Lightning Network Q&A
Answers to the cogent feedback from my criticism of the Lightning Network
It is not often that I receive constructive feedback regarding my criticism of second layer networks. When I do, I always spend some time doing research on the points raised. Most of the feedback is based around attacking me personally or blind rage and name-calling. In this post, I address every rational point that I’ve given thought to:
The Lightning Network (LN) solves the scaling problem, but all I ever hear from you is that we should expand the block size, which we all know won’t scale. So, do you even have a solution to this problem?
In fact, I do have a solution and have made my proposal many times and in many different ways. Of course I agree that raising the block size simply won’t allow the network to scale in such as a way that we can avoid all the bad things that are happening right now. Let me, again, explain one possible engineering solution to this problem. In setting the stage for this, I need to remind everyone that right when the block size debate was at its zenith was exactly the time a new technology was anonymously announced to fix the most serious problem that Bitcoin has, fungibility. It was/is like mana from heaven this mimblewimble. It allowed for very very small transaction footprint and, at the same, made bitcoin transactions fully anonymous. Bam! Fungibility -and- an effective increase in transaction velocity. To pull something like this off for Bitcoin, it would take a serious hard fork, but remember at the time this was released, Bitcoin was not yet mainstream like it is today. It was not in Silicon Valley’s / Wall Street’s best interest to entertain this kind of plan. There were pull requests to test this, but all were summarily ignored. This is why we not have the Grin coin. Could this solution still work? Maybe, depending on the network’s propensity for hard forks. The current regime will not tolerate a hard fork, sadly.
But the LN allows for “streaming money” just like the original promise of Bitcoin. Why would you not want that?
The Bitcoin White Paper says nothing about “streaming money”, I think this came from Andreas Antonopoulos. I love this concept, but not at the expense of centralizing Bitcoin and recreating the central banking system.
We have a shit coin for you, it is called Bitcoin Cash. Why don’t you just go over there and forget about real money like Bitcoin.
Ok, this one stings just a bit. It doesn’t have to be this way, anyone brave and smart enough to pay attention to cryptocurrencies, let alone Bitcoin, deserves our respect. Be that as it may, this is what I hear the most, sigh, but is a solution to the problem of second layer networks. It pains me to say, but a lot of the really smart people I used to work with did bounce from Bitcoin and on to Bitcoin Cash. What a shame to lose these people. They were some of the most fervent supporters of Bitcoin when nobody, I mean nobody, even gave two shits about The Blockchain. They were avantgarde and visionary and are, regrettably working on other coins now. For me, I still think the general public can learn the dark underbelly of Bitcoin, it is possible. Please don’t get me wrong, the LN is a technical solution and a thoughtful one, but it has some pretty serious warning signs if and only if Bitcoin users can no longer transact on the main chain. I haven’t heard calls for suspension of the main chain…yet, but what prevents the scenario that I outline from happening? Please go read, The Creature from Jekyll Island and then re-read my blog posts, I think you will start to see what’s going on here.
But all the most noteworthy and important people in Bitcoin are behind the LN.
Apart from Andreas Antonopoulos, who, exactly are you referring to? I am not sure why Andreas is supporting the LN apart from what he’s said publicly. Since the new set of core developers took the reigns from Gavin Andresen, Andreas’ fondness for them has ever-increased, it seems to me. For the most part, the current core developers maintaining Bitcoin.org and the bitcoin/bitcoin GitHub repository have done a very competent job. They deserve a lot of praise for that. I can see why Andreas’ gives those developers the benefit of the doubt. It makes sense when you are plugged in to that matrix. You lose a lot of your choir if you go against that. There are very few people “on my side”, most people who are have FO’ed to BCH.
But Max Keiser supports Bitcoin and this support seems to extend to the LN.
I am very happy for Max and Stacy and they are very good boosters for Bitcoin. Of course, they are media personalities and not engineers. I would not expect someone like Max to be able figure out how the LN could be used against the very people he is bringing into the ecosystem. He seems to be on a mission to pump up bitcoin and I don’t think he thinks too far into the future. But on the topic of Max Keiser, at some point any other coin other than Bitcoin became a real thorn in his side. I think it was at the time when Bitcoin Cash dropped (August 2017). I think he bought into the narrative that Bitcoin was somehow going to be changed or stolen from someone. In actuality, the Bitcoin that he thinks he knows was stolen long before that date. Max, strangely, has been given his talking points to argue against other cryptocurrency. Only Bitcoin is decentralized, all the rest are centralized. Weird, all of the other coins are just centralized? I doubt he’s studied them all.
But anyone can run a LN node and provide payment channels. I don’t understand why you are fixated on “hub and spoke” architecture and centralization. If you look at a visualization of the LN, it looks like cotton candy! See there is no centralization, there is no hub and spoke. There is no indication otherwise.
This is the most constructive feedback. Yes, I would have to stipulate that, currently, the network looks pretty mesh network-ery. I am certainly not concerned about what’s happening today, I care about what will inevitably happen in the distant future when it is far too late to rescue people’s life savings out of the network. I will also stipulate that the current LN is wayyyyy better than our current fiat central banking regime. Without repeating my whole argument about the dangers of the LN, I will just say a skosh about mathematical distributions. When mathematicians are dealing with sets of things, often, the correct question to start with is, how are items in the set distributed? We use our superior Bayesian reasoning to hypothesize that a good starting distribution is the power law distribution. This occurs over and over in nature and especially in human endeavors. Ask yourself, of the set of all social networks, are the users of those networks, more or less, evenly distributed? Nope. OK, so are they distributed in any discernable way? They are distributed such that they follow the 80/20 rule or Pareto distribution. This means that a small number of LN nodes will attract an outsize proportion of clients. The bigger these nodes get, the likelihood of these nodes getting even bigger increases, not decreases. What can we make of this? We can make an educated guess, based on history, mathematics and common sense that the LN will “evolve” into a hub and spoke computer network. Are there any counter arguments to this? There are only two things that can happen to the logical layout of the LN. It can be a highly decentralized mesh-type network (best case), or it can not be this (less best case). What kind of network is most efficient and has multiple incentives for being built? If you guessed not mesh, you’d be correct.
Why are you even wasting time on this topic?
I want to send out a dire warning. I know these topics will be met with hostility or won’t be responded to at all. When the LN network achieves the Network Effect and people realized the main chain has been officially deprecated, I know someone will find my writings and ask: “how did you know all this was coming?”