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The Lightning Network might or might not lead to a widely used open payment network. I would love to hear more from people who already use it. How well does it

The Lightning Network might or might not lead to a widely used open payment network. I would love to hear more from people who already use it. How well does it work? As far as I know, El Salvador is currently trying to shift their whole economy to Bitcoin. Handling day to day payments via Lightning. Is anybody from HN there? How practical is it for non tech people to use it for their daily payments?

lawn 5y ago
Very poorly. The only way it's usable is by relying on third parties, at which point you might as well use standard services. Or even actual cryptocurrencies for that matter.
- ArtTimeInvestor 5y ago
  Which third parties do you mean?
  - Semaphor 5y ago
    My understanding of lightning is, that unless you run your own node (which requires a lot of funds and needs to be online 24/7), you are using a third-party node for these payments. The positive would be, that there are (I presume, don’t know) far more nodes/services available to choose from than there are credit-card firms. This is just what I remember from reading into lightning a few months ago.
    - ArtTimeInvestor 5y ago
      I'm in a similar, semi educated situation as you are. But my interpretation of what I have read so far is different: As far as I understand it: When a channel you have open is closed by the other side of the channel your wallet needs to know this within a certain time (24 hours? Can't remember). So to avoid having to read the blockchain updates once a day, you would subscribe to some service that tells you when one of your channels is closed. I also think you only have to do that if you distrust the other side of the channel. If you select a channel partner (a friend, a well known institution, a bank?) and only keep a small amount in that channel, I think you can just trust them and not sign up for any "watchtower" to watch if they try to cheat on you. PS: Looking up the growth of the Bitcoin blockhain it seems that even if you do the watching yourself, that would only mean to read less than 1MB per day? Here is the data: https://www.blockchain.com/charts/blocks-size https://www.blockchain.com/charts/blocks-size
      - RL_Quine 5y ago
        You're misreading the graphs, the chain size can grow at most by 576MB a day. A maximum of 4MB per block, 6 per hour, 24 hours per day.
        ArtTimeInvestor 5y ago
        Oh, it is "368.664K Megabytes", not "368.664K Bytes"? The day before yesterday it shows: 368.471K Yesterday it shows: 368.664K So "0.193K" up in that day. What does that mean? 193 Megabytes?
        RL_Quine 5y ago
        I don't know, blockchain.com has a history of showing just complete garbage information.
        3np 5y ago
        My favorite block explorers (both self-hostable for the privacy-conscious): https://blockstream.info/ https://blockstream.info/ https://mempool.space/ https://mempool.space/
    - RL_Quine 5y ago
      You don't need a lot of funds, or to always be online. You can run the software quite happily on a cellphone (I have previously), the requirement to be "online" is only in the scale of occasionally (once a day would be more than sufficient), and even that can be delegated (dork "watchtowers") with little to no risk.
      - Semaphor 5y ago
        Ah, so you can leave the channel open without being online?
        RL_Quine 5y ago
        Yes. You only need to be “online” periodically to check for fraud, which is a task which can be relatively trustlessly delegated if need be.
        Semaphor 5y ago
        Well, that’s a big part of the puzzle that most introductions seem to omit :D
    - ulzeraj 5y ago
      I'm curious about what made you reach that understanding. My guess is that you either tried or heard from someone who tried to open channels with some LN giant like Bitrefill. You shouldn't do that. Big channel operators don't want to dilute their liquidity with unreliable small channels. You should instead establish a channel to a smaller node that may be directly or indirectly connected to that merchant. LN is all about routing. Also in the thread's context we are talking about Visa and Mastercard banning merchants right? In a scenario where the LN is widely adopted that merchant can setup and run BTCPayServer (https://btcpayserver.org https://btcpayserver.org) to maintain his own independent LN or on chain payment process system. As for users, there has been work to facilitate nodeless operation on software wallets. Probably based on https://github.com/lightninglabs/neutrino https://github.com/lightninglabs/neutrino. I know Blue Wallet is building something based on a lightweight LN node so people can establish channels from their personal wallets (https://github.com/BlueWallet/rn-ldk https://github.com/BlueWallet/rn-ldk). There is an Android exclusive wallet that (https://lightning-wallet.com https://lightning-wallet.com) can do that and Muun (https://muun.com https://muun.com) is doing some smart tricks to provide nodeless and custodial LN experience.
  - lawn 5y ago
    That provide liquidity, open or manage channels for you, watch your channel so you don't lose your money or even hold your keys (as is the case with some popular wallets people recommend). And the network itself centralizes around large hubs (otherwise route finding doesn't scale).
    - RL_Quine 5y ago
      The repeated comments about "routing not scaling" are sort of weird, there's no real technical hurdle to overcome. Approximations of route finding are really all that's necessary, there's no strong centralizing force to be found there.
      - lawn 5y ago
        "no real technical hurdle to overcome" Uh, this kind of route finding is still an open problem, and there's not even an idea of how to address it. Approximations don't scale, as routes will start failing more and more as the network grows(due to liquidity issues). Therefore routes will go through well-connected and well-funded nodes, which is the centralizing force you're looking for.
        ArtTimeInvestor 5y ago
        Even if there were only as many nodes as there are countries in the world, that would make a more open payment network than the credit card systems. There are 195 countries in the world. And a user could pay via any of those 195 nodes. When you accept a certain credit card type (Visa, Mastercard etc) only users who are customers of that company can pay you.
        lawn 5y ago
        The comparison should be with cryptocurrencies, which problems LN was supposed to solve, not the credit card companies.
vmception 5y ago
Its an option. Basically a litmus test will be when a gigantic brothel in Europe or a European country’s Caribbean district does a very public but permissionless capital raise, gets filled by retail, and pays dividends while shares being actively traded permissionlessly. Thats when you’ll know the floodgates are open. Just given how much unwanted attention and publicity that will generate. To me, its surprising it hasnt happened yet but I think now it is just a matter of time. Many services will take a second look when ownership by address is still concealed. Most crypto platforms do not offer that yet for shares/assets issued on their platform (ie. Monero has no ability to have fungible assets traded on it). Lightning Network has a theoretical but limited ability to do this. Bitcoin will have a greater ability to do this after its current inprogress upgrade goes live (taproot, schnorr) but not a complete solution out of the box even then.
- pjc50 5y ago
  You don't generally need to raise capital for sex work, and the problem there is having a physical location that will be raided if it's illegal. To me, the important litmus test is when bitcoin gets definitively linked to a specific terrorist incident. Now, terrorism in the West is mostly out of fashion, except US rightwing extremists, because it's hard to have a death toll that anyone would notice over COVID, but that's not to say it won't happen in the future.
  - vmception 5y ago
    So the interesting thing about the chosen example is that the brothels already operate compliantly enough in a regulated environment but those environments typically are marginalizing them in a variety of ways such as with zoning and exchange listings. There is definitely room for price discovery in that industry from an environment with free floating shares. It only takes an enterpriser getting a little greedy or an existing shareholder bundling up their stake in a fund. Capital formation in the crypto markets rivals VC’s fiat activity, but it is mostly crypto native purchasers for crypto native infrastructure. The systems do work for trusted centralized physical establishments, and the regulatory environments typically just require notice in the state's register. Those societies are comfortable with private sector exchanges being the gatekeepers in how people raise capital and plan exits, and have not factored in the reality where they are completely circumvented and marginalized industries grow, compliantly, and very quickly.
kevinak 5y ago
I use it almost daily, don't have any issues. I run my own node though for my main "wallet". I've done transactions of up to 3k without hick-ups. Any custodial ones I have tested have worked well, though.
- ArtTimeInvestor 5y ago
  What do you use it for? Any benefits over paying with credit cards / cash / direct deposits?
  - kevinak 5y ago
    The larger transactions have all been to transfer funds between exchanges. Very easy to transfer in and out when I want to quickly enter leveraged positions. It reduces counter-party risk for me. For the day-to-day stuff it's obviously not as widespread as credit cards and I can't use it for much. For those situations I top up a debit card (Lastbit) using lightning. In addition to that I spend a fair bit of money on Bitrefill. Obviously also a stop-gap until wider adoption gets here. For someone living in a country where it's easy to send money locally and where cash isn't very common I don't think the benefits are apparent yet, for me personally. In my business I do receive a number of payments from abroad that always take at least a day to arrive and some funds are lost due to bad exchange rates. Lightning would help a lot here.

lawn 5y ago

Very poorly. The only way it's usable is by relying on third parties, at which point you might as well use standard services. Or even actual cryptocurrencies for that matter.

ArtTimeInvestor 5y ago
Which third parties do you mean?
- Semaphor 5y ago
  My understanding of lightning is, that unless you run your own node (which requires a lot of funds and needs to be online 24/7), you are using a third-party node for these payments. The positive would be, that there are (I presume, don’t know) far more nodes/services available to choose from than there are credit-card firms. This is just what I remember from reading into lightning a few months ago.
  - ArtTimeInvestor 5y ago
    I'm in a similar, semi educated situation as you are. But my interpretation of what I have read so far is different: As far as I understand it: When a channel you have open is closed by the other side of the channel your wallet needs to know this within a certain time (24 hours? Can't remember). So to avoid having to read the blockchain updates once a day, you would subscribe to some service that tells you when one of your channels is closed. I also think you only have to do that if you distrust the other side of the channel. If you select a channel partner (a friend, a well known institution, a bank?) and only keep a small amount in that channel, I think you can just trust them and not sign up for any "watchtower" to watch if they try to cheat on you. PS: Looking up the growth of the Bitcoin blockhain it seems that even if you do the watching yourself, that would only mean to read less than 1MB per day? Here is the data: https://www.blockchain.com/charts/blocks-size https://www.blockchain.com/charts/blocks-size
    - RL_Quine 5y ago
      You're misreading the graphs, the chain size can grow at most by 576MB a day. A maximum of 4MB per block, 6 per hour, 24 hours per day.
      - ArtTimeInvestor 5y ago
        Oh, it is "368.664K Megabytes", not "368.664K Bytes"? The day before yesterday it shows: 368.471K Yesterday it shows: 368.664K So "0.193K" up in that day. What does that mean? 193 Megabytes?
        RL_Quine 5y ago
        I don't know, blockchain.com has a history of showing just complete garbage information.
        3np 5y ago
        My favorite block explorers (both self-hostable for the privacy-conscious): https://blockstream.info/ https://blockstream.info/ https://mempool.space/ https://mempool.space/
  - RL_Quine 5y ago
    You don't need a lot of funds, or to always be online. You can run the software quite happily on a cellphone (I have previously), the requirement to be "online" is only in the scale of occasionally (once a day would be more than sufficient), and even that can be delegated (dork "watchtowers") with little to no risk.
    - Semaphor 5y ago
      Ah, so you can leave the channel open without being online?
      - RL_Quine 5y ago
        Yes. You only need to be “online” periodically to check for fraud, which is a task which can be relatively trustlessly delegated if need be.
        Semaphor 5y ago
        Well, that’s a big part of the puzzle that most introductions seem to omit :D
  - ulzeraj 5y ago
    I'm curious about what made you reach that understanding. My guess is that you either tried or heard from someone who tried to open channels with some LN giant like Bitrefill. You shouldn't do that. Big channel operators don't want to dilute their liquidity with unreliable small channels. You should instead establish a channel to a smaller node that may be directly or indirectly connected to that merchant. LN is all about routing. Also in the thread's context we are talking about Visa and Mastercard banning merchants right? In a scenario where the LN is widely adopted that merchant can setup and run BTCPayServer (https://btcpayserver.org https://btcpayserver.org) to maintain his own independent LN or on chain payment process system. As for users, there has been work to facilitate nodeless operation on software wallets. Probably based on https://github.com/lightninglabs/neutrino https://github.com/lightninglabs/neutrino. I know Blue Wallet is building something based on a lightweight LN node so people can establish channels from their personal wallets (https://github.com/BlueWallet/rn-ldk https://github.com/BlueWallet/rn-ldk). There is an Android exclusive wallet that (https://lightning-wallet.com https://lightning-wallet.com) can do that and Muun (https://muun.com https://muun.com) is doing some smart tricks to provide nodeless and custodial LN experience.
- lawn 5y ago
  That provide liquidity, open or manage channels for you, watch your channel so you don't lose your money or even hold your keys (as is the case with some popular wallets people recommend). And the network itself centralizes around large hubs (otherwise route finding doesn't scale).
  - RL_Quine 5y ago
    The repeated comments about "routing not scaling" are sort of weird, there's no real technical hurdle to overcome. Approximations of route finding are really all that's necessary, there's no strong centralizing force to be found there.
    - lawn 5y ago
      "no real technical hurdle to overcome" Uh, this kind of route finding is still an open problem, and there's not even an idea of how to address it. Approximations don't scale, as routes will start failing more and more as the network grows(due to liquidity issues). Therefore routes will go through well-connected and well-funded nodes, which is the centralizing force you're looking for.
      - ArtTimeInvestor 5y ago
        Even if there were only as many nodes as there are countries in the world, that would make a more open payment network than the credit card systems. There are 195 countries in the world. And a user could pay via any of those 195 nodes. When you accept a certain credit card type (Visa, Mastercard etc) only users who are customers of that company can pay you.
        lawn 5y ago
        The comparison should be with cryptocurrencies, which problems LN was supposed to solve, not the credit card companies.

vmception 5y ago

Its an option. Basically a litmus test will be when a gigantic brothel in Europe or a European country’s Caribbean district does a very public but permissionless capital raise, gets filled by retail, and pays dividends while shares being actively traded permissionlessly. Thats when you’ll know the floodgates are open. Just given how much unwanted attention and publicity that will generate. To me, its surprising it hasnt happened yet but I think now it is just a matter of time. Many services will take a second look when ownership by address is still concealed. Most crypto platforms do not offer that yet for shares/assets issued on their platform (ie. Monero has no ability to have fungible assets traded on it). Lightning Network has a theoretical but limited ability to do this. Bitcoin will have a greater ability to do this after its current inprogress upgrade goes live (taproot, schnorr) but not a complete solution out of the box even then.

pjc50 5y ago
You don't generally need to raise capital for sex work, and the problem there is having a physical location that will be raided if it's illegal. To me, the important litmus test is when bitcoin gets definitively linked to a specific terrorist incident. Now, terrorism in the West is mostly out of fashion, except US rightwing extremists, because it's hard to have a death toll that anyone would notice over COVID, but that's not to say it won't happen in the future.
- vmception 5y ago
  So the interesting thing about the chosen example is that the brothels already operate compliantly enough in a regulated environment but those environments typically are marginalizing them in a variety of ways such as with zoning and exchange listings. There is definitely room for price discovery in that industry from an environment with free floating shares. It only takes an enterpriser getting a little greedy or an existing shareholder bundling up their stake in a fund. Capital formation in the crypto markets rivals VC’s fiat activity, but it is mostly crypto native purchasers for crypto native infrastructure. The systems do work for trusted centralized physical establishments, and the regulatory environments typically just require notice in the state's register. Those societies are comfortable with private sector exchanges being the gatekeepers in how people raise capital and plan exits, and have not factored in the reality where they are completely circumvented and marginalized industries grow, compliantly, and very quickly.

kevinak 5y ago

I use it almost daily, don't have any issues. I run my own node though for my main "wallet". I've done transactions of up to 3k without hick-ups. Any custodial ones I have tested have worked well, though.

ArtTimeInvestor 5y ago
What do you use it for? Any benefits over paying with credit cards / cash / direct deposits?
- kevinak 5y ago
  The larger transactions have all been to transfer funds between exchanges. Very easy to transfer in and out when I want to quickly enter leveraged positions. It reduces counter-party risk for me. For the day-to-day stuff it's obviously not as widespread as credit cards and I can't use it for much. For those situations I top up a debit card (Lastbit) using lightning. In addition to that I spend a fair bit of money on Bitrefill. Obviously also a stop-gap until wider adoption gets here. For someone living in a country where it's easy to send money locally and where cash isn't very common I don't think the benefits are apparent yet, for me personally. In my business I do receive a number of payments from abroad that always take at least a day to arrive and some funds are lost due to bad exchange rates. Lightning would help a lot here.