Lightning Network Flaws
github.com
github.com
Maybe someone who has actually investigated will have something to say?
And finally, it's not just "a Bitcoin Cash viewpoint" and labeling it as such does the criticism a big disservice.
If the opposing view is political, then the proposition is political. Dismissing it out of hand because it is 'political' becomes nonsensical from this point.
LN has been presented as a panacea to BTC usability issues. Are there no incentives in this promotion? Why would they be beyond critique?
Yes, technologies deserve a chance to develop and stumbling blocks along the way can be expected. However LN has been a basket case of never ending issues. There are other platforms aside from BCH which are effective for transacting. I won't list my favorites in the interest of avoiding controversy.
A few years ago I wrote a browser based PvP rougelikelike. Just a hobby project. I wanted to add microtransactions. Payouts for NPC and player kills, along with a mechanism to bid into the game. The near religious devotion to different cryptocurrency ecosystems was off putting when looking for a solution. That, and the multitudes of projects with flashy landing pages, poor documentation, ridiculous tooling and loads of gotchas for implementation.
In the end I found another altcoin that satisfied my needs for the project. No fees, decentralized and validated transactions in seconds or less. Simple to use, less gotchas and flashy marketing, but as with any coin there were plenty of maximalists.
That didn't stop users from asking, "Why didn't you use [favored coin]?"
Technical merits were of no concerns for maximalists, who continually emphasized, "number go up" or some imagined impending price action. Nobody seemed to care what was actually delivered, but everyone was constantly espousing the technological virtues of their preferred ecosystem.
If cryptocurrency is to be taken at face value, as a mechanism for transacting, one would expect that usability would be a concern. LN is a good example of this. There are simply too many steps and potential failure modes. Yet that isn't a concern for advocates. They're more interested in the valuation and their own sunk costs.
This is why cryptocurrency isn't taken more seriously. Yes, there is the potential to transact and do things with it, but the community is more interested in speculation. Critiques about 'politics' are a good illustration of where speculative mania overtakes the actual value proposition. Hope you can appreciate the irony.
Of course BCH folks would say that corps have hypnotized the BTC community and convinced them that small blocks are good, when in reality they just want to cripple it so it can't compete with traditional payment methods. The main issue I take with BCH folks is they act like smaller blocks are worthless - if they at least addressed the merits with some earnestness it would be easier to see them as rational in their reasoning.
Trying to make blanket statements leads to incorrect conclusions...there are a myriad of cases where consumers prefer classes of transactions to be digital-cash like.
Most crypto holders just want digital cash...not another paypal. We already have paypal. I don't want "customer support" when I put my cash down...neither reversibility or "legal protection(whatever that means). There are legal agreements that can be set for different types of transaction but I definitely don't want paypal, visa or some random bank to decide whether it likes my transaction or not or put it on hold for "my own protection".
Your only options are to either keep a lightning node online yourself, or to trust another node to custody your funds. At scale I think most people would do the latter, which sorta breaks the whole point of "p2p digital cash."
[1] https://github.com/moneybutton/yours-channels/blob/master/do...
> or to trust another node to custody your funds
That is a bit of an understatement, given that actually implementing a routing algorithm that works at scale is an open problem in computer science with nobody even knowing where to begin.
This results is a decreasing failed transaction rate for increasing sizes of transactions as we move into the future.
I've never owned BCH, and I was once an owner of BTC who steered clear of BCH, but I have to admit that the BCH solution has the major advantages of simplicity and tried-and-provenness. It's tried-and-proven because it doesn't make any additions to the algorithm Bitcoin uses, which after 11 years of experience we know works. If you want a computationally secure system, then you want it to have exactly the aforementioned qualities. I guess if gigabyte/USD prices for storage devices were to drop fast enough, and if it were possible to turn down the latency of transactions without compromising the safety of the network, then maybe the Big Block solution could work? I'd still be worried about surges in latency when there are increases in demand.
The LN approach seems very complicated and experimental, and involves playing with real money. It's been in development since 2017 and is perpetually 12 months away from being ready. Some papers introducing attacks list numerous difficult tradeoffs that need to be made to make the network secure against them. The descriptions of it I've seen online seem naive and simplistic compared to the reality. Complexity is antithetical to security and correctness.
I haven't paid attention to BCH in a while but when it was released they had changes to the difficulty calculation that allowed difficulty to drop before the normal 2016 block interval.
In principle this could give miners greater control over inflation.
I'm not saying it's good or bad but it is a change to the bitcoin algorithm.
My understanding of mining difficulty is that you could tune it without compromising security so long as it's hard enough to provide dampening to the system. Right now it's adjusted to produce one block every 10 minutes on average.
Ultimately, if you want to keep the algorithm you need to either allow bigger blocks or allow blocks to be produced more often.
And if your objective is to discard LN because of those issues, those same issues do not seem to matter in the real world where people are actually using LN for real transactions every day all over the world. This is public data you can check yourself.
Anyways, I think this list of links is biased and doesn’t add value to someone trying to understand modern payment networks.
This looks outdated. This warning was true a few years ago, but nowdays the risk is low enough for everyday use (as a checking account, not as a savings account).
Of course market speculation has made any cryptocurrency system completely unusable for long term value storage so I wouldn't put my savings in there anyway, but even for a checking account the existence of risk of spontaneously losing money that you can never get back while using the system normally seems like a massive design flaw.
Bitcoin and lightning network exposes the end users to all the potential security issues, but gives finality and no bank bailouts in return.
"Solution" because it does not actaully allow fast and cheap "cash-like" transactions as Bitcoin was originally designed to do (and still can easily scale to Visa-like levels).
From day one Satoshi had built Bitcoin to scale to to Visa levels of transactions by simply incrementaly increasing the block size over time. Blockstream hijacked the Bitcoin Core GitHub repo and soon after disabled several core features and have since refused to increase the block size while pushing their products (Liquid and LN) as "solutions" to this problem they created.
Specifically wrt to privacy, there are pitfalls and subtleties in using Lightning Network privately but it is doable. I think this article does a good job summarizing the current state [0].
IMO LN is secure enough to sleep well at night with open channels but you definitely want uptime monitoring and at least one watchtower hosted on separate infrastructure from the LN node, or great trust in whatever custodial wallet provider you may be using to not doxx you if you do and that's a concern. (Seriously though, any cryptocurrency going through any form of custodianship with any form of company/business will eventually have to be KYC’d and accounted for to authorities, if currently existing and planned regulations take effect. Self-custody and, for L2 like LN, self-hosting, takes some self-education but is the only way to get the true benefits of cryptocurrencies)