
Lightning Network Skepticism - kushti
https://chrispacia.wordpress.com/2015/12/23/lightning-network-skepticism/
======
josephpoon
> It seems I wasn’t the only one with this concern as there’s been a fairly
> recent pivot away from the hub-and-spoke network topology to a more organic,
> wallet-to-wallet routing. The network is now envisioned as a more pure p2p
> payment layer without those large scale payment hubs.

As the co-author of the Lightning Network, this is not true, there has been no
pivot. The design has always designed around wallet-wallet topologies from the
beginning (try doing a Find for the word "hub" in the paper). Will there be
nodes more connected than others? Of course. But with LN, they are designed to
be interchangeable and formless. It may look like other P2P topologies of
ever-shifting "supernodes", but never irreplaceable "hubs" like Visa or
Fedex's single primary Memphis, TN hub -- in fact you'd be challenged to find
a P2P network with a topology of only a handful of static hubs (this makes
sense because establishing connectivity is cheap in a virtual system, opposed
to physical infrastructure like wires or an airport).

I'm not particularly happy that "small-block skeptics" are using LN as some
kind of punching bag against their pet ideas of who the enemies are (the
arguments have become highly politicized in the bitcoin community). The LN
paper itself presumes bigger blocks, and have never argued that LN is the sole
solution, merely that a large component of scalability needs to occur via
moving transactions off-chain. The alternatives are a failure of mining
incentives (whether it be low-value transactions get crowded off bitcoin and
moves to a bitcoin-backed centralized ledger, or the fee-market breaks down
and miners reduce fees far too low due to commons externalities).

There is a clear obvious misunderstanding of core principles in computer
science, wishful thinking does not solve real problems. It is is akin to
assuming that systems are easily capable of a broadcast topology -- that
everyone in the world can be on the same wifi access point. Bigger block
capacity is desirable, but it's also desirable to be able to instantly
transact a payment of $0.0001 without everyone in the world processing that
payment.

(I'm going to be intermittent with computer access today due to the holidays
but I will reply to email or respond tomorrow :P)

~~~
mike_hearn
_The design has always designed around wallet-wallet topologies from the
beginning (try doing a Find for the word "hub" in the paper)._

This is very clearly not true, and you don't do yourself any favours by saying
such things. The paper discusses hubs that need to provide various guarantees,
like being continuously online and routing payments for arbitrary third
parties. This is not at all the same thing as a wallet and Chris is right to
point out the distinction.

With respect to your point about becoming a punching bag, I'm afraid I am not
particularly sympathetic. When Blockstream started floating LN as an
alternative to raising the block size (which is what they have consistently
done) you should have condemned that and them right away, loudly and clearly,
as it was obviously an absurd suggestion and not going to happen anywhere near
in time.

LN is a highly theoretical system that doesn't have any implementation that
ordinary people could actually use. There is no practical experience with
running such a network. It doesn't even have answers to basic design
questions, like how routing and addressing would work. The chance of project
failure is therefore quite high, as is always the case for research projects.

Thus to imply LN is some sort of dead-cert thing is hubris. Academics have
been producing e-cash white papers for decades. Almost none of them actually
turned into real-world systems. Nobody will know if LN actually works better
than Bitcoin does (or did) until it's built and has competitive usability,
which is a very long time away.

 _> There is a clear obvious misunderstanding of core principles in computer
science, wishful thinking does not solve real problems_

That's not very charitable is it?

I can assure you, the CS understanding of the people who disagree with you
(like Chris, Gavin, myself and Satoshi) is just fine, but I have to question
your understanding of engineering. The calculations were done years ago that
showed for typical payment network loads that global broadcast could work just
fine. Computer science doesn't mean "some algorithms never work and some
always work". It just gives us the tools to analyse costs. By simply ignoring
complexity and engineering costs of LN, as well as some rather tricky
algorithmic costs around pathfinding in global non-suspended networks, you can
obviously make any actually existing system look bad in favour of a
theoretical proposal.

~~~
josephpoon
The paper never refers to hubs, the necessity of a handful of entities routing
payments a-la Visa has never been part of the design. There are certainly more
connected nodes, but that's true in any P2P system (as well as nodes with
higher uptime). Additionally the paper refers to larger blocks, LN doesn't
resolve underlying block capacity issues alone, it could help mitigate its
problems significantly -- much like how a switched network helps resolve
bandwidth (but you still might want faster connections).

I've never argued that it is a dead certainty, certainly less so than you have
argued that arbitrarily large blocksizes are the only solution.

Quite frankly, I don't understand why you're so butthurt with my comment, I've
stated that I think multiple solutions are best, and have explicitly avoided
the politicization with this community.

> I can assure you, the CS understanding of the people who disagree with you
> (like Chris, Gavin, myself and Satoshi) is just fine

I'm pretty sure your comments don't accurately represents Gavin's view (AFAIK,
he also thinks we need to explore many technical approaches), nor do you speak
for Satoshi (current understanding of bitcoin's risks is significantly
different than 2011).

Engineering costs are one thing, technical impossibilities are another. It's
not credibly possible for bitcoin to exist in its current form while also
being able to make a $0.0001 payment. I agree there are some aspects to
consider, esp with maximizing the social value of the network and testing it
out, though. Certainly, for all we know there may be unaccounted issues, but
that's the case for bitcoin as well (51% risks are still unknown).

For those who are not paying attention to the bitcoin discussions, I have
always stated many transactions will still be on-chain (e.g. large directional
flows, but paying $0.001 has not been feasible for a very long time in
Bitcoin, LN enables those payments to exist using Bitcoin again).

~~~
mike_hearn
_> It's not credibly possible for bitcoin to exist in its current form while
also being able to make a $0.0001 payment._

Of course it is. I've made such payments many times over the years. The only
reason it's not currently possible is because the Bitcoin Core developers have
deliberately forced the network to run out of capacity instead of doing what
the community wanted and raising the block size limit. So now the fees are
huge, payments are flaky and users are rightly complaining that the system
they rather liked appears to be losing any advantages it had over the
competition.

Saying "it isn't feasible" or "not credibly possible" when it was repeatedly
done right up until very recently is ... not great.

The proposed Lightning Network has received some very strong technical
criticism, such as Chris Pacia's article. I wrote a similar one months ago
that touched on different issues. I have not seen much in the way of answers
to these criticisms.

~~~
kanzure
> The only reason it's not currently possible is because the Bitcoin Core
> developers have deliberately forced the network to run out of capacity

The Bitcoin developers suspect that there is nearly unlimited demand for
$0.000000000000000000001 bitcoin transactions (micropayments). "Unlimited
demand" is another way of saying "denial-of-service vulnerability".

I think that "forced the network" is tiresome allegation-making. The
developers did not force the network to have an asymmetric bandwidth graph,
but they definitely have an interest in countering centralization pressure
(such as the increase in resource requirements derived from increasing
transaction rate directly through the block size parameter). ....

I know you have long-standing disagreements with Bitcoin Core developers, but
this does not seem like good reason to gloss over their reasoning.

> Saying "it isn't feasible" or "not credibly possible" when it was repeatedly
> done right up until very recently is ... not great.

"What they call a 'centralization pressure' was working fine right up until
some limitations on that 'centralization pressure' were implemented!"

> instead of doing what the community wanted and raising the block size limit

Btw "what the community wants" is irrelevant when trying to determine
feasibility; sum of community-desire-weight does not make community-desired
options more/less feasible.

------
pstrateman
The authors primary concern is that lightning will produce a hub and spoke
model.

The design has been a true peer-to-peer payments network without hubs for
quite a while[1].

[1] [https://lists.linuxfoundation.org/pipermail/lightning-
dev/20...](https://lists.linuxfoundation.org/pipermail/lightning-
dev/2015-July/000019.html)

~~~
mrblockchain
So if Lightning is better than Bitcoin at being a P2P payments network, why
not just build an altcoin?!

~~~
supermari0_
Because there's no good reason to implement it as an altcoin.

------
dgenr8
I'd be a lot more excited about Lighting Mightwork if there were one, 1, ONE
merchant accepting GreenAddress.

From a user perspective, the benefits of GreenAddress were similar (instant
confirmation), and the hurdles to adoption were actually lower.

GreenAddress and Lightning each require both sides -- sender and receiver --
to use something different, and more complex, than a regular bitcoin
transaction.

They both have to restart with 0 network effect.

GreenAddress never got anywhere with users. Why will Lightning be any
different? Because bitcoin itself won't work very well anymore?

------
3dfan
Is there any rationale for LN?

As I understand the situation: Bitcoin has a hardcoded limit for the number of
transactions that can be processed every 10 minutes. Having such a limit is a
good thing, because nobody can stress the network with an unlimited number of
transactions. But the limit should be close to the normal usage of the
network. So the hardcoded limit should rather be a setting that gets updated
from time to time.

So there are the Bitcoin Unlimited guys who propose a client that has a
setting for the limit.

And there are the LN guys, who propose a whole new layer on top of Bitcoin.
Why?

~~~
tdryja
"Bitcoin Unlimited" has no maximum block size, hence the name.

There are many problems which arise from unbounded transaction rates in
Bitcoin. The most fundamental is that long term the coinbase reward is zero,
and transaction fees are the only reason to create new blocks. Without
artificial scarcity of block space (artificial in the sense of beyond what
hardware can support) transaction fees would tend to zero, and mining would no
longer generate revenue.

LN is proposed to allow many users and many transactions (when nodes
cooperate) while keeping the security properties of Bitcoin (when nodes
don't).

~~~
freework
Mining does not need to be profitable. People always make the mistake in
thinking that if mining ceases to be profitable that mining would suddenly
stop. That is simply not how it works. It is more economical to buy tomatoes
at the grocery store, but that doesn't stop people from growing tomatoes in
their backyard.

~~~
maaku
Mining costs millions of dollars per day in electricity costs. I guess we can
just expect a few people to burn a hole in their pocket for the good of the
network?

~~~
aback
This reflects a misunderstanding of the drivers of mining costs.

Mining only costs a lot because coin value is high and the block reward is
high. This means miners are willing to spend more to win the reward.

As the block reward lowers then mining becomes funded entirely by equilibrium-
priced fees.

~~~
maaku
Oh I understand mining economics quite well. The comment I was responding to
however claims that some people will continue to mine at a loss after the
subsidy is negligible. However that assumes that people would be willing lose
hundreds of millions of dollars per year on power costs just to meet current
security levels, let alone whatever level of higher security might be required
in a moonshot scenario.

~~~
tmornini_ey
Millions of people collectively losing hundreds of millions of dollars a year
is less than $1/month individually.

------
3dfan
In case the blockchain forks, it will get really interesting. And how I
understand it, some people will get stinking rich. Because you can then
effectively double every old coin by mixing it with new coins. After that, it
is valid and independently spendable on both forks. So people in the know will
probably buy old coins like mad, mix them with new coins and immediately sell
them on both chains. Then use the money to buy old coins again.

~~~
adrianmacneil
Not how it works. If there was a fork, then coins on each side would become
independent (you could not mix them together). Since the current price
represents the total demand, the market cap must equal the sum of the parts,
so coins on each side would become less valuable. I would expect the aggregate
would actually go down, due to lack of faith in Bitcoin developers being able
to get shit done (and possibility for other coins to pick up the slack).

~~~
3dfan
The fork that is on the horizon looks like this:

    
    
        On chain A blocks bigger then 1mb will be valid
        On chain B blocks bigger then 1mb will be invalid
    

Now when you sign a transaction and broadcast it, it will get executed on both
chains.

Unless the transaction has coins in one of its inputs that already went
through a block bigger then 1mb. Then the transaction is only valid in chain
A. This way you can double the value of a coins that are spendable on both
chains. Because now you can sell them once on chain A and once on chain B.

~~~
adrianmacneil
Right. But economically speaking, if exchanges started allowing you to trade
both coins against each other, then supply has doubled while total Bitcoin
demand remained constant. So the price would tank to at least 50% of its
previous level on each side of the fork to reflect the new equilibrium.

Anyway, I think this is extremely unlikely to happen, because:

1) It requires 50% of miners to cooperate to even create a >1MB chain

2) Anyone using the old chain would be insecure, due to lack of mining power
making it susceptible to a 51% attack.

3) If that many miners were on board, it's unlikely that existing core
developers would opt to continue working on an insure fork rather than admit
defeat.

4) If that many miners were on board, it's unlikely that exchanges would opt
to confuse users by letting them separately trade two different types of
Bitcoin, rather than just switching to the more secure, more popular chain.

~~~
josephpoon
I'm presuming 3dfan is assuming some kind of split in merchant/exchange
acceptance, I agree this is less likely, though. However, in a hardfork, you
can be sure there will be some kind of forkA/forkB exchange site that will
emerge (not at a 1-to-1 exchange rate, of course).

------
markkat
My concern is that LN puts a premium on unpredictable transaction behavior,
and private transactions are unpredictable by nature. Thus, LN trades privacy
for efficiency.

It's odd considering the struggle to keep the blocksize near 1MB for the
purpose of keeping bitcoin decentralized. LN could centralize by making
private transactions very expensive.

