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Bitcoin has a huge scaling problem–Lightning could be the solution

arstechnica.com

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Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#101

Post by notahacker »

grondilu wrote: post #21

Bitcoin is both a currency and a payment method. Everybody knew right from the beginning that it's not a great payment method. The 10 minutes delay is a long time if you want to prevent double-spending. For fast payments nothing beats a server with credit accounts. Naysayers will say that it defeats the purpose of bitcoin, but nobody thought bitcoin would entirely make banks and their fractional reserves system disap…

If it's not a decent payment method, it's not a currency. Sure, there are plenty of non-currency assets which are deficient as payment methods highly valued to investors, but they tend to have some use value or return.

Why would banks function on top of something which has no use value, generates no returns and whose sole claim to be a useful asset rests on its fungibility, which is now inferior to that of currency except in cases of regulation evasion? If people are concerned credit instruments are too risky because debtors sometimes fail to repay, it makes no sense to swap it out of their portfolio for something with no more intrinsic value than a credit instrument but also no repayment obligations.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#102

Post by buckie »

gruez wrote: post #23
jxub wrote: post #13

Earlier quoted context omitted.

Nano previously called Raiblocks is an amazing candidate for fee-less, instant transactions. The block-lattice approach is a fundamental breakthrough that overcomes the limitations of blockchain in terms of cost and speed. Stellar is also a worthy contender although it wasn't designed with the purpose of payments, but decentralised currency/crypto exchanges. The Lightning Network daemon codebase on Github is a beauti…

>The block-lattice approach is a fundamental breakthrough that overcomes the limitations of blockchain in terms of cost and speed. Not really. DAG/lattice based cryptocurrencies offer different security guarantees compared to blockchain based ones.

They also have different scaling tradeoffs as they scale really well (the graph can be arbitrarily wide as tx's can run in parallel) when most transactions are causally unrelated but hit bottlenecks with every "killer app" that gains traction (graph narrows as more and more transactions become causally related).

I'm not sure what domains see this problem crop up but I've seen it in quant finance strategy execution. Say you have 1k strats that you want to run in parallel but risk needs to bound the bank's per-equity positions globally. When the strats work on different subsets, DAG approaches aren't a problem, but when most of the strats trade APPL/IBM your once very wide (parallel execution) graph narrows significantly (becomes more sequential) as the strats need to check with risk w.r.t. AAPL/IBM sequentially.

NB: for this reason, causal approaches are pretty rare to see today (though it depends on the domain as high latency contexts don't really care).

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#103

Post by kbody »

JumpCrisscross wrote: post #84
kbody wrote: post #79

Earlier quoted context omitted.

I was talking about Lightning Network nodes, not Bitcoin. Bitcoin at one point was at this stage but through iterations and continuous improvement it evolved to being able to secure all those funds. The point is that it's disingenuous to deem a new tech dead, while the engineers working on it sill say that it's not yet fully-ready for production. The implementation and the protocol still evolves, but the core idea be…

> I was talking about Lightning Network nodes, not Bitcoin The latter being useless as a currency, per the article, without the former.

I fail to see how this moves the discussion forward, we're talking about how effective LN could be regarding helping with scaling.

Also, note the core idea of LN (updatable non-broadcasted Bitcoin TXs with incentive-based security and eventual broadcast to the blockchain network) is a powerful idea and as we explore this scheme and more engineers get accustomed I am sure we will see even more exciting things.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#104

Post by grondilu »

notahacker wrote: post #101
grondilu wrote: post #21

Bitcoin is both a currency and a payment method. Everybody knew right from the beginning that it's not a great payment method. The 10 minutes delay is a long time if you want to prevent double-spending. For fast payments nothing beats a server with credit accounts. Naysayers will say that it defeats the purpose of bitcoin, but nobody thought bitcoin would entirely make banks and their fractional reserves system disap…

If it's not a decent payment method, it's not a currency. Sure, there are plenty of non-currency assets which are deficient as payment methods highly valued to investors, but they tend to have some use value or return. Why would banks function on top of something which has no use value, generates no returns and whose sole claim to be a useful asset rests on its fungibility, which is now inferior to that of currency e…

> If it's not a decent payment method, it's not a currency.

Before bitcoin, was there any currency that was also a payment method?

I would also add that though it's not great a payment method, it's not to a degree worse than payments in euros for instance. Bank wire transfers take up to three days in Europe. I don't hear anyone stating that this undermines the value of euro as a currency.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#105

Post by kbody »

lalaland1125 wrote: post #87
kbody wrote: post #57

Earlier quoted context omitted.

Wow, I guess it's dead then /s It's an evolving software still in pre-alpha state. But the core idea is solid and if you follow the development you'll see the strides of progress that is being done on all fronts. To your points. 1. Depending on the options you set to your channels, you could have a window of days (or anything the two parties agree to), to act in case the other party tries to broadcast outdated TXs i.…

Do you happen to know where I can find the code or white paper for the current, working, routing algorithm?

Sure.

- Onion Routing Protocol: https://github.com/lightningnetwork/lightning-rfc/blob/maste...

- P2P Node and Channel Discovery https://github.com/lightningnetwork/lightning-rfc/blob/maste...

This repo contains specs for a lot of parts of the LN, although probably there may be changes I imagine.

As for code, one of the implementations, LND (Go): https://github.com/lightningnetwork/lnd/tree/master/routing but there are at least 3 other implementations in the works.

https://github.com/ElementsProject/lightning (clang) https://github.com/ACINQ/eclair (Scala) https://github.com/mit-dci/lit (Go)

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#106

Post by notahacker »

grondilu wrote: post #104
notahacker wrote: post #101

Earlier quoted context omitted.

If it's not a decent payment method, it's not a currency. Sure, there are plenty of non-currency assets which are deficient as payment methods highly valued to investors, but they tend to have some use value or return. Why would banks function on top of something which has no use value, generates no returns and whose sole claim to be a useful asset rests on its fungibility, which is now inferior to that of currency e…

> If it's not a decent payment method, it's not a currency. Before bitcoin, was there any currency that was also a payment method? I would also add that though it's not great a payment method, it's not to a degree worse than payments in euros for instance. Bank wire transfers take up to three days in Europe. I don't hear anyone stating that this undermines the value of euro as a currency.

People have only been paying with coins for six or so millenia now...

(And of course the reason bank credit has more recently become treated as currency and accepted as electronic payment is because it's exchangeable on demand, at parity to and often instantaneously for legal tender)

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#107

Post by UncleEntity »

grubles wrote: post #91
UncleEntity wrote: post #88

Earlier quoted context omitted.

> Lightning has huge capital costs. You need to lock up large amounts of bitcoin in these channels for significant amounts of time. Isn't that kind of the point? You conduct your day to day transactions outside the bitcoin network and (presumably) only need to hit the blockchain on rare occasions. Or so I assume not having read the whitepaper. Having studied the history of money and banking in a previous lifetime I'd…

"You need to lock up large amounts of bitcoin in these channels for significant amounts of time." That's actually false. The protocol actually limits channels to a fraction of a bitcoin currently (something like 0.1 or maybe even 0.01 BTC).

I think they mean across all channels implying some "velocity of money" fallacy harming the bitcoin network.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#108

Post by berberous »

haolez wrote: post #12

Bitcoin Cash seems to be doing just fine with on-chain scaling. There are concerns about centralization on miners with it, but in my understanding the incentives planned in the original Bitcoin paper account for that.

Bitcoin may have made a PR mistake by not allowing for interim scaling solutions like BCH did with doubling the block size, but block size increases are a dead end. They cannot possibly scale the network enough if demand really takes off. I think lightening is a very interesting solution. You may disagree, but you can’t just plan to increase the block size forever.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#109

Post by gruez »

lalaland1125 wrote: post #97
gruez wrote: post #61

Earlier quoted context omitted.

you don't. you're not handing over the private keys. you sign the transaction locally, and give them to the third party to broadcast in case you're not online. it can even be multiple third parties so you're not trusting a single one. this provides better reliability than broadcasting it yourself on your home/vps/colo connection.

You are trusting those third parties to react accordingly. They could be paid off or attacked in other ways.

If you're dealing with amounts so large that you can't trust [large number] of independent third parties, you can always fall back to on-chain. but you've got to be pretty paranoid to think that starbucks is going to collude with [large number] of independent third parties to steal your $100 coffee deposit.

Re: Bitcoin has a huge scaling problem–Lightning could be the solution

#110

Post by jxub »

gruez wrote: post #23
jxub wrote: post #13

Earlier quoted context omitted.

Nano previously called Raiblocks is an amazing candidate for fee-less, instant transactions. The block-lattice approach is a fundamental breakthrough that overcomes the limitations of blockchain in terms of cost and speed. Stellar is also a worthy contender although it wasn't designed with the purpose of payments, but decentralised currency/crypto exchanges. The Lightning Network daemon codebase on Github is a beauti…

>The block-lattice approach is a fundamental breakthrough that overcomes the limitations of blockchain in terms of cost and speed. Not really. DAG/lattice based cryptocurrencies offer different security guarantees compared to blockchain based ones.

I know that there might be spam problems if one manages to precompute the local PoW hashes (solved by pruning the chain), but I would love if you explained more this security problems. Are they consensus-related as some people in reddit suggested? If this is the case, it might be good for Nano to get someone like @aphyr to audit the code.
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