Developers propose hierarchical channels to boost LN scalability

[Majestic-milf]

 Developers are looking into the idea of proposing the use of hierarchical channels to help solve Bitcoin's lightning network scalability issues.
 A hierarchical channel is a 2 -party channel with two main outputs; one per party. Plus zero or more HTLC outputs. Each outputs from a hierarchical channel that pays to multi user party, funds another potentially hierarchical channel.
 Now, Bitcoin devs believe that the implementation of a hierarchical channel could solve lightning network's major problem which is scalability as they allow for flexible off chain resizing of channels without the use of on chain transactions which cause delay.
 Since it can help aid the LN in scalability, can it also solve the issue of offline transaction fraud which plagues the LN as well?
 More insight on this will be appreciated.

https://bitcoinmagazine.com/technical/bitcoin-developers-propose-hierarchical-channels-for-lightning

[DaveF]

I stopped reading at

In contrast, resizing channels on-chain can cause delays of several months and increases fees

Several months? Not.... Well unless you are trying to do thins with a 1 sat /vb during congested times.

It's also old news: https://www.youtube.com/watch?v=WxNlQflXhKo&t=95s
Tweeting about it over a month ago: https://twitter.com/AdoptingBTC/status/1633787306447450112

can it also solve the issue of offline transaction fraud which plagues the LN as well?

There is no inherent problem with this. Any more then trying to do any transaction offline.
People like to blow it out of proportion since there are a lot of mobile lightning users but most users / node operators don't care.

-Dave

[Majestic-milf]

Great. Thanks for the helpful insight on this.

[BlackHatCoiner]

As rightly said by DaveF, splicing is implemented already. In fact it was firstly proposed in 2018, and I'm pretty sure most popular lightning clients support it. C-lightning does.

The TL;DR is: splicing is committing a new funding level. You don't have to open or close any channel, because you're essentially coming to an agreement with your partner to update the channel's worth.

[NotATether]

LN is not really something that can solve Bitcoin's scalability issues long-term, even if it manages to solve its own one way or another.

Bitcoin itself needs more than just a new protocol to address these things (although blockchain culling would help here), it also needs a new widespread full-node software that is open to implementing these things.

[thecodebear]

LN is not really something that can solve Bitcoin's scalability issues long-term, even if it manages to solve its own one way or another.

Bitcoin itself needs more than just a new protocol to address these things (although blockchain culling would help here), it also needs a new widespread full-node software that is open to implementing these things.

L2 is where Bitcoin scaling happens. That's been known for years. You scale on-chain you lose the things that make Bitcoin unique and powerful - you turn Bitcoin into an altcoin.

Anything that helps make the LN work better and need less use of on-chain txs is a great thing for Bitcoin. Assuming it doesn't make LN way more complex to use. On-chain will continue to be used for moving money around and making large transactions and moving money to/from LN (which of course this update means to help lessen). Bitcoin as a payments network - that's where LN comes in. Payments needs massive scalability, that doesn't happen on the base layer. That is literally what higher layers are for. That's LN.