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

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

arstechnica.com

Post reply on HN
Print view View original

91–100 of 141 posts

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

#91

Post by grubles »

UncleEntity wrote: post #88
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…

> 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).

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

#92

Post by api »

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 didn't know about #1. That is absolutely, categorically fatal. If that's true then lightning is DOA.

Nothing to see here.

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

#93

Post by marcandre »

znpy wrote: post #66

I honestly dislike how the author abuses terms like "lots" and "a handful". For example: « That means you can use a single payment channel to make lots of payments to many different people—all while generating just a handful of transactions on the underlying blockchain.» I am no bitcoin expert, but AFAIK the bitcoin network can currently process in the order of tens of transactions per second, and that is a low numbe…

No, the processing capacity is about 7 transactions per second. See https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

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

#94

Post by r3demon »

Klathmon wrote: post #78
philipwhiuk wrote: post #65

Earlier quoted context omitted.

Are those services called banks?

You could call them that if you want, but they are significantly different than traditional banks. These services won't actually hold your money, just a transaction that sends all the money to you if someone tries to cheat. It's more of an escrow service than a bank, but the escrow service again doesn't actually hold anything valuable.

Not exactly banks, but there's a huge chance they will be big corps with a money transmitter license, KYC, AML. What if they refuse your channel or transaction?

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

#96

Post by lalaland1125 »

Klathmon wrote: post #77
IncRnd wrote: post #74

Earlier quoted context omitted.

That's fine, but if #1 is true, Lightning is far from workable.

#1 isn't strictly true, you don't need to be "always online", only online at some point within the locktime (normally 3 days right now). You can also hand your "revocable delivery" transactions to a 3rd party (or multiple 3rd parties) who can monitor and broadcast them in the case of cheating, but can't actually spend any of your money themselves. So you could have a group of people watching the blockchain always onl…

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

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

#97

Post by lalaland1125 »

gruez wrote: post #61
throwaway2048 wrote: post #56

Earlier quoted context omitted.

if you have to trust third parties, whats the point?

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.

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

#98

Post by Klathmon »

lalaland1125 wrote: post #96
Klathmon wrote: post #77

Earlier quoted context omitted.

#1 isn't strictly true, you don't need to be "always online", only online at some point within the locktime (normally 3 days right now). You can also hand your "revocable delivery" transactions to a 3rd party (or multiple 3rd parties) who can monitor and broadcast them in the case of cheating, but can't actually spend any of your money themselves. So you could have a group of people watching the blockchain always onl…

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 proper node isn't online at any point during the locktime (or DoS your node to prevent you from seeing the bad transaction) to punish the thief and "steal" all the money back. I think we are doing a pretty good job!

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

#99

Post by Klathmon »

r3demon wrote: post #94
Klathmon wrote: post #78

Earlier quoted context omitted.

You could call them that if you want, but they are significantly different than traditional banks. These services won't actually hold your money, just a transaction that sends all the money to you if someone tries to cheat. It's more of an escrow service than a bank, but the escrow service again doesn't actually hold anything valuable.

Not exactly banks, but there's a huge chance they will be big corps with a money transmitter license, KYC, AML. What if they refuse your channel or transaction?

I think we are talking about different things. This thread is about services that will watch the blockchain for "cheaters" and will punish them on your behalf so you don't need to be always online.

You are talking about LN nodes, which work a bit differently than you seem to think it does.

For starters, anyone can "refuse" to open a channel with you, but they can't "refuse" to pass along a transaction (well they can, but because of the routing system used, you don't know where a transaction came from, or where it's going to, so they have no reason to refuse it). So if coinbase refuses to open a channel with me, I can still send money using coinbase as a middle "hop", and they would never know.

And KYC/AML laws aren't really applicable at this level in the stack. KYC laws apply regardless of what i'm buying/selling (in most cases). If I'm buying from best buy, they need to know who I am. That has nothing to do with how I'm paying, and the "middle hops" are like routers more than banks. Even if an internet router is sending a financial transaction, that doesn't mean they need to follow KYC laws. It's the same with LN, if your node is acting as a "hop" for a transaction, you don't know who or where the tx is coming from, or who or where it's going to, and it's counterparty risk free. It's more like an internet router than any kind of financial institution, so KYC laws don't apply.

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

#100

Post by JumpCrisscross »

amluto wrote: post #90

I think that the end game of Lightning is very bad. Imagine that Bitcoin remains relevant and continues to have huge market cap for several years and that Lightning takes off to the point that most transactions use Lightning and the cost of an actual on-chain transaction drops to a few tens of cents. The reward for mining a block will drop significantly (as originally planned in the Bitcoin design), and the transacti…

> the cost of an actual on-chain transaction drops to a few tens of cents

"In 2014, the volume-based transaction fees [for Fedwires] range from 2.8 cents to 69 cents per transfer" [1]. They charge an extra 15¢ if the quantity is over $10 million and another 36¢ if over $100 million. These transactions settle instantly and almost every bank gives consumers access to them (albeit with varying surcharges).

[1] https://www.federalreserve.gov/paymentsystems/fedfunds_corep...

Post reply on HN