#lightning network

[phneep]

[foxstory]

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[reddragdiva]

why the Lightning Network is fractally stupid

(this is me ranting onto tumblr. if you don’t understand this, you betta off.)

bitcoin doesn’t scale. since mid-2015 it’s been clogged to unusability. slow, fees through the roof, you name it.

so the solution is: set up another network on top and do all the real work there!

the favoured solution is the Lightning Network. it was posited in 2015 and they finally released toy alpha code at the start of the year.

seriously, if you ever say “bitcoin doesn’t scale” they’ll say “but but but the lightning network!! lol!”

the idea is this thing will form a mesh network of individuals. you will set up a payment channel with anyone you want to exchange payments with. you have to pre-fund the channel up to the limits of how much money you’re likely to want to exchange, from whatever coin your LN is running on top of (usually bitcoin, could be litecoin). if you want to exchange with someone you’re not directly connected to, your transactions go through intermediaries on the network.

since this is cryptocurrency, they want it not to depend on trusted third parties, extending credit, etc.

this approach has a number of problems.

1. it doesn’t work. the software is absolute dogshit. buggy as hell. lost funds are routine. the fans say “it is fwuffy awpha softwawe uwu” and you shouldn’t treat it as existing. until someone says “bitcoin doesn’t scale” and then the same people say “but the lightning network!! lol!”

fucking 99% of transactions around $200 fail.

1.5. it can’t work. the mesh network problem - computationally finding an arbitrary path from random leaf node A to random leaf node B - is literally an unsolved problem in computer science. but it’s absolutely required for the LN to work

seriously, the closest to serious work on this problem was UUCP email in the ‘80s, which worked in a similar mesh. these were the most motivated computer scientists and sysadmins on hand too. closest they came to solving it: a. hubs. b. maps of the whole damn network, updated monthly. c. throw this stupid idea in the bin the moment proper Internet with proper DNS became available.

with LN it’s even harder, because the graph changes with every transaction - a transaction changes the liquidity in the channels, therefore changes how large a transaction can go through. their solution: a map of the whole damn network, updated every transaction. holy scaling, crapman!

(their posited solution was “something like BGP.” BGP is how the internet finds a path from arbitrary node A to arbitrary node B. the catch is that BGP is a completely trust-based protocol - the surly telecoms network engineers who run this shit trust each other not to fuck it up, and when someone does everyone scrambles. this is not a protocol for a decentralised cryptocurrency.)

also you have to be online 24/7 or the other end of your channel can screw you over. (workarounds include paying someone to watch your channel for you.)

the likely solution is hubs. gigantic frickin hubs. now you might call these “alternate-visa”, “alternate-mastercard” etc but,

2. the whole idea is dumb. nobody wants a network of prepaid channels. this is not going to compete with payment networks that don’t require that.

it’s important to note that this idea has no precedents in the history of finance. that’s a huge strike against the LN, because there’s no fucking thing in the history of finance that wasn’t tried by the dutch, the british or the americans. nobody has ever made a prepaid channel network. they all worked by extending credit.

the LN is the sort of idea that’s really obviously someone seeing a problem (bitcoin’s transaction clog), coming up with the first thing that occurs to them, and it being seized upon because it’s a solution and never mind it can’t work.

the only purpose the LN serves is an excuse for bitcoin’s failure to scale, and the only use case is bitcoiners who wish their internet pogs had a payment network, ‘cos then they could say bitcoin was useful for something other than zero-sum speculation.

3. the LN solves a problem that doesn’t exist. the idea is to make transactions fast again, to let merchants take bitcoin. but even before the transaction clog, there was nearly no merchant use of bitcoin - because it’s a shitty payment network.

they honestly think this will bring a flood of new crypto users!! when LN is even easier to fuck up with than bitcoin.

4. the LN is coin-agnostic - so it isn’t an excuse for bitcoin’s unscalability. the LN was designed to run on top of any coin - currently works on bitcoin and litecoin. you could run it on top of a central bank dollar-pegged crypto if you wanted. if LN ever somehow became a good payment network people wanted to use (this will never happen), then there’s no reason it would have to hobble itself by being tied to bitcoin. so “but LN!” is not a good enough answer any more.

any questions?

[bitcoin-dood]

Lightning network info-graphic  via: https://twitter.com/CryptoEagle0x/status/955242150798745601

[cryptocurrencygoodness]

The Lightning Network Could Make Bitcoin Faster—and Cheaper

A new layer of code could address two problems that inhibit use of bitcoin in transactions.

[bitcoinversed]

What is Fedimint?

What is Fediminint? In simple terms, it’s a community-driven technology enabling more private and decentralized use of Bitcoin. It’s like a secure and private wallet, but run by a community, not a big company.

Fedimint originated from the desire to make Bitcoin transactions even more private and controlled by the community. The main goal? To empower user communities, enhance transaction privacy, and give more control to the individual user. It’s all about decentralization and community power!

At its core, Fedimint operates through a federated structure, bringing together different user groups or “federations.” Users deposit Bitcoin, receive eCash Notes, and the guardians of the system ensure the funds are safe. Read More