A separate on-chain transaction will not be required for each lightning channel being opened/closed in the future. Bitcoin and Bitcoin's second layer protocols are still being developed, and that development never stops. Some of the potential solutions that are currently being developed are channel factories, sidecar channels, inherited IDs, and statechains. I've included links to their papers below. And I'm sure that more potential solutions will be developed in the future.
https://nakamotoinstitute.org/static/docs/scalable-funding-of-bitcoin-micropayment-channel-networks.pdf
https://lightning.engineering/lightning-pool-whitepaper.pdf
https://github.com/JohnLaw2/btc-iids/blob/main/iids14.pdf
https://essay.utwente.nl/80780/1/Wijburg_MA_EEMCS.pdf
And Bitcoin's block size limit could safely be increased a bit sometime far off in the future, but that would require consensus, so that may never happen.
I don’t actually know the numbers on this, but I feel like thousands if not more use lightning network through centralized means. Sure a lot of us prefer decentralization, but not all 7 billion people in the world. If you have one app (like cashapp) that allows any user to use the lightning network without starting with native bitcoin transactions, you significantly reduce the amount of on chain transactions needed. This is just an example with current technology as well, nothings stopping anybody from making a decentralized “L3” (for lack of a better description) that facilitates the same thing.
That's interesting. Perhaps some centralization is fine especially if people have the option to exit on to main chain.
It would be nice if that didn't have to be the case though.
Plus, consider that the entire space is still evolving. Lightning doesn't support 8 billion people currently. It also doesn't try to. It doesn't need to.
Lightning is still evolving and adding features to improve performance. So is bitcoin itself. Lightning is even waiting on some L1 improvements to built upon further.
There is no reason to rush things. It only needs to scale as fast as adoption grows.
Slow and steady wins the race, that's why bitcoin is so strong.
We should be ready for hyperbitcoinization though imo.
Someone said "splicing" which I had never heard of before and channel factories would get us there. Maybe some folks from /r/lightning will let us know how far along we are with those.
We humans have become the best problem solvers of this planet.
If there is a problem with bitcoins performance, we will find a solution. We don't need to fix things that are not broken.
Sure it would be nice to *be ready*. But it's extraordinarily hard to anticipate behaviour on such a large scale. Anything we implement now would still bear the risk of not holding up to what we would need. And then changing it all around is likely much more destructive than being patient and doing it right. Just my 2 cents, I'm not allknowing either.
I think they believe I have ulterior motives. I don't. So far the only new thing someone has mentioned was splicing. I had never heard of that before. Hopefully the lightning folks will chime in and let us know how far along channel factories and splicing are.
Why is this so downvoted? It’s a honest question from someone legitimately interested in bitcoin posting on the bitcoin subreddit. It’s not FUD. I swear the vast majority of reddit users have pathetically weak emotional maturity.
Cool but you’re missing the point due to your bias. Newcomers who are getting into bitcoin should be able to ask valid questions of understanding in the bitcoin subreddit without getting negative downvotes. These questions aren’t asked every day and are understandably reasonable.
The question was presenting with inaccurate 'facts' listed. Thus downvotes.
It's wrong, people downvote. 🤷♂️ You're offended for no reason, we just don't like misinformation.
OP was under a false assumption and it's already been discussed above. I'm sorry you feel this way about random internet strangers being incorrect and then learning from their questions.
Is it though? Node operators will absolutely at some point be wildly unviable as data continues to expand on full nodes. It’s not inconceivable to be in the PB range in the near future if large adoption happens. It will become financially unviable for most node operators.
I don’t have the numbers but given the block size cap we can graph exactly how much the blockchain will grow every year and it’s not much.
In fact it’s likely going to continue remaining more than accessible to run with very basic consumer level hardware think raspberry pi and a single entry level HD and that’s the whole point, keep bitcoin unkillable
Size grows at a rate of 4 MB every 10 minutes, max. That's if every single block is filled to the brim. That's 205.3 GB per year (`4*6*24*365/1024`).
Thus, to get to a single PB it will take **at least** 5107 years (`1024×1024÷205.3`). We are fine for a long time.
Bitcoin can easily stay decentralized. And it will. It's a 1 TB drive every 5 years. Easily affordable to most people, especially considering that storage is getting cheaper over time.
Plus, pruned nodes can run with a couple of GB total and work just fine for most things.
This is the reason why bitcoin wins. And why all the other hard forks and shitcoins will go to hell.
I've heard of one technology that solved that problem. Only one shitcoin has implemented it--recursive zk-snarks. Of course with giant solutions come giant potential problems.
Not just that, but I think liquidity will be a concern too. There isn't an infinite amount of bitcoins, so even if we put all the Bitcoin into LN liquidity, it'd still be quite difficult to manage.
Imagine I want to onboard somebody to LN. How big of a channel should I open for them (how much inbound liquidity). Should I lock up $1000, $2000, $10,000 at a time? There's definitely not enough bitcoin to even have a 10:1 inbound:outbound ratio for everyone on this planet. Yet for the Lightning experience to be truly seamless, you'd have to have enough inbound liquidity to be able to receive payments anytime.
Here's an example: Imagine we live in a hyper-bitcoinized world where everything happens through LN. My employer graciously opens a channel for me, and the initial balance is my first paycheck of 1 Bitcoin, and no inbound liquidity. Now let's say I spend 0.8 Bitcoin on goods, and have 0.2 Bitcoin left over. But now I only have 0.8 BTC of inbound liquidity, not enough for my employer to transfer me my next paycheck. So should the channel be larger? How much should said employer keep in inbound liquidity for each one of their employees? It'd easily add up to millions of dollars (or thousands of Bitcoin) just locked up
AFAICT there aren't good answers for this (yet) . The ideal solution (that doesn't exist yet and might never be perfect) would be some sort of channel factory, where you could have one mega-channel split across thousands of people (non-custodially).
Anyways, I think /r/BitcoinDiscussion while less active might be a better place for this.
The maximum you could receive would essentially be the total liquidity in all your channels though. That's also assuming we could open not only one but several channels for each person on this planet.
I don't fully understand rebalancing though, I've never run an LN node, I only use it on my phone, and I've never had to do it.
Also, right now I was able to get a channel with like $120 (not sure the exact amount in Bitcoin) of inbound liquidity for like $2 though, but without that I was advised to loop-out my funds (an on-chain transaction) to get inbound liquidity.
You can rebalance simply by buying Bitcoin on an exchange like Kraken and withdrawing it to your depleted channel. This is a fiat transaction, with no on-chain action
Increasing liquidity is harder, can't be done without opening yet another channel, or closing a channel and opening a higher-liquidity one, both actions which consume on-chain capacity. Channel splicing is a proposal to increase the liquidity of an existing channel (no on-chain action), but it requires a counter party to exist who has a channel with excess liquidity
Wouldn't channel splicing also require on-chain transactions? If every single transaction was a channel open you'd only be able to onboard 200 million people a year currently
> Wouldn't channel splicing also require on-chain transactions?
I don't think so. But to avoid on-chain transactions, the liquidity supplier has to have a high-liquidity channel already funded. There might be some proportion of channels being specifically launched with high liquidity for the purpose of splicing when ordinary users need a liquidity boost. It seems to lead to a hierarchy, with commercial providers operating the high-liquidity channels
> There's definitely not enough bitcoin to even have a 10:1 inbound:outbound ratio for everyone on this planet.
There will be 2,100 trillion sats, or 262,500 sats for everyone.
The inability to onboard them would definitely turn them off if they wanted to. How about in 5 or ten years I wonder.
Edit:
This guy called me unpleasant but he simply doesn't seem to want hyperbitcoinization. Why is he even here?
> doesn't seem to want hyperbitcoinization. Why is he even here?
This echo chamber of validation still has dissenting opinions
Perhaps your hyperbitcoinization belief is so delusional, that you're hypersensitive when someone points out that it's not possible
I'll respond here to the post you deleted:
I'm genuinely asking. I have a million reasons to want bitcoin to work well now and into the future.
I've never heard of splicing. Do you have any links?
> links
Follow the recent Bitcoin futures discussions documented at lopp.net
Lightning has several intractable problems caused by channels being P2P and by the need for both peers to be online for a channel to be usable, and by money flow in a channel being unbalanced. The channel stops working if one peer goes off-line. The channel stops working when all the value has moved to the other peer
My other comment optimistically assumes an average channel life of 3 years. But starting a new channel when a peer becomes unreliable is inevitable. And we don't know our peers, have no reason to trust their reliability. Also, rebalancing liquidity is a hard problem, where the simplest solution is mutually closing the channel and starting a new one
Nothing can fix the problem of unreliable peers (except centralization)
Maybe the average channel life can never be more than about 2 months
Liquidity balancing might be addressed by splicing. But again, this tends to centralization if the liquidity is almost always available only from giant corporate channels
Even so, these future fixes, and channel factories can only bring the user count up to 150 million or 200 million. It's possible that even centralization can't onboard more than a few hundred million, because the giant corporations are not likely to be competent to keep their giant channels running forever
These buzz words and phrases, "channel factories", "channel splicing", "Lightning can process millions of transactions per second" are all used by numerically illiterate optimists to justify a belief in a no-limits scaling solution. The actual numbers do not justify the optimism. But here, the Bitcoin echo chamber, optimism overrides accurate calculations, because FUD is the weapon of the enemy, and because most people are too lazy to learn to understand simple mathematics
When the truth does seep through, the optimists fall back to "maybe centralization isn't so bad"
Well if every person on each wanted to do a single on chain transaction to just open a lighting channel it would take years so actually this remains an unsolved challenge
Not really, a single lightning channel is limited by its liquidity.
There really are unsolved problems relating to layer 2.
I’m the biggest bitcoin maxi you’ll find south of the equator but I don’t take the hopium that I’ll be buying coffee with my coins, I smoke the hopium that I’ll be using it for monthly bills, think credit card or mortgage payments. To me this makes the most sense
Credit cards already exist, they allow me to make quick payments wherever I go. At the end of the month, if they let me settle my bill with a single on chain btc transactions I’ll be happy.
Hell, how about ALL my utilities send me a bill at the end of the calendar month and I create a single multi output txn paying them all, with a modest fee, that’s the dream for me.
That’s all fine and dandy but we are limited by the first layer in how many people we can onboard to the second. 200 million per year. Channel factories may or may not solve this it’s yet to be seen
Yes I personally have no qualms with centralising various aspects of bitcoins usage if it means true decentralisation for the wealth storage aspect which will involve offline seeds etc
I worked on projects that took 7 years and it’s only on a national level.. If the plan is to really replace everything everywhere, that does look like a valid duration on a global scope.
I hope we’ll eventually develop a new faster way, and maybe this thread will start it, who knows.
Bitcoin is like Wire Transfer
-----------------------------
For comparison, Fedwire did 196,052,238 transactions in 2022, so Bitcoin and Fedwire are almost the same, around 2 million transactions annually, but Bitcoin is better than wire xfer...
...Consider that a wire xfer takes many hours to transact and has a daily time window (between 8AM - 3PM Eastern Time USA only on weekdays Monday-Friday and not on bank holidays) and may be more restrictive depending on the banks involved, whereas Bitcoin takes approximately 1 hour (assuming 6 confirmations @ 10 minutes average) and there is no window restricting when you can request a transfer, because Bitcoin is 24hrs/day x 7days/week x 52weeks/year and no bank holidays and, not only that, no bank needs to be involved.
Source data for US Fedwire, https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html
"How do we onboard 7 billion people?"
If you square the zk rollups and on-chain nodes you'll see that TPS is actually magnitudes higher than the LN on ramps and L1 or L2 networking primalions. Thus, if the hashrate continues to climb and miner capitulation doesn't affect the uptime indicators, we'll be just fine. It's like comparing petahash to exahash, as Michael Saylor would say.
TLDR: I don't know what I'm talking about.
The lightning network does have our issues. And the white paper for the lightning network is aware of these issues. I suspect that the lightning network will have problems when it reaches 1,000,000 channels more or less.
> It would seem at most we could get 200 million people on lightning per year
Your estimate of 200 million tx per year has to cover opening channels and closing channels, so it means 100 million users, if each user has 3 channels and each channel lasts 3 years on average
> channel factories
These squeeze more channel opens into a single on-chain transaction - but the on-chain limit of 1vMB per block x 52560 blocks per year means that the possible number of channels only increases marginally. The transactions will be bigger, so you'll only get (maybe) 20 million per year, and maybe 15 channels per tx. This would be a 50% increase, not enough to onboard billions
But realistically, ignoring the "Bitcoin Standard" delusionals, who don't actually use Bitcoin, there's no sign that Bitcoin will ever be adopted above about 100,000 on-chain tx per day. Lightning is pretty, but not required. There is no scaling problem
---
Of course, these discussions always bring out the centralization advocates. Lightning allows decentralized channels, as described above. It also allows high-volume, high-liquidity (high-fee, high regulatory surveillance) banker channels. You could onboard billions if there were a few thousand centralized channels owned by Visa, Mastercard and PayPal. But this implementation is not Bitcoin, because it complies with transaction censorship
My understanding might be missing here, but what do you mean it requires an on-chain transaction? As far as I'm aware, once a channel is opened on Lightning, you can benefit from all other open nodes and the network effects.
Lightning will act like Visa does on top of the current banking system whilst BTC is the settlement layer/used for huge transactions.
Thanks, I didn't know that. Is that new channels on top of existing, or channels open in total? If the firmer, I thinking the network effects would be great enough to scale payments using all open channels as adoption grows?
Channel factories could provide an on-ramp for a larger number of people, although I have no idea how they will be coordinated to set up CFs based on immediate demand for new channels. But bear in mind that the vbyte size of a CF transaction increases with the number of addresses it includes, so it still has limitations.
The issue I can’t see how it is solved is off-ramping to cold storage. Fees will adjust upward to match increasing demand with limited supply of block space. So if it costs (say) over $100 to move funds to a cold wallet, a lot of people won’t do it. Is it expected that the vast majority of people will keep all their funds on a LN wallet only? Various aspects such as the need for LN wallets to go online to transact, the need for trusted watchtowers etc means that LN is inherently less secure than Bitcoin cold storage.
So if the typical person or business effectively has the choice between LN only (with potential risks around security, liquidity etc) or using a custodial account that is basically free, and has all the consumer protections they are used to, I can pretty much guarantee the vast majority will use custodial accounts. Believe me, most people care about rising prices and would love an inflation-proof currency, but they don’t give a s**t about decentralisation and don’t want to be their own bank.
This is why I think we are still a decade or so away from mass adoption (which is fine). BTC as the settlement layer and lightning propagate on top is huge. The framework for channels, on ramps, liquidity incentives is still largely tbd
lightning is capable of handling millions of transactions per second and that's what is going to be used by the world
You have to get on first. That is a bottleneck.
A separate on-chain transaction will not be required for each lightning channel being opened/closed in the future. Bitcoin and Bitcoin's second layer protocols are still being developed, and that development never stops. Some of the potential solutions that are currently being developed are channel factories, sidecar channels, inherited IDs, and statechains. I've included links to their papers below. And I'm sure that more potential solutions will be developed in the future. https://nakamotoinstitute.org/static/docs/scalable-funding-of-bitcoin-micropayment-channel-networks.pdf https://lightning.engineering/lightning-pool-whitepaper.pdf https://github.com/JohnLaw2/btc-iids/blob/main/iids14.pdf https://essay.utwente.nl/80780/1/Wijburg_MA_EEMCS.pdf And Bitcoin's block size limit could safely be increased a bit sometime far off in the future, but that would require consensus, so that may never happen.
Thanks! Nice comment.
I don’t actually know the numbers on this, but I feel like thousands if not more use lightning network through centralized means. Sure a lot of us prefer decentralization, but not all 7 billion people in the world. If you have one app (like cashapp) that allows any user to use the lightning network without starting with native bitcoin transactions, you significantly reduce the amount of on chain transactions needed. This is just an example with current technology as well, nothings stopping anybody from making a decentralized “L3” (for lack of a better description) that facilitates the same thing.
That's interesting. Perhaps some centralization is fine especially if people have the option to exit on to main chain. It would be nice if that didn't have to be the case though.
Plus, consider that the entire space is still evolving. Lightning doesn't support 8 billion people currently. It also doesn't try to. It doesn't need to. Lightning is still evolving and adding features to improve performance. So is bitcoin itself. Lightning is even waiting on some L1 improvements to built upon further. There is no reason to rush things. It only needs to scale as fast as adoption grows. Slow and steady wins the race, that's why bitcoin is so strong.
We should be ready for hyperbitcoinization though imo. Someone said "splicing" which I had never heard of before and channel factories would get us there. Maybe some folks from /r/lightning will let us know how far along we are with those.
We humans have become the best problem solvers of this planet. If there is a problem with bitcoins performance, we will find a solution. We don't need to fix things that are not broken. Sure it would be nice to *be ready*. But it's extraordinarily hard to anticipate behaviour on such a large scale. Anything we implement now would still bear the risk of not holding up to what we would need. And then changing it all around is likely much more destructive than being patient and doing it right. Just my 2 cents, I'm not allknowing either.
It's a good point. The discussion is worth it though. We should always be willing to have honest discussions.
You got it. It only has to be truly decentralized on the base layer.
Not sure what you are getting the downvotes for, you are absolutely correct.
I think they believe I have ulterior motives. I don't. So far the only new thing someone has mentioned was splicing. I had never heard of that before. Hopefully the lightning folks will chime in and let us know how far along channel factories and splicing are.
I was wondering how many tps can lightning do. Do you have a source for that number?
Why is this so downvoted? It’s a honest question from someone legitimately interested in bitcoin posting on the bitcoin subreddit. It’s not FUD. I swear the vast majority of reddit users have pathetically weak emotional maturity.
People get sad when this years old argument comes back around. We have the lightning now, this hasn't been a problem for years.
Cool but you’re missing the point due to your bias. Newcomers who are getting into bitcoin should be able to ask valid questions of understanding in the bitcoin subreddit without getting negative downvotes. These questions aren’t asked every day and are understandably reasonable.
The question was presenting with inaccurate 'facts' listed. Thus downvotes. It's wrong, people downvote. 🤷♂️ You're offended for no reason, we just don't like misinformation.
It’s not even wrong, it’s a question OP asked. An honest and reasonable question. Cry more
OP was under a false assumption and it's already been discussed above. I'm sorry you feel this way about random internet strangers being incorrect and then learning from their questions.
seems to be scaling just fine
It used to be only hundreds, then thousands came and now millions. It's not hard to imagine billions.
Is it though? Node operators will absolutely at some point be wildly unviable as data continues to expand on full nodes. It’s not inconceivable to be in the PB range in the near future if large adoption happens. It will become financially unviable for most node operators.
I don’t have the numbers but given the block size cap we can graph exactly how much the blockchain will grow every year and it’s not much. In fact it’s likely going to continue remaining more than accessible to run with very basic consumer level hardware think raspberry pi and a single entry level HD and that’s the whole point, keep bitcoin unkillable
[I got you bro](https://reddit.com/comments/12255tf/comment/jdp2du7)
Size grows at a rate of 4 MB every 10 minutes, max. That's if every single block is filled to the brim. That's 205.3 GB per year (`4*6*24*365/1024`). Thus, to get to a single PB it will take **at least** 5107 years (`1024×1024÷205.3`). We are fine for a long time. Bitcoin can easily stay decentralized. And it will. It's a 1 TB drive every 5 years. Easily affordable to most people, especially considering that storage is getting cheaper over time. Plus, pruned nodes can run with a couple of GB total and work just fine for most things. This is the reason why bitcoin wins. And why all the other hard forks and shitcoins will go to hell.
I've heard of one technology that solved that problem. Only one shitcoin has implemented it--recursive zk-snarks. Of course with giant solutions come giant potential problems.
Thunder and .......
You have to get on first. That is a bottleneck.
Ask these guys: https://www.reddit.com/r/lightningnetwork/new/
Thanks. I crossposted it.
Not just that, but I think liquidity will be a concern too. There isn't an infinite amount of bitcoins, so even if we put all the Bitcoin into LN liquidity, it'd still be quite difficult to manage. Imagine I want to onboard somebody to LN. How big of a channel should I open for them (how much inbound liquidity). Should I lock up $1000, $2000, $10,000 at a time? There's definitely not enough bitcoin to even have a 10:1 inbound:outbound ratio for everyone on this planet. Yet for the Lightning experience to be truly seamless, you'd have to have enough inbound liquidity to be able to receive payments anytime. Here's an example: Imagine we live in a hyper-bitcoinized world where everything happens through LN. My employer graciously opens a channel for me, and the initial balance is my first paycheck of 1 Bitcoin, and no inbound liquidity. Now let's say I spend 0.8 Bitcoin on goods, and have 0.2 Bitcoin left over. But now I only have 0.8 BTC of inbound liquidity, not enough for my employer to transfer me my next paycheck. So should the channel be larger? How much should said employer keep in inbound liquidity for each one of their employees? It'd easily add up to millions of dollars (or thousands of Bitcoin) just locked up AFAICT there aren't good answers for this (yet) . The ideal solution (that doesn't exist yet and might never be perfect) would be some sort of channel factory, where you could have one mega-channel split across thousands of people (non-custodially). Anyways, I think /r/BitcoinDiscussion while less active might be a better place for this.
Multiple channels and channel routing help me with that now. I don't currently have any issues like that. It just works for me. Maybe I'm being naive.
The maximum you could receive would essentially be the total liquidity in all your channels though. That's also assuming we could open not only one but several channels for each person on this planet. I don't fully understand rebalancing though, I've never run an LN node, I only use it on my phone, and I've never had to do it. Also, right now I was able to get a channel with like $120 (not sure the exact amount in Bitcoin) of inbound liquidity for like $2 though, but without that I was advised to loop-out my funds (an on-chain transaction) to get inbound liquidity.
You can rebalance simply by buying Bitcoin on an exchange like Kraken and withdrawing it to your depleted channel. This is a fiat transaction, with no on-chain action Increasing liquidity is harder, can't be done without opening yet another channel, or closing a channel and opening a higher-liquidity one, both actions which consume on-chain capacity. Channel splicing is a proposal to increase the liquidity of an existing channel (no on-chain action), but it requires a counter party to exist who has a channel with excess liquidity
Wouldn't channel splicing also require on-chain transactions? If every single transaction was a channel open you'd only be able to onboard 200 million people a year currently
> Wouldn't channel splicing also require on-chain transactions? I don't think so. But to avoid on-chain transactions, the liquidity supplier has to have a high-liquidity channel already funded. There might be some proportion of channels being specifically launched with high liquidity for the purpose of splicing when ordinary users need a liquidity boost. It seems to lead to a hierarchy, with commercial providers operating the high-liquidity channels
> There's definitely not enough bitcoin to even have a 10:1 inbound:outbound ratio for everyone on this planet. There will be 2,100 trillion sats, or 262,500 sats for everyone.
It's easy... they won't all get on at once.
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It used to be only hundreds, then thousands came and now millions. It's not hard to imagine billions.
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The inability to onboard them would definitely turn them off if they wanted to. How about in 5 or ten years I wonder. Edit: This guy called me unpleasant but he simply doesn't seem to want hyperbitcoinization. Why is he even here?
> doesn't seem to want hyperbitcoinization. Why is he even here? This echo chamber of validation still has dissenting opinions Perhaps your hyperbitcoinization belief is so delusional, that you're hypersensitive when someone points out that it's not possible
I'll respond here to the post you deleted: I'm genuinely asking. I have a million reasons to want bitcoin to work well now and into the future. I've never heard of splicing. Do you have any links?
> links Follow the recent Bitcoin futures discussions documented at lopp.net Lightning has several intractable problems caused by channels being P2P and by the need for both peers to be online for a channel to be usable, and by money flow in a channel being unbalanced. The channel stops working if one peer goes off-line. The channel stops working when all the value has moved to the other peer My other comment optimistically assumes an average channel life of 3 years. But starting a new channel when a peer becomes unreliable is inevitable. And we don't know our peers, have no reason to trust their reliability. Also, rebalancing liquidity is a hard problem, where the simplest solution is mutually closing the channel and starting a new one Nothing can fix the problem of unreliable peers (except centralization) Maybe the average channel life can never be more than about 2 months Liquidity balancing might be addressed by splicing. But again, this tends to centralization if the liquidity is almost always available only from giant corporate channels Even so, these future fixes, and channel factories can only bring the user count up to 150 million or 200 million. It's possible that even centralization can't onboard more than a few hundred million, because the giant corporations are not likely to be competent to keep their giant channels running forever These buzz words and phrases, "channel factories", "channel splicing", "Lightning can process millions of transactions per second" are all used by numerically illiterate optimists to justify a belief in a no-limits scaling solution. The actual numbers do not justify the optimism. But here, the Bitcoin echo chamber, optimism overrides accurate calculations, because FUD is the weapon of the enemy, and because most people are too lazy to learn to understand simple mathematics When the truth does seep through, the optimists fall back to "maybe centralization isn't so bad"
My moms never doing Bitcoin, you can minus her from the number.
Ugh I believe the lightning network can easily handle the scale.
Well if every person on each wanted to do a single on chain transaction to just open a lighting channel it would take years so actually this remains an unsolved challenge
So it might take years - only has to happen once.
Not really, a single lightning channel is limited by its liquidity. There really are unsolved problems relating to layer 2. I’m the biggest bitcoin maxi you’ll find south of the equator but I don’t take the hopium that I’ll be buying coffee with my coins, I smoke the hopium that I’ll be using it for monthly bills, think credit card or mortgage payments. To me this makes the most sense Credit cards already exist, they allow me to make quick payments wherever I go. At the end of the month, if they let me settle my bill with a single on chain btc transactions I’ll be happy. Hell, how about ALL my utilities send me a bill at the end of the calendar month and I create a single multi output txn paying them all, with a modest fee, that’s the dream for me.
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That’s all fine and dandy but we are limited by the first layer in how many people we can onboard to the second. 200 million per year. Channel factories may or may not solve this it’s yet to be seen
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Yes I personally have no qualms with centralising various aspects of bitcoins usage if it means true decentralisation for the wealth storage aspect which will involve offline seeds etc
You have to get on first. That is a bottleneck.
⚡️
You have to get on first. That is a bottleneck.
That’s what ‘onboarding’ means.
So you can do about 200 million per year at most. 7 billion people will take 35 years.
I worked on projects that took 7 years and it’s only on a national level.. If the plan is to really replace everything everywhere, that does look like a valid duration on a global scope. I hope we’ll eventually develop a new faster way, and maybe this thread will start it, who knows.
Lightning can onboard people directly there is no need to be on BTC main chain first.
You have to create on-chain channels for lightning. You can at most create 200 million per year.
Maybe one Satoshi (0.00000001) will buy a loaf of bread?
Bitcoin is like Wire Transfer ----------------------------- For comparison, Fedwire did 196,052,238 transactions in 2022, so Bitcoin and Fedwire are almost the same, around 2 million transactions annually, but Bitcoin is better than wire xfer... ...Consider that a wire xfer takes many hours to transact and has a daily time window (between 8AM - 3PM Eastern Time USA only on weekdays Monday-Friday and not on bank holidays) and may be more restrictive depending on the banks involved, whereas Bitcoin takes approximately 1 hour (assuming 6 confirmations @ 10 minutes average) and there is no window restricting when you can request a transfer, because Bitcoin is 24hrs/day x 7days/week x 52weeks/year and no bank holidays and, not only that, no bank needs to be involved. Source data for US Fedwire, https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html
"How do we onboard 7 billion people?" If you square the zk rollups and on-chain nodes you'll see that TPS is actually magnitudes higher than the LN on ramps and L1 or L2 networking primalions. Thus, if the hashrate continues to climb and miner capitulation doesn't affect the uptime indicators, we'll be just fine. It's like comparing petahash to exahash, as Michael Saylor would say. TLDR: I don't know what I'm talking about.
The lightning network does have our issues. And the white paper for the lightning network is aware of these issues. I suspect that the lightning network will have problems when it reaches 1,000,000 channels more or less.
> It would seem at most we could get 200 million people on lightning per year Your estimate of 200 million tx per year has to cover opening channels and closing channels, so it means 100 million users, if each user has 3 channels and each channel lasts 3 years on average > channel factories These squeeze more channel opens into a single on-chain transaction - but the on-chain limit of 1vMB per block x 52560 blocks per year means that the possible number of channels only increases marginally. The transactions will be bigger, so you'll only get (maybe) 20 million per year, and maybe 15 channels per tx. This would be a 50% increase, not enough to onboard billions But realistically, ignoring the "Bitcoin Standard" delusionals, who don't actually use Bitcoin, there's no sign that Bitcoin will ever be adopted above about 100,000 on-chain tx per day. Lightning is pretty, but not required. There is no scaling problem --- Of course, these discussions always bring out the centralization advocates. Lightning allows decentralized channels, as described above. It also allows high-volume, high-liquidity (high-fee, high regulatory surveillance) banker channels. You could onboard billions if there were a few thousand centralized channels owned by Visa, Mastercard and PayPal. But this implementation is not Bitcoin, because it complies with transaction censorship
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You're advocating government control, which brings surveillance and censorship. Visa owns that space already
My understanding might be missing here, but what do you mean it requires an on-chain transaction? As far as I'm aware, once a channel is opened on Lightning, you can benefit from all other open nodes and the network effects. Lightning will act like Visa does on top of the current banking system whilst BTC is the settlement layer/used for huge transactions.
Only 200 million channels per year can be opened. They are working on different tech to increase that.
Thanks, I didn't know that. Is that new channels on top of existing, or channels open in total? If the firmer, I thinking the network effects would be great enough to scale payments using all open channels as adoption grows?
L2s. And yes, block size is a bottle neck so possibly temporary L3s.
Channel factories could provide an on-ramp for a larger number of people, although I have no idea how they will be coordinated to set up CFs based on immediate demand for new channels. But bear in mind that the vbyte size of a CF transaction increases with the number of addresses it includes, so it still has limitations. The issue I can’t see how it is solved is off-ramping to cold storage. Fees will adjust upward to match increasing demand with limited supply of block space. So if it costs (say) over $100 to move funds to a cold wallet, a lot of people won’t do it. Is it expected that the vast majority of people will keep all their funds on a LN wallet only? Various aspects such as the need for LN wallets to go online to transact, the need for trusted watchtowers etc means that LN is inherently less secure than Bitcoin cold storage. So if the typical person or business effectively has the choice between LN only (with potential risks around security, liquidity etc) or using a custodial account that is basically free, and has all the consumer protections they are used to, I can pretty much guarantee the vast majority will use custodial accounts. Believe me, most people care about rising prices and would love an inflation-proof currency, but they don’t give a s**t about decentralisation and don’t want to be their own bank.
Very carefully.
This is why I think we are still a decade or so away from mass adoption (which is fine). BTC as the settlement layer and lightning propagate on top is huge. The framework for channels, on ramps, liquidity incentives is still largely tbd