Lightning Network

in #bitcoin4 years ago

A little rant on it.

A lot of good people are working on the portcool. And yeah you see the new on possible LN flaw but not really big of a deal.
And contray to popular thinking big blocks aren't needed for LN to work good. More layers and thing like hper batching make the possbility of opening thousands of LN channel in one tx.
No the real issues of the LN are here:

  • Inbound liquidty: Basically in order to receive LN txs you need someone to prelock bitcoin in a LN channel to you. This is kinda of a service provider and can be made noncustodial but the risks of who renting what to who is not there. Some LN wallets(Breex and Phoneix) developed a business of where they open LN channel and then charge you small fees per tx. It does incentives future LN wallet work as it provides money incentives but the risk is to large for most people. Thing like Eltoo help inc LN security but requires a soft fork....
  • Chain security: LN and in turn small blocks limit miner income tx fee wise. Onchain tx fees will still happen but not as much if it was a onchain all chain.... Miners will move to things like attacking supply wise i.e getting new source of cheap energy and efficient Asic. If you can get a 0 cost energy you can run your Asic almost forever for profit after breakeven.

Lot of unknowns. Lot of waiting. LN can work but in turns introduces new game theory. I still like the LN.
End of rant.

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I'm a huge fan of LN and already operate a few nodes on the network. I think we'll see channel management and liquidity moved away from the end user in favor of good programming. I really like what ACINQ has done so far with Phoenix and also what the LNURL team has accomplished with LNURL-channel. I think most new users will likely not even be running their own nodes in favor of a friend or service provider running something like LNbits.

I am too. I just tired that people bring out the wrong criticism. Agreed much of channel management and liquidity will be moved away from end users. In fact it would need to be. Many users aren't just going to "lock" away their bitcoin to open a LN channel to accept LN payments. Breez wallet and Phoenix are the best wallets as of now. Both hide the complex parts, open LN channels for users, a good way to monetize said users without resorting to selling data(remember bitfury LN wallet). I just saying more wallets aren't doing it probably b/c eltoo or something like it would increase security thus making more incentive to do it. Running your own node won't actually be a big deal in the future as with a stable block size but for now yeah it be some type of spv style wallet.
The UX though are looking pretty good :P