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Comment by ArtTimeInvestor | Hacker News Reader

In terms of every day transactions, Bitcoin is just the base layer. Like TCP/IP is the base layer for using Hacker News. Nobody is crafting TCP packets manually when using a website. For every day transactions, protocols higher up in the stack will be used, like the Lightning Network.

The author makes it sound like you need to be tech-savvy to use the Lightning Network.

That is not true.

Using the Lightning Network is just like using any other software. Lightning is just a protocol. The user is not exposed to it. Just like a user is not exposed to SSL, HTTP and TCP when using a website.

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Lightning network is impossible to use at scale because any operation to move to and from L2 involves operation on L1. So just to create an L2 wallet for every adult on Earth would take 10-15 years, not even counting humans born in the meantime. Second problem is that opening a bidirectional channel to any merchant is also an L1 operation, and thus makes the issue worse. So Lightning Network technical flaws let to a total centralization of the L2. Basically there are now "banks" in L2 who issue their fake virtual tokens and all transaction on L2 happen inside a centralized "bank" with this bank's IOUs and once in a while it can settle accounts. Basically a shittier and in all aspects worse copy of the existing monetary system. Not decentralized, not private, not fast, not safe for customers. Garbage tech and garbage technical implementation.

That seems like a dubious claim.

Say I sell you a meal. You pay for me for it with a L2 transaction. I use that L2 transaction to pay the taxi driver for my ride.

In that very short story the value representing stuff (the meal) was moved onto L2, and then out of L2 in exchange for a taxi ride. Neither move involved L1.

L2 implementation for BTC works like this (roughly). One L2 wallet needs to open a channel to a peer and lock there a a number of L2 tokens in total exceeding the expected trasaction or more, and iirc a reverse tunnel also needs be opened with the same parameters. Then one L2 wallet can transact with another L2 wallet fast and without involving L1, yes. Also channels can be chained in arbitrary topology and then LN network calculates an optimal set of channels and funds inside them to make a transaction. That is a NP-hard problem which needs to be solved in real time for every transaction, and which has exponential difficulty increase with every new participant in the network. But, those yet other issues LN has.

The problem is that opening an L2 channel is an L1 operation. And closing L2 channel is an L1 operation. So if an individual want to use BTC L2 as designed, it would involve a lot of L1 operation plus tax the network with every transaction.

This all is absurd as it is sounds. The hardest problem with discussing Lightning Network is to choose which idiotic design decision to dismantle first :) .

So eventually the system evolved and ditched stupid decentralization (sarcasm alert) and centralized in a few big entities (Lighthouse iirc) and the full L2 network is no longer needed, every user and merchant opens one single channel to the central bank, and then all operations happens inside the central bank via IOUs. This removes the need to most of the channels, and gets rid of unneeded decentralization. But even then, with 1 single channel operation per user life, it would require 10-15 years of L1 anemic performance to even onboard everyone to LN.

Look up channel factories.

In what way is bitcoin on the Lightning Network fake virtual tokens?

You’re right…nobody crafts TCP packets manually, and Lightning can absolutely offer similar abstraction.

But here’s the twist: TCP/IP was built open and insecure by default, forcing us into decades-long battles (SSL, VPNs, Tor) to claw back privacy.

Bitcoin risks repeating history if we treat transparency as a minor inconvenience rather than a systemic flaw.

The point isn’t whether Lightning is easy (or hard) to use. It’s whether privacy should ever be optional at all.

Privacy, like security, isn’t a feature you bolt on later; it must be foundational, invisible, and unavoidable from day one.

Otherwise, we’re just building a prettier front-end on a fundamentally flawed architecture.

The difference is that if you want sovereignty of your own bitcoin on the lightning network you need to run the lightning daemon yourself, open a channel, and maintain it and deal with closures of the payment channel.

Payment channels are useful for some things, but you have to admit they are pretty much abandoning the typical cryptocurrency use case of just sending money to an address, even if the recipient is offline.

If we use this HTTP/email protocol comparison, an ordinary SPV wallet is like a web browser and a lightning network node is like a web server. Actually an email client/mail server is a better example.

When you open up a Lightning channel with another node, that node becomes your gateway to the world wide web of Lightning nodes. Just like your internet provider becomes your gateway to the web when you buy their service.

Do it with a reputable node, and they will not maliciously close it just to steal a few dollars from you by closing the channel with an outdated state. They will want to keep their reputation. Just like your internet provider does not deny you service after a day when you paid for a month.

>that node becomes your gateway to the world wide web of Lightning nodes

My point is that you need to constantly have your lightning node running to service the channel. Whereas before with SPV or something you don't need a constant connection to the bitcoin network, and you can just receive transactions offline. That basic use case is necessarily gone in lightning.

>just to steal a few dollars

It's never just "a few dollars" because the amount in the channel needs to be much greater than the fees to open and close it. It is always a serious amount of money. This is the type of issue that gradually gets worse as bitcoin becomes more widely used, which it won't (because of issues like this).

The thing about payment channels is that bitcoiners use them to make up for the low transaction throughput caused by bitcoin's outdated 1MB block size, but payment channels are most efficient when the fees to open and close the channel are low, and there is little risk associated with closing a channel.

Want to break the lightning network? Just open a massive number of channels, then maliciously close them all at the same time. Because bitcoin's transaction throughput is so low, you can create enough channels such that not everyone will be able to close the channel at low enough fees.

    you need to constantly have your
    lightning node running to service the channel

Why do you think so? What do you think would happen when you go offline for a week?

    It's never just "a few dollars" because
    the amount in the channel needs to be
    much greater than the fees

Connect to a node that processes a million dollars worth of transactions per day, then the amount in your channel is just "a few dollars" for them, for which they would not risk their reputation.

If you go offline for a week, you can't receive transactions for a week.

Connect to a node that processes a million dollars worth of transactions per day, without securing the channel on the other side and congratulations you've invented a bank (albeit fractional reserve spending is more difficult).

Not that that's a terrible thing, I mean it's better than most banks: I've used it before as a means to transfer money from exchange to exchange: it's competitive and has low fees compared to SWIFT. But the problem is that if people rely on some centralized payment processor you will eventually get vendor lock-in.

You have that now with Coinbase commerce: before it was the case that they would just give you an address and you could pay with LTC or whatever, now they want you to download an app and link it with their system. That's the direction all this LN stuff is generally going.

    If you go offline for a week, you can't
    receive transactions for a week.

Same with the cash wallet in my pocket. I have to take it out to receive transactions. Not a problem for an individual. And for a merchant it is not a problem to have the wallet online all the time, or during business hours.

    you've invented a bank

There are many differences. One is that the bank can see where you send money to. A LN node can't.

But I think the better comparison when it comes to the LN is Visa, not a bank. And again, there are many differences. One is that Visa can reverse transactions. Making payments costly for vendors because of fraud. LN nodes can't.

> Connect to a node that processes a million dollars worth of transactions per day

Your solution is to centralized transactions on a few large payment processor nodes?

The core problem of LN remains, which is that in order to operate a LN node you must keep it always online or risk having your coins stolen. The entire point of creating a L2 network in the first place was because Bitcoin Core decided that scaling the base layer with larger blocks would harm decentralization by making it more difficult to operate a Bitcoin node. Well anyone who has ever operated a server can tell you that maintaining near 100% uptime is a much much higher technical bar than buying a larger hard drive.

The alternative for LN users if they don't want to operate their own LN node is to give up custody of their coins to someone who does operate a node, but this goes against the core premise of cryptocurrencies.

Goalposts --->

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