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No. Lightning simply gives up more decentralization and security for the illusion of scalability. I say illusion of scalability because it's still hamstrung by

by lawn 2y ago

No. Lightning simply gives up more decentralization and security for the illusion of scalability. I say illusion of scalability because it's still hamstrung by Bitcoin in a major way. You still need to use Bitcoin to enter the system, which is a big bottleneck. For security you also need to be able to settle to the Bitcoin blockchain in a cheap and reliable way, which just won't scale with a congested blockchain. Lightning is honestly pretty shit and it's not at all a solution to Bitcoin's problems.

jenadine 2y ago
If I understand correctly, lightning allow an unbounded amount of transactions for the cost of a couple of on chain transactions. So sure, there are still the need to hit the chain, but if you were to do all transactions on chain, you'd be even less scalable. In that respect, I don't see how you can claim that it is only an illusion.
- barnacs 2y ago
  Exactly. Lightning minimizes the use of the globally consistent ledger, which inevitably has to make trade-offs due to the "trilemma". You set aside some funds on the global ledger and then you can use those funds to transact in a much more efficient, truly p2p manner, without touching the global ledger. Eventually, you net out everything and settle it all at once on-chain, utilizing its features to resolve any conflicts.
- pjc50 2y ago
  > an unbounded amount of transactions .. between the two parties that started the link, up to the initial value. It's so limited as to be useless. It's like a bar tab where you have to put down a deposit of the maximum amount you might spend first. https://docs.lightning.engineering/the-lightning-network/payment-channels/lifecycle-of-a-payment-channel https://docs.lightning.engineering/the-lightning-network/pay...
  - DennisP 2y ago
    Well you can use intermediate nodes, it doesn't have to be a direct payment channel between sender and receiver. But to make that work, you have to be online in real time to receive funds. It's not like on-chain transactions that complete without needing your direct involvement. If you're not online, then somebody has to do that on your behalf and now you're back to having someone else custody your funds. Here's a good article explaining it: https://github.com/moneybutton/yours-channels/blob/master/docs/gentle-lightning.md https://github.com/moneybutton/yours-channels/blob/master/do... (You also need someone online monitoring for fraud, even without intermediates, but at least that part can be outsourced without trusting someone with custody.)
    - lawn 2y ago
      > Well you can use intermediate nodes, it doesn't have to be a direct payment channel between sender and receiver. Assuming of course that there's a path between the sender and receiver, and that there's enough liquidity at each step of the way. Otherwise, you need to setup a new channel, paying dearly for it once more.
mattwilsonn888 2y ago
Adding on to this: If Bitcoin scalability is the problem Lightning Solves, then it almost tautologically fails when you realize that entering into a Lightning Channel requires a base Bitcoin transaction. If every person on Earth tried to take on-chain Bitcoin into a LN Channel, it would skyrocket the fee-rate. The only other option then would be for all Bitcoin purchased to exist on Lightning, so people simply buy LN Bitcoin. This is not impractical to get started; exchanges simply send and receive LN BTC. But Lightning security relies on the ability to get a transaction posted to the base layer Bitcoin. If everyone is using lightning, and thousands of users are attacked on Lightning at once, the chain would not be able to handle the influx and would leave many victims. Not only that, but the LN node network would naturally centralize, especially with liquidity requirements. It would be much better to properly scale some base layer.

by lawn 2y ago

jenadine 2y ago

If I understand correctly, lightning allow an unbounded amount of transactions for the cost of a couple of on chain transactions. So sure, there are still the need to hit the chain, but if you were to do all transactions on chain, you'd be even less scalable. In that respect, I don't see how you can claim that it is only an illusion.

barnacs 2y ago
Exactly. Lightning minimizes the use of the globally consistent ledger, which inevitably has to make trade-offs due to the "trilemma". You set aside some funds on the global ledger and then you can use those funds to transact in a much more efficient, truly p2p manner, without touching the global ledger. Eventually, you net out everything and settle it all at once on-chain, utilizing its features to resolve any conflicts.
pjc50 2y ago
> an unbounded amount of transactions .. between the two parties that started the link, up to the initial value. It's so limited as to be useless. It's like a bar tab where you have to put down a deposit of the maximum amount you might spend first. https://docs.lightning.engineering/the-lightning-network/payment-channels/lifecycle-of-a-payment-channel https://docs.lightning.engineering/the-lightning-network/pay...
- DennisP 2y ago
  Well you can use intermediate nodes, it doesn't have to be a direct payment channel between sender and receiver. But to make that work, you have to be online in real time to receive funds. It's not like on-chain transactions that complete without needing your direct involvement. If you're not online, then somebody has to do that on your behalf and now you're back to having someone else custody your funds. Here's a good article explaining it: https://github.com/moneybutton/yours-channels/blob/master/docs/gentle-lightning.md https://github.com/moneybutton/yours-channels/blob/master/do... (You also need someone online monitoring for fraud, even without intermediates, but at least that part can be outsourced without trusting someone with custody.)
  - lawn 2y ago
    > Well you can use intermediate nodes, it doesn't have to be a direct payment channel between sender and receiver. Assuming of course that there's a path between the sender and receiver, and that there's enough liquidity at each step of the way. Otherwise, you need to setup a new channel, paying dearly for it once more.

mattwilsonn888 2y ago

Adding on to this: If Bitcoin scalability is the problem Lightning Solves, then it almost tautologically fails when you realize that entering into a Lightning Channel requires a base Bitcoin transaction. If every person on Earth tried to take on-chain Bitcoin into a LN Channel, it would skyrocket the fee-rate. The only other option then would be for all Bitcoin purchased to exist on Lightning, so people simply buy LN Bitcoin. This is not impractical to get started; exchanges simply send and receive LN BTC. But Lightning security relies on the ability to get a transaction posted to the base layer Bitcoin. If everyone is using lightning, and thousands of users are attacked on Lightning at once, the chain would not be able to handle the influx and would leave many victims. Not only that, but the LN node network would naturally centralize, especially with liquidity requirements. It would be much better to properly scale some base layer.