Author: Anthony Towns 2015-08-10 18:50:31
Published on: 2015-08-10T18:50:31+00:00
The belief that transaction fees are essential to reward miners and secure the network is not universally held. The cost of supporting mining currently amounts to $832,000 per day, which some consider too high. If fees are effectively zero until the block reward goes away entirely, then the lightning network offers three benefits over on-chain transactions: lower fees, shorter confirmation times, and no ongoing costs once the channel is closed. Every lightning transaction happens through a series of channels, each of which requires at least two blockchain transactions. While it is not 100% clear whether keeping a lightning channel open will have hardware costs that grow linearly in the number of transactions, it is likely that closing a channel eventually is good practice to rollover keys. Channels also have a maximum theoretical number of transactions, but that's probably irrelevant. Channel profitability varies over time, so closing less profitable channels so the funds can be used elsewhere is valuable. Lightning transactions will have to pay for several things, including the blockchain fees for opening/closing the channel, the time value of the funds being used to keep the channels open, and the maintenance costs of the hardware/software to run a lightning channel.
Updated on: 2023-05-19T21:29:20.846806+00:00