it dont matter' or 'there shouldnt be any net loss' because it will actually now cost D more to do anything either round-routing backwards or re-aggregating channels onchain

i know i know some fangirls will sat D just has to man up and reroute backwards at the higher fee(IF A had alternative route) and send 'ooo' to B and then get B to send 'ooo' back to D via that reroute.. saying doing that will still be cheaper than onchain re-aggregating..

but thats the hope method. not the guarantee method. you hope A has a back way round to B

so again. might be best you dont allow big players route through you too much.
and yea think about your own investment. and not the wishes of other players hoping they can abuse your path
or it will cost you in the long run.

many fangirls dont care about your own situation they just want people to put in high liquidity so that THEY can take advantage.

That’s why I believe, besides the limited capital consideration, with the specialization that comes in running a Lightning node, and maintaining channels, the node operators will be requiring higher fees if LN is adopted as one of the main payment systems for Bitcoin. It would be very debatable if the fees will always be lower than centralized altcoins.

[LoyceV]

imagine the average product bought via LN was $2.
if someone has 4 channels with say $1650 per channel ($6600 total(average node/channel cap:1ml)
thats only 825 transactions possible per session per channel

with closing/reopening channels being ~$2x2. thats a $4 cost to run a channel.
to break even LN payment fees need to be $0.0049

Now imagine you buy the same $2 product using on-chain Bitcoin. You'll pay $12 in fees, and the payment service will charge you 0.0002 BTC (or more) because of their own consolidation costs. That's $24 in fees for a $2 product, and the transaction takes much longer.

I'll gladly pay whatever fees LN charges me. It's negligible compared to on-chain transactions.

Why do you hate LN so much? The existence of LN doesn't stop you from using on-chain Bitcoin at high fees.

but for emphasis. the reality is the hop ideal of utopian freedom wont flourish. the hub/spoke banker model will

I don't mind

[Wind_FURY]

and so the hop model fails and the hub-spoke banker model prevails

I have already mentioned, and have always thought that it might have been better for the Lightning Network if it was to be boot-strapped, and started off under a hub and spoke model, than chase the decentralized route. They point here is to increase funcionality for Bitcoin, but without sacrificing decentralization.

[TangentC]

imagine the average product bought via LN was $2.
if someone has 4 channels with say $1650 per channel ($6600 total(average node/channel cap:1ml)
thats only 825 transactions possible per session per channel

with closing/reopening channels being ~$2x2. thats a $4 cost to run a channel.
to break even LN payment fees need to be $0.0049

Now imagine you buy the same $2 product using on-chain Bitcoin. You'll pay $12 in fees, and the payment service will charge you 0.0002 BTC (or more) because of their own consolidation costs. That's $24 in fees for a $2 product, and the transaction takes much longer.

I'll gladly pay whatever fees LN charges me. It's negligible compared to on-chain transactions.

I would not overly pay a fee for a feel good feeling.
If I believe a service is overcharging me for a transaction fee, I use another service.

For a $2 product, the only economic options in crypto for me are either
using coinbase offchain transaction to another coinbase user without being charged any transaction fees.
Speed is Instant
or
using an altcoin like Dogecoin where the transaction fee is less than 5 cents.
Speed is 1 minute

[LoyceV]

I would not overly pay a fee for a feel good feeling.
If I believe a service is overcharging me for a transaction fee, I use another service.

That's why I stopped using Bitpay My favourite nowadays is Coinpayments.net, which gives a bunch of options including LN and doesn't add an additional fee. But most services use something else.
If, however, a service offers LN payment, I prefer that service over anything else

[DaveF]

I would not overly pay a fee for a feel good feeling.
If I believe a service is overcharging me for a transaction fee, I use another service.

That's why I stopped using Bitpay My favourite nowadays is Coinpayments.net, which gives a bunch of options including LN and doesn't add an additional fee. But most services use something else.
If, however, a service offers LN payment, I prefer that service over anything else

Nominally OT here but coinpayments.net can at times have really crappy conversion rates.

I too use LN whenever possible. Do a lot of GC purchases at bitrefill.com and fold for stuff I need in the real world.
Have some channels pending open at the moment I just opened them with a low fee figuring they will open in the next few hours or overnight.
Then I can spend the next few weeks, or months if I keep the 'add to shopping cart' to a minimum.

The problem still is getting people to use it.
I even setup my own BTCPay server to take payments ( https://paydave.lightning.ninja/ ) and almost nobody used it so I stopped posting it when selling stuff here.
I thought that when I was doing some $1 raffles people would hop in and buy a ticket or two for a buck with lightning with the low fees but nope.

-Dave

[Timelord2067]

...

Hi franky1 - I always enjoy reading your posts, they're insightful and pose the hard questions that need to be asked (sadly I can't merit you as the DT merit font trolls are on strike at the moment ^{Which in itself means they're not doing the job they signed up to do})

I've got a comment about my own observations concerning the Lightning Network.  On the block-chain, I think small value transactions with small TX fees paid are going to be sooner rather than later a thing of the past as people will either shift to another, cheaper altcoin with negligible fees, or those altcoin TX will be non-existent fees.

While I like the LN and the ease of use it promises, it's klunky at the coal face end.  (It might be good for the coders at the back-end who want to sit and watch every electron that flicker's across their computer screen, but it has a long way to go before the masses adopt it)  I've lost bitcoins via Eclair and Zap and I'm in TX limbo attempting to shift funds from one Zap wallet to a new one since the 6th of March.  (Which means I'm a glutton for punishment)

So, like other people who are buried under an ever growing list of TX that get queued ahead of their own, I was wondering (in a thought bubble kind of way) if you can explain how you would speed up transactions on the block-chain (of any price range) without having to go into a bidding war - surely a level playing field where first in, first served (and all users paying the same fare to ride the TX bus) would be a more appropriate way for the transactions to be processed?


That said:

Did you know that LN transactions look for the CHEAPEST path to the end user?  Perhaps that's why DaveF's path is seen as golden and is now well trodden - have you considered that?  (either of you?)

[Wind_FURY]

did you know a service can clog the block with just 5 transactions. where if you break down the number of max sigops and work out how many outputs they can squeeze in means they can have their average 'payment' cost alot and i mean alot less than a normal person doing a 1in2out payment

But Bitcoin continues to chug along, functioning, without breaking, without network downtime. It was attacked, socially and technically, it was forked to many different forked-shitcoins, but it continues to be the most valued cryptocurrency, and the most robust network.

[DooMAD]

please try to learn about LN
and stop promoting LN as if its as secure as bitcoin.. heck start by not pretending it is bitcoin.. because its not

Stop pretending every brainfart of an idea you have is Bitcoin.  It never will be.  It must grieve you tremendously to know that many people all around the world will continue their efforts working to build upon something you utterly despise, when it's unlikely a single person will ever code any of your precious ideas.  LN will keep growing as you and your fractured mind are forever to be stuck in 2017, living your sad fairytales over and over until they become the only thing you can comprehend, despite not being real.  This is literally the rest of your life now.  Lost in a dream world of your own creation.  You don't know how to move on.  Have fun with that.