Will the Lightning Network Solve ALL Scalability Issues?

[d5000]

In BitCoin you can send P2P trx via simple bitcoin layer having only group of miners your counterparty, [...]
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.

While it's true that the on-chain transaction has lots of advantages over LN, I simply don't understand why some people hate LN so fervously, being the alternative a completely centralized payment processor (e.g. Bitcoin prepaid card issuers, custodial wallets), who can always run away with your money. There may be protections in certain countries if the centralized operator has a bank license, but this does't apply to many of the jurisdictions where most of the unbanked live, who could enormously benefit from BTC.

The new counterparties that are added in LN do have this advantage only in very specific circumstances, mostly if the blockchain is too full and the malicious actors got connected to too many channels. The other risks (cyberattacks etc.) are also present in the no-LN structure with centralized payment processors.

It is simply terribly inefficient and not necessary if you store all transactions in a ledger shared by _all_ full nodes.

For medium to large payments however I like the sidechain structure (as I wrote above), just because it shares some of the advantages of on-chain transactions. But there seem to be big challenges regarding the two-way-peg. Maybe however an one-way peg (via proof-of-burn) could do the trick too. The challenge however here seems to be to guarantee enough security and demand to maintain the peg.

@franky1: The HTLCs being formatted in millisats may be implementation details, the important thing however is that you always get the right (by the off-chain transactions sent to you by your counterparties) to settle on the blockchain with the correct value rounded to satoshi, with a pure Bitcoin transaction. If that's not the case, then please provide me further proof.

[titular]

devs are in the process of making lightning 2.0 (layer 3)
its where you dont vault up funds into a channel. but instead deposit funds into a factory multisig
the factory then offchain creates channels below it in millisats.
so users cant broadcast, but can close session with the factory and so the factory aggregates the channel balances and recreates new channels to rebalance the channels.

thus even less onchain transactions as it wont require onchain broadcasts/settlement to close/reopen

THIS is exciting. Do you have any documentation you can share?

One of the biggest issues I have found with LN is the issue with locking funds up in a channel. I always thought this would be the main issue for many users. I am glad to see the LN devs are looking to improve on this model!!

[franky1]

@franky1: The HTLCs being formatted in millisats may be implementation details, the important thing however is that you always get the right (by the off-chain transactions sent to you by your counterparties) to settle on the blockchain with the correct value rounded to satoshi, with a pure Bitcoin transaction. If that's not the case, then please provide me further proof.

bitcoins structure is simple. you get paid when its confirmed. anything else should not be treated as a payment until confirmed and immutable. thats the security and the whole beauty of what makes bitcoin and blockchains and crypto such a unique and trusted system

however
inside LN
"get the right to settle in the blockchain" = commitment..
these commitments however have conditions(if statements) thus not the same as legacy/native bitcoin system

but so many obsess about commitments and pretend its like a guarantee. and a security that people will always get paid..
with the fluff that these yet unconfirmed commitments are as secure as a confirmed bitcoin transaction

reality is people are not guaranteed. and there is no security of always getting paid.
definitely not while unconfirmed and in many cases not even after confirmation(IF conditions attached)

there are many many bugs and flaws that break the ability to claim whats owed.

note: commitments are separate from the HTLC/invoice messages in ln
its like a commitment is a signed cheque of ajoint bank account. and an HTLC/invoice is a post-it note IOU between users in LN.. handed around the routes of users

i know people are going to obsess and want to distract people with the commitments and avoid with their very harsh insults that people should only think and discuss commitments.. but,. take a breath and start thinking about the real inside LN stuff.. beyond the commitments

commitments are sent onchain to settle
HTLC'offers'/'invoices' (the inside LN messages looping around the network) are not sent onchain

there is alot of stuff happening between commitment updates. there are also alot of issues around the bugs and flaws of not getting the "secret" of a hash160(secret) commitment outputs 'if condition'.

so even if someone was to form a commitment and broadcast it. they are not able to claim all thats owed unless they have the "secret" and they only get the secret AFTER all the inside LN flimsy htlc/invoice stuff is complete

many users AND DEVS have lost funds this way. many malicious users playing around outside the flimsy non audited rules, abuse the system to ensure they get an advantage

..
if alice-bob-charlie-dave-eric were on a route

and alice wanted to pay eric. where alice has NO COMMITMENT with eric.
its not a system where alice only talks to bob. via commitments
alice sends messages to eric and eric provides messages back to alice with a millisats  value and hash(hash160(secret) accepting the offer
alice then and only then talks to bob. and starts the gossip/path finding through the channels to get through charlie dave  to get to eric where then and only then the commitments are created with the hash160 added output 'IF condition'

but in all this part described above. has bob charlie or dave got the secret?? NO.
 and alot can go wrong
however bob-charle-dave have locked value toward their own outbound counterparty unable to be spend on other things..  and also dont have the secret to spend the promised inbound funds
thus unable to spend it themselves and the other party unable to claim it

again lots can go wrong here
even broadcasting the current commitment wont help as they dont have the secret to claim

its a known fact that lots can go wrong here. its not just the low success rate of "payment success" issues

these locks are not measured in milliseconds. but have lengthy timeouts.
these lengthy timeouts are to allow users to accept and help out or reject

during these lengthy timeouts of initial offer...  alice can reject/abstain/not respond to the bob-charlie-dave route to eric

and instead use zoe-yenson-xena to get to eric and leave bob-charlie-dave waiting with locked value they cant spend of their own commitment forward(outbound) nor claim funds owed/promised to them(inbound)

because they are left waiting for the other LN messages that are not commitments.

so please understand there is alot more happening in LN then just the commitments. and alot that can break/delay/make unclaimable those commitments.
so please understand the other "layers" of LN outside the over promised and utopian dreams of commitment guarantee

[franky1]

devs are in the process of making lightning 2.0 (layer 3)
its where you dont vault up funds into a channel. but instead deposit funds into a factory multisig
the factory then offchain creates channels below it in millisats.
so users cant broadcast, but can close session with the factory and so the factory aggregates the channel balances and recreates new channels to rebalance the channels.

thus even less onchain transactions as it wont require onchain broadcasts/settlement to close/reopen

THIS is exciting. Do you have any documentation you can share?

One of the biggest issues I have found with LN is the issue with locking funds up in a channel. I always thought this would be the main issue for many users. I am glad to see the LN devs are looking to improve on this model!!

theres actually alot.
but it comes under many many buzzwords.
elthree
factories
hubs
gateways
custodian services

in most cases you got to imagine it as you depositing funds into a manager and the manager just sets up a non-broadcastable channel set under them
(current buzzwords 'micropayment channel' as oppose to 'payment channel' (micro denominated in msat))

which requires the manager to control if/when//why users should be allowed to completely exit LN and retrieve some real bitcoin utxo via a separate commitment in control of the manager

[hv_]

In BitCoin you can send P2P trx via simple bitcoin layer having only group of miners your counterparty, [...]
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.

While it's true that the on-chain transaction has lots of advantages over LN, I simply don't understand why some people hate LN so fervously, being the alternative a completely centralized payment processor (e.g. Bitcoin prepaid card issuers, custodial wallets), who can always run away with your money. There may be protections in certain countries if the centralized operator has a bank license, but this does't apply to many of the jurisdictions where most of the unbanked live, who could enormously benefit from BTC.

The new counterparties that are added in LN do have this advantage only in very specific circumstances, mostly if the blockchain is too full and the malicious actors got connected to too many channels. The other risks (cyberattacks etc.) are also present in the no-LN structure with centralized payment processors.

It is simply terribly inefficient and not necessary if you store all transactions in a ledger shared by _all_ full nodes.

For medium to large payments however I like the sidechain structure (as I wrote above), just because it shares some of the advantages of on-chain transactions. But there seem to be big challenges regarding the two-way-peg. Maybe however an one-way peg (via proof-of-burn) could do the trick too. The challenge however here seems to be to guarantee enough security and demand to maintain the peg.

@franky1: The HTLCs being formatted in millisats may be implementation details, the important thing however is that you always get the right (by the off-chain transactions sent to you by your counterparties) to settle on the blockchain with the correct value rounded to satoshi, with a pure Bitcoin transaction. If that's not the case, then please provide me further proof.

Guess ppl  dont like be be 'forced' out of Bitcoin as the best thing ever happend to electronic payments and cash. Further proven is that Bitcoin cannot be altered in legal and tech terms or it is sth different ( see copyright and just legal prospecting of financial products ...)

LN in terms of netting systems are already here, no need to change Bitcoin's basic protocol for. Ryan X Charls and Clemens Ley mad LN work on BTC - way before Segwit or any other rubbish was sold to the herd. Capacity is no issue in e world, and the fake talk with decentraliziation already debunked

[AGD]

devs are in the process of making lightning 2.0 (layer 3)
its where you dont vault up funds into a channel. but instead deposit funds into a factory multisig
the factory then offchain creates channels below it in millisats.
so users cant broadcast, but can close session with the factory and so the factory aggregates the channel balances and recreates new channels to rebalance the channels.

thus even less onchain transactions as it wont require onchain broadcasts/settlement to close/reopen

THIS is exciting. Do you have any documentation you can share?

One of the biggest issues I have found with LN is the issue with locking funds up in a channel. I always thought this would be the main issue for many users. I am glad to see the LN devs are looking to improve on this model!!

Answer given 3 posts before yours:

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.


...

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

...

[franky1]

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

inbound

accept

..
the other persons question was in general.. 'if i have bitcoin and i want to spend..'
 you mention a "solution" where
i have to pay a company. and they hand me channels so that i can 'receive' upto 0.04btc
i dont think you really understood the situation and requirement
i give you a hint. when people want to spend . they want an outbound solution

oh and a quick search and it shows that breez offers that as point of sale merchant tool
basically its like saying dont worry about bitcoin addresses, sign up to bitpay as your merchant shopping cart

many dont want custodial solutions. and others dont want to spend funds to be given an option to receive
after all wasnt that the point of bitcoin

oh and yea breez is still not a solution for everyone

[famososMuertos]

...//...:

It is not about displacing other projects or ALTS is about an alternative, the LN is always seen as the solution, bitcoin works well as it was created, LN is an alternative to the concerns of the current present and the demands that are presented with bitcoin for its use. I like LN in its alternative.

[franky1]

...//...:

It is not about displacing other projects or ALTS is about an alternative, the LN is always seen as the solution, bitcoin works well as it was created, LN is an alternative to the concerns of the current present and the demands that are presented with bitcoin for its use. I like LN in its alternative.

no issue calling LN an 'option' for utility. or an alternative. .. but dont praise LN as THE SOLUTION.. as that is trying to push the mantra that everyone needs/should use LN. even when LN is a niche and not a all out solution

many scenarios where LN does not solve things. heck LN does not have a 100%payment success rate for its minimal usecase/bestcase

its niche is very small. and so people need to be informed on its limitations to then make wiser choices. rather then be bombarded with myth and PR that its better than bitcoin

[AGD]

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

inbound

accept

..
the other persons question was in general.. 'if i have bitcoin and i want to spend..'
 you mention a "solution" where
i have to pay a company. and they hand me channels so that i can 'receive' upto 0.04btc
i dont think you really understood the situation and requirement
i give you a hint. when people want to spend . they want an outbound solution

oh and a quick search and it shows that breez offers that as point of sale merchant tool
basically its like saying dont worry about bitcoin addresses, sign up to bitpay as your merchant shopping cart

many dont want custodial solutions. and others dont want to spend funds to be given an option to receive
after all wasnt that the point of bitcoin

oh and yea breez is still not a solution for everyone

That shows how much you don't know about lightning. To spend money you just have to send some into your Breez wallet (or get them for free by tipping etc). That's how the world works: Spend some if you have some. If you have no Bitcoin at all, you can't spend them. Still no need to open a channel. And yes, Breez (and other wallets like that) is the solution for everyone.

Edit:

i have to pay a company. and they hand me channel

is completely wrong. You don't pay for the channel.

[hv_]

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

inbound

accept

..
the other persons question was in general.. 'if i have bitcoin and i want to spend..'
 you mention a "solution" where
i have to pay a company. and they hand me channels so that i can 'receive' upto 0.04btc
i dont think you really understood the situation and requirement
i give you a hint. when people want to spend . they want an outbound solution

oh and a quick search and it shows that breez offers that as point of sale merchant tool
basically its like saying dont worry about bitcoin addresses, sign up to bitpay as your merchant shopping cart

many dont want custodial solutions. and others dont want to spend funds to be given an option to receive
after all wasnt that the point of bitcoin

oh and yea breez is still not a solution for everyone

That shows how much you don't know about lightning. To spend money you just have to send some into your Breez wallet (or get them for free by tipping etc). That's how the world works: Spend some if you have some. If you have no Bitcoin at all, you can't spend them. Still no need to open a channel. And yes, Breez (and other wallets like that) is the solution for everyone.

the part of that world is just getting smaller and smaller that must!! finally use sth (sold!) here, sold as Bitcoin - but ... wft?

Hoping for lot of things, finally some space to settle ( what fee it ll be ?)

Freedom is not here

[franky1]

That shows how much you don't know about lightning.
..
Still no need to open a channel.

i have bitcoin. probably more then most
there is no magic that a channel just appears
i have to get an app and ask for a channel to be opened.
if i want to spend i have to fund that channel

(there is a big difference of language between 'dont need to open' and the reality of 'dont need to be the funding initiator')

you can play mind games about how the channel opened but if i have to use another app  which i have to download and i have to request a channel using such app. its still triggered by me even if a 'custodian' then 'initiates' it

i do love it how people try to make things sound magical and utopian,
but end result is the same

if i want to spend coins. using LN.. it still requires a channel. and that channel is not magically existing already. its created by my request. and i still need to fund it

but anyway have a nice day with you "LN solves everything"
its weird that people are sooooooooo determined to say bitcoin is broke and another separate network is the sole solution everyone needs.
even when bitcoin transactions are more guaranteed, and its the other network that cannot guarantee stuff

when the solution is more broke than the presented problem.. its not a solution

LN's biggest flaw. its liquidity.
payment success for micropennies is ok
payment success for 1 coffee is almost ok
payment success for a months worth of coffee is varied and not always ok
                                                          pizza has more issues
                                                          weekly groceries is poor
                                                          house rent is even worse
you get the idea the more you want to spend the less chance you get to spend it

so the LN fan philosophy is to pamper and promote LN beyond logic and outside of moral risk just to get OTHERS into LN for the hope OTHERS will facilitate the fans payments. whilst others then suffer the issues the fans avoid telling them about
the flaw in that philosophy. is more people=more competitions for the route liquidity
EG someone might have 1500,000sat ($450)(split into a a few channels of $150) they want to spend themselves. but they only allow 10,000sat($3) to be spent via autopilot routing of others
so people end up in bottlenecks because everyones using up the $3 route to try getting their $150 spent
..
and no . no one is silly enough to open up their whole $150 to be used by others. as the sub penny fee's of such act makes that channel void of spending in just 50 attempts. but at a cost that wont cover the fees onchain to re-org channels

[Maymoney]

To make this quick, “Will the lightning network be game over for the rest of the ALT coins that are borderline built on scalability?” My answer is YES

[franky1]

To make this quick, “Will the lightning network be game over for the rest of the ALT coins that are borderline built on scalability?” My answer is YES

LN is not fixed as a bitcoin feature
LN is a separate network that multiple altcoins can use too

so any niche benefit bitcoin gets. altcoins will too

many have run scenarios.
and here is the main conclusion
people deposit bitcoin into custodians so they can play around with outbound millisat balance on LN phone app.. coz yea who wants to carry around a desktop full node when in starbucks buying coffee

so they play around with millisats in lite custodial apps

and instead of exiting LN back to bitcoin. to avoid onchain fee's that custodians have determined as the channel initiator. users atomic swap to an altcoin and exit LN via cheap fee altcoins
end result custodians keep the bitcoin. and users play with altcoins

its how the banks did it over the last 200 years. grab the gold hand out paper. at the end swap for nickel and copper

[acquafredda]

In the meanwhile the network is clearly growing both in value and activity terms. More and more people are jumping on LN: most of them via simple wallets that avoid the whole LN complexity. The following chart shows that it took three years to reach 1000btc and six months to go from 1058 to 1641. It reminds me how bitcoin started, little by little.

[d5000]

you get paid when its confirmed. anything else should not be treated as a payment until confirmed and immutable.

This is indeed the advantage of on-chain transactions. But I view the model a bit different.

Let's compare it to traditional solutions in the financial system. The base layer are bank transfers. It's the most secure layer and the one preferred for big transactions (yes, you have also cash, but in the current system it is more or less an "additional tool").

Above bank transfers you have additional layers: credit card systems, online wallets like Paypal, et cetera. Payments with these means are inherently less secure than "normal" bank transfers, but offer the advantage to be instant.

So in my opinion the comparison - on chain=bank transfer, credit card=LN - is perfectly valid.

these commitments however have conditions(if statements) thus not the same as legacy/native bitcoin system

OP_IF is an old statement of Bitcoin script which is present at least since 2011.

but so many obsess about commitments and pretend its like a guarantee. and a security that people will always get paid..
with the fluff that these yet unconfirmed commitments are as secure as a confirmed bitcoin transaction

As I wrote above: it's a >99% guarantee, like a credit card or PayPal payment, which is enough in most cases, and in practically all cases of payments of less than an equivalent of $100 or even $500.

there are many many bugs and flaws that break the ability to claim whats owed.

You can't bring up bugs as an argument against a technology. No software would be "legit" then, not even Bitcoin. The only valid argument would be that LN is more complex than on-chain Bitcoin and thus more vulnerable to bugs. But LN is currently in a state as Bitcoin was in 2011/2012, and yes, there is a chance that a fatal bug could happen, like it occurred in the Bitcoin network in 2013 in the transition to 0.8.

If LN is "un-audited", like you claim, this is also not an argument against it, because it can be audited at any time. The rest of your post is about "possible things which can go wrong". But in which software system this isn't the case in such an early state? Above all: is it really riskier to pay via LN than to pay via any centralized processor which can run away with your money?

To make this quick, “Will the lightning network be game over for the rest of the ALT coins that are borderline built on scalability?” My answer is YES

[...]LN is a separate network that multiple altcoins can use too
so any niche benefit bitcoin gets. altcoins will too

The post was about altcoins "built on scalability". While my answer would not be as categorical als Maymoney's, altcoins would not directly benefit from LN enhancements in Bitcoin. The communities have to adapt the LN software to use it. And most important: they cannot use Bitcoin LN nodes and much less the Bitcoin-LN-supporting merchants etc., so they have to bring in a whole lot of extra community-building effort.

[AGD]

That shows how much you don't know about lightning.
..
Still no need to open a channel.

i have bitcoin. probably more then most
there is no magic that a channel just appears
i have to get an app and ask for a channel to be opened.
if i want to spend i have to fund that channel

(there is a big difference of language between 'dont need to open' and the reality of 'dont need to be the funding initiator')

you can play mind games about how the channel opened but if i have to use another app  which i have to download and i have to request a channel using such app. its still triggered by me even if a 'custodian' then 'initiates' it

i do love it how people try to make things sound magical and utopian,
but end result is the same

if i want to spend coins. using LN.. it still requires a channel. and that channel is not magically existing already. its created by my request. and i still need to fund it

but anyway have a nice day with you "LN solves everything"
its weird that people are sooooooooo determined to say bitcoin is broke and another separate network is the sole solution everyone needs.
even when bitcoin transactions are more guaranteed, and its the other network that cannot guarantee stuff

when the solution is more broke than the presented problem.. its not a solution

LN's biggest flaw. its liquidity.
payment success for micropennies is ok
payment success for 1 coffee is almost ok
payment success for a months worth of coffee is varied and not always ok
                                                          pizza has more issues
                                                          weekly groceries is poor
                                                          house rent is even worse
you get the idea the more you want to spend the less chance you get to spend it

so the LN fan philosophy is to pamper and promote LN beyond logic and outside of moral risk just to get OTHERS into LN for the hope OTHERS will facilitate the fans payments. whilst others then suffer the issues the fans avoid telling them about
the flaw in that philosophy. is more people=more competitions for the route liquidity
EG someone might have 1500,000sat ($450)(split into a a few channels of $150) they want to spend themselves. but they only allow 10,000sat($3) to be spent via autopilot routing of others
so people end up in bottlenecks because everyones using up the $3 route to try getting their $150 spent
..
and no . no one is silly enough to open up their whole $150 to be used by others. as the sub penny fee's of such act makes that channel void of spending in just 50 attempts. but at a cost that wont cover the fees onchain to re-org channels

OK. Now you are presenting your typical ignorance about simple facts. I don't know if you are just silly or trolling. You know what? I put you and your dumb posts on ignore. Enough is enough.

[franky1]

many altcoins are bitcoin rip-offs
all thats required is not to change masses of code of the altcoin
but to change the first couple characters of an invoice in the LN software.
many LN node software already have litecoin and other coins already coded in.
........
as for you believing that LN is 99% successful for $100-$500
care to show me the latest 'payment success rate' graph

like this one from 2018


as for 2021
seems the lightning network stats sites (removing the elite hub/gateways) shows the median node capacity is only $60 for the general network. channel being less

[BlackHatCoiner]

I believe that franky1 somehow feels benefited from trying to make others avoid the lightning network. I'm still not convinced from his counter-arguments against the lightning fans in here. I have to state, though, that he sometimes brings in reasonable issues to the discussion.

What I do observe is that he can't formulate them properly, as a result to make no sense and create thousands of meaningless posts repeatedly. That's why he may be hated; because of unjustified “quarrel”.

[verita1]

I think this year will be important for the Lightning network, Jack Mallers is building an incredible App with Strike. He recently published this tweet with the news that the App will have zero fees when its users buy bitcoin.

I just published Announcing the Bitcoin Tab

Today, the cost to acquire bitcoin works its way towards zero.

Buying #bitcoin for no added fees is how it always should have been.

Now it is.

Pawn to e4, world. Your move.

https://twitter.com/jackmallers/status/1410645403754659842?s=19

Also all the eyes of the world are waiting when the bitcoin law begins to rule in El Salvador because the government app called Chivo is built by Jack Mallers using the Lightning network.

More Latin American countries want to follow El Salvador's step and celebrate its success, surely there will be more work for Jack Mallers building apps that adapt to the needs of each of these nations.