4 ms·

In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined

In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it. Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.

kadoban 7y ago
Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
- codexon 7y ago
  Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
  - kadoban 7y ago
    That's not lightning. That's just how exchanges work now.
    - codexon 7y ago
      That is how exchanges have always worked, but the lightning network encourages people to use centralized exchanges that already have lightning network channels between all other exchanges and sellers so they don't have to waste time committing unknown amounts of bitcoins between 100+ vendors.
      - Mate2Mate 7y ago
        These complexities are why Lightning Network adoption is failing. Nano fixes this, superbly, securely, instantly, simply.
xur17 7y ago
> If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend. And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.
- codexon 7y ago
  So what happens if you aren't linked even indirectly? What if the trust chain is 20 users long? Who's going to spend the resources to find this chain? And has it been tested to scale, or is it just like Bitcoin in the early days where people said it would scale and never tested it? People are going to gravitate to putting all their money into a large exchange like Coinbase to avoid these problems.
  - keymone 7y ago
    There is no trust chain. You have no idea how lightning works. Every hop only knows the previous and next one, nothing else, not even the length of the chain. Your computer/phone finds the route and if you’re ok with privacy trade off you can outsource this task to your hub for a fee in single satoshis. People are going to gravitate towards convenient solutions making all sorts of security, privacy and financial risks, that’s why it’s important to have multiple alternatives with different trade offs.
    - codexon 7y ago
      There is a trust chain. If there was 0 trust involved then you could pick random nodes instead of needing to find a specific path. Sure there's cryptographic trickery involved so it is harder to steal the money, but it can still happen. Large centralized lightning nodes will form and they will act like banks and be able to stop payments to arbitrary entities like Paypal, and even make the payment get stuck for days or weeks depending on how long the timeout is. From the paper itself. "the network will look a lot like the correspondent banking network"
Geee 7y ago
It doesn't work that way. If Coinbase operates a Lightning node, you simply open a channel to their node, from your Lightning wallet. You don't give Coinbase your money.

kadoban 7y ago

Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?

codexon 7y ago
Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.
- kadoban 7y ago
  That's not lightning. That's just how exchanges work now.
  - codexon 7y ago
    That is how exchanges have always worked, but the lightning network encourages people to use centralized exchanges that already have lightning network channels between all other exchanges and sellers so they don't have to waste time committing unknown amounts of bitcoins between 100+ vendors.
    - Mate2Mate 7y ago
      These complexities are why Lightning Network adoption is failing. Nano fixes this, superbly, securely, instantly, simply.

xur17 7y ago

> If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The "network" part of lightning network allows you to make a payment to anyone else on the network (trustlessly) through multiple hops. For example, if you opened a channel with a friend, and your friend had a channel open with Starbucks, you would be able to pay Starbucks through your friend without having to trust your friend. And this works today. I have one channel open on the lightning network, and regularly make payments to random nodes on the network. I pay << $0.01 in fees for these transactions, and they settle in ~a second.

codexon 7y ago
So what happens if you aren't linked even indirectly? What if the trust chain is 20 users long? Who's going to spend the resources to find this chain? And has it been tested to scale, or is it just like Bitcoin in the early days where people said it would scale and never tested it? People are going to gravitate to putting all their money into a large exchange like Coinbase to avoid these problems.
- keymone 7y ago
  There is no trust chain. You have no idea how lightning works. Every hop only knows the previous and next one, nothing else, not even the length of the chain. Your computer/phone finds the route and if you’re ok with privacy trade off you can outsource this task to your hub for a fee in single satoshis. People are going to gravitate towards convenient solutions making all sorts of security, privacy and financial risks, that’s why it’s important to have multiple alternatives with different trade offs.
  - codexon 7y ago
    There is a trust chain. If there was 0 trust involved then you could pick random nodes instead of needing to find a specific path. Sure there's cryptographic trickery involved so it is harder to steal the money, but it can still happen. Large centralized lightning nodes will form and they will act like banks and be able to stop payments to arbitrary entities like Paypal, and even make the payment get stuck for days or weeks depending on how long the timeout is. From the paper itself. "the network will look a lot like the correspondent banking network"

Geee 7y ago

It doesn't work that way. If Coinbase operates a Lightning node, you simply open a channel to their node, from your Lightning wallet. You don't give Coinbase your money.