Interesting comment by dzimbeck on github.
I've never seen those criticisms of the Lightning network before.
Yeah Lightning has had that problem. Their design was very similar to a multisignature exchange i wanted to make. Until i realized the collusion attacks. Lightning will not suffer from collusion as long as the money is in the accounts. Here is a sketch of why this matters.
Joe has more money than Alice and they are in a 2 of 2
So if Jane also has an account of 2 of 2 with Joe, she can promise Joe money and use HTLC to connect the two channels
Joe will promise money to Alice and it all works!! This idea is perfectly sound no money has to touch the blockchain.
So you ask, why can't Jane promise money to Alice? After all they can use Pune Dryja channels to link the 2 of 2 multisig accounts.
Sure but then, what if Joe was also Jane?! He can trick Alice and withdraw the money owed from his own 2 of 2. Because Joe didn't promise funds directly to Alice, she loses everything she was owed!
And this is what will ALWAYS happen when Joe has LESS money than Alice. She will be owed money that isn't in the 2 of 2 account. And there my friends lies the rub. This creates the same arbitration risk that we have seen in 2 of 3 accounts. It only works when the money is in both sides of the deal.
Therefore, the only way to do lighting is for Joe to be really, really rich. And that is centralized and makes the rich richer. But it also runs another serious concern.
What if Joe gets hacked?
What if Joe keeps reusing the same public keys and cryptoanalysis is used to reverse them? Granted this attack isn't proven but he can still get hacked.
So even if real money is owed there is a hacking concern.
What will really happen in lightning?!
It will be a debt settlement network. Where people irresponsibly route payments that could be defaulted on at any time. Therefore it will not be decentralized and run risk of fraud and hacking. People will learn to "trust" the middle man again and the same bullshit starts all over again just like the USD.
Whats the best solution? Don't do lighting as your primary payment routing method. Perhaps use lots of servers to chop up the traffic or something. Facebook after all stores insane amounts of data so how is that different from a really large blockchain run by thousands of nodes sharing the data?
Use BitBays frozen funds! This is a very futuristic concept but in theory if we were pegged and lots of people had frozen funds it would be easier to route debt since so many users would have the frozen funds as collateral. Surely they wouldn't be as valuable as the liquid funds but they count for something. At the sign of hacking nobody would sell them frozen funds anymore and thus they would have a hard time building up creditworthiness (similar to using it for DDE).
So those are some of the best concepts so far dealing with bloat. The Bitcoin github is being subverted by some extremely selfish people who think they are Bitcoin. Its no surprise they ignored my request. They don't care about decentralization. Bitcoin core and Ethereum are some of the most pro-middleman pro-government groups I've seen. They remind me of bankers. Years ago I said "Decentralizing the money will not change the world, decentralize the media and then the world will be saved". This I still believe to be a cogent statement even if its unrealistic.
With that said, I guess they(Bitcoin core devs) forgot that all one needs to do is copy+paste and change the port number to get off their network. And with decentralized pegging those small economies might even be healthy. Too bad they are watching this play out before their very eyes. And altcoins are finally booming.
