Bitcoin has a huge scaling problem–Lightning could be the solution • Hacker News Board

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

#111

Post by wan23 » Sun, Feb 04, 2018, 6:24 PM UTC

JumpCrisscross wrote: post #72

Klathmon wrote: post #47

Earlier quoted context omitted.

About 2, like I said we should know soon if it will work. I just don't think that most channels will be updating as quickly as you think, and even if they are, a channel will know of someone is trying to route through it, so it can avoid trying to route another tx for the duration of the first. 3. Fees can and will help balance things out. If a channel is really unbalanced, negative fees can strongly incentivize reba…

> You can also take money out of LN at any time (assuming your counterparty I cooperative) This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account. > Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get…

> This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account.

Is it really true that you can get easily the money out of your checking account if your bank declines to give it to you? In a traditional bank account, it is possible to place a hold on an account for various reasons, mostly when compelled by the government.

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

#112

Post by grondilu » Sun, Feb 04, 2018, 6:26 PM UTC

notahacker wrote: post #106

grondilu wrote: post #104

Earlier quoted context omitted.

> 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)

When you exchange coins physically, the payment method is ... your hands.

> bank credit has more recently become treated as currency

A bank credit is not a currency. The thing it is denominated into (EUR, USD, BTC...) is.

> And of course the reason bank credit has more recently become treated as currency (sic) and accepted as electronic payment

I think the real reason is that people had little to no choice in that regard.

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

#113

Post by koonsolo » Sun, Feb 04, 2018, 6:39 PM UTC

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.

The moment I used Bitcoin Cash myself, I was completely stunned why people keep supporting it.

To give something to back me up, just look at the charts of BCH and it's main competitors: Litecoin and Dogecoin.

total # transactions: https://bitinfocharts.com/comparison/transactions-bch-ltc-do...

-> Litecoin does more than 2x the traffic of Bitcoin Cash and Dogecoin. Remark that Dogecoin sometimes handles more traffic than Bitcoin Cash.

Transaction fee: https://bitinfocharts.com/comparison/transactionfees-bch-ltc...

-> Dogecoin clear winner, Bitcoin Cash about the same as Litecoin (but remark that Litecoin handles double the amount of transactions)

So to be honest, I think Bitcoin Cash is just trying to ride the "Bitcoin" name, because for applicability, it doesn't seem to have any advantage over its direct competitors.

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

#114

Post by wyager » Sun, Feb 04, 2018, 6:46 PM UTC

lalaland1125 wrote: post #15

Lightning appears to add more problems than solutions. It has a whole bunch of critical issues. Here is a short list. 1. You need to have a computer constantly online or your counter party can easily steal all your money. This leaves you vulnerable to all sorts of attacks. 2. The lightning network works by routing payments through a network to your destination. The issue here is that the routing for the lightning net…

Literally none of these are true except for #4. It’s remarkable to have this many incorrect assertions stated so confidently in a single post.

As for #4, I view it like a checking account. You need to have a bit of money set aside in liquid form in case you want to buy something.

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

#115

Post by koonsolo » Sun, Feb 04, 2018, 6:50 PM UTC

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…

> For fast payments nothing beats a server with credit accounts.

For scalability and robustness, one server won't cut it. You need a whole infrastructure to handle lots of payments securely.

I see various exchanges having trouble with scaling to support all their (new) customers, and basically they are doing the "single server" that you are talking about. Only at deposit/redraw they need to go over the requested blockchain.

So in that sense, what is your view on the latest generation of cryptocurrencies which have instant transactions and 0 fees (such as Nano)? Since I consider them the BitTorrent of currencies, I don't see how any institution could beat that.

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

#116

Post by JumpCrisscross » Sun, Feb 04, 2018, 7:15 PM UTC

wan23 wrote: post #111

JumpCrisscross wrote: post #72

Earlier quoted context omitted.

> You can also take money out of LN at any time (assuming your counterparty I cooperative) This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account. > Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get…

> This isn’t what people mean when they imply liquidity. Needing consent and being able to unilaterally demand cash are different domains. The former is e.g. a holding in a fund or coins in a LN, the latter is a consumer checking account. Is it really true that you can get easily the money out of your checking account if your bank declines to give it to you? In a traditional bank account, it is possible to place a ho…

> In a traditional bank account, it is possible to place a hold on an account for various reasons, mostly when compelled by the government

The traditional hierarchy of liquidity goes first cash, then Treasuries then checking accounts. Checking account balances (i.e. senior, registered claims on a bank) are junior to the first two (i.e. senior, registered claims on the U.S. Treasury and senior, unregistered claims on the Federal Reserve, respectively) for the reason you specified. I still contend a checking account will more reliably produce immediately-available funds quicker than a LN "deposit," even if one is a criminal.

This sidelines into why I believe illegal markets are the only place blockchains have a shot at being a currency. Shadow economies are substantial, between $1 and 3 trillion in the U.S. alone [1]. It's a different pitch from "replace the U.S. dollar," but it's more realistic. (I am not advocating anyone do anything illegal.)

Stepping back, it's pertinent to look at the Two Generals' Problem [2] which Satoshi's paper solved. It's a problem of exchanging information, not value per se. Blockchains are here to stay, but not--in my opinion--as currencies. Libor on a blockchain or legal documents "Docusigned" on a blockchain are far more compelling than "we'll make our light-speed payments system less reversible and better for illegal activity". They're also use cases which become difficult to justify if the "tokens" underlying them rise in value.

[1] http://www.imf.org/en/Publications/WP/Issues/2018/01/25/Shad... Table 4, page 11

[2] https://en.wikipedia.org/wiki/Two_Generals%27_Problem

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

#117

Post by [deleted] » Sun, Feb 04, 2018, 7:38 PM UTC

kbody wrote: post #57

lalaland1125 wrote: post #15

Lightning appears to add more problems than solutions. It has a whole bunch of critical issues. Here is a short list. 1. You need to have a computer constantly online or your counter party can easily steal all your money. This leaves you vulnerable to all sorts of attacks. 2. The lightning network works by routing payments through a network to your destination. The issue here is that the routing for the lightning net…

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.…

[deleted]

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

#118

Post by [deleted] » Sun, Feb 04, 2018, 7:43 PM UTC

wyager wrote: post #114

lalaland1125 wrote: post #15

Lightning appears to add more problems than solutions. It has a whole bunch of critical issues. Here is a short list. 1. You need to have a computer constantly online or your counter party can easily steal all your money. This leaves you vulnerable to all sorts of attacks. 2. The lightning network works by routing payments through a network to your destination. The issue here is that the routing for the lightning net…

Literally none of these are true except for #4. It’s remarkable to have this many incorrect assertions stated so confidently in a single post. As for #4, I view it like a checking account. You need to have a bit of money set aside in liquid form in case you want to buy something.

[deleted]

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

#119

Post by JumpCrisscross » Sun, Feb 04, 2018, 7:50 PM UTC

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.

> was there any currency that was also a payment method?

Every currency has, by definition, native payment methods. (If it doesn't, it's a settlement system, not a currency.) Most simply: physical cash.

Electronic payment systems are more complicated. In some countries, consumers can directly access them. In others, e.g. the United States, consumers indirectly access the settling-in-seconds and costing-pennies Fedwire system through banks.

> Bank wire transfers take up to three days in Europe

Maximum settlement time for SEPA transfers has been 1 business day since 2012.

[1] https://www.ecb.europa.eu/pub/pdf/other/sepa_brochure_2009en... footnote on page 20

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

#120

Post by IncRnd » Sun, Feb 04, 2018, 7:55 PM UTC

Klathmon wrote: post #98

lalaland1125 wrote: post #96

Earlier quoted context omitted.

Of course, someone could pay off that third party to stop watching your channel.

And you could have multiple "watching" services that can prevent any one "watching" service from betraying you. Obviously controlling your own "watching" system is most secure, but the vast majority of people aren't going to want to do it themselves. And again, if the biggest worry is that someone will pay off multiple "watchers" then publish a previous version of a channel to steal money from you and hope that your…

According to you own words, the answer to poor transaction times is to make transactions less reliable and to introduce centralization.

I have to ask the million dollar question. Has this been threat modeled?