Has Bitcoin's Lightning Network Failed?
(Edited)
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Back in 2018, many people claimed that 2019 would be the year of the Lightning Network.
With 2019 soon coming to a close, adoption has been...disappointing. Some might say.
In this video, we'll be discussing whether the Lightning Network has failed.
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▶️ 3Speak
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Vitalik talked about the blockchain trilemma: Scalability, Decentralization and Security, you can only choose two out of those for a blockchain. Bitcoin lacks scalability. So the lightning network was the answer. But it's clearly a bullshit answer, since it doesn't scale Bitcoin, it simply is a sidechain which uses timelocks to the Bitcoin blockchain.
Any blockchain can do that. The lightning network can be used for any blockchain. the lightning network does not have the same security and decentralization as the Bitcoin layer.
Saying that the lightning network is a solution is like saying that any other blockchain with better scalability is a solution, disregarding decentralization and security. For some reason people assume that Bitcoin's qualities are passed down to the lightning network. Not true.
I'm just waiting for the day that the bitcoin community will finally understand all they have to do is raise the blocksize. As the cost of hardware goes down over time, it won't impact decentralization in a negative way. And no I don't think bitcoin cash will ever workout, it needs to be on bitcoin.
Blocksize itself can't be the ultimate solution as it won't scale as well. It not just the storage but prorogation speed which has variable such as geo location and bandwidth.
BCH funny enough are planning on going second layer after the blocksize reaches a certain point-not the LN though.
Blocksize is quick solution, one that works with some cost. But not the ultimate fix.
A good fix would of been doing a somewhat blocksize inc,going second layer. The problem with second layer protocol like payment channel ie LN is that once you go all in, hardforking becomes harder.
Blocksize inc can be soft fork ie extension block but no crypto has ever tried it. Litecoin might be the first to even attempt it and could possibly change the game.
LN is a great idea but the problem is in order to scale the LN you have to add more second layers to it ie statechains and channel factories. Nothing wrong with it but indeed Bitcoin's qualities are not passed. But timelocks and redemption is what counters it offering a safe haven. But that brings the dust attack problem where if tx fees are to high, the LN is not = to the quality of the mainnet bitcoins.
Statechain fix this by creating a noncustodial bridge to mainnet with ablity to redeem no matter tx fees.
Ironically BTC is following what Hal said: Bitcoin Banks.
These are better than trad banks but the idea of using secondary layers to scale bitcoin is happening before eyes.
It isn't an easy path but a blocksize inc buys time. Maybe this could of been done just to allow some fixes to go through but it be faking the results and pushing the problem into the future.
Yes I agree that currently block size is just a quick fix. However I also think that propagation speed can and will be improved one day. Communications have seen tremendous improvements over the years. Although that's a longshot I admit.
However, the Bitcoin network is already at 50% capacity, in a bear market. How do we expect adoption to spread if people won't be able to even transact between exchanges as soon as users double? A quick solution is definitely needed.
What about mimblewimble, do you think it could work?
Yeah propagation speed will inc but not enough to scale. You could use a second layer 0 base layer solution such as bloxroute that aims to fix the propagation issue. The problem with bloxroute is it skews chain interest by creating a new network interest-yikes.
Communications has increase but they also use second layers as well :P Exp, sharding is pretty big in database and other solutions.
To be fair centralized solutions could be done to transact between exchanges.
Mimblewimble is actually a pretty good solution but even they are working on second layers. Mimblewimble is also less feature rich so if you think Bitcoin has limited smartcontract features well Mimblewimble are way less....
Certainly, those numbers are far from impressive, but I have a feeling that since BTC is the battle ram if we really have a chance for crypto currency mass adoption then it will be achieved through BTC first. It will just take longer than expected...
PS. Nice decoration you have there mate. Sweet BTC pillows. Ha!
Haha! Thanks for noticing the pillows :D
IMO No, it hasn't got that much of an attention. When the focus turns on scaling Bitcoin Lightning network will have a huge impact
I believe at this point Bitcoin will never get mass adoption and become only a niche of store of value.
Stablecoins will bring crypto mainstream.
Thank you for a very informative 3 Speak presentation explaining what the Lighting Network is and your thoughts on whether is has failed.
I agree with your theories about liquidity and the Bitcoin price having to be much higher in value, so that any price fluctuations are smoothed out.
thanks for your video. here are my thoughts
i prefer on chain scaling with dash (no forks for 5 yrs now, fingers crossed) - very easy, fast and reliable. I have seen LN in action for a year now, online AND offline and iam not convinved that merchants will be satisfied with it. too complicated to also take care of a 2nd layer. There is a 2nd layer in dash too (Masternode network) but this you dont really notice as an end user.
I still hold some BTC put if things continue this way for BTC/LN i think it will head towards serious issues because store of value will fade if bicoin isnt usable as money anymore.
To be fair a store of value doesn't have to be usable money but trustworthy money. Gold is the best example.
but gold pegged bills had been money until 1971 in the us for example (not to long ago, in money terms) since then money has been manipulated all the way long.
so what if i can get a faster system with Dash/BCH with SAME level of security, BTC might be washed out of the market in, lets say, 5 years time.
and bills are centralized solution to which bitcoin could be used with as well.
Disagree with the level of security
we'll see, I don't think BTC will even be washed out even in 10 years
time will tell - hope steem will be around in 10 years ;D
Lightning is working fine, very hard to know the volume of transactions which is good for privacy but I have done thousands myself!
Unfortunately, we find that Lightning at least up to this point is still very difficult to use for the average person.