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Transactions are moving to layer 2 solutions like the lightning network. Individual lightning transactions are not recorded on the blockchain and are not subje

Transactions are moving to layer 2 solutions like the lightning network. Individual lightning transactions are not recorded on the blockchain and are not subject to chain analysis.

cowtools 4y ago
They are not subject to chain analysis, but they are still subject to analysis.
- jejeyyy77 4y ago
  by that logic, so is every fiat payment processor, bank, what have you.
  - cowtools 4y ago
    The privacy characteristics of the lightning network are probably worse than that of the traditional banking system, but this depends on implementations.
helsinkiandrew 4y ago
But aren't lightning transactions limited to 0.5 BTC?
- thinkmassive 4y ago
  No, there was a limit in the early days (0.16777215 BTC for channels, 0.04294967 BTC payments) but it’s been optimal for about two years. Direct peers are only limited by channel capacity, and the biggest nodes (exchanges like Bitfinex) keep 5+ BTC public channels (could be much larger unannounced channels). As far as routing larger payments across the network, the Loop service handles 1.2 BTC swaps today: https://twitter.com/alexbosworth/status/1570189188091514880 https://twitter.com/alexbosworth/status/1570189188091514880
pclmulqdq 4y ago
Lightning is a lot less untraceable than people think. Settlement payments on a lightning channel are still traceable, and can be matched up. Also, lightning nodes get a lot of information about transactions that they don't publish to the blockchain, and you can bet that most lightning nodes that are around today keep logs. Most of them are run by big crypto companies, several of which are US-based.
- jejeyyy77 4y ago
  It's not meant to be "untraceable". But it's fast, and as mentioned not a public ledger. If you want untraceable, you can go out of your way to achieve that using something akin to tornado.cash I think the point is that the technology is already here and available - it's just not evenly distributed yet.
  - pclmulqdq 4y ago
    More people have tried to sell me on the lightning network on the basis that it offers privacy and reduces net transaction fees than on the basis that it offers speed.
    - jejeyyy77 4y ago
      It does all those things to different degrees?
  - Apocryphon 4y ago
    Really bizarre that the whole asset class is labelled "crypto" when it's not even traceable. The blockchain being an unalterable ledger makes this generation of cryptocurrencies weirdly public. Perhaps in the future there will be true crypto currency.
- cowtools 4y ago
  It is quite difficult to compare the obfuscation features of lightning network with that of "conventional" systems like cryptonote-style ring signatures. Consider two different situations: A) A user picks the economically best peer to open channels with, or chooses peers randomly. Neither of these are sybil proof, which basically means you are transmitting your requests publicly. B) A user only opens channels privately within a cohort of peers that privately agree not to keep logs, have special means of transmitting requests privately, etc. I would assume that most users follow some of A's heuristic and some of B's. To the extent that situation B offers privacy, it prevents you from transacting with other users globally in a more general sense. In other words, it is useful as a privacy mechanism only if you trust your peers not to keep logs, but don't trust them not to double-spend, and also you are not worried about guilt-by-association of owning a channel with these peers. If you were running some sort of dark net market or something, it would be easier to implement some sort of (cryptocurrency-backed?) chaumian cash, as you already implicitly trust the marketplace's sysadmin to some extent (as they can simply MITM your relationships unless you establish them by keypairs out-of-band (this is another sybil problem), which is probably more dangerous than double-spending).
jqpabc123 4y ago
What prevents lightning network operators from making transactions records and details available --- for fun and/or profit? Better yet, what prevents a lightning network operator from going rogue and draining your account to fund his retirement and then moving to Tonga? Imagine the outcry if government suddenly announced that all your fiat bank transactions will be routed through small, unregulated 3rd party operators who can do as they see fit with them?
- LN_is_a_scam 4y ago
  LN is a "re-centralization" of a decentralized asset. From day one anyone in the know with Bitcoin has said LN is a scam and/or completely pointless for the users. LN is a way for big central authorities to lock away and control the assets of individuals, sounds like a bank right? Amazing that such an obvious scam has gone on for so long and gathered so many "users".
- TimJRobinson 4y ago
  What are you talking about? The lightning network is permissionless, you open channels with other nodes and then you can send funds across them, the other nodes can't take your funds. Unless you mean signing up with strike or some centralized service in which case the old adage "not your keys not your coins" applies.

Transactions are moving to layer 2 solutions like the lightning network. Individual lightning transactions are not recorded on the blockchain and are not subject to chain analysis.

cowtools 4y ago

They are not subject to chain analysis, but they are still subject to analysis.

jejeyyy77 4y ago
by that logic, so is every fiat payment processor, bank, what have you.
- cowtools 4y ago
  The privacy characteristics of the lightning network are probably worse than that of the traditional banking system, but this depends on implementations.

helsinkiandrew 4y ago

But aren't lightning transactions limited to 0.5 BTC?

thinkmassive 4y ago
No, there was a limit in the early days (0.16777215 BTC for channels, 0.04294967 BTC payments) but it’s been optimal for about two years. Direct peers are only limited by channel capacity, and the biggest nodes (exchanges like Bitfinex) keep 5+ BTC public channels (could be much larger unannounced channels). As far as routing larger payments across the network, the Loop service handles 1.2 BTC swaps today: https://twitter.com/alexbosworth/status/1570189188091514880 https://twitter.com/alexbosworth/status/1570189188091514880

pclmulqdq 4y ago

Lightning is a lot less untraceable than people think. Settlement payments on a lightning channel are still traceable, and can be matched up. Also, lightning nodes get a lot of information about transactions that they don't publish to the blockchain, and you can bet that most lightning nodes that are around today keep logs. Most of them are run by big crypto companies, several of which are US-based.

jejeyyy77 4y ago
It's not meant to be "untraceable". But it's fast, and as mentioned not a public ledger. If you want untraceable, you can go out of your way to achieve that using something akin to tornado.cash I think the point is that the technology is already here and available - it's just not evenly distributed yet.
- pclmulqdq 4y ago
  More people have tried to sell me on the lightning network on the basis that it offers privacy and reduces net transaction fees than on the basis that it offers speed.
  - jejeyyy77 4y ago
    It does all those things to different degrees?
- Apocryphon 4y ago
  Really bizarre that the whole asset class is labelled "crypto" when it's not even traceable. The blockchain being an unalterable ledger makes this generation of cryptocurrencies weirdly public. Perhaps in the future there will be true crypto currency.
cowtools 4y ago
It is quite difficult to compare the obfuscation features of lightning network with that of "conventional" systems like cryptonote-style ring signatures. Consider two different situations: A) A user picks the economically best peer to open channels with, or chooses peers randomly. Neither of these are sybil proof, which basically means you are transmitting your requests publicly. B) A user only opens channels privately within a cohort of peers that privately agree not to keep logs, have special means of transmitting requests privately, etc. I would assume that most users follow some of A's heuristic and some of B's. To the extent that situation B offers privacy, it prevents you from transacting with other users globally in a more general sense. In other words, it is useful as a privacy mechanism only if you trust your peers not to keep logs, but don't trust them not to double-spend, and also you are not worried about guilt-by-association of owning a channel with these peers. If you were running some sort of dark net market or something, it would be easier to implement some sort of (cryptocurrency-backed?) chaumian cash, as you already implicitly trust the marketplace's sysadmin to some extent (as they can simply MITM your relationships unless you establish them by keypairs out-of-band (this is another sybil problem), which is probably more dangerous than double-spending).

jqpabc123 4y ago

What prevents lightning network operators from making transactions records and details available --- for fun and/or profit? Better yet, what prevents a lightning network operator from going rogue and draining your account to fund his retirement and then moving to Tonga? Imagine the outcry if government suddenly announced that all your fiat bank transactions will be routed through small, unregulated 3rd party operators who can do as they see fit with them?

LN_is_a_scam 4y ago
LN is a "re-centralization" of a decentralized asset. From day one anyone in the know with Bitcoin has said LN is a scam and/or completely pointless for the users. LN is a way for big central authorities to lock away and control the assets of individuals, sounds like a bank right? Amazing that such an obvious scam has gone on for so long and gathered so many "users".
TimJRobinson 4y ago
What are you talking about? The lightning network is permissionless, you open channels with other nodes and then you can send funds across them, the other nodes can't take your funds. Unless you mean signing up with strike or some centralized service in which case the old adage "not your keys not your coins" applies.