The idea here is that the blockchain model where everyone checks everything that happens doesn't scale to billions of users.
Fortunately for people who disagree, there are hundreds of crypto projects that think this is possible. Including straight up copies of Bitcoin like Bitcoin Cash and Bitcoin SV.
What do you mean by "compliance" issues? If you meant that the sum of money you send cannot trigger someone, somewhere to check to make sure the transaction is legit, and we're assuming a transfer from a "normal" bank to another, then I would guess on the order of $10,000. But companies and organizations routinely transfer millions and billions between normal banks. Yes, the transactions may cause someone or many someones to investigate, but the transfers still succeed.
What does OP mean with "liquidity issues"? Lightning is a routing network, and you can connect directly to your counterparty, circumventing all potential liquidity issues.
> But companies and organizations routinely transfer millions and billions between normal banks
Just like companies have direct lightning channels between each other, they can send billions of they please.
You're being disingenuous. A channel needs to be already funded before a transaction can happen, with an amount at least the size of the transaction. So, to transfer billions, you need billions more to first fund the channel. A quick search shows that most channels currently have less than $100 in them, limiting how much you can send without prior arrangement.
> A quick search shows that most channels currently have less than $100 in them, limiting how much you can send without prior arrangement.
Note that not all channels are public, so you won't find all in searches. I'm only saying that you shouldn't be worried about lightning liquidity if you can directly connect to your counterparty - as you can directly transact with that party without relying on any liquidity from anyone else.
For Lightning to work at scale, we need solutions for problems that nobody on earth has solved yet, nor have any idea how to solve.
Sure, it kind of sort of works for small network sizes. It will die a fiery death the second it attempts to become popular with no known way out of the mess.
Let me further clarify: Lightning is not worthless and has already become the basis of a new industry of apps and services.
Like any low-value transaction using bitcoin, like the proverbial cup of coffee, it’s not necessary to wait for even one confirmation before doing anything.
Plain vanilla lightning uses a UTXO (that’s what a bitcoin on the blockchain is, an unspent transaction) to open a channel. But you don’t have to wait 10 minutes for at least 1 confirmation before using the payment channel.
I’ve received multiple LN transactions with various LN apps and it’s always been instant.
Once the payment channel is opened, it stays open as long as it needs to. But the killer feature is being able to transact without requiring the underlying bitcoin blockchain; it’s only required once the parties decide to close the channel.
Same thing with multi hop payments.
There are many enhancements being worked on, like loop-in, loop-out and submarine swaps, which handle providing liquidity to enable transactions and the ability to make swaps between chains, like being able to “swap” between bitcoin and light coin if that was desired.
There’s also work happening to enable one on-chain UTXO to fund multiple payment channels in one go.
So tens of thousands of transactions can take place without touching the underlying blockchain.
So there’s no lag when it comes to opening or closing a payment channel.
There are no scalability issues; we’ll have more LN nodes than Bitcoin full nodes (about 55,000 worldwide) by this time next year and it’ll be fine.
> But the killer feature is being able to transact without requiring the underlying bitcoin blockchain.
To be clear, you can send and receive bitcoin without the fees or latency of the bitcoin blockchain until you close the channel. And depending on the use case, that could be weeks or months in the future.
And even when opening or closing a payment channel, you don’t have to wait for the blockchain to confirm that transaction.
> Except a 4tx/sec cap on opening and closing channels.
Once a channel is funded, it can stay open for as long as it needs to. I can have a payment channel open with my local coffeeshop and we can transact dozens of times; only the final bill has to be broadcast to the bitcoin blockchain.
Well connected LN nodes can be connected to hundreds of other nodes and route transactions accordingly.
In the short time LN has been available, there are over 10,000 nodes and growing; the network capacity is almost $8 million USD: https://1ml.com/statistics
The Internet was always at capacity. Until we had the pervasive networking we have today, there were always more people wanting to have Internet access more persistently and with more performance than what was available. Almost everyone who had the opportunity to use the Internet, would. As a result, enormous advances in technology were made to implement today’s pervasive networking. New use cases manifested immediately all the time. Nobody ever said “we implemented this world wide network thing, now we are looking for use cases”, there were, and are, always more use cases to choose from than resources to implement them.
> Almost everyone who had the opportunity to use the Internet, would.
I'm too young to have experienced this. But I've seen countless of clips and interviews of people claiming they would never use the internet because they can send post and use a telephone instead. "Computers are for geeks", etc.
> New use cases manifested immediately all the time. Nobody ever said “we implemented this world wide network thing, now we are looking for use cases”, there were, and are, always more use cases to choose from than resources to implement them.
It took a dotcom bubble to find the use cases we actually use today. Would you have not said the exact same thing back then about the internet?
Nobody said that back then, no. They said there had been an over-exuberant market with people throwing stupid money at any old idea, but nobody was saying "the internet is a bust" or even "we don't know the use-cases" because there were a ton of other useful, successful things going on with it.
You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.
Many people were saying this, Paul Krugman (one of the leading economists) went as far as comparing the internet to the fax machine:
"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'–which states that the number of potential connections in a network is proportional to the square of the number of participants–becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."
> You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.
I'm too young to live through it, but luckily I studied it in university :-) Many people claim to know many things about history prior to their birth. I guess I'm one of these people.
> Many people were saying this, Paul Krugman (one of the leading economists) went as far as comparing the internet to the fax machine:
And he caught a bunch of shit for it, even at the time. You keep trying to conflate critics of Bitcoin, many of whom have technical & finance backgrounds, with the largely non-technical crowd that didn't understand the web back in the 90s.
> I'm too young to live through it, but luckily I studied it in university :-)
What's the name of this "history of the internet" course(s) you took? The most historical context I ever got consisted of maybe a few intro paragraphs on Arpanet in my networking 101 class.
"Media history" would be the English translation. It wasn't about the technical origins of the internet which are irrelevant in this discussion.
They studied the impact on a few big media inventions (printing press, TV and the internet) on (western) culture. It seems you don't believe I had this in University? You can find some information here: https://docplayer.nl/2209094-Studiegids-2013-2014-communicat...
The subject is called "Mediageschiedenis" and you can find it on page 37. This document is unfortunately in Dutch.
> You keep trying to conflate critics of Bitcoin, many of whom have technical & finance backgrounds, with the largely non-technical crowd that didn't understand the web back in the 90s.
People today are as illiterate about economics as they were about the Internet back in the 90s. Just look around and see how many people know what Austrian econ is.
I was there. By the time the dotcom bubble burst, the Internet was already everywhere, having steadily grown as a household technology since first introduced to the general populace just a few years earlier.
The dotcom bubble was then precisely a symptom of the Internet's runaway success: Everyone wanted to use it, massive amounts of money were being made with it, and so everyone thought they could make money with it as well. As a result, even the stupidest ideas got funding.
When the bubble burst, it caused a significant economical upset. It did not have any really noticeable effect on the Internet itself, its usage, and the availability of most of the services that were actually in use. I don't think anybody remembers a time where Internet usage "dipped" from its massive momentum since the mid-90s, because the dip was largely economic.
Then he was an idiot, because at the time email was already in heavy use and had been for years, and had had a massive effect on business communication and the economy. Unless for some reason you don't count email as part of 'the internet'?
I was working back then, in 2003. The view on the ground was that SV had blown its head, but the rest of the world was just getting on with it. In fact most of the tech industry didn't even notice or care.
If you want to talk about whether web-based commerce was looking feasible, well even that was healthy enough - amazon was there and people were using it more and more, though clearly it wasn't as big as it is today.
So no, there was no feeling that 'the internet' wasn't going to be such a huge thing. There was a pessimism about some aspects of web commerce.
But I guess that's not as catchy a tagline as "It's like the early internet!"
> The internet didn't support millions of users after a decade either. Is the internet a scam?
The internet wasn't actively anti-efficient, making itself less efficient the more people wanted to use it haha.
> I'm not sure why you are saying all efforts go into a flawed second layer?
Because Bitcoin is fundamentally incapable of processing more than a laughable number of transactions, barely enough for a small town let alone the world?
> a) Dozens of teams are working on other efforts.
With nothing to show for it that isn't either (a) an objective scam or (b) not true to the fundamentally unachievable objectives underpinning "Bitcoin"
Fortunately for people who disagree, there are hundreds of crypto projects that think this is possible. Including straight up copies of Bitcoin like Bitcoin Cash and Bitcoin SV.