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Lightning network comes up just about every discussion involving bitcoin transactions, but because it requires the bitcoin network to make confirmations, Lightn

Lightning network comes up just about every discussion involving bitcoin transactions, but because it requires the bitcoin network to make confirmations, Lightning only scales with the number of transactions, not users. This is still a problem. Example of the problem: * For 2 users to make 10,000,000 transactions between each other, it would take 10 minutes on the lightning network. * For 10,000,000 users to make just 2 transactions between each other, it would take 46 days on the lightning network. This means that if the entire state of Georgia used Lightning Network as a payment system, people wouldn't even be able to pay their monthly rent on time. Lightning Network is an over-engineered solution to a Bitcoin problem, which is why nobody is seriously adopting it.

pouta 7y ago
Where can I read more about how you came up with those numbers? I didn't knew that side of lightning.
- deleted 7y ago
  [deleted]
- bduerst 7y ago
  It's napkin math based on the Bitcoin network's hard limitations of 4-7 transactions/second, so assuming 5 tx/s, then there's 432K transactions/day limit. Since lightning requires Bitcoin to settle transactions between parties, it means that the more users there are making transactions, the more it needs bitcoin. If it's just a handful of users making a million transactions, then there's no problem since lightning will do the math and then settle on Bitcoin with a handful of transactions. If there's a million users making a handful of transactions, well, then lightning needs to settle a few million transactions on Bitcoin (which takes weeks).
  - Acrobatic_Road 7y ago
    > If there's a million users making a handful of transactions, well, then lightning needs to settle a few million transactions on Bitcoin (which takes weeks). Sorry, but you seem to be entirely ignorant of how lightning works. Lightning does not need to settle transactions on Bitcoin. If I pay someone using lightning then that payment is as good as good. The person who received the funds could go on and pay someone further. Notice there was no need to make an on-chain settlement transaction for this to work.
    - bduerst 7y ago
      > If I pay someone using lightning then that payment is as good as good. Lightning is an I.O.U. that is not good until you settle on Bitcoin. If you are not using Bitcoin to settle transactions, then you there is zero guarantee of getting paid. Stop spreading these lies about the Lightning network. Trading I.O.U.s on an obscure network is not a payment solution outside of sending money between your friends. For businesses and other untrusted parties, they will settle immediately on Bitcoin which is why Lightning is not being used seriously today. The same way businesses don't trade in third party checks today.
      - fghdft4t3t 7y ago
        Lightning isn't an IOU, its actual Bitcoin. What you are doing is trading payment states in channels, these payment channels contain real Bitcoin, locked in smart contracts. You can settle (and close) for your channel for Bitcoin any time you like, and there is a punishment mechanism if you try to cheat (steal) and replay an old channel state. This style of network, or a higher order version of it will certainly be the way that we further decentralize our economy and scale to every human and system. It is nonsensical to store full transactions between everything in an immutable ever growing data structure for all time. You can condense what needs to be stored forever in channels, or go further smaller still and store commitments+proofs. We need to move past the blockchain to store all the things model. It was cool when it was small, but we need to be thinking about how to implement higher order payment or economic concepts rather than raw txs. Finally, to your point about businesses not trading in third-party checks... Kinda! When the store takes your payment over the PCI network, the card holders bank and the vendors bank trade some payment state between each other, and delivery of funds can take days to clear. Its all businesses trading slates, e-checks, e-balance sheets. In essence lightning isn't too dissimilar to how things work now with electronic $s.
        bduerst 7y ago
        A commitment to pay Bitcoin, that is signed or unsigned, cashable at any time, is an IOU. It's the same as a signed check, except lightning is passing itself as a network to spend the equivalent of third party checks. Businesses and untrusted parties do not do this, so they settle (cash checks immediately), which Lightning can't handle at scale with users. If Lightning wasn't really an IOU, then it wouldn't need Bitcoin to settle transactions, now would it?
  - mr_woozy 7y ago
    >the more users there are making transactions, the more it needs bitcoin. whot? why?
Acrobatic_Road 7y ago
>but because it requires the bitcoin network to make confirmation It doesn't require the Bitcoin network to make confirmation at all. Two users could do millions of txn/s between each other. The only limitation is their internet speed. The bitcoin network does not need to confirm or even know about anything other than the initial deposits. It could even happen entirely offline in a closed network, though that would be insecure. That is the whole idea behind lightning so I am not sure how you missed it. The real limitations of lightning/state channels relate to liquidity.
- bduerst 7y ago
  >... Lightning only scales with the number of transactions, not users. Is the rest of the sentence that you quoted out of context. Did you not see the example?
  - Acrobatic_Road 7y ago
    >Lightning only scales with the number of transactions, not users. You seem to be poking at the need to open a lightning channel to get started using lightning and using the onboarding time to suggest that lightning cannot scale. First of all I think the way you made that argument is entirely disingenuous. Let's look at your first example: >* For 2 users to make 10,000,000 transactions between each other, it would take 10 minutes on the lightning network. It would take 10 minute for any two users to get started with lightning in the traditional way because that's the block time used in Bitcoin. For the record, lightning in not just for Bitcoin. It would take 2.5 minutes if using Litecoin for instance. What you are obscuring here is that once the channel is set up, the two users could transact with each other with no delay. That's what makes your example both incorrect and disingenuous. Your next example is basically the same thing, but at scale. You are incorporating on boarding times to get a big scary number. I encourage you to read about channel factories which should alleviate onboarding times.
    - bduerst 7y ago
      This is why I precisely used the example of paying monthly rent, because: 1) Paying rent is an example of a repeat payment between two users where you theoretically could have an open Lightning channel, but... 2) Landlords are still going to settle transactions immediately to avoid liability anyways The "just leave the channel open" is the disingenuous part being projected here. Your landlord isn't going to hold off on cashing your rent check because they want to turn around, endorse it, and use that slip of paper to pay for maintenance. No, the landlord cashes the check the same way that they would immediately settle a lightning transaction. Now imagine single, non-repeated payments between millions of untrusted parties. You're not going to have millions of "open channels". All those millions of users are going to settle the transactions immediately, which requires Bitcoin's bottleneck.
darawk 7y ago
Are you including the time it takes to open a state channel in this? That's an infrequently incurred cost that can be amortized pretty easily. Not really a reasonable comparison here.
Huycfhct 7y ago
These numbers are nonsensical. There is no reason to make a LN payment if you are going to close the channel after 2 payments

pouta 7y ago

Where can I read more about how you came up with those numbers? I didn't knew that side of lightning.

deleted 7y ago
[deleted]
bduerst 7y ago
It's napkin math based on the Bitcoin network's hard limitations of 4-7 transactions/second, so assuming 5 tx/s, then there's 432K transactions/day limit. Since lightning requires Bitcoin to settle transactions between parties, it means that the more users there are making transactions, the more it needs bitcoin. If it's just a handful of users making a million transactions, then there's no problem since lightning will do the math and then settle on Bitcoin with a handful of transactions. If there's a million users making a handful of transactions, well, then lightning needs to settle a few million transactions on Bitcoin (which takes weeks).
- Acrobatic_Road 7y ago
  > If there's a million users making a handful of transactions, well, then lightning needs to settle a few million transactions on Bitcoin (which takes weeks). Sorry, but you seem to be entirely ignorant of how lightning works. Lightning does not need to settle transactions on Bitcoin. If I pay someone using lightning then that payment is as good as good. The person who received the funds could go on and pay someone further. Notice there was no need to make an on-chain settlement transaction for this to work.
  - bduerst 7y ago
    > If I pay someone using lightning then that payment is as good as good. Lightning is an I.O.U. that is not good until you settle on Bitcoin. If you are not using Bitcoin to settle transactions, then you there is zero guarantee of getting paid. Stop spreading these lies about the Lightning network. Trading I.O.U.s on an obscure network is not a payment solution outside of sending money between your friends. For businesses and other untrusted parties, they will settle immediately on Bitcoin which is why Lightning is not being used seriously today. The same way businesses don't trade in third party checks today.
    - fghdft4t3t 7y ago
      Lightning isn't an IOU, its actual Bitcoin. What you are doing is trading payment states in channels, these payment channels contain real Bitcoin, locked in smart contracts. You can settle (and close) for your channel for Bitcoin any time you like, and there is a punishment mechanism if you try to cheat (steal) and replay an old channel state. This style of network, or a higher order version of it will certainly be the way that we further decentralize our economy and scale to every human and system. It is nonsensical to store full transactions between everything in an immutable ever growing data structure for all time. You can condense what needs to be stored forever in channels, or go further smaller still and store commitments+proofs. We need to move past the blockchain to store all the things model. It was cool when it was small, but we need to be thinking about how to implement higher order payment or economic concepts rather than raw txs. Finally, to your point about businesses not trading in third-party checks... Kinda! When the store takes your payment over the PCI network, the card holders bank and the vendors bank trade some payment state between each other, and delivery of funds can take days to clear. Its all businesses trading slates, e-checks, e-balance sheets. In essence lightning isn't too dissimilar to how things work now with electronic $s.
      - bduerst 7y ago
        A commitment to pay Bitcoin, that is signed or unsigned, cashable at any time, is an IOU. It's the same as a signed check, except lightning is passing itself as a network to spend the equivalent of third party checks. Businesses and untrusted parties do not do this, so they settle (cash checks immediately), which Lightning can't handle at scale with users. If Lightning wasn't really an IOU, then it wouldn't need Bitcoin to settle transactions, now would it?
- mr_woozy 7y ago
  >the more users there are making transactions, the more it needs bitcoin. whot? why?

Acrobatic_Road 7y ago

>but because it requires the bitcoin network to make confirmation It doesn't require the Bitcoin network to make confirmation at all. Two users could do millions of txn/s between each other. The only limitation is their internet speed. The bitcoin network does not need to confirm or even know about anything other than the initial deposits. It could even happen entirely offline in a closed network, though that would be insecure. That is the whole idea behind lightning so I am not sure how you missed it. The real limitations of lightning/state channels relate to liquidity.

bduerst 7y ago
>... Lightning only scales with the number of transactions, not users. Is the rest of the sentence that you quoted out of context. Did you not see the example?
- Acrobatic_Road 7y ago
  >Lightning only scales with the number of transactions, not users. You seem to be poking at the need to open a lightning channel to get started using lightning and using the onboarding time to suggest that lightning cannot scale. First of all I think the way you made that argument is entirely disingenuous. Let's look at your first example: >* For 2 users to make 10,000,000 transactions between each other, it would take 10 minutes on the lightning network. It would take 10 minute for any two users to get started with lightning in the traditional way because that's the block time used in Bitcoin. For the record, lightning in not just for Bitcoin. It would take 2.5 minutes if using Litecoin for instance. What you are obscuring here is that once the channel is set up, the two users could transact with each other with no delay. That's what makes your example both incorrect and disingenuous. Your next example is basically the same thing, but at scale. You are incorporating on boarding times to get a big scary number. I encourage you to read about channel factories which should alleviate onboarding times.
  - bduerst 7y ago
    This is why I precisely used the example of paying monthly rent, because: 1) Paying rent is an example of a repeat payment between two users where you theoretically could have an open Lightning channel, but... 2) Landlords are still going to settle transactions immediately to avoid liability anyways The "just leave the channel open" is the disingenuous part being projected here. Your landlord isn't going to hold off on cashing your rent check because they want to turn around, endorse it, and use that slip of paper to pay for maintenance. No, the landlord cashes the check the same way that they would immediately settle a lightning transaction. Now imagine single, non-repeated payments between millions of untrusted parties. You're not going to have millions of "open channels". All those millions of users are going to settle the transactions immediately, which requires Bitcoin's bottleneck.

darawk 7y ago

Are you including the time it takes to open a state channel in this? That's an infrequently incurred cost that can be amortized pretty easily. Not really a reasonable comparison here.

Huycfhct 7y ago

These numbers are nonsensical. There is no reason to make a LN payment if you are going to close the channel after 2 payments