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> How is this expected to work with 7 billion people using it for every tiny financial transaction? https://lightning.network/ https://lightning.network/ tl;d

> How is this expected to work with 7 billion people using it for every tiny financial transaction? https://lightning.network/ https://lightning.network/ tl;dr: a network of off-chain, transitive payment channels. two on-chain transactions (to fund and settle channel) allow for ~unlimited, ~free, ~instant transactions across a p2p network of nodes off-chain

runeks 9y ago
Payment channels (which Lightning Network uses) allows for unlimited transactions, but not an unlimited number of users, because — as you say — two on-chain transactions (deposit+withdrawal) are required to initiate and finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M transaction per month, this means only 20M people can deposit to/withdraw from the Lightning Network (LN) per month. To this critique, some reply that merchants will just start trading unsettled (off-chain) LN transactions to pay their suppliers, but no one has presented any model of how this would work in a real economy, with merchants needing to pay suppliers, who need to pay their suppliers, who need to pay their employees.
- gst 9y ago
  ~20M transaction per month are an arbitrary limit. The economic majority recently decided against increasing that limit, but this doesn't mean it's not going to get increased at some later point.
  - KirinDave 9y ago
    There are very good technical reasons for that limit. It is not as simple a problem as "voting".
    - gst 9y ago
      Of course there are technical reasons for that limit. But whatever the correct size of the limit is - the current limit is almost certainly too low. The Ethereum blockchain is able to handle a significantly higher amount of transactions without implementing all of the performance optimizations that Bitcoin has (such as compact blocks).
- dumbfounder 9y ago
  There will be large rewards for companies that do tackle these types of problems though. It's still early in the game.
  - spookthesunset 9y ago
    > It's still early in the game. Bitcoin is 9 year old tech--that is an eternity in tech. Lightning network has been touted as "the scaling solution" for many of those years and has yet to see any use. And even then, the scaling solution Lightning Network provides is "don't use bitcoin". All the solutions for bitcoins scaling problems boil down to "don't use bitcoin". So if the only way to scale Bitcoin is to not use it... again... what is the point?
- barnacs 9y ago
  Sure, LN alone might not be enough to serve the daily transactions of billions of users. Still, it proves how layers built on top of the blockchain can improve the efficiency by several orders of magnitude with some reasonable trade-offs. LN is probably just the first of such layers. Things like sidechains, cross-chain atomic swaps, various block space usage improvements (eg. Schnorr signatures) are also in the pipeline right now, all of which could further improve throughput. So while LN may not be the silver bullet, it makes me hopeful that at least from a technical perspective, Bitcoin will be able to scale to become a global currency.
criddell 9y ago
I think people equate Bitcoin with the blockchain and by that understanding I think the parent poster is correct. The current blockchain doesn't scale and isn't suitable for every tiny transaction.
nmca 9y ago
Or https://raiden.network/micro.html https://raiden.network/micro.html

runeks 9y ago

Payment channels (which Lightning Network uses) allows for unlimited transactions, but not an unlimited number of users, because — as you say — two on-chain transactions (deposit+withdrawal) are required to initiate and finalize a transfer. Given that the Bitcoin blockchain can only handle ~20M transaction per month, this means only 20M people can deposit to/withdraw from the Lightning Network (LN) per month. To this critique, some reply that merchants will just start trading unsettled (off-chain) LN transactions to pay their suppliers, but no one has presented any model of how this would work in a real economy, with merchants needing to pay suppliers, who need to pay their suppliers, who need to pay their employees.

gst 9y ago
~20M transaction per month are an arbitrary limit. The economic majority recently decided against increasing that limit, but this doesn't mean it's not going to get increased at some later point.
- KirinDave 9y ago
  There are very good technical reasons for that limit. It is not as simple a problem as "voting".
  - gst 9y ago
    Of course there are technical reasons for that limit. But whatever the correct size of the limit is - the current limit is almost certainly too low. The Ethereum blockchain is able to handle a significantly higher amount of transactions without implementing all of the performance optimizations that Bitcoin has (such as compact blocks).
dumbfounder 9y ago
There will be large rewards for companies that do tackle these types of problems though. It's still early in the game.
- spookthesunset 9y ago
  > It's still early in the game. Bitcoin is 9 year old tech--that is an eternity in tech. Lightning network has been touted as "the scaling solution" for many of those years and has yet to see any use. And even then, the scaling solution Lightning Network provides is "don't use bitcoin". All the solutions for bitcoins scaling problems boil down to "don't use bitcoin". So if the only way to scale Bitcoin is to not use it... again... what is the point?
barnacs 9y ago
Sure, LN alone might not be enough to serve the daily transactions of billions of users. Still, it proves how layers built on top of the blockchain can improve the efficiency by several orders of magnitude with some reasonable trade-offs. LN is probably just the first of such layers. Things like sidechains, cross-chain atomic swaps, various block space usage improvements (eg. Schnorr signatures) are also in the pipeline right now, all of which could further improve throughput. So while LN may not be the silver bullet, it makes me hopeful that at least from a technical perspective, Bitcoin will be able to scale to become a global currency.

criddell 9y ago

I think people equate Bitcoin with the blockchain and by that understanding I think the parent poster is correct. The current blockchain doesn't scale and isn't suitable for every tiny transaction.

nmca 9y ago

Or https://raiden.network/micro.html https://raiden.network/micro.html