Bitcoin has no intrinsic value — Top hedge fund manager

quovadis

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Lightning technology theoretically can support up to a billion transactions a second, but realistically now that is about 25 million tps.

There is no 3rd party controlling your money with a lightning transaction. Lightning wallets are non custodial. You hold your money. At no stage does lightning have access to your Bitcoin. If the transaction were to fail the Bitcoin is returned.
Great. I think you missed the question. At some stage the lightning transactions are consolidated and committed to the blockchain where there exists a bottleneck - how does that get dealt with? And secondly please explain why signifiers are required and do you trust them?
 

Sensorei

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Great. I think you missed the question. 1) At some stage the lightning transactions are consolidated and committed to the blockchain where there exists a bottleneck - how does that get dealt with? 2) And secondly please explain why signifiers are required and do you trust them?
So the Bitcoin lightning transactions occur off chain in a payment channel through the lightning network, which no doubt make some people uneasy as using a 3rd party brings in questions about security and double spending and censorship resistance, etc. 1) Offchain means they are not recorded on the blockchain, so are not verified by miners which is what would cause a bottleneck due to Bitcoin's obvious scaling issues. Transactions and routing hops are saved and can be viewed on lighting nodes.

It's a p2p trust using Bitcoins's underlying security and a) hash verification and b) timelock using multisig addresses for securing the transaction in the lightning payment channel.

Not sure what you mean by it requiring signifiers? Transaction are p2p smart contracts between the sending and receiving wallet where the timelock functions ensures that if there is any unforeseen problem with the transaction (say nodes go offline or whatever) then the funds are returned to sender.
 

richjdavies

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You aren't fully dependent on waiting for someone willing to offer more for your share. The underlying business is supposed to make money. (if you picked well)
Not FULLY no, but mainly...

Most stocks in your portfolio are probably dividend yielding nothing, if not maybe 1-4%. At best it would take 25 years of those dividends to realise the value without selling. Of course thats crazy because you CAN sell, but still relies on someone willing to buy at a higher value than you think.

Pointing to a tautology, not a great insight here!
 

quovadis

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So the Bitcoin lightning transactions occur off chain in a payment channel through the lightning network, which no doubt make some people uneasy as using a 3rd party brings in questions about security and double spending and censorship resistance, etc. 1) Offchain means they are not recorded on the blockchain, so are not verified by miners which is what would cause a bottleneck due to Bitcoin's obvious scaling issues. Transactions and routing hops are saved and can be viewed on lighting nodes.

It's a p2p trust using Bitcoins's underlying security and a) hash verification and b) timelock using multisig addresses for securing the transaction in the lightning payment channel.

Not sure what you mean by it requiring signifiers? Transaction are p2p smart contracts between the sending and receiving wallet where the timelock functions ensures that if there is any unforeseen problem with the transaction (say nodes go offline or whatever) then the funds are returned to sender.
Ok you're still missing the point. They can't be off-chain forever and have to be committed to the blockchain. The point at which they are committed is the eventual bottleneck anyway. I doubt people will have open lightning channels forever. Signifiers as in with use with watchtowers to avoid malicious activity.
 

Sensorei

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Ok you're still missing the point. They can't be off-chain forever and have to be committed to the blockchain. The point at which they are committed is the eventual bottleneck anyway. I doubt people will have open lightning channels forever. Signifiers as in with use with watchtowers to avoid malicious activity.
No I'm not missing your point. Let me explain a bit more clearly. Like I said, Lightning transactions are not stored on the Bitcoin blockchain. This gives users the option of a more private way of using Bitcoin. It's called Layer 2 because its a p2p system layered on top of the BTC blockchain.

The only transaction recorded on the blockchain is when you send Bitcoin to your Lightning wallet first from your on-chain wallet before you do the final p2p Lightning transactions. Eg. I send my trading profits in Bitcoin from Binance to my Lightning wallet, and the rest to my hardware wallet. Whatever I do afterwards from my Lightning wallet is done off-chain on the Lightning network. But if I choose to send BTC from my wallet to a normal legacy or segwit address, then the transaction is authenticated on-chain by miners and therefore slower and more expensive.

Only when the lightning channels are closed is when the Bitcoin balance and total net of transactions of channels are confirmed on the Bitcoin blockchain. Individual transactions are not mined which saves space and time when mining blocks.
 
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quovadis

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No I'm not missing your point.
I think you are.
Only when the lightning channels are closed is when the Bitcoin balance and total net of transactions of channels are confirmed on the Bitcoin blockchain. Individual transactions are not mined which saves space and time when mining blocks.
When the channels are closed there'll still exist a noticeable bottleneck and hence a similar albeit deferred problem exists. And don't forget the pitfalls that to open a channel requires an on-chain transaction too, both parties nodes need to stay online to avoid a fraudulent close unless a watchtower is used (the third party).
 
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Sensorei

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OK, that bottleneck is really far off from happening, but it might need to be addressed eventually. Just like 640K RAM being enough memory that anyone might need back in the 80's. Technology advances with changing requirements.

I'm not seeing this bottleneck as an issue for a long time to come, if ever. By then dev's would have a solution. Only the TX to open and close lightning channels is recorded on the blockchain. A new channel doesn't have to be opened every time one party transacts with another party for the first time, as long as there is network path connecting them to each other. Only when a lightning wallet 'cashes out' to the blockchain is the TX added to blocks. By the time this bottleneck is an issue there would be enough Lightning adoption for easily 98%+ of all TXs to be completely off-chain.

I don't have privacy concerns over watchtowers. There are already proposed upgrades to solve potential issues, eltoo for lightning and BIP118.

Personally I am more excited about blockchains like Solana that can handle 50,000 tps without a layer 2 gaining adoption. Vitalik says Eth 2.0 will boost speeds from the current 15 tps to 100,000 tps. Lightning has loads of potential, but I think we're more likely to see BTC primarily as a digital gold store of value with without the "one crypto to rule them all BS".
 

quovadis

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OK, that bottleneck is really far off from happening, but it might need to be addressed eventually. Just like 640K RAM being enough memory that anyone might need back in the 80's. Technology advances with changing requirements.
Actually the bottleneck is happening right now. Let's say 1,000,000 people want to open a channel to use lightning for shopping or whatever - at the current rate of confirmations how long will that take - and then those 1,000,000 close at the end of the day...? In the context of your argument of standing in line at a grocery store even with lightning it doesn't scale as it's touted to especially you need to commit to a spend prior to making it - that's not very practical either.
 

Sensorei

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Actually the bottleneck is happening right now. Let's say 1,000,000 people want to open a channel to use lightning for shopping or whatever - at the current rate of confirmations how long will that take - and then those 1,000,000 close at the end of the day...? In the context of your argument of standing in line at a grocery store even with lightning it doesn't scale as it's touted to especially you need to commit to a spend prior to making it - that's not very practical either.
No there is no bottleneck now. BTC blockchain hasn't processed more than 300,000 TXs a day since May and network fees are close to the lowest they have been in a year. That's a nonsense theoretical example which in reality is not happening. All of these theoretical channels realistically aren't going to close at the end of the day. There has never been anything remotely close to even a 10% of 1000,000 people wanting to open a multisig address in one day.

I agree lightning does not scale right now as it should if there was mass adoption, but tech has been advancing as it is needed. Your argument is like saying a Bugatti Chiron is a slow car because in 2050 there will be 500 cars faster that it.

The vast majority of channels opened will be when a party first creates their lightning wallet multisig address and sends money to it. That channel could stay open indefinitely. You don’t have to set up a channel with everyone you transact with. Nodes can send transactions through each other, keeping the sent Bitcoin off-chain even when reach their target node/address. What you are implying is that most parties are going to be rushing to close their lightning wallets and move everything onchain, and that most transactions will result in an immediately closed channel. Nonsense. I don't throw away my leather wallet and buy a new one every few days.
 
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Sensorei

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Bitcoin: 65,000 transactions per second in El Salvador​


What bottleneck was experienced on the BTC Blockchain when El Salvador's Chivo Lightning wallet was adding 200,000 new lightining users a day last month?

Only 2 months in the last 3 years saw fewer TXs in a month than the month of September 2021 when the Lightning Network saw it's biggest growth and most transactions.

"Chivo is acquiring new users at an average rate of 142 every minute, or more than 8,500 new users every hour, and more than 200,000 per day"

"Chivo appears to be registering a volume of more than 65,000 transactions per second, made possible by the use of the Lightning Network"
 

quovadis

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No there is no bottleneck now. BTC blockchain hasn't processed more than 300,000 TXs a day since May and network fees are close to the lowest they have been in a year. That's a nonsense theoretical example which in reality is not happening. All of these theoretical channels realistically aren't going to close at the end of the day. If there is a balance in your Lightning wallet thats a channel that's indefinitely open. There has never been anything remotely close to even a 10% of 1000,000 people wanting to open a multisig address in one day.

I agree lightning does not scale right now as it should if there was mass adoption, but tech has been advancing as it is needed. Your argument is like saying a Bugatti Chiron is a slow car because in 2050 there will be 500 cars faster that it.

The vast majority of channels opened will be when a party first creates their lightning wallet multisig address and sends money to it. That channel can stay open indefinitely as long as this a BTC balance. You don’t have to set up a channel with everyone you transact with. Nodes can send transactions through each other, keeping the sent Bitcoin off-chain even when reach their target node/address. What you are implying is that most parties are going to be rushing to close their lightning wallets and move everything onchain, and that most transactions will result in an immediately closed channel. Nonsense. I don't throw away my leather wallet and buy a new one every few days.

I think you're missing the nuance of the argument. The bottleneck still exists when channels are opened or closed and there's no guarantee that payment channels will stay open indefinitely especially due to the possibility of manipulation.
 

quovadis

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Bitcoin: 65,000 transactions per second in El Salvador​


What bottleneck was experienced on the BTC Blockchain when El Salvador's Chivo Lightning wallet was adding 200,000 new lightining users a day last month?

Only 2 months in the last 3 years saw fewer TXs in a month than the month of September 2021 when the Lightning Network saw it's biggest growth and most transactions.

"Chivo is acquiring new users at an average rate of 142 every minute, or more than 8,500 new users every hour, and more than 200,000 per day"

"Chivo appears to be registering a volume of more than 65,000 transactions per second, made possible by the use of the Lightning Network"
Look at little closer to what Chivo is. I think you might be surprised.
 

Sensorei

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Look at little closer to what Chivo is. I think you might be surprised.
Yes I know Chivo is run by and controlled by the El Salvador dictatorship. Point is those are lightning transactions all on the Lightning Network, and no noticeable impact on the BTC blockchain. Point made.
 

Sensorei

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I think you're missing the nuance of the argument. The bottleneck still exists when channels are opened or closed and there's no guarantee that payment channels will stay open indefinitely especially due to the possibility of manipulation.
This 'bottleneck' has had no noticeable effect on either the Lightning network or the blockchain. TXs hashlocks AND time lock to ensure payment security so BTC is refunded after a specified time. The Eltoo upgrade for Lightning will deal with uncertainties caused by watchtowers.

Lightning is far from perfect but it does not job now. Like I said am more keen to see Solana or another blockchain that uses a more ideal architecture like their Proof of History being used to settle instant payments in the future.
 

quovadis

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Yes I know Chivo is run by and controlled by the El Salvador dictatorship. Point is those are lightning transactions all on the Lightning Network, and no noticeable impact on the BTC blockchain. Point made.
They are not all lightning transactions on the lightning network especially for users of the Chivo wallet.
 

quovadis

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This 'bottleneck' has had no noticeable effect on either the Lightning network or the blockchain. TXs hashlocks AND time lock to ensure payment security so BTC is refunded after a specified time. The Eltoo upgrade for Lightning will deal with uncertainties caused by watchtowers.
Once again, the underlying bottleneck exists. If you want to ignore it in favour of mass adoption of lightning and believe such adoption will have no domino effect and not fundamentally diverge from how BTC was originally sold that's your prerogative.
 

Snyper564

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While you all debating this BTC just doing its thing... (it dont give a sh*t)

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