Lightning doesn't work because it either leads to a chaos of routing that doesn't scale or it ends up centralized and you lose the point of bitcoin in the first step.
And don't bother coming up with hand wavy explanations of how it could work, some day. People have been talking about Lightning for years, literally billions of dollars have been poured into the "tech", the fact that even bitcoin enthusiasts barely ever use it is all the proof I need.
I wonder how many more years of empty promises we'll have to suffer through before people accept that cryptocurrencies are a very good pyramid scheme with a thick layer of technobabble around it.
Daily reminder that cryptocurrencies are not == bitcoin
All the problems with bitcoin are long long solved just not with bitcoin because its not possible to fix something when the majority (of hashpower) thinks its not broken or rather profit form its brokenness.
> Daily reminder that cryptocurrencies are not == bitcoin
This is an interesting feature of cryptocurrencies. Someone levels a fair criticism of a particular implementation but it can be handwaved away because an entirely separate cryptocurrency solved this particular problem (nevermind that whatever replacement you’ve chosen has its own host of separate problems because those can be handwaved away the same way).
I did not hand wave anything away, maybe read the thread.
There was a wrong generalization (cryptocurrencies == bitcoin) about cryptocurrencies that is very common but not accurate at all. Fair criticism on the Ford Model T does not apply to cars.
faceplam FBA is a technology its not a thing or a running system. It can not be centralized its just bunch of math that BTW is mathematically proven to work. There are many FBA based "blockchains" out there some centralized some not. Ripple is a company that uses such a FBA system.
Would you include environmental impact as a solved problem? My understanding is that Proof of Stake is the best serious option and that it's very controversial if it'll work.
Grinding attacks aren't a problem if you include secure verifiable randomness in the protocol. E.g., Algorand's VRF-based sortition, or Ethereum 2.0's verifiable delay function.
Solves as in it does not use more energy than what the hardware needs to process the data + it doubles every time you double the number of nodes (obviously since they all have to do the same work too)
Its not wasting energy for a PoW lottery it just uses energy like a comparable instant messenger with global server farm would. The more people who use it the more energy it will use there is no way around that.
FBA is completely different form PoS. It does not work on incentives and penalties it works with a global final state, global rules and (federated) byzantine agreement (FBA) for progress (adding the next "block").
No way to re-org, no block/staking reward, no censorship. If someone doesn't act in everyone's interest other nodes simply wont listen to them anymore. Not following the rules its publicly visible for anyone.
And since there is no reward anyway there is no financial reason why anyone would participate who does not simply want to help the system.
Well, the "pyramid scheme" + "technobabble" is not totally worthless, if it enables the investment of "literally billions of dollars" in otherwise totally unproven technology paths, doesn't it? Finally there is one area where people are really investing money into computer science! A cause to celebrate in my book.
Except this bubble is a bit more insidious because you have actors like Tether that are most likely creating a lot of artificial liquidity/demand. If there is a sudden loss of faith and enough actors start rushing for the exits, it will look something more like a musical game of chairs of who is left holding the bag of worthless Mickey Mouse dollars, by my estimation.
Absolutely, that is my biggest worry. And it has no true backing, apart from these pump and dumps.
The single question people in favor of crypto can’t answer is the value creation. Now crypto is a natural evolution of certain monetary services and techniques, but at the core it literally does nothing of value. In fact, one might argue that that is its prime feature in its current state.
Who cares, the size could be 10 times smaller and it would not make a dent in the scalability problem.
Its a few transaction per second at max and it would need to be be several hundred just so people could move their "owned" bitcoins away from exchange wallets without loosing several % in fees.
LN is not part of bitcoin and a total joke anyway.
Oh good, BTC can finally support Schnorr signatures, a feature that been available on BCH for years now. A feature that is useless until wallet developers add Schnorr signing functionality.
Taproot is the update we get after ten years of the BTC devs doing nothing except gaslighting users about the protocol's scalability? All that momentum wasted.
Segwit was also supposed to scale Bitcoin, and it turns out it was a massively inefficient solution, which took years to even reach it's lackluster potential.
Taproot will in practice have an even smaller impact, as it only affects special transactions that normal people won't use.
So yeah, it's not zero progress, but it's certainly not much.
Segwit itself provided an effective 2x increase in onchain transaction capacity and it fixed transaction malleability which was necessary for lightning network. Lightning network has 50,000+ open channels where payments can be routed without going onchain. Given the lightning network’s strict requirements to keep a node online & responsive, less you lose all your funds, I think that’s extremely impressive and shows a real demand for fast cheap payments.
Now, in November taproot/schnor activates which gives us ptlc’s on the lightning network as well as makes a lightning channel opening transaction look like a normal single signature transaction, yay privacy. All of this lays the groundwork for the next major base layer change, in probably ~2023, anyprevout. This will give us “eltoo” on lightning which is nirvana. Eltoo removes the penalty mechanism which makes running a lightning node on a mobile phone or home node much more reasonable.
Protocols take a long time to develop, especially ones where a miss-step could mean the loss of billions of dollars.
Do not believe anyone telling you that their coin solved bitcoin’s scaling problems years ago.
Bitcoins scaling problem was solved by removing PoW/PoS and by removing the incentive structure (block rewards).
As soon as this is gone there was no reason anymore why it would not scale like similar systems. Its basically limited only by how fast data can propagate trough the network.
PoW/PoS was replaced by FBA (Federated Byzantine Agreement)
Its not a coin its technology used by several systems and based on BFT (which is way older than bitcoin and bitcoin actually is based on BFT as well although maybe unintentional).
FBA just adds the federated part so a decentral system can be build. While bitcoin instead used a work-reward lottery system (PoW) to decide who can write the next block rather than finding a block everyone agrees on.
Its really not that hard to figure out which of these solutions probably works better and scales somewhat like a distributes system is expected to scale.
So in about 5 years pretend everyone in the United States melts a wrench like that... Then a month later they do that twice, a month later they do it three times.
Why does every discussion about Bitcoin's environmental impact reduce to "it uses a lot of electricity therefore it should be stopped".
We're not going to shut down entire sectors of the economy because of their environmental impact. People are going to innovate and invest in alternative sources of energy because it is becoming profitable to do so. The solution is hardly ever "just stop doing it", it's "how can we do this better".
Crypto is hardly a "sector of the economy". It's main utility right now is lining the pockets of a few speculators.
Traditional centralized ledgering systems do everything crypto does better and with a fraction of the energy use. It also gives governments tools to combat inflation/deflation and manage counterparty risks within the system.
Crypto is a neat idea, but in the end it doesn't really solve anything, and instead only introduces a lot of unnecessary problems.
It pains me to see how someone could see no value in having a medium of exchange outside of any government currency control. One of my ex-coworkers had his family's fortune wiped out twice in Argentina due to government seizure and hyperinflation before they fled to Canada.
There are few sectors of the economy whose entire model depends fundamentally on huge energy consumption: Bitcoin's Proof of Work depends entirely on wasting huge amounts of electricity as assurance that transactions are verified. If mining became more power efficient, the algorithm would be changed to bring it back to where it is today.
It has been "done better" in 2013 or so when the first FBA system where created as an direct answer to bitcoins expected future environmental impact and scalability problems.
It launched, is usable in most wallets, and is starting to get adoption. It's going to be a key piece of the recently passed legislation in El Salvador which makes Bitcoin legal tender.
Using a closed, centralized implementation that doesn't accept third party nodes. The use of bitcoin is pure marketing, it's just MySQL with extra steps.
The ceo of strike said they are continually promoting that banks and businesses in the El Salvador operate their own lightning network nodes & not to solely rely on them. Only the government’s official (but optional) app will be a wrapper around strike.
This is interesting. Obviously, I heard about the whole "El Salvador something something Bitcoin" deal, but am completely unaware of the actual situation. Can somebody point me in the direction of some nice writeup explaining these details? I can only vaguely imagine how one can take Bitcoin and make it essentially an extension of SWIFT, and struggle to clearly visualize what the implications of this are.
Let’s walk through a user story. I want to send $1,000 to a friend of mine in El Salvador:
* When I initiate the $1,000 payment, Strike debits my existing USD balance.
* Strike then automatically converts my $1,000 to bitcoins ready for use in its infrastructure using its real-time automated risk management and trading infrastructure.
* Strike then moves the bitcoins across the Gulf of Mexico where it arrives in our Central American infrastructure in less than a second and for no cost.
* Strike then takes the bitcoins and automatically converts them back into USDT (synthetic digital dollar known as Tether) using its real-time automated risk management and trading infrastructure.
* Strike then credits the existing user with the USDT to their Strike account.
It seemed like an answer at first, but actually this answers absolutely nothing and I'm not even sure how it's related to the topic being discussed:
* This guy starts talking about sending USD, but ends up talking about receiving USDT. USD != USDT. And while there are problems with sending USD across the border, there're absolutely no problem with sending USDT. And there's absolutely no problem buying USDT wherever you are. (But, what's important, there might be problems actually converting your USDT into USD.)
* Since we end up buying USDT with USD, the word "Bitcoin" in the middle of the story seems redundant and actually confusing.
* There's nothing about Lightning here. I mean, you can talk about how you use Lightning to transfer BTC inside Strike as much as you want, but if BTC is irrelevant to the user story, so is Lightning.
* I'm not sure how Strike and this user story are relevant at all. It started out about El Salvador accepting BTC as a legal tender, and how using it in actual transactions w/o lightning is problematic due to low TPS. How sending USD to El Salvador is relevant here at all?
Is Tether now backed by a reasonable amount of real dollars? I'm surprised to see it being used in such a serious application after years of hearing how it was a scam.
edit: looked it up, still looks like a total scam. I hope El Salvador is able to get through this without getting screwed and I guess I'll assume Strike (first time I've heard of it) is just as shady until I hear otherwise:
There is no bitcoin needed for this at all its does not even move on the chain for the transfer.
Both sides are Strike entities all this does is use bitcoin as a bridge for USD to USD which is completely pointless as both sides are USD.
You could just buy USDT (or another stabelcoin) and send it there.
Its a different story if there is actually a switch in currency needed.
There is this famous and from bitcoin people often hated company called Ripple that specializes on cross-border settlement using crypto as a bridge currency.
For that however the crypto must be actually moved and be sold locally for the local currency. And for that to work without risk due to volatility it must be fast. Hence they use XRP (4 sec) instead of bitcoin (10+ min). They call it ODL (On-Demand Liquidity).
Please somebody explain why it's downvoted. Ignoring digression about XRP, this is exactly what I read from the parent comment. Judging by the user-story above, all this talk about how BTC is being "sent" (which, as we all know, is a small lie on it's own, since unlike fiat, BTC is never really being sent anywhere) seems just to distract us from the fact that we just end up buying USDT for USD. No BTC involvement required.
Most of HN down votes anything about bitcoin and a few HN bitcoin fans down vote anything "negative" about bitcoin and certainly everything involving XRP. So to no surprise this is being down voted.
>No BTC involvement required.
Totally correct. Remittance over a bridge currency only make sense under very specific conditions, which include that the input currency and the output currency are different. And a direct exchange is not possible or not cheap.
The traditional banking system does this as well, they usually use USD as bridge. To pair every currency with every currency simply isn't feasible and the low volume pairs would have no liquidity anyway. Its basically the same as with goods if you have wood but want metal you use a currency as bridge because there is no market to sell wood for metal. Now if you also have a location difference between the market where you want to sell and the mark where you want to buy then you actually can use the bridge currency to move from one market (location) to another market (location).
The legislation that made Bitcoin legal tender in El Salvador does not legislate the use of Strike. Businesses can use whatever system they want, as long as they can accept payment in Bitcoin. Strike is providing a service that allows any business to take Bitcoin lightning payments and have them automatically converted to dollars, for businesses that do not want to hold Bitcoin. It's not fair to just call this a "sql database" because it's connected to an open payment network and the customer can use whatever means they want to pay the business, even if the business decides to just uses Strike.
I am puzzled by one thorn it is intended to solve.
In the case of merchant/customer interactions, the LN channel blocks customer funds from their balance, but they will never receive money from the merchant. So that balance will be sent to the merchant, payment by payment.
Not only does that block funds for the customer (which wants to reduce those, to avoid blocking too much, but that reduces the number of payments that can be made off-chain), but it also blocks the merchant’s reception of those payments: the merchant wants to be able to spend it soon, but it can only spend it on-chain.
That is compounded by the fact that most merchant/customer interactions are rare one-offs in the real world. I just don’t buy stamps every day.
LN channels are only most useful when the two parties exchange money bidirectionally on average.
It’s an ongoing problem for sure, but the simple answer is users maintaining multiple well connected channels.
It’s very common on lightning to pay liquidity providers to balance your channels to you. Lightning Labs has a service called loop where you can pay them an onchain transaction and it will make a lightning network payment to your channel for that amount, thus giving you more spend liquidity. Loop is sweet cause it does this in a non custodial way, look into it.
Afaik it is still considered #reckless to put bigger amounts on your lightning node and at least the "lnd" implementation seems to be in "beta" (according to their Github releases). Idk about the roadmap for a solid, production ready version is. But in this case safe seems to be better than sorry
Lightning network more or less failed to live up to the hype. Problems like routing complexity, liquidity, and a lack of on-chain space to open and close channels have delayed/limited its impact.
To expand on this, to receive money over Lightning, you need someone else to lock up their bitcoins for you. This is called inbound liquidity, and the problem of users getting inbound liquidity is no joke. Lightning Labs recently launched Lightning Pool to help with this, but fees range from 5% to 25%. Uncompetitive. If you think about it too, it makes sense, because anyone locking up their bitcoins for others should expect a several % return, or else they would loan it out at similar rates. Current Lightning wallets are basically giving their users inbound liquidity for free using VC funds, but is this honestly sustainable? There are other problems with Lightning, like the requirement to be online to receive payments, watchtowers, UX complexity of channels. Some of these are solvable through centralization. But that is why you'll hear people say Lightning recreate the banking model, because realistically that looks like the only way it could work. Oddly, this was all pointed out by many people over the years, but Lightning seems to get endless forgiveness in its inability to deliver, because it is BTC's only hope to maintain the peer-to-peer cash narrative.
The looking up of liquidity is the whole reason LN can not scale or be cheap ever.
Today people in crypto may be willing to look up bitcoins they hold long term anyway. But in the real world this would be dead and trapped capital it doesn't work for you and you cant even use it to quickly buy something an take advantage of a market situation.
The only reason why someone would look up capital like that if is it makes money. So people who use someone else locked up bitcoins have to pay. This makes LN impossible to be cheap. You literally lend money to send money to someone. Its complete absurd. And as you said to make this more efficient large centralized pools are created so there will be a monopoly or oligopoly for lending, hows that gonna be good for the fees.
No one questions that the people who are bullish on BTC are in on it (some).
The question is why would I pay you to lend me BTC when I actually want to send my BTC to someone.
It literally adds a third party in what should be a p2p transaction. They replaced the "evil third parties" called banks with their own liquidity pool.
Funny how they figured out that you cant make money with money services if you remove the third party, so they added it back in.
On top of that there are countless other blockchains/DLT that have cheap transactions on the first layer. Cheap as in fractions of a cent. To compete with that you would need to lock your BTC for free but then you still have the on chain transaction that LN needs sometimes that cost way too much.
In order to get money on and off lightning network, you still need to make on-chain BTC transactions. Meanwhile, the BTC devs have intentionally changed the network so that it's expensive to make on-chain transactions. From this you can probably figure out why lightning network failed.
Check out Stacks (https://stacks.co), enables smart contracts on top of Bitcoin through Proof-of-Transfer consensus. Founded by YC alums and launched this January after many years of R&D.
There was never any need to scale it at the protocol level. The overwhelming majority of Bitcoin transfers presently happen off-chain, within exchanges. Very few people seem to understand this.
The exchange itself holds a fluctuating amount of Bitcoin and then updates entries in its own database when transfers occur between exchange participants to reflect a change in ownership. These constitute the vast majority of transactions that occur and none of them are recorded to the blockchain.
It should be p2p cash then turn into store of value after some years and then it becomes the settlement layer for centralized second layer solutions that only exist because the first layer sucks.
Just kidding, it should only be p2p cash and it failed at that.
PoW/PoS will be replace by FBA in the next years and every system that can not switch away from PoW will become irrelevant.
> taproot, which recently locked in, reduces the space needed to represent complex contracts.
Complex contracts? Are you joking? What kind of complex contracts do you think can be done on BTC? Their scripting language and capabilities has been neutered just like their blocksize. Good luck writing a useful contract on BTC.
From what I understand, that's 50,000 pre-generated transactions pumped directly to the mining node. Not 50,000 transactions spread across hundreds of non-mining nodes and relayed to the mining node. There's a huge difference. Correct me if I'm wrong here.
Either way, bitcoin the protocol can handle waaaaaay more transactions than the BTC devs have constrained it to.
Yes, more-or-less, but that how it is designed to work. The most reliable way to get a transaction into a block is to send it directly to a miner or set of miners. Apps on BSV do this today via MAPI REST endpoints, similar to how this test was configured. Non-mining nodes will see the transactions later, but they won't do the same verification that mining nodes require because they are not part of consensus. BSV generally sees the eventual network configuration as a small-world network for the mining core, and a mandala network for the apps and services surrounding it, rather than as a mesh network which most blockchain systems strive to be.
So-called heretics have been scaling Bitcoin in spite of BTC's braindead decisions. Last week, 50K TPS were demonstrated publicly on Bitcoin SV: https://www.youtube.com/watch?v=i3As9-9uSXs. More privately.
Years ago, there was a presentation [1] by Peter Rizun of Bitcoin Unlimited at Stanford that demonstrated ~100TPS on Bitcoin, and the potential for 1000+ TPS if certain bottlenecks were removed. People said the same thing you're saying back then, but it served to motivate the big block community, and now today BSV routinely does 300+ MB blocks (1000+ tps). This Teranode software is the future of BSV and will become the common node configuration within a few years, so it's worth taking seriously. Also, I left a comment in this thread explaining why this test is more representative than you may think [2].
That's not the issue. Block size has to be limited to protect decentralization. Decentralization is the only thing that has value in blockchains, otherwise you're better off using centralized databases.
I'm aware of that argument. The counter-argument goes that at scale, larger blocks would bring in more businesses, more miners, and more competition, and that competition is what actually protects the chain from bad actors who might try to change the rules or censor transactions, not decentralization, and that decentralization is mostly a meme to pacify the masses from realizing who actually has power over the network.
Well, that's a good argument but it's wrong. Larger blocks makes it harder to compete, because it's harder to run a full node. If everyone has to trust the datacenters that run full nodes, then it's game over for everyone else.
The protocol is protected by allowing everyone to run their own full node, to give every user and every entity the power to choose which version of the protocol they want to run. When the network is run by its users, the network evolves in a direction that is best for the users. When the network is run by a few large businesses, the network evolves in a direction that is best for them.
The Bitcoin Core's layered approach is a much better solution than big blocks. The first layer protects the protocol itself, and "big blocks" are implemented on layers on top of that without compromising the core protocol.
There has been great progress in scaling the original protocol through the Bitcoin SV implementation:
- Transaction fees are ~$0.0001
- The network has shown capacity for 50k tps
- On March 14, 2021, the network processed a world record 638 MB block
- As of June 4, 2021 the chain size exceeded that of the BTC implementation and is currently 418.17 GB
- New business based on micropayments have emerged like twetch, streamanity, peergame, etc
For anyone interested in the saga, Stefan Matthews, who worked with Craig Wright in 2007 and 2008 before Bitcoin was released, gave a couple interviews this past week adding new flavor to the story [1] [2].
Above is proof that the original bitcoin protocol can scale, and recently testnet can do 90k tps. What you think of certain people doesn't change the fact.
Its centralized and run by the people around this fraud. It doesn't matter if the tech is good since no one will use it for anything beside speculation or abuse it as storage which just wont be sustainable in the long run with no limits in place.
The protocol remains the original and it scales significantly. I'd focus on protocol not people. If people changed the protocol then it's no longer bitcoin.
Twetch.app has more than 50k users. It's also a genuine use case. So is etched.page or the other above-mentioned services.
How can you abuse storage if there is a 0.5 satoshis/byte fee to write data on chain currently? Miners are for-profit entities and will always charge for storage.
A scalable bitcoin ends up in a dozen data centers. The cost to set up such data centers is few hundred millions plus tens of millions in yearly operations. Miners must secure their infrastructure uptime to remain profitable. There is huge risk and little reward for any such mining company to act dishonestly on new blocks or break antitrust laws. Also it is easier for governments to audit a few large publicly traded miners than auditing thousands of small and inefficient miners. The nature of the bitcoin protocol security is economic.
There has been great progress in scaling on just about every other cryptocurrency, including many flavours of bitcoin. BTC is the only coin who finds scaling too difficult.
There is exactly zero progress to make it scale in the last 10+ years.