Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

lightning.network

Post reply on HN
Print view View original

41–50 of 115 posts

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#41

Post by sanswork »

josephpoon wrote: post #38
sanswork wrote: post #34

Earlier quoted context omitted.

Question for you. Say I want to pay Bob $0.001. That's too small for a bitcoin transaction since the fee is higher than that. So from what I understand I would "load" say $10 into the lightning network then create a transaction over the network to Bob for $0.001. Say tons of other people do this and now Bob is sitting on $10. How does he turn that into actual Bitcoin? Like get it out of the lightning network. Doesn't…

The fun part of the Lightning Network is that you're actually exchanging bitcoin transactions. You're just keeping a local cache and electing when to broadcast it. It's flipping the double-spend problem on its head (and using it as a feature ) and securing it via time-bonded proofs using programmed Bitcoin scripts native to the blockchain itself. At any time either party can close out the channel unilaterally by broa…

Sorry I think you'll have to dumb it down for me.

Say Bob says I want my $10 to stick on OKCoin now. He broadcasts that he wants to close the channels for all those thousands of people now? Doesn't that mean the transactions go through on the actual network costing him ~$0.05 for each $0.01? Or am I understanding settlement completely wrong?

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#42

Post by um_ya »

ptokb3 wrote: post #12

-Blockstream Playbook- Step 1: Buy off all of the top developers of open-source project. Check. Step 2: Refuse to support/fix basic network operations so that transactions stop confirming just as the network needs to grow. Check. Step 3: Create a 2nd-layer solution for growth that allows the company to siphon Billions of dollars over many years. Check. Step 4: Censor any forum where people alert others about secret g…

You're an idiot. If you actually understood how lightning network works, you would understand what a HUGE leap this is for bitcoin. This solves the problem of miners downloading and transferring too much data, it solves the zero confirmation problem, it solves the micropayment problems, and it solves the scale-ability problem... All this, just by using bitcoin timelocks and transaction channels. It's a pretty cool trick, that's completely secure.

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#43

Post by bfstein »

josephpoon wrote: post #32

For the HN crowd passing by, here's why this stuff could be interesting to you. It's not possible to do extremely small micropayments on bitcoin directly as people use it today. Bitcoin's made a lot of promises around micropayments, but doing it in an economical way has tradeoffs, especially if you're talking about millions to billions of transactions per second. In fact it's not possible to extremely small micropaym…

> Even Paypal, who ostensibly should be doing this, charges $0.30 for payments for goods and services.

PayPal is doing this. At least, via their subsidiary Venmo. The first thing I thought of when you said "try sending $.001 to someone once" was "huh, I do that all the time on Venmo. Couldn't be simpler."

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#44

Post by josephpoon »

sanswork wrote: post #41
josephpoon wrote: post #38

Earlier quoted context omitted.

The fun part of the Lightning Network is that you're actually exchanging bitcoin transactions. You're just keeping a local cache and electing when to broadcast it. It's flipping the double-spend problem on its head (and using it as a feature ) and securing it via time-bonded proofs using programmed Bitcoin scripts native to the blockchain itself. At any time either party can close out the channel unilaterally by broa…

Sorry I think you'll have to dumb it down for me. Say Bob says I want my $10 to stick on OKCoin now. He broadcasts that he wants to close the channels for all those thousands of people now? Doesn't that mean the transactions go through on the actual network costing him ~$0.05 for each $0.01? Or am I understanding settlement completely wrong?

Let's say you're Alice. You have a channel open with Bob. Bob is connected to Carol (OKPay).

You update your channel to tell Bob, I will pay you conditional upon a proof that you paid Carol. Bob pays Carol and provides proof. If Bob didn't provide proof after an agreed timeframe, this gets cancelled. There can be an arbitrary number of people between you and Bob (7-degrees of Kevin Bacon, but probably don't go too high!).

This is done completely off-blockchain. At any time this can be moved on-blockchain, but since the blockchain will enforce the payment as part of its transaction scripting language, you both elect to do it off-blockchain. Think of this with the system intent/design where it represents an enforcible caching layer where invalid cache can be corrected on-blockchain.

You can do thousands, even millions of these transactions off-blockchain. Only the final balance is net-settled on the blockchain. So you finalize your balance between Alice and Bob if you want to close out the channel. Note that the channel between Bob and Carol could still be left open and everything still works fine!

Since it's scalable in a routed graph (think switches instead of hubs), you could potentially do millions to billions of transaactions which route value, much like routing packets on the internet.

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#45

Post by MichaelGG »

josephpoon wrote: post #35
troymc wrote: post #33

Earlier quoted context omitted.

You can send someone one Linden in Second Life (the virtual world), i.e. over the Internet. One Linden works out to about 0.004 US dollars. (It depends on the exchange rate, which is determined by an open market.) This has been possible for many years.

Ah yeah, that's a good point, I totally forgot about them, thanks! I think the big difference here is that obviously decentralization is nice, but the real issue is that Linden could do it because they simply didn't become big enough to be a target. There were some attacks at the edges, but if you wanted to do what Linden did at Visa-scale, they would quickly put a stop to it with chargebacks. Adversarial problems ar…

Bitcoin doesn't offer chargebacks though, and nor do any of the exchanges. I think GP's point is that Linden money is equivalent to BTC, just centralized. And they can send small amounts of money.

If you mean Linden would have issues with chargebacks for people exchanging real money -- why wouldn't any BTC exchange have the same problem? It seems unlikely you'll be able to buy $0.01 of BTC.

In fact, any centralize system that throws out chargebacks should have zero problems scaling. A few years ago VISA said their target was around 50K tx/sec peak (though their daily peak is only a few thousand). It'd be slightly odd for a centralized system to not be able to easily scale to that volume.

Forgive me if I'm misunderstanding the thread.

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#46

Post by josephpoon »

bfstein wrote: post #43
josephpoon wrote: post #32

For the HN crowd passing by, here's why this stuff could be interesting to you. It's not possible to do extremely small micropayments on bitcoin directly as people use it today. Bitcoin's made a lot of promises around micropayments, but doing it in an economical way has tradeoffs, especially if you're talking about millions to billions of transactions per second. In fact it's not possible to extremely small micropaym…

> Even Paypal, who ostensibly should be doing this, charges $0.30 for payments for goods and services. PayPal is doing this. At least, via their subsidiary Venmo. The first thing I thought of when you said "try sending $.001 to someone once" was "huh, I do that all the time on Venmo. Couldn't be simpler."

I thought their minimum was $0.01 last I checked, I stand corrected!

Venmo also explicitly discourages you from sending money to people whom you don't have a social relationship with due to chargeback risks. They're a long ways away from being a general payment platform for goods and services online with people whom you don't have a prior relationship with, and as part of that will likely drop it from their business model. There's a reason why Paypal has been talking about doing it for 15 years but haven't actually done it (paypal doesn't charge any fees for payments to your friends but charges fees if you're paying for goods and services).

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#47

Post by josephpoon »

MichaelGG wrote: post #45
josephpoon wrote: post #35

Earlier quoted context omitted.

Ah yeah, that's a good point, I totally forgot about them, thanks! I think the big difference here is that obviously decentralization is nice, but the real issue is that Linden could do it because they simply didn't become big enough to be a target. There were some attacks at the edges, but if you wanted to do what Linden did at Visa-scale, they would quickly put a stop to it with chargebacks. Adversarial problems ar…

Bitcoin doesn't offer chargebacks though, and nor do any of the exchanges. I think GP's point is that Linden money is equivalent to BTC, just centralized. And they can send small amounts of money. If you mean Linden would have issues with chargebacks for people exchanging real money -- why wouldn't any BTC exchange have the same problem? It seems unlikely you'll be able to buy $0.01 of BTC. In fact, any centralize sy…

The presumption would be the underwriting risk is batched and pushed to one point (the exchange point). It's economically feasible to underwrite a single transaction for hundreds of dollars to buy Bitcoin (exchanges doing AML/KYC). It's much more uneconomical to underwrite a $0.001 payment -- as a result building a real marketplace for this becomes difficult even if there would be a lot of users.

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#48

Post by MichaelGG »

josephpoon wrote: post #32

For the HN crowd passing by, here's why this stuff could be interesting to you. It's not possible to do extremely small micropayments on bitcoin directly as people use it today. Bitcoin's made a lot of promises around micropayments, but doing it in an economical way has tradeoffs, especially if you're talking about millions to billions of transactions per second. In fact it's not possible to extremely small micropaym…

The site talks about billions of transactions per second. So presumably multiple tx/sec/person on earth. Can you give me some examples of how this is useful? For instance, why would a CDN want to handle and record a financial transaction for e.g. every HTTP load or something?

I'm also suspicious of pay-per-whatever extending to end-users. People hate that kind of billing, even when it's cheaper (I learned this the hard way). And between companies, again, what's the benefit of having thousands of transactions when a couple would do?

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#49

Post by sanswork »

josephpoon wrote: post #44
sanswork wrote: post #41

Earlier quoted context omitted.

Sorry I think you'll have to dumb it down for me. Say Bob says I want my $10 to stick on OKCoin now. He broadcasts that he wants to close the channels for all those thousands of people now? Doesn't that mean the transactions go through on the actual network costing him ~$0.05 for each $0.01? Or am I understanding settlement completely wrong?

Let's say you're Alice. You have a channel open with Bob. Bob is connected to Carol (OKPay). You update your channel to tell Bob, I will pay you conditional upon a proof that you paid Carol. Bob pays Carol and provides proof. If Bob didn't provide proof after an agreed timeframe, this gets cancelled. There can be an arbitrary number of people between you and Bob (7-degrees of Kevin Bacon, but probably don't go too hi…

Thanks for taking the time. I think I understand it now though I'll spend some more time having a read through the site when I have a bit more time.

Re: Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions

#50

Post by sanswork »

MichaelGG wrote: post #48
josephpoon wrote: post #32

For the HN crowd passing by, here's why this stuff could be interesting to you. It's not possible to do extremely small micropayments on bitcoin directly as people use it today. Bitcoin's made a lot of promises around micropayments, but doing it in an economical way has tradeoffs, especially if you're talking about millions to billions of transactions per second. In fact it's not possible to extremely small micropaym…

The site talks about billions of transactions per second. So presumably multiple tx/sec/person on earth. Can you give me some examples of how this is useful? For instance, why would a CDN want to handle and record a financial transaction for e.g. every HTTP load or something? I'm also suspicious of pay-per-whatever extending to end-users. People hate that kind of billing, even when it's cheaper (I learned this the ha…

>Can you give me some examples of how this is useful?

Marketing.

Post reply on HN