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Lightning network is impossible to use at scale because any operation to move to and from L2 involves operation on L1. So just to create an L2 wallet for every

by Yizahi 2y ago

Lightning network is impossible to use at scale because any operation to move to and from L2 involves operation on L1. So just to create an L2 wallet for every adult on Earth would take 10-15 years, not even counting humans born in the meantime. Second problem is that opening a bidirectional channel to any merchant is also an L1 operation, and thus makes the issue worse. So Lightning Network technical flaws let to a total centralization of the L2. Basically there are now "banks" in L2 who issue their fake virtual tokens and all transaction on L2 happen inside a centralized "bank" with this bank's IOUs and once in a while it can settle accounts. Basically a shittier and in all aspects worse copy of the existing monetary system. Not decentralized, not private, not fast, not safe for customers. Garbage tech and garbage technical implementation.

rstuart4133 2y ago
That seems like a dubious claim. Say I sell you a meal. You pay for me for it with a L2 transaction. I use that L2 transaction to pay the taxi driver for my ride. In that very short story the value representing stuff (the meal) was moved onto L2, and then out of L2 in exchange for a taxi ride. Neither move involved L1.
- Yizahi 2y ago
  L2 implementation for BTC works like this (roughly). One L2 wallet needs to open a channel to a peer and lock there a a number of L2 tokens in total exceeding the expected trasaction or more, and iirc a reverse tunnel also needs be opened with the same parameters. Then one L2 wallet can transact with another L2 wallet fast and without involving L1, yes. Also channels can be chained in arbitrary topology and then LN network calculates an optimal set of channels and funds inside them to make a transaction. That is a NP-hard problem which needs to be solved in real time for every transaction, and which has exponential difficulty increase with every new participant in the network. But, those yet other issues LN has. The problem is that opening an L2 channel is an L1 operation. And closing L2 channel is an L1 operation. So if an individual want to use BTC L2 as designed, it would involve a lot of L1 operation plus tax the network with every transaction. This all is absurd as it is sounds. The hardest problem with discussing Lightning Network is to choose which idiotic design decision to dismantle first :) . So eventually the system evolved and ditched stupid decentralization (sarcasm alert) and centralized in a few big entities (Lighthouse iirc) and the full L2 network is no longer needed, every user and merchant opens one single channel to the central bank, and then all operations happens inside the central bank via IOUs. This removes the need to most of the channels, and gets rid of unneeded decentralization. But even then, with 1 single channel operation per user life, it would require 10-15 years of L1 anemic performance to even onboard everyone to LN.
npoc 2y ago
Look up channel factories. In what way is bitcoin on the Lightning Network fake virtual tokens?

by Yizahi 2y ago

rstuart4133 2y ago

That seems like a dubious claim. Say I sell you a meal. You pay for me for it with a L2 transaction. I use that L2 transaction to pay the taxi driver for my ride. In that very short story the value representing stuff (the meal) was moved onto L2, and then out of L2 in exchange for a taxi ride. Neither move involved L1.

Yizahi 2y ago
L2 implementation for BTC works like this (roughly). One L2 wallet needs to open a channel to a peer and lock there a a number of L2 tokens in total exceeding the expected trasaction or more, and iirc a reverse tunnel also needs be opened with the same parameters. Then one L2 wallet can transact with another L2 wallet fast and without involving L1, yes. Also channels can be chained in arbitrary topology and then LN network calculates an optimal set of channels and funds inside them to make a transaction. That is a NP-hard problem which needs to be solved in real time for every transaction, and which has exponential difficulty increase with every new participant in the network. But, those yet other issues LN has. The problem is that opening an L2 channel is an L1 operation. And closing L2 channel is an L1 operation. So if an individual want to use BTC L2 as designed, it would involve a lot of L1 operation plus tax the network with every transaction. This all is absurd as it is sounds. The hardest problem with discussing Lightning Network is to choose which idiotic design decision to dismantle first :) . So eventually the system evolved and ditched stupid decentralization (sarcasm alert) and centralized in a few big entities (Lighthouse iirc) and the full L2 network is no longer needed, every user and merchant opens one single channel to the central bank, and then all operations happens inside the central bank via IOUs. This removes the need to most of the channels, and gets rid of unneeded decentralization. But even then, with 1 single channel operation per user life, it would require 10-15 years of L1 anemic performance to even onboard everyone to LN.

npoc 2y ago

Look up channel factories. In what way is bitcoin on the Lightning Network fake virtual tokens?