Will the Lightning Network Solve ALL Scalability Issues?

[hitsnorth]

It will not solve all the issues but it's definitely will be a good thing. And it will solve as many problrems as it will give.
And it's definitely not a game over for altcoins. There are plenty of good ones.

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[franky1]

for the next couple decades miners dont need to rely on fee's. its still defined as a bonus. not the salary
the block reward is still the salary. so on that premiss of the nest 5 years, this is what happens

imagined a settled average mining cost is ~ $220k per block. today ($35k/btc)
with a yearly 1.5x of (hashpower, difficulty, cost)
meaning 2022 they will need $330k
meaning 2023 they will need $500k
meaning 2024 they will need $750k
meaning 2025 they will need $1.125m
(without having to care about any tx fee bonus)

in 2024 each block changes from 6.25 to become 3.125
so 1btc would need to be $240k to achieve block reward of $750k

this means if the minimum onchain fee was 1sat/byte
and average tx was 250bytes
thats 250sat
with LN needing 2 onchain fee's to open then close so 500sat
0.5btc=$120k
0.005=$1.2k
0.00005=$12
0.000005=$1.20

so the very minimum and i mean minimum cost onchain to use LN from start to end is $1.20 a session

here is the thing though.
fee's are hardly ever 1sat/byte
the average is min 6 max 60
meaning $7.20-$72

people will just stop using bitcoin alltogether to make settlement transactions. if its going to cost $10+

after all.. imagine it.. what if paypal started charging people a monthly subscription of $10+ just to use paypal account for a month..  then micropenny fee once in. people will start using other fiat wallet services like venmo, cashapp, dwalla which have no subscription and no fees

bitcoin WILL NEED to increase its onchain transactions AND change to things like 10byte/sat to keep the onchain fee's low

any dev or altnet fangirl that thinks that bitcoin will still have purpose if it costs say min of $20 to use.. is in some fantasy land or they hope to kill bitcoin utility to force people to play on other networks.

LN is not the saviour of bitcoin.. its the segregation of bitcoiner and eventual displacement of bitcoin. because devs refuse to allow cheap utility on bitcoin..
bankers played this game over 100 years with gold-fiat and we all know how that ended.

[Timelord2067]

...

With the price as high as you are suggesting ^{(thank you for doing the calculations too by the way - it's appreciated)} I feel people will either turn to products that offer small transaction fees in built ^{(cue the Lightning Network theme song)} or, they will wise up to paying higher than necessary fees and, fed up with those high fees, turn to something like coin control and drop the fee down to 1 satoshi (not one satoshi per byte, but *just* one satoshi) themselves.

Were bitcoin to reach One Million Dollars US, then one satoshi would be worth one cent, so a five cent transaction would be *just* five satoshis.

Coin Control as we know it would have to be modified.

[DatKing]

I don't know whether it will be ALL. But it can solve a lot of problems for sure. It could remove the slowness on high amount of transactions on a large scale. And the fees can be much cheaper than this I believe.

[d5000]

In my opinion, LN is "only" a part of the scalability puzzle, but a pretty big one. LN can rise the Bitcoin capacity safely by 1000x or more, without any fundamental disadvantages for small-to-medium transactions.

But I write safely for a reason, because if LN adoption becomes too high, a point could be reached where attacks could have a success probability of higher than 1, because the closure of all affected channels by the attacker would take longer than the timelocks expiration. This point would be reached earlier if the network becomes relatively centralized (hub-and-spoke model), and later if there are lots of well-connected hubs.

What we must aim for, thus, is to not let grow the biggest LN nodes too much - ideally there should be lots of medium hubs of a few thousand channels each. This is of course currently not an issue, as the whole LN has only about 50.000 channels, which could all be closed in 2 hours given the current blockchain capacity. But once there are nodes with more than 100K channels each, things could become more critical, as if a 100K node decides to try out an attack, the closure transactions would compete with regular transactions, and if the blockchain is quite full, then it may take several days to close them and consume lots of transaction fees.

Anyway, I think we are far away from that situation. The other parts of the puzzle may be:

1) altcoins/alternative blockchains - let's face it, they will always exist, and if there are a few strong ones of them, it's better for the resilience of the cryptocurrency ecosystem as a whole, because not everything would be concentrated on a single blockchain. But I'm also quite sure that no (decentralized) altcoin will be able to scale fundamentally better than BTC, all "big block" and "zero fees" models come with tradeoffs.
2) pegged BTC coins on alt chains, either centralized (wBTC) or fairly decentralized (BitBTC)
3) maybe pegged sidechains - I had big hopes on that in the past, but I'm not so sure it will ever get massively adopted, as for example the Drivechain project is taking longer than I expected, but there may be a surprise breakthrough.
4) centralized solutions, like Bitcoin debit cards, which will be ok for smaller transactions in many cases.

So I believe the scalability problem will probably be solved fully, but without LN it would be difficult. I also don't think that fiat money will disappear, so Bitcoin will not need to have a capacity for all monetary transactions which are made in the world.

[hazenyc]

Obviously other currencies have been aiming to tackle the scalability issues that Bitcoin is being presented with.

Obviously if the Lightning Network is not successfully implemented, the likes of coins like XRP will fill in the gap that banks need for fast cheap liquidity.

Will the lightning network be game over for the rest of the ALT coins that are borderline built on scalability?

Let me know what you guys think.

I don't know in how far the lighting network itself can scale or whether it has to be improved over time as well. Is it able to infinitely scale for all kinds of micro transactions? Right now there are a couple of networks that do an amazing job at transaction throughput and very low fees. I am not sure if it is a given that the lightning network will outcompete all of those no questions asked.

Does somebody know where the technical limits of the lightning network are? I know it is a centralized mechanism, making it more dangerous to be used for larger transactions, but purely from a scalability perspective, does it scale infinitely?

[franky1]

In my opinion, LN is "only" a part of the scalability puzzle, but a pretty big one. LN can rise the Bitcoin capacity safely by 1000x or more, without any fundamental disadvantages for small-to-medium transactions.

1900-1970 bank notes were not actually gold. but paper pegged to gold
alternate networks like liquid and LN are not bitcoin. they are tokens pegged to bitcoin

a millisat htlc on LN is not a bitcoin transaction that can be broadcast.
bitcoin does not understand 12 decimals.
bitcoin is measuured in satoshi's which are multplied by 100m to make the basket term btc
millisats are 12 decimals of a btc. thus they are not convertable at raw transaction value level

so LN is not increasing bitcoin capacity.
its getting people to vault up their gold so they can play around with bank notes.
once you make the distinction of the different tokens (sats vs millisats)
and you understand bitcoin has know understanding of millisats. it becomes clear. that its not scaling bitcoin.
but converting bitcoiners to another token

LN is not even a feature unique to bitcoin, solely for bitcoin. and created to only wiork with bitcoin.
LN cant even use the same pegged token unit as bitcoin.

LN is a separate gateway for multiple coins to utilise.
meaning what will play out is bitcoin locked into factory.. users play with millisats. then "atomic swap" to a cheaper fee altcoin like LTC, giving the atomic swapper the bitcoin unlock ability.
or
people will vault up the btc into factories. and never exit LN unless through a exchage that converts to dollar. meaning the factory again keeps the btc

its how banks done it in the last century.. with the pretend 'bank notes are gold so no need to convert back' lie

[amosfrancis]

I would say that Lightning Network is one good solution to deal with the scalability issues, but it does not seem that all scalability issues can be taken care of by the lightning network.

[d5000]

alternate networks like liquid and LN are not bitcoin. they are tokens pegged to bitcoin

LN (or better: payment channels) is a mechanism to bundle several (potentially thousands of) Bitcoin transactions together. If something goes wrong while you're transacting offchain, you can always settle on-chain. And you're always using Bitcoin Script contracts, the pure Bitcoin protocol.

Liquid is very different from LN, as it requires trust in a federation. Once you use the sidechain buying the token, you can't rely on the protocol exclusively to be sure to get back your coins. In LN, in contrast, you can - as long as you observe your channels to be ready to close them (or let them observe by watchtowers).

So you're mixing apples and oranges.

The only issue I agree a little bit with you is that I am a bit concerned about the probabilistic methods that are planned to subdivide satoshis into millisats. The decision to use millisats is based on a megalomaniac conception of Bitcoin's future -- as if the satoshi could be worth 1$ eventually or so (the maximum Bitcoin price I can imagine is the equivalent of around 1 million USD, this would result in a 1 cent satoshi), or if it could make sense to do nanotransactions worth 0.001 cent (why, why would you use Bitcoin for that? And for what purpose?). This part of the design is making LN sort of "impure", because obviously millisat differences can't be represented adequately on-chain. But as long as you transact only values measured in satoshi, you're using pure Bitcoin, only bundled together.

And it should be possible without problems to build an implementation of LN that doesn't support millisat.

[Timelord2067]

...1900-1970 bank notes were not actually gold. but paper pegged to gold
alternate networks like liquid and LN are not bitcoin. they are tokens pegged to bitcoin...

Perhaps you are thinking of the "Silver Certificates" as the "Gold Certificates" were no longer pegged to gold in the 1930's (and, as it happens, the Silver Certificates were not issued after the late 1950's as the modern smaller size notes were introduced circa 1963).

Both Gold and Silver certificates were issued from 1863 on-wards.

[hv_]

alternate networks like liquid and LN are not bitcoin. they are tokens pegged to bitcoin

LN (or better: payment channels) is a mechanism to bundle several (potentially thousands of) Bitcoin transactions together. If something goes wrong while you're transacting offchain, you can always settle on-chain. And you're always using Bitcoin Script contracts, the pure Bitcoin protocol.

Liquid is very different from LN, as it requires trust in a federation. Once you use the sidechain buying the token, you can't rely on the protocol exclusively to be sure to get back your coins. In LN, in contrast, you can - as long as you observe your channels to be ready to close them (or let them observe by watchtowers).

So you're mixing apples and oranges.

The only issue I agree a little bit with you is that I am a bit concerned about the probabilistic methods that are planned to subdivide satoshis into millisats. The decision to use millisats is based on a megalomaniac conception of Bitcoin's future -- as if the satoshi could be worth 1$ eventually or so (the maximum Bitcoin price I can imagine is the equivalent of around 1 million USD, this would result in a 1 cent satoshi), or if it could make sense to do nanotransactions worth 0.001 cent (why, why would you use Bitcoin for that? And for what purpose?). This part of the design is making LN sort of "impure", because obviously millisat differences can't be represented adequately on-chain. But as long as you transact only values measured in satoshi, you're using pure Bitcoin, only bundled together.

And it should be possible without problems to build an implementation of LN that doesn't support millisat.

In BitCoin you can send P2P trx via simple bitcoin layer having only group of miners your counterparty, nearly not visible, no care as long fees are lowest (don't care) and miners have game theory = economic driver to process your trx. Makes BitCoin cash and a bearer instrument

LN is just totally different. Another layer (design, hardware, software, interface, cyber risk...), new counterparty structure, different economics/ game theo, and legal structure as a true payment processor that needs licensing- and its not P2P cash. Selling such as Bitcoin - the P2P electronic cash system sold by the White Paper of Satoshi is just consumer fraud imo

Debunking of such might just ve started here  https://decrypt.co/73845/el-salvadors-u-s-bitcoin-partner-lacks-key-licenses

[hv_]

Lightning is stillborn, unintended, custodial, Blockstream patented,
insecure, off-chain and not Bitcoin. #BitcoinCash is the #Bitcoin
Satoshi intended and we are growing our vendor and user numbers
rapidly with faster than lightning on-chain transactions and the cheapest fees.

Kim dot Con - the man of decentralized content - against all rules. Sure he knows his shit / tech -to make it run big

but wont get adopted AGAINST the bigger consensus of regulation

https://twitter.com/KimDotcom/status/1408576877216681986

And Satoshi made pure Bitcoin - that scales onchain (not crippled BTC or BCH)

and yes - there was no block / capacity limit from the very beginning. Satoshi got talked into by first Bitcoin-FUD ever

https://twitter.com/wisewizzz/status/1409243183888932866

[nutildah]

I agree the whole millisat thing is unnecessarily complicating.

I'll tell you what would really be handy is an Electrum-type wallet for Lightning. You can't expect everybody who wants to participate to run their own node. I'd also be more inclined to use Liquid if exchanges other than Bitfinex supported it. Liquid and Lightning support - along with feeless conversions - should be standard for all major BTC exchanges.

Kim dot Con - the man of decentralized content - against all rules. Sure he knows his shit / tech -to make it run big

Megaupload is quite centralized. You must have him confused with the Pirate Bay people. But then again your bar for decentralization is quite low, so maybe not.

[Vlad2Vlad]

I agree the whole millisat thing is unnecessarily complicating.

I'll tell you what would really be handy is an Electrum-type wallet for Lightning. You can't expect everybody who wants to participate to run their own node. I'd also be more inclined to use Liquid if exchanges other than Bitfinex supported it. Liquid and Lightning support - along with feeless conversions - should be standard for all major BTC exchanges.

Kim dot Con - the man of decentralized content - against all rules. Sure he knows his shit / tech -to make it run big

Megaupload is quite centralized. You must have him confused with the Pirate Bay people. But then again your bar for decentralization is quite low, so maybe not.

Bits.  Even illiterate peasants understand 2 bits.  Been saying for 8 or 9 years it’s going to bits.  :/

Lightning is stillborn, unintended, custodial, Blockstream patented,
insecure, off-chain and not Bitcoin. #BitcoinCash is the #Bitcoin
Satoshi intended and we are growing our vendor and user numbers
rapidly with faster than lightning on-chain transactions and the cheapest fees.

Kim dot Con - the man of decentralized content - against all rules. Sure he knows his shit / tech -to make it run big

but wont get adopted AGAINST the bigger consensus of regulation

https://twitter.com/KimDotcom/status/1408576877216681986

And Satoshi made pure Bitcoin - that scales onchain (not crippled BTC or BCH)

and yes - there was no block / capacity limit from the very beginning. Satoshi got talked into by first Bitcoin-FUD ever

https://twitter.com/wisewizzz/status/1409243183888932866

BSV thread got deleted?  Wow.  Anyway, dude, you’re over 1000 merits now and still not legendary.  Odd. 


[moderator's note: consecutive posts merged]

[Rath_]

I'll tell you what would really be handy is an Electrum-type wallet for Lightning. You can't expect everybody who wants to participate to run their own node

I am not sure what you would exactly expect from an Electrum-like Lightning wallet, but actually, Electrum has introduced support for the Lightning Network in the 4.x update. I even wrote a step-by-step guide. In short, a user can easily open a channel with any Lightning Network node. The only caveat is that the user has to either set up a watchtower or launch their wallet every few days to check if the other party did not broadcast an outdated state of the channel.

There are even more user-friendly wallets out there but most of them are custodial, for example, BlueWallet which takes care of the channel management so that users don't have to worry about incoming/outbound liquidity.

[franky1]

alternate networks like liquid and LN are not bitcoin. they are tokens pegged to bitcoin

LN (or better: payment channels) is a mechanism to bundle several (potentially thousands of) Bitcoin transactions together. If something goes wrong while you're transacting offchain, you can always settle on-chain. And you're always using Bitcoin Script contracts, the pure Bitcoin protocol.

the IN LN payments are not using bitcoin scripts. your talking about the latter end session commitments. not the in channel payments known as HTLC

HTLC are measured in millisats and not formatted to be broadcast/accepted by the bitcoin network

its these very same HTLC that are not bitcoin formats that allow for custodials(elthree) to 'print' their own channel balance and manage customers. as its the manager/custodian that then when end sessions are needed aggregate the HTLC's into a commitment they sign to then allow onchain withdrawals. otherwise users could also just request the aggregated funds held within the custodian be reused to open new sessions without needing to touch the blockchain

once you separate the idea of the open/close onchain transactions. from the inside LN htlc payments. you start to see how millisats are not actually bitcoin

oh and one last tip...
lightning is not subservient, not solely functional to bitcoin. many LN apps alow utility with many other altcoins too.

in short LN is nor forced to play by bitcoin rules. because htlc's are not network wide audited

[franky1]

It will get better, I suppose

LN devs crippled bitcoins onchain capacity/utility to promote users to move over to LN before LN was a proper beta working project

EG at the moment a blocks can only hold so many open and close sessions
so imagine people having 4 channels and locks for about 1 month(standard predictable spending plan)
4 close previous sessions 4 open new session. that 8 transactions per user per month.
(1.6kb)
so for now thats call that 1000 users per block
well over 4032 blocks(a month) thats only 4million users efectively able to open and close sessions per month.
but here is the thing
it only works as upto 4 million users of LN if:
no other transactions are allowed(no legacy transactions. no exchange reserves rebatching)
everyone timed their close-reopen sessions precisely not to bottleneck with others
they intend to spend more times within LN than 8 times onchain

EG if your an ebayer that only uses paypal 2 times a month. where your offered paypal to ebay fee's of 1c
but it costs you $16 just to get to use paypal membership each month just to get the privilege of 1c fee.
but you could just buy something on ebay direct with your bank card for $2 each($4 total)
it then makes using paypal less of an incentive

LN is not a solution for everyone its a niche market separate network for spammer(multiple spenders)

the bitcoin devs made onchain transaction fee's increase. removed any rational fee formulae mechanism of fairness and just promoted everyone should use LN even if they are not a frequent user. and even when using LN there is a silly ignorance// because not all channels/route will work all the time.

its like they tried to run before they could even get out the womb

[BlackHatCoiner]

LN devs crippled bitcoins onchain capacity/utility to promote users to move over to LN before LN was a proper beta working project

Buddy, transactions included into blocks can't handle the entire world for global adoption whether they extended the block size or not. (Even if the block generation happened every 10 seconds with size > 10GB, which has other downsides)

You have to tackle the problem from its root and it's been solved with LN; it makes Bitcoin operate more practically. Think about it. If I wanted to make purchases, buy coffee/food, electronic goods, other services etc, I'd have to make multiple transactions whereas they should be included into thousands of computers' disk. But, with LN the thing changes completely. We no longer broadcast our debts; we agree upon a final balance on our own ledger and once we're out of capacity we can send it to be confirmed in the main ledger. (And then we can increase our capacity and repeat again)

And the best part: The system works and my money aren't controlled by a third party! I have 100% ownership of my funds. It's genius.

[AGD]

Even knowing that op started this thread to shill a centralized random shitcoin (xrp), which definitely will NOT solve all scalability issues, I feel almost forced to clear some things up.


Lightning is NOT a solution for big payments
Bitcoin is already able to handle this. You can send Bitcoins worth millions for a very small fee already, so there is no need to find another solution. Lightning fees are measured by the amount you send and not the tx size. Most big payments will be cheaper on the btc mainchain. Discussions about how big payments can be send over lightning are a non issue.


Lightning is a solution for small payments
You can buy a coffee and a piece of cake with lightning and pay a very low fee. You can tip people a few satoshis and pay a very low fee. That's what lightning is good at.

There is NO need for everybody to open channels
You can use a lightning wallet like Breez for example, which gives you inbound liquidity up to 0.04 BTC (4 million satoshis) and you can accept lightning payments instantly without caring about opening channels. You can use @lntxbot on Telegram to send and receive satoshis to/from everybody else on telegram. No need to open channels for this. There are more solutions like that. Find out for yourself

Payments within the lightning network are not countable from the outside
There is no open ledger, which counts the payments made on lightning. Only node operators can count how many paments they are routing on their own node. They don't know what's exactly happening on other nodes. This makes lightning payments practically anonymous, which is a nice side effect. When people start to crunch numbers on how many payments the lightning network is able to handle, forget about them. They don't know because they can't!

[BIN-BIN]

The lightning network may not solve the scalability problem faced in the Bitcoin network entirely but it will further help to solve high liquidity. If the lightning network is fully implemented, then Bitcoin will become a full flesh currency rather than just being a store of value as many have speculated bitcoin to be.