5 ms·

Why bother settling on the blockchain at all? The second-layer transactions could just float, like the dollar separated from the gold standard.

rawtxapp 5y ago
For sure, you can keep channels open indefinitely. It won't be like dollars separated from gold though, it's still the same exact Bitcoin and the fund gets allocated at the opening of the channel.
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gruez 5y ago
> The second-layer transactions could just float, like the dollar separated from the gold standard. You can't mint more bitcoins on the lightning network. There's a 1:1 relation between what's on the lightning network and what's on the blockchain. This is as opposed to fiat (zero relation, currency units can be generated at will), or gold standard in practice (the central bank only having enough gold for a fraction of the notes issued to be redeemed).
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- UncleMeat 5y ago
  Sure you can. Just mint some "lightnings" and move on. Nothing stops a large centralized processor from creating its own coin. L2 is also shit for actual distribution and censorship resistance. Imagine a future where BTC is 100x the current price and the people who got in early are rich as heck and nobody else can afford even a single transaction and must instead rely entirely on L2 services, never actually owning their own wealth.
  - gruez 5y ago
    > Sure you can. Just mint some "lightnings" and move on. Nothing stops a large centralized processor from creating its own coin. But that's literally not how the lightning network works? If some intermediary in the chain wants to accept IOUs in place of real bitcoins that's on them, but on both ends you're putting in and getting real bitcoins. By "real bitcoins" I mean they can be redeemed at any point in time by closing the channel, and there's no risk of a bank run (at least to the sender and receiver). If some intermediary decides to accept IOUs instead of real bitcoins, that's on them if it comes crashing down.
    - UncleMeat 5y ago
      It isn't how the lightning network works... until everybody without vast sums of wealth have literally no alternative except to transact through approved L2 providers. Then we are right back at numbers in centralized databases with no restriction whatsoever.
- devname 5y ago
  If you never close channels, you can print infinite Bitcoins. No one knows the true state of a channel until it is settled.
  - gruez 5y ago
    uhh what? It's true that nobody knows what the state of the channel is, but the capacity is known. so they know it would conclude with either party A getting 0.1 BTC (for example), party B getting 0.1 BTC, or somewhere in between.
- devname 5y ago
  A triangle ABC of lightning nodes opens a channel with 1 bitcoin between nodes. 3 bitcoins total. Each node can have a state with a total of 2 bitcoins. That's 6 bitcoins. It'd be a race to close channels, and only if the channel value is above the fee-floor, else the settled value is $0.
  - gruez 5y ago
    > A triangle ABC of lightning nodes opens a channel with 1 bitcoin between nodes. 3 bitcoins total. >Each node can have a state with a total of 2 bitcoins. That's 6 bitcoins. Well, no. If you want a channel between A and B with 1 BTC capacity in either direction, you'll need to deposit 2 BTC to fund the channel. Therefore there's 6 BTC total that's locked up. As for the rest of your comment, it's not really clear how it's "separated" from the on-chain value.

rawtxapp 5y ago

For sure, you can keep channels open indefinitely. It won't be like dollars separated from gold though, it's still the same exact Bitcoin and the fund gets allocated at the opening of the channel.

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gruez 5y ago

> The second-layer transactions could just float, like the dollar separated from the gold standard. You can't mint more bitcoins on the lightning network. There's a 1:1 relation between what's on the lightning network and what's on the blockchain. This is as opposed to fiat (zero relation, currency units can be generated at will), or gold standard in practice (the central bank only having enough gold for a fraction of the notes issued to be redeemed).

deleted 5y ago
[deleted]
UncleMeat 5y ago
Sure you can. Just mint some "lightnings" and move on. Nothing stops a large centralized processor from creating its own coin. L2 is also shit for actual distribution and censorship resistance. Imagine a future where BTC is 100x the current price and the people who got in early are rich as heck and nobody else can afford even a single transaction and must instead rely entirely on L2 services, never actually owning their own wealth.
- gruez 5y ago
  > Sure you can. Just mint some "lightnings" and move on. Nothing stops a large centralized processor from creating its own coin. But that's literally not how the lightning network works? If some intermediary in the chain wants to accept IOUs in place of real bitcoins that's on them, but on both ends you're putting in and getting real bitcoins. By "real bitcoins" I mean they can be redeemed at any point in time by closing the channel, and there's no risk of a bank run (at least to the sender and receiver). If some intermediary decides to accept IOUs instead of real bitcoins, that's on them if it comes crashing down.
  - UncleMeat 5y ago
    It isn't how the lightning network works... until everybody without vast sums of wealth have literally no alternative except to transact through approved L2 providers. Then we are right back at numbers in centralized databases with no restriction whatsoever.
devname 5y ago
If you never close channels, you can print infinite Bitcoins. No one knows the true state of a channel until it is settled.
- gruez 5y ago
  uhh what? It's true that nobody knows what the state of the channel is, but the capacity is known. so they know it would conclude with either party A getting 0.1 BTC (for example), party B getting 0.1 BTC, or somewhere in between.
devname 5y ago
A triangle ABC of lightning nodes opens a channel with 1 bitcoin between nodes. 3 bitcoins total. Each node can have a state with a total of 2 bitcoins. That's 6 bitcoins. It'd be a race to close channels, and only if the channel value is above the fee-floor, else the settled value is $0.
- gruez 5y ago
  > A triangle ABC of lightning nodes opens a channel with 1 bitcoin between nodes. 3 bitcoins total. >Each node can have a state with a total of 2 bitcoins. That's 6 bitcoins. Well, no. If you want a channel between A and B with 1 BTC capacity in either direction, you'll need to deposit 2 BTC to fund the channel. Therefore there's 6 BTC total that's locked up. As for the rest of your comment, it's not really clear how it's "separated" from the on-chain value.