What are some of the arguments on why lightning ⚡️ is not enough to scale bitcoin?
Discussion
Channel capacity.
Can we expand/ elaborate on this? Pretend like I’m a 7 year old… lol
Not enough bitcoin locked up in channels to support a big lighting transaction. Say a whole bitcoin (100m sats).
I think over time, this can be resolved.
When it becomes the norm for most people to run their own lightning node the same way now most people have Wi-Fi boxes in their house….??
Maybe. Or maybe a new opportunity for a bitcoin bank like company. They use their btc in lighting, Increase capacity, and charge fees for the transaction to clear. But then why not just do big transactions on chain?
Jon do you run your own bitcoin node?
No not yet. I’ve been wanting to for a long time just don’t have a laptop or computer yet at my house
Look at umbrel or start9 purpose built for nodes. You can open lighting channels too.
Thanx I will
Start9 is amazing I’ve just started running my own. I had challenges trying to download bitcoin core from source and i’m not techie enough to figure out a lot of command line stuff but Start9 has super simple UI so I don’t have to worry about fucking up my node by accident.
TBH, if I was sending a whole #bitcoin, I would rather do it on-chain. It's cheaper and I get a proof.
#asknostr
On-chain interaction for now. The thing is, we might use something in like liquid in the middle to fix that if/when needed.
Custodians.
Explain more on this?? Please lol
Custodial wallets introduce counterparty risk where users depend on a provider to maintain their funds in exchange for easy onboarding and payment reliability. These entities have to be trusted to not become bad actors and steal funds, or be subjected to “shotgun KYC” by a regulatory body.
But we have non custodial lightning wallets also rite? I feel like I’m missing something…
Yes, we do. But those require more of a learning curve and the user is responsible for funding their wallet (and paying channel open fees) to give themselves enough capacity to make payments. Most new users either won’t do this or can’t do this because they have become conditioned to wallets that do those things for you, and many don’t have the funds to open a 100K+ sat channel out of the box. They also can’t get an LNURL to receive payments this way.
Splicing does fix the first part if I'm not mistaken.
We do. The space is getting better and better. People will find the right balance at the end.
Not everyone needs a dedicated channel nor does everyone need to be on a centralized custodial wallet.
Counter party risk can be broken down, a simple example, a family level node, with all members of the family on one channel.
Since we now have splicing, one channel can be increased as needed.
But who knows, all of this is still emerging.
People always say, “Wait for BOLT12.”
Meanwhile…
Do you have a TLDR on bolt12? What it fixes exactly?
I googled this in the past, but im sure more experienced node runners will have a more in depth answer.
In order for a node to receive a transaction, it has to issue an invoice, so if you want to send anyone a transaction, you need to communicate with that node live to ask it to issue an invoice. That communication happens over a lightning url.
Bolt12 allows the lightning url to pack more data, so one can send a transaction to a node even if it is offline.
This is helpful because wallet nodes cant stay online, as soon as you close the app, the node is technically offline.
I meant to say phone nodes. Not wallet nodes, but i also like this typo lol
Yes, and there are other ways to do this.
nostr:npub1xnf02f60r9v0e5kty33a404dm79zr7z2eepyrk5gsq3m7pwvsz2sazlpr5 is experimenting with a way to hold non-custodial LNURL payments in a state until your mobile node comes back online to receive them.
#ZapLocker from nostr:npub1yxp7j36cfqws7yj0hkfu2mx25308u4zua6ud22zglxp98ayhh96s8c399s gives you a Lightning address where you can redeem payments both in LN and on-chain, but there are higher fees involved with that.
Does it mean the #sats are in someone elses custody until I connect? Can they steal the sats by not noticing that I'm back online?
Nope. Sats are never in our custody
U mean they just stay on the timechain? And get bounced around back and forth according to who holds what keys etc? Or am I wayy off?
Way off. We’ll write a blog post about it to explain
Post the link here please when you do #[7]
Sorry if I spilled the beans but I’m very excited about this one.
I’m so confused and feel like an idiot today JS
I am also an idiot, but an excited one.
People generally say that it would take 30 or 40 years for everyone to onboard to LN given mainchain throughput limitations for opening LN channels. However, I've seen bitcoiners turn that statement on its head and say "good, then that means we have 3 or 4 decades of transition, we can do it slowly rather than thinking that its has to happen all at once."
Also, to the extent that users are not immediately concerned with moving their sats back to the mainchain, it would seem to me that LN can begins to scale natively with whatever liquidity already exists in so much as a new LN channel doesn't have to open every time a new LN user wallet is created.
However the long term risk here is that custodial LN products become the vector for currency inflation / debasement on L2 if/as custodial LN services begins printing paper sats. In that case, anything even approaching a global run on LN wallets back to the mainchain would feel truly calamitous to users.
The solution is probably somehow making non-custodial LN solutions more ubiquitous but I am no expert here and this is an area I'm interested to learn.
nostr:npub1h8nk2346qezka5cpm8jjh3yl5j88pf4ly2ptu7s6uu55wcfqy0wq36rpev nostr:npub1zgxfjvfyt9j59rnpxfay666njxa7wl4aye8d25jj2wmj9zp0m68q2gx9uk
Spinning up a node is never going to be simple enough for the average person, and even if it were, the on-chain capacity will prohibit it. Innovations will continue to address this (channel factories, etc) but the limitation can’t be removed.
Ecash, however, removes all such limitations. I suspect this is the layer 3 the world will adopt.
All three layers will be open to those who can afford them, and a free market for competitive access to higher layers through providers (blockspace, liquidity) has already begun to develop naturally
Isn't ecash fully custodial?
No, it has an issuer, but that issuer can’t see who has what balances and can’t move their balances. They could theoretically cancel redemption of a specific bundle of cash but they’d have no way of knowing who they were confiscating from.
The issuer could over-issue ecash claims on underlying bitcoin but the implementations being built all enable instant redemption out via the lightning network
In other words fractional reserve could happen but the remedy would be lightning fast bank runs
And it will still be a massive privacy improvement over the current banking system… imagine individual banks issuing their own digital bank notes for example
It’s all trade-offs, and it’s important to compare it to the existing system as much as we compare it to a perfect ideal
Thanks