4 ms·

2 isn't true at all, routing isn't nearly that complicated and I don't know why everyone thinks it is. Most routes are expected to be under a few hops. But rega

2 isn't true at all, routing isn't nearly that complicated and I don't know why everyone thinks it is. Most routes are expected to be under a few hops. But regardless we will find out soon as the number of nodes on the live system is very rapidly growing. 3 doesn't really apply, as channels can be used as middle hops to rebalance. If I give money to you for a good/service and drain my channel. Then I buy more Bitcoin from coinbase, coinbase can route that BTC to me through you to rebalance our channel so it is all on my side. 4 isn't true, as "locking the BTC up" is basically making it available. Would you consider depositing cash into a checking account "locking it up"? Because that's the equivalent here. But also locktimes are normally a few days.

lalaland1125 9y ago
2. Where is the evidence of this? Sure, routing can be easy and short if it's centralized and the number of hops is small. But, if it's centralized, then what's the point of using Bitcoin? Where is this mystical routing algorithm that will work in the presence of constant capacity changes over a decentralized network? 3. The issue here is that the flow for all channels across the entire network needs to be about balanced for things to work out properly. Once someone starts either net accumulating bitcoin or net dispersing bitcoin, then there will be problems somewhere on some link. 4. I can take money out of my checking account at any time at no expense.
- Klathmon 9y ago
  About 2, like I said we should know soon if it will work. I just don't think that most channels will be updating as quickly as you think, and even if they are, a channel will know of someone is trying to route through it, so it can avoid trying to route another tx for the duration of the first. 3. Fees can and will help balance things out. If a channel is really unbalanced, negative fees can strongly incentivize rebalancing in many cases. If it starts to get unbalanced again, fees can increase to help reduce the speed that it unbalances. 4. You can also take money out of LN at any time (assuming your counterparty I cooperative). Only in the case of non-cooperation do you need to wait for locks to expire, and in that case you get ALL money from both sides of the channel, and need to wait for the lock to expire. Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money...
  - JumpCrisscross 9y ago
    > You can also take money out of LN at any time (assuming your counterparty I cooperative) This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account. > Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. We then split the speculation and transfer functions of our financial system and ended up better for it.
    - Klathmon 9y ago
      >This isn’t what people mean when they imply liquidity. Needing consent and being able to demand cash are different domains. I don't understand what you are trying to say here. You don't need "consent" if you want to wait the 3 days, but if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH. But if you want, you can feel free to open channels with shorter locktimes if needed. >Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. That history is one Bitcoin is presently replaying. But you can't lose money if LN is working correctly. The whole idea is that you sign the transactions saying "if this is broadcast under these conditions, you get all of my money" when you open the channel. It's literally not possible to fractionally lend on LN, because all money MUST be there, and signed, for you to use it. I've had conversations with you before, and I'm fairly sure you don't understand the basics of Bitcoin as you keep repeating these things as fact, so I'm going to stop replying here. Please make an effort to understand it before you start denouncing it. Or at least explain why you think these apply to the conversation in ways that someone like myself who isn't well-versed in traditional banking systems but understands Bitcoin technically will understand.
      - JumpCrisscross 9y ago
        > if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH You said, like a checking account, one “can also take money out of LN at any time.” I clarified that when people say “take money out at any time,” they mean unilateral liquidity. You can unilaterally demand cash or an instantaneous Fedwire transfer, the latter which costs 3 to 69 cents [1] (though some banks heftily upcharge this service), against your checking account balance. It takes a good deal longer to settle a LN balance (theoretically). TL; DR The Lightning Network has some neat features, but pitching its liquidity as analogous to a checking account’s is disingenuous. > you can't lose money if LN is working correctly This applies to anything. In finance, things never work correctly because someone, somewhere, can be trusted to be an arsehole. > It's literally not possible to fractionally lend on LN The number of Americans who have lost a single U.S. dollar to this threat since the FDIC was formed is basically zero. The number of Americans who have nuked substantial fractions of their net worths speculating on Bitcoin is significantly greater. [1] https://www.federalreserve.gov/paymentsystems/fedfunds_coreprinciples.htm https://www.federalreserve.gov/paymentsystems/fedfunds_corep...
- freejulian 9y ago
  Lightning uses the same routing algorithm as tor — it’s an onion router. It has the added benefit of no one in the network knowing where transactions are from or whom they’re to. With regards to channel capacity — fees in lightning are proportional to the amount of the transaction. If you are sending a transaction which consumes a large amount of capacity, you pay a high fee. Note how this is a fundamental difference from onchain transactions where fees are proportional to the amount of block space used. Lightning is more akin to an atm. You pay a fee to take out cash, but you can then transact instantly all day with nearly no fees.
  - philipwhiuk 9y ago
    Tor has a centralised list of exit nodes.
    - Klathmon 9y ago
      which doesn't apply to tor hidden services, which work fine without an exit node.
shazow 9y ago
Sounds like you're familiar with the tech, maybe you could answer a couple of questions: > If I give money to you for a good/service and drain my channel. Then I buy more Bitcoin from coinbase, coinbase can route that BTC to me through you to rebalance our channel so it is all on my side. Could you point me to details about how cross-channel rebalancing happens? Since lightning network channels are purely 1:1 (per the whitepaper); say you drained your channel to me, how does your channel with Coinbase allow you to route BTC to our channel without reopening a channel (requiring on-chain transactions)? The whitepaper mentions hops, but I can't find any details on how they actually work. > But also locktimes are normally a few days. Does that imply that every channel needs to make an on-chain transaction every few days to reopen/keep the channel open?
- Klathmon 9y ago
  >Could you point me to details about how cross-channel rebalancing happens? Lightning transactions are less like TCP packets, and more like water in a pipe. If I put 1 ml of water in a pipe full of water, 1 ml comes out the other end, but it's not the same water. It works like this: I can give you 1 apple, but I contractually obligate you to give 1 apple to my friend Bob, and if you don't you get penalized. You won't actually give Bob the apple I gave you, you'll give him another apple that you have, and if you don't know exactly where bob is, you could give an apple to someone else, telling them to eventually give an apple to bob "or else". (in LN, the "or else" is actually cryptographically secure pre-created transactions) Because of this, each 1:1 channel is actually a network of 1:1 channels that can move in both ways. In my first example, there was an unwritten implication that you would have a connection to coinbase somehow through another channel. So if I paid you 1 BTC for something, and you have a connection with coinbase (either directly, or through another channel), then if I buy from coinbase they can send that money "through" you to recharge our channel, without you really "spending" any money. And you are more than happy that happened, because now I can buy more from you directly through our channel, so you might incentivize that kind of routing by setting an extremely low, or even zero, or even NEGATIVE! fee. >Does that imply that every channel needs to make an on-chain transaction every few days to reopen/keep the channel open? No, locktimes only come into play in the case of non-compliance. If we have a channel with a 3-day locktime, on day 2 we can agree to re-up our lock for another 3 days (really at any time we can), we can also agree to close it right now if we want, all off the blockchain. Only when you either try to cheat, or become non-responsive do locktimes come into play.
IncRnd 9y ago
That's fine, but if #1 is true, Lightning is far from workable.
- Klathmon 9y ago
  #1 isn't strictly true, you don't need to be "always online", only online at some point within the locktime (normally 3 days right now). You can also hand your "revocable delivery" transactions to a 3rd party (or multiple 3rd parties) who can monitor and broadcast them in the case of cheating, but can't actually spend any of your money themselves. So you could have a group of people watching the blockchain always online that can punish non-compliance, but you yourself are only online when you want to transact.
  - lalaland1125 9y ago
    Of course, someone could pay off that third party to stop watching your channel.
    - Klathmon 9y ago
      And you could have multiple "watching" services that can prevent any one "watching" service from betraying you. Obviously controlling your own "watching" system is most secure, but the vast majority of people aren't going to want to do it themselves. And again, if the biggest worry is that someone will pay off multiple "watchers" then publish a previous version of a channel to steal money from you and hope that your proper node isn't online at any point during the locktime (or DoS your node to prevent you from seeing the bad transaction) to punish the thief and "steal" all the money back. I think we are doing a pretty good job!
      - IncRnd 9y ago
        According to you own words, the answer to poor transaction times is to make transactions less reliable and to introduce centralization. I have to ask the million dollar question. Has this been threat modeled?

lalaland1125 9y ago

2. Where is the evidence of this? Sure, routing can be easy and short if it's centralized and the number of hops is small. But, if it's centralized, then what's the point of using Bitcoin? Where is this mystical routing algorithm that will work in the presence of constant capacity changes over a decentralized network? 3. The issue here is that the flow for all channels across the entire network needs to be about balanced for things to work out properly. Once someone starts either net accumulating bitcoin or net dispersing bitcoin, then there will be problems somewhere on some link. 4. I can take money out of my checking account at any time at no expense.

Klathmon 9y ago
About 2, like I said we should know soon if it will work. I just don't think that most channels will be updating as quickly as you think, and even if they are, a channel will know of someone is trying to route through it, so it can avoid trying to route another tx for the duration of the first. 3. Fees can and will help balance things out. If a channel is really unbalanced, negative fees can strongly incentivize rebalancing in many cases. If it starts to get unbalanced again, fees can increase to help reduce the speed that it unbalances. 4. You can also take money out of LN at any time (assuming your counterparty I cooperative). Only in the case of non-cooperation do you need to wait for locks to expire, and in that case you get ALL money from both sides of the channel, and need to wait for the lock to expire. Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money...
- JumpCrisscross 9y ago
  > You can also take money out of LN at any time (assuming your counterparty I cooperative) This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account. > Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. We then split the speculation and transfer functions of our financial system and ended up better for it.
  - Klathmon 9y ago
    >This isn’t what people mean when they imply liquidity. Needing consent and being able to demand cash are different domains. I don't understand what you are trying to say here. You don't need "consent" if you want to wait the 3 days, but if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH. But if you want, you can feel free to open channels with shorter locktimes if needed. >Or lost 90%. We had this in the era of free banking, i.e. pre Federal Reserve. That history is one Bitcoin is presently replaying. But you can't lose money if LN is working correctly. The whole idea is that you sign the transactions saying "if this is broadcast under these conditions, you get all of my money" when you open the channel. It's literally not possible to fractionally lend on LN, because all money MUST be there, and signed, for you to use it. I've had conversations with you before, and I'm fairly sure you don't understand the basics of Bitcoin as you keep repeating these things as fact, so I'm going to stop replying here. Please make an effort to understand it before you start denouncing it. Or at least explain why you think these apply to the conversation in ways that someone like myself who isn't well-versed in traditional banking systems but understands Bitcoin technically will understand.
    - JumpCrisscross 9y ago
      > if you get "consent" from your counterparty you can get it instantly. 3-days is about as fast as ACH You said, like a checking account, one “can also take money out of LN at any time.” I clarified that when people say “take money out at any time,” they mean unilateral liquidity. You can unilaterally demand cash or an instantaneous Fedwire transfer, the latter which costs 3 to 69 cents [1] (though some banks heftily upcharge this service), against your checking account balance. It takes a good deal longer to settle a LN balance (theoretically). TL; DR The Lightning Network has some neat features, but pitching its liquidity as analogous to a checking account’s is disingenuous. > you can't lose money if LN is working correctly This applies to anything. In finance, things never work correctly because someone, somewhere, can be trusted to be an arsehole. > It's literally not possible to fractionally lend on LN The number of Americans who have lost a single U.S. dollar to this threat since the FDIC was formed is basically zero. The number of Americans who have nuked substantial fractions of their net worths speculating on Bitcoin is significantly greater. [1] https://www.federalreserve.gov/paymentsystems/fedfunds_coreprinciples.htm https://www.federalreserve.gov/paymentsystems/fedfunds_corep...
freejulian 9y ago
Lightning uses the same routing algorithm as tor — it’s an onion router. It has the added benefit of no one in the network knowing where transactions are from or whom they’re to. With regards to channel capacity — fees in lightning are proportional to the amount of the transaction. If you are sending a transaction which consumes a large amount of capacity, you pay a high fee. Note how this is a fundamental difference from onchain transactions where fees are proportional to the amount of block space used. Lightning is more akin to an atm. You pay a fee to take out cash, but you can then transact instantly all day with nearly no fees.
- philipwhiuk 9y ago
  Tor has a centralised list of exit nodes.
  - Klathmon 9y ago
    which doesn't apply to tor hidden services, which work fine without an exit node.

shazow 9y ago

Sounds like you're familiar with the tech, maybe you could answer a couple of questions: > If I give money to you for a good/service and drain my channel. Then I buy more Bitcoin from coinbase, coinbase can route that BTC to me through you to rebalance our channel so it is all on my side. Could you point me to details about how cross-channel rebalancing happens? Since lightning network channels are purely 1:1 (per the whitepaper); say you drained your channel to me, how does your channel with Coinbase allow you to route BTC to our channel without reopening a channel (requiring on-chain transactions)? The whitepaper mentions hops, but I can't find any details on how they actually work. > But also locktimes are normally a few days. Does that imply that every channel needs to make an on-chain transaction every few days to reopen/keep the channel open?

Klathmon 9y ago
>Could you point me to details about how cross-channel rebalancing happens? Lightning transactions are less like TCP packets, and more like water in a pipe. If I put 1 ml of water in a pipe full of water, 1 ml comes out the other end, but it's not the same water. It works like this: I can give you 1 apple, but I contractually obligate you to give 1 apple to my friend Bob, and if you don't you get penalized. You won't actually give Bob the apple I gave you, you'll give him another apple that you have, and if you don't know exactly where bob is, you could give an apple to someone else, telling them to eventually give an apple to bob "or else". (in LN, the "or else" is actually cryptographically secure pre-created transactions) Because of this, each 1:1 channel is actually a network of 1:1 channels that can move in both ways. In my first example, there was an unwritten implication that you would have a connection to coinbase somehow through another channel. So if I paid you 1 BTC for something, and you have a connection with coinbase (either directly, or through another channel), then if I buy from coinbase they can send that money "through" you to recharge our channel, without you really "spending" any money. And you are more than happy that happened, because now I can buy more from you directly through our channel, so you might incentivize that kind of routing by setting an extremely low, or even zero, or even NEGATIVE! fee. >Does that imply that every channel needs to make an on-chain transaction every few days to reopen/keep the channel open? No, locktimes only come into play in the case of non-compliance. If we have a channel with a 3-day locktime, on day 2 we can agree to re-up our lock for another 3 days (really at any time we can), we can also agree to close it right now if we want, all off the blockchain. Only when you either try to cheat, or become non-responsive do locktimes come into play.

IncRnd 9y ago

That's fine, but if #1 is true, Lightning is far from workable.

Klathmon 9y ago
#1 isn't strictly true, you don't need to be "always online", only online at some point within the locktime (normally 3 days right now). You can also hand your "revocable delivery" transactions to a 3rd party (or multiple 3rd parties) who can monitor and broadcast them in the case of cheating, but can't actually spend any of your money themselves. So you could have a group of people watching the blockchain always online that can punish non-compliance, but you yourself are only online when you want to transact.
- lalaland1125 9y ago
  Of course, someone could pay off that third party to stop watching your channel.
  - Klathmon 9y ago
    And you could have multiple "watching" services that can prevent any one "watching" service from betraying you. Obviously controlling your own "watching" system is most secure, but the vast majority of people aren't going to want to do it themselves. And again, if the biggest worry is that someone will pay off multiple "watchers" then publish a previous version of a channel to steal money from you and hope that your proper node isn't online at any point during the locktime (or DoS your node to prevent you from seeing the bad transaction) to punish the thief and "steal" all the money back. I think we are doing a pretty good job!
    - IncRnd 9y ago
      According to you own words, the answer to poor transaction times is to make transactions less reliable and to introduce centralization. I have to ask the million dollar question. Has this been threat modeled?