
Lightning Network: Scalable, Instant Bitcoin/Blockchain Transactions - sinak
http://lightning.network/
======
josephpoon
For the HN crowd passing by, here's why this stuff could be interesting to
you.

It's not possible to do extremely small micropayments on bitcoin directly as
people use it today. Bitcoin's made a lot of promises around micropayments,
but doing it in an economical way has tradeoffs, especially if you're talking
about millions to billions of transactions per second. In fact it's not
possible to extremely small micropayments on ANY platform. Try sending $0.001
to someone once. It's not possible. The closest you're probably going to get
is sending someone an item on Steam (and there's no easy way to price the
items). The reason for this is underwriting costs, it's too expensive for Visa
to process it since they're assuming some liability. Even Paypal, who
ostensibly should be doing this, charges $0.30 for payments for goods and
services.

Lightning allows for micropayments to actually happen because custody is still
pushed to the edges, so you don't have the same kinds of underwriting risk.

This means that something as simple as paying someone $0.001 over the internet
one time will become viable this year. The amount of possible business models
and use cases could dramatically shift. Users may not know they're using
Bitcoin (your application could hide it and abstract it away), but people are
getting paid in a way they could not before (even centralized systems did not
exist, let alone decentralized ones). Pay-per-click webpages, massive
decentralized CDNs, creating API services without a username/password to make
onboarding seamless (you paid? you're done!).

We're working on code here:
[http://github.com/lightningnetwork/lnd](http://github.com/lightningnetwork/lnd)
It's MIT licenced and will soon have some pretty simple APIs to use. Of
course, since this stuff will be in testing for a little while, make sure you
only use small amounts/micropayments initially when it's released.

~~~
MichaelGG
The site talks about billions of transactions per second. So presumably
multiple tx/sec/person on earth. Can you give me some examples of how this is
useful? For instance, why would a CDN want to handle and record a financial
transaction for e.g. every HTTP load or something?

I'm also suspicious of pay-per-whatever extending to end-users. People hate
that kind of billing, even when it's cheaper (I learned this the hard way).
And between companies, again, what's the benefit of having thousands of
transactions when a couple would do?

~~~
sanswork
>Can you give me some examples of how this is useful?

Marketing.

~~~
onetallnerd
Machine to Machine payments. Payable endpoints 402 payments? They're tech guys
not marketing. I'm not sure if the LN guys even have marketing people?

------
jswny
I'm still not sure how I feel about implementing a layer over the Bitcoin
network like this instead of just fixing the inherent flaws with the protocol.
Especially when said network is being pushed by the company Blockstream which
is known for shady practices.

~~~
paavokoya
>instead of just fixing the inherent flaws with the protocol

What are the "inherent flaws"? Seems like the bitcoin blockchain has done its
job better than any other blockchain for longer. Also, it's open source.. You
can submit a proposal yourself if you want to fix it..

~~~
stale2002
"You can submit a proposal yourself if you want to fix it"

Not really. The vast majority of the bitcoin community has been trying to do
just that. But a few devs have unilaterally been able to block the changes.
The Devs have a lot of "soft power" to do stuff like that.

~~~
nullc
> The vast majority of the bitcoin community has been trying to do just that.

Thats a common claim made on easily sockpuppeted forums, but when put to
cryptographic votes, we find pretty much the opposite response:
[http://bitcoinocracy.com/arguments/if-non-core-hard-fork-
win...](http://bitcoinocracy.com/arguments/if-non-core-hard-fork-wins-major-
holders-will-sell-btc-driving-price-into-the-ground)

Similarly, I've found in person meetings to also yield similar results.

> But a few devs

Really, almost the _entire_ technical community; with the exception of a few
high profile companies and their consultants.

> have unilaterally been able to block the changes

That isn't how Bitcoin works.

~~~
bachback
why can't you face up to the fact that Blockstream is the de-facto governance
body for Bitcoin? It claims it is, and you spend countless hours on the
Internet trying to show the opposite. "Cryptographic votes" \- duh, that's
what the Bitcoin consensus should be for. I can't fathom that somehow so
deeply engaged in the project doesn't understand this most obvious fact.

------
ptokb3
-Blockstream Playbook-

Step 1: Buy off all of the top developers of open-source project. Check.

Step 2: Refuse to support/fix basic network operations so that transactions
stop confirming just as the network needs to grow. Check.

Step 3: Create a 2nd-layer solution for growth that allows the company to
siphon Billions of dollars over many years. Check.

Step 4: Censor any forum where people alert others about secret get-rich
playbook. Check.

~~~
nullc
> Step 1: Buy off

We founded the company.

> all of the top developers

A couple people out of a community of around 50-200 depending on the phase of
the moon.

> Step 2: Refuse to support/fix basic network operations

Uh. You know that Bitcoin is a decenteralized system that no one controls;
right? We do a lot of fixes, but we're not your personal code monkies. There
is a LOT going on in Bitcoin, and it's working pretty darn well at the moment.

> Step 4: Censor any forum

Via our magical mind control rays, I suppose? Blockstream doesn't control or
influence any forums.

Wheres your playbook? Which step does "Create throwaway accounts on hacker
news to slander people" fit? Is it before "profit" or "suppression of
inconvenient technology"?

~~~
wellthissukz
Again, these are lies from Gregory Maxwell (Blockstream CTO).

Please provide details on funding. Specifically, how much AXA paid?

"A couple people out of a community of around 50-200 depending on the phase of
the moon."

Again a lie. The top Core devs are Blockstream employees.

Blockstream has created a toxic environment and a huge ivory tower.

"Uh. You know that Bitcoin is a decenteralized system that no one controls;
right? We do a lot of fixes, but we're not your personal code monkies. There
is a LOT going on in Bitcoin, and it's working pretty darn well at the
moment."

Meanwhile 80%+ of the hasrate is concentrated in a single country and in the
hands of a handful of entities.

Ironically, Blockstream goes graet lengths to exploit this (HK roundtable
farce).

"Via our magical mind control rays, I suppose? Blockstream doesn't control or
influence any forums."

People associated with BlockstreamCore support censored and manipulated
forums, interestingly owned by a single individual (theymos)

Gregory, you are the most pathetic individual in the Bitcoin space.

~~~
nullc
> Please provide details on funding. Specifically, how much AXA paid?

Dunno, not enough to be broken out on the reports I have. They're not an
investor that I've ever met with-- we have a lot of investors. Though it's a
cute technique that y'all have been using where you try asking something that
would be confidential, to try to inhibit a response on the long list of
leading questions that follows.

>> "A couple people out of a community of around 50-200 depending on the phase
of the moon."

> Again a lie. The top Core devs are Blockstream employees.

I gave a breakout in another post; if you want to go by top you end up with
three out of the top 10, all of whom were founders of the company. wooo.

> Blockstream has created a toxic environment and a huge ivory tower.

What does that even mean? or another way, how could someone falsify that
claim?

> Meanwhile 80%+ of the hasrate is concentrated in a single country and in the
> hands of a handful of entities

Unfortunately, the block size limit was set too large and this created
outsized returns for large consolidations. More recent improvements have
caught things up a bit but it will take a while for the damage to equalize
out.

> People associated with BlockstreamCore support censored and manipulated
> forums,

What the @#$@ are you talking about? Citations? Or are you just saying that
anyone of the vast majority of people who are supportive of our work is
"associated"?

~~~
fraggle222
>Unfortunately, the block size limit was set too large and this created
outsized returns for large consolidations.

Can you clarify this statement?

------
deftnerd
This is from the same company that has seized control of the development of
the main Bitcoin codebase and has been making changes to cause problems that
their Lightning Network claims to solve.

~~~
RustyRussell
Your comment seems like a cheap poke at Blockstream, who have nothing to do
with the lightning paper authors.

(I work for Blockstream, and I am also trying to implement and standardize
lightning. But we certainly didn't invent it, and this isn't our page)

~~~
ptokb3
You are implementing Lightning, paid by Blockstream but Blockstream has
nothing to do with it?

Maybe you're just really funny and they are paying you for your incredible
sense of humor.

~~~
forgotpwtomain
Supposing this is really Rusty Russell [0], I would encourage some hesitation
before you imply that they are involved in advocating for less than savory
things.

Rusty Russell has done a lot of great work on Linux (the TCP stack in
particular) and you've probably used some of his work. For all I know, Russell
might be deluded and Blockstream might be an evil brain-washing machine, but
if Russell was in it for the money he could or would just as easily have done
that 10 years ago rather than today.

[0]
[https://en.wikipedia.org/wiki/Rusty_Russell](https://en.wikipedia.org/wiki/Rusty_Russell)

~~~
ptokb3
I was pointing out the obvious logical flaw in what he said, that's all.

I'm sure he is a nice guy and maybe he's even funny.

Blockstream does need to recoup the 70 million in funding they've received
though and it's a fact that they have most of BitcoinCore's top contributing
developers on their payroll, with exception to Wladimir.

Clearly I'm not the only one concerned about a conflict of interest and I'm
sure it's hard to see conflicts of interest if you're the one at the center of
it.

One last edit, aside from a grammar correction: authority deserves scrutiny.

~~~
nullc
Hi, ptokb3, you seem to have created this account to make these posts but you
see fit to go on about scrutiny. Seems odd to me.

Blockstream does support Bitcoin infrastructure development-- something much
of the Bitcoin industry has failed to do, perhaps a company you work for and
are concealing through your anonymous posts?-- but that is a far cry from a
"majority" by any definition. E.g. in the last 3 months 58 people have made
contributions to Bitcoin Core, 7 work for Blockstream. Sorted by commits in
the last year, among the top ten, 3 work for blockstream (all founders of the
company). -- just as we've done for the last 5+ years (the same group has been
in the top 10 contributors pretty much the whole time).

Whats your actual allegation beyond pointing out that we spend some resources
supporting the public infrastructure we all depend on?

~~~
ptokb3
Hey nullc,

I'm a software consultant for my own developing firm. I don't have a conflict
of interest. As I've said before, this is a new account and my only account
here. I've read HN for some 5-7 years now as a morning news source and have
not gotten involved in the conversation until this point.

To the issue:

MIT would probably be happy to support more Core developers and that would
definitely lessen the current conflict of interest.

Is it hard to see that one company paying most of the top developers in the
accepted codebase is something that makes people uneasy? It does and the
considerable pushback from modest on-chain scaling (which needs to happen
eventually anyway) has people worried that you're (Blockstream) is trying to
control or limit Bitcoin due to your funding from AXA.

~~~
nullc
> MIT would probably be happy to support more

MIT doesn't support _any_ developers. MIT DCI pays MIT and is funded by
undisclosed parties, but you never even care to ask about that. (And not that
MIT is magically benevolent, in any case...)

We've tried for _years_ to get sustainable funding for development; but the
Bitcoin 'industry' is just not interested.

> paying most of the top developers

Why do you keep repeating this misinformation? As I pointed out, e.g. three of
the top ten by commit activity work for blockstream (and all of us were
founders of the company). This is not most.

> has people worried

Has pseudonomyous sock accounts on the Internet who appear to own not much (to
zero) Bitcoins; worried, at least.

> modest on-chain scaling (which needs to happen eventually anyway)

I think all the engineers at blockstream that work on Bitcoin supported segwit
which roughly doubles block transaction capacity. (in a backwards compatible
while improving scalability, to keep the operating costs low).

> due to your funding from AXA

Pretty perplexing, AXA isn't even to be broken out in the reports I have (we
have many investors). I've never even had a conversation with anyone from AXA
myself.

~~~
ptokb3
It was my understanding that Gavin and Wladimir were part of the MIT Media Lab
payroll.

> you never even care to ask about that

Honestly, I don't know where that would be public information to know to ask
about it.

> to own not much (to zero) Bitcoins;

That is not the case. Most people who have been very vocal pushing for larger
blocks have significant Bitcoin investments.

> segwit which roughly doubles block transaction capacity

This only happens if all wallets adopt it, which makes them write/fix their
wallet software upstream. That takes time. It's not a quick enough solution
for an urgent problem.

Last, if you're taking money from someone there is a conflict of interest
there.

"It's hard to get a man to understand something if his job depends on him not
understanding it" \- Upton Sinclair

Large investors usually want something back for their investments. Maybe you
don't know what that is right now, but it's legitimate for regular users to be
weary of it.

~~~
petertodd
> It was my understanding that Gavin and Wladimir were part of the MIT Media
> Lab payroll.

They aren't. The Digital Currency Inititive (DCI) != MIT. Rather, it's a
separate entity that's effectively paying MIT for use of the MIT name and
administrative infrastructure; we do not know who is actually funding DCI.

~~~
sk55
[https://medium.com/mit-media-lab-digital-currency-
initiative...](https://medium.com/mit-media-lab-digital-currency-
initiative/announcing-a-900-000-bitcoin-developer-
fund-6e8b7e8b0861#.eychwbpd5)

"Together, we’ve raised $900,000. Donors include companies (BitFury, Bitmain,
Chain, Circle and Nasdaq) and individuals (Jim Breyer, Jim Pallotta, Jeff
Tarrant, Reid Hoffman and Fred Wilson)...while the funds will be limited to
support Bitcoin protocol development, the donors do not have any influence
over the developers."

~~~
petertodd
Ah good, they finally published part of the list (I was discussing that with
them in early march in person at MIT).

That said, I believe that list is incomplete.

------
hashmp
At it's most basic, the Lightning network is just a way of implementing pre
payment cards for Bitcoin.

Its over engineered and over complex. Which is demonstrated by the comments
here trying to explain how it works.

No one has yet been able to explain how they will prevent one central hub from
developing which by economies of scale will offer the lowest cost path through
the network as it will have channels setup with everyone.

Ask yourself who will operate this hub and you'll understand why people want
to implement this.

------
wellthissukz
The lightning network is a pathetic scheme to suppress the liberties the
original vision of Bitcoin provides.

Blockstream is a corrupt company which does not refrain from spreading lies
and propaganda to further their agenda.

Everyone is free to look up what entities own them.

------
nofollow
lower fees, but still no return of free transactions? core recently removed
support for free transactions even though satoshi stated [1] clearly that free
transactions should always be allowed.

[1]
[https://bitcointalk.org/index.php?topic=994.msg12168#msg1216...](https://bitcointalk.org/index.php?topic=994.msg12168#msg12168)

~~~
gruez
>core recently removed support for free transactions even though satoshi
stated clearly that free transactions should always be allowed.

Free transactions right now have essentially zero chance of going through, so
it makes sense that they're removing it, since it would prevent users from
creating transactions that will never confirm. I'm not disputing satoshi's
point, but given the current network conditions, the change makes sense.

------
toomim
Is there any news here?

~~~
josephpoon
Not sure why it's posted again, but we might have some announcements soon :D

------
realraghavgupta
Nothing special / news here. I would also like to have limited free
transactions per block allowed.

------
7373737373
Similar work is going on in the Ethereum space, both with microtransactions
and more generalized state channels for arbitrary computation and data
distribution (see Raiden/Truebit/Swarm). But the problem remains the same:
finding protocols that have the right (or even adjustable)
centralisation/efficiency/privacy/risk/cost tradeoff. Another question is
whether these systems will become purely financially incentivised or implement
some form of social routing. While the trust conferred to the intermediaries
can be quite low, some cooperation is still necessary and even in an initially
free market, economies of scale could result in some actors having control
over the entire system. Routing still requires consensus, but this time it's
local.

~~~
nullc
Whats the challenge for ethereum? If the smart contracts don't work out like
you hoped, you just get the people running it to adjust the ledger for you.

(Or do they only do that when they personally lose out?)

~~~
7373737373
The DAO debacle showed that regardless of the system - even Blockchains -
there is no cloud, there are only other people's computers. All systems are
inherently influenced by the people behind it, even if they try to ignore or
abstract that fact away. There is no perfect neutrality, in fact, Blockchains
with economic consensus (PoW/PoS) set a price for it.

In addition to what I described above, there are more open questions, ranging
from the best network topology to the different patterns of interactions and
how they can be optimized. I'm becoming convinced that the best approach would
not only allow for one paradigm, but for a range of protocols with different
properties (e.g. that work in offline environments) - logical
decentralisation. Any kind of maximalism for a single currency and network
instance isn't applicable to this.

