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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

#41

Post by freejulian »

ericb wrote: post #20
bytefactory wrote: post #11

Earlier quoted context omitted.

Opening a Lightning payment channel doesn't require your master private key. You'd create an initial transaction using your primary wallet (which would presumably be in cold storage) to open the Lightning channel and fund it. There's no relation between the two, _at all_. A funding transaction is no different from any other transaction. By design, the Lightning hot wallet can only hold small amounts of BTC (0.042 BTC…

> doesn't require your master private key So it does require the private key to your hot-wallet to be on an always on, networked machine, right? And the hotwallet and lightning channel can only transmit, across all channels, as much as is in this hot-wallet, and each channel has a potentially higher and rising transaction cost to open as lightning network will generate more transactions to the blockchain, not less. S…

Not necessarily. Easy to build a lightning wallet that uses a hardware wallet for signing.

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

#42

Post by kylnew »

marsRoverDev wrote: post #8

Or perhaps replacing bitcoin with something that doesn't have fundamental flaws in its design. Hence why a lot of us think it has no inherent value into the future. Of course, those in on the ponzi scheme will disagree with this sentiment.

It’s funny to say ‘replacing’ bitcoin to me because we talk like it had a strong value and use in the past but really this has all just been speculation since the start. We all seem in agreement that blockchain as a technology is legitimate but none of these currency implementations float my boat yet because of how highly speculative the whole market is right now.

Aside: last week up I looked it up and sure enough there’s a ‘PonziCoin’ out there

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

#43

Post by jameshayton »

jxub wrote: post #13
marsRoverDev wrote: post #8

Or perhaps replacing bitcoin with something that doesn't have fundamental flaws in its design. Hence why a lot of us think it has no inherent value into the future. Of course, those in on the ponzi scheme will disagree with this sentiment.

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…

My understanding is that Stellar is both a payment solution and a platform for facilitating decentralized exchanges. The two go hand in hand.

Nano is also interesting, but limited. In terms of moving value around, I think Stellar is more compelling.

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

#44

Post by haolez »

gruez wrote: post #27
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 Cash seems to be doing just fine with on-chain scaling Has it though? AFAIK it still has lower transaction volume than bitcoin.

There were some episodes in the latest months of very intense traffic (either an “attack” or someone stress testing) and Bitcoin Cash has endured it just fine.

Let’s see how it works out when adoption grows. If it doesn’t scale, then the timing for off-chain scaling will be more appropriate.

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

#45

Post by [deleted] »

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…

[deleted]

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

#46

Post by freejulian »

r3demon wrote: post #26
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…

0-confirmation transactions were working excellent before Bitcoin Core added SegWit and other useless stuff. You don't need to wait for a new block if your signed transaction is in the mempool, and it's secure enough for small payments.

0 conf transactions are incredibly insecure. If you accept one you are putting a great deal of trust in the person paying you. Bitcoin transactions are suppose to be trustless.

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

#47

Post by Klathmon »

lalaland1125 wrote: post #33
Klathmon wrote: post #18

Earlier quoted context omitted.

2 isn't true at all, routing isn't nearly that complicated and I don't know why everyone thinks it is. Most routes are expected to be under a few hops. But regardless we will find out soon as the number of nodes on the live system is very rapidly growing. 3 doesn't really apply, as channels can be used as middle hops to rebalance. If I give money to you for a good/service and drain my channel. Then I buy more Bitcoin…

2. Where is the evidence of this? Sure, routing can be easy and short if it's centralized and the number of hops is small. But, if it's centralized, then what's the point of using Bitcoin? Where is this mystical routing algorithm that will work in the presence of constant capacity changes over a decentralized network? 3. The issue here is that the flow for all channels across the entire network needs to be about bala…

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 rebalancing in many cases. If it starts to get unbalanced again, fees can increase to help reduce the speed that it unbalances.

4. You can also take money out of LN at any time (assuming your counterparty I cooperative). Only in the case of non-cooperation do you need to wait for locks to expire, and in that case you get ALL money from both sides of the channel, and need to wait for the lock to expire.

Id love it if my bank could give me 2x my money if it takes more than 3 days for me to get my money...

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

#48

Post by lalaland1125 »

binarybits wrote: post #35
lalaland1125 wrote: post #28

Earlier quoted context omitted.

See section 9.5 of the lightning whitepaper: > 9.5 Forgetting to Broadcast the Transaction in Time > If one does not broadcast a transaction at the correct time, the counterparty may steal funds. You need to be online all the time (or at least frequently enough) so that you can publish a penalty transaction if your counter party tries to steal coins from you.

I see what you mean. Three thoughts on this: * The time lock on commitment transactions is typically set to be a few days, so you don't need to be online "constantly." At most you need to check in about once a day. * As the white paper says, you can delegate this function to a third party, without giving the third party the ability to steal your funds. * If the other party tries to steal your funds and you catch him,…

One interesting comment about the third point is that once a channel gets sufficiently depleted (say down to 10% of the balance on one side), then there is an increased incentive to cheat (because the potential losses are lower). So you will usually have to keep channels at above a certain balance for security reasons.

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

#49

Post by freejulian »

lalaland1125 wrote: post #33
Klathmon wrote: post #18

Earlier quoted context omitted.

2 isn't true at all, routing isn't nearly that complicated and I don't know why everyone thinks it is. Most routes are expected to be under a few hops. But regardless we will find out soon as the number of nodes on the live system is very rapidly growing. 3 doesn't really apply, as channels can be used as middle hops to rebalance. If I give money to you for a good/service and drain my channel. Then I buy more Bitcoin…

2. Where is the evidence of this? Sure, routing can be easy and short if it's centralized and the number of hops is small. But, if it's centralized, then what's the point of using Bitcoin? Where is this mystical routing algorithm that will work in the presence of constant capacity changes over a decentralized network? 3. The issue here is that the flow for all channels across the entire network needs to be about bala…

Lightning uses the same routing algorithm as tor — it’s an onion router. It has the added benefit of no one in the network knowing where transactions are from or whom they’re to.

With regards to channel capacity — fees in lightning are proportional to the amount of the transaction. If you are sending a transaction which consumes a large amount of capacity, you pay a high fee. Note how this is a fundamental difference from onchain transactions where fees are proportional to the amount of block space used.

Lightning is more akin to an atm. You pay a fee to take out cash, but you can then transact instantly all day with nearly no fees.

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

#50

Post by ataturk »

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…

Anything tied to Bitcoin is a zero. What's 1,000,000 times 0?
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