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From: Hector Chu <hectorchu@gmail.com>
Date: Sun, 9 Aug 2015 21:14:55 +0100
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To: Mark Friedenbach <mark@friedenbach.org>
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Subject: Re: [bitcoin-dev] What Lightning Is
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--001a11c25f52ea1faf051ce6861b
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In the Lightning network it is assumed that the balances can always be
settled on the blockchain if any of the parties along the channel has a
problem. What if the fee on the settlement transactions is not high enough
to enter the blockchain? You can't do replace-by-fee after the fact. Do the
fees always have to assume worst case scenarios on the Bitcoin fee market?
On 9 August 2015 at 19:54, Mark Friedenbach via bitcoin-dev <
bitcoin-dev@lists.linuxfoundation.org> wrote:
> Tom, you appear to be misunderstanding how lightning network and
> micropayment hub-and-spoke models in general work.
>
> > But neither can Bob receive money, unless payment hub has
> advanced it to the channel (or (2) below applies). Nothing requires the
> payment hub to do this.
>
> On the contrary the funds were advanced by the hub on the creation of the
> channel. There is no credit involved. if the funds aren't already available
> for Bob to immediately claim his balance, the payment doesn't go through in
> the first place.
>
> On Sun, Aug 9, 2015 at 11:46 AM, Tom Harding via bitcoin-dev <
> bitcoin-dev@lists.linuxfoundation.org> wrote:
>
>> On 8/4/2015 4:27 AM, Pieter Wuille via bitcoin-dev wrote:
>>
>> > Don't turn Bitcoin into something uninteresting, please.
>>
>> Consider how Bob will receive money using the Lightning Network.
>>
>> Bob receives a payment by applying a contract to his local payment
>> channel, increasing the amount payable to him when the channel is closed.
>>
>> There are two possible sources of funding for Bob's increased claim.
>> They can appear alone, or in combination:
>>
>>
>> Funding Source (1)
>> A deposit from Bob's payment hub
>>
>> Bob can receive funds, if his payment hub has made a deposit to the
>> channel. Another name for this is "credit".
>>
>> This credit has no default risk: Bob cannot just take payment hub's
>> deposit. But neither can Bob receive money, unless payment hub has
>> advanced it to the channel (or (2) below applies). Nothing requires the
>> payment hub to do this.
>>
>> This is a 3rd-party dependency totally absent with plain old bitcoin.
>> It will come with a fee and, in an important way, it is worse than the
>> current banking system. If a bank will not even open an account for Bob
>> today, why would a payment hub lock up hard bitcoin to allow Bob to be
>> paid through a Poon-Dryja channel?
>>
>>
>> Funding Source (2)
>> Bob's previous spends
>>
>> If Bob has previously spent from the channel, decreasing his claim on
>> its funds (which he could have deposited himself), that claim can be
>> re-increased.
>>
>> To avoid needing credit (1), Bob has an incentive to consolidate
>> spending and income in the same payment channel, just as with today's
>> banks. This is at odds with the idea that Bob will have accounts with
>> many payment hubs. It is an incentive for centralization.
>>
>>
>> With Lightning Network, Bob will need a powerful middleman to send and
>> receive money effectively. *That* is uninteresting to me.
>>
>>
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev@lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>
>
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
--001a11c25f52ea1faf051ce6861b
Content-Type: text/html; charset=UTF-8
Content-Transfer-Encoding: quoted-printable
<div dir=3D"ltr">In the Lightning network it is assumed that the balances c=
an always be settled on the blockchain if any of the parties along the chan=
nel has a problem. What if the fee on the settlement transactions is not hi=
gh enough to enter the blockchain? You can't do replace-by-fee after th=
e fact. Do the fees always have to assume worst case scenarios on the Bitco=
in fee market?</div><div class=3D"gmail_extra"><br><div class=3D"gmail_quot=
e">On 9 August 2015 at 19:54, Mark Friedenbach via bitcoin-dev <span dir=3D=
"ltr"><<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=
=3D"_blank">bitcoin-dev@lists.linuxfoundation.org</a>></span> wrote:<br>=
<blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1p=
x #ccc solid;padding-left:1ex"><div dir=3D"ltr"><div>Tom, you appear to be =
misunderstanding how lightning network and micropayment hub-and-spoke model=
s in general work.<span class=3D""><br><br>> But neither can Bob receive=
money, unless payment hub has<br>
advanced it to the channel (or (2) below applies).=C2=A0 Nothing requires t=
he<br>
payment hub to do this.<br><br></span></div>On the contrary the funds were =
advanced by the hub on the creation of the channel. There is no credit invo=
lved. if the funds aren't already available for Bob to immediately clai=
m his balance, the payment doesn't go through in the first place.<br></=
div><div class=3D"HOEnZb"><div class=3D"h5"><div class=3D"gmail_extra"><br>=
<div class=3D"gmail_quote">On Sun, Aug 9, 2015 at 11:46 AM, Tom Harding via=
bitcoin-dev <span dir=3D"ltr"><<a href=3D"mailto:bitcoin-dev@lists.linu=
xfoundation.org" target=3D"_blank">bitcoin-dev@lists.linuxfoundation.org</a=
>></span> wrote:<br><blockquote class=3D"gmail_quote" style=3D"margin:0 =
0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">On 8/4/2015 4:27 AM, =
Pieter Wuille via bitcoin-dev wrote:<br>
<br>
> Don't turn Bitcoin into something uninteresting, please.<br>
<br>
Consider how Bob will receive money using the Lightning Network.<br>
<br>
Bob receives a payment by applying a contract to his local payment<br>
channel, increasing the amount payable to him when the channel is closed.<b=
r>
<br>
There are two possible sources of funding for Bob's increased claim.<br=
>
They can appear alone, or in combination:<br>
<br>
<br>
Funding Source (1)<br>
A deposit from Bob's payment hub<br>
<br>
Bob can receive funds, if his payment hub has made a deposit to the<br>
channel.=C2=A0 Another name for this is "credit".<br>
<br>
This credit has no default risk: Bob cannot just take payment hub's<br>
deposit. But neither can Bob receive money, unless payment hub has<br>
advanced it to the channel (or (2) below applies).=C2=A0 Nothing requires t=
he<br>
payment hub to do this.<br>
<br>
This is a 3rd-party dependency totally absent with plain old bitcoin.<br>
It will come with a fee and, in an important way, it is worse than the<br>
current banking system.=C2=A0 If a bank will not even open an account for B=
ob<br>
today, why would a payment hub lock up hard bitcoin to allow Bob to be<br>
paid through a Poon-Dryja channel?<br>
<br>
<br>
Funding Source (2)<br>
Bob's previous spends<br>
<br>
If Bob has previously spent from the channel, decreasing his claim on<br>
its funds (which he could have deposited himself), that claim can be<br>
re-increased.<br>
<br>
To avoid needing credit (1), Bob has an incentive to consolidate<br>
spending and income in the same payment channel, just as with today's<b=
r>
banks.=C2=A0 This is at odds with the idea that Bob will have accounts with=
<br>
many payment hubs.=C2=A0 It is an incentive for centralization.<br>
<br>
<br>
With Lightning Network, Bob will need a powerful middleman to send and<br>
receive money effectively.=C2=A0 *That* is uninteresting to me.<br>
<br>
<br>
_______________________________________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">=
bitcoin-dev@lists.linuxfoundation.org</a><br>
<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" =
rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail=
man/listinfo/bitcoin-dev</a><br>
</blockquote></div><br></div>
</div></div><br>_______________________________________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.=
linuxfoundation.org</a><br>
<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" =
rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail=
man/listinfo/bitcoin-dev</a><br>
<br></blockquote></div><br></div>
--001a11c25f52ea1faf051ce6861b--
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