Published on: 2021-08-23T11:48:13+00:00
In an email to the Lightning-dev mailing list, Daki Carnhof proposes a philosophical approach to channel fee settings on the Lightning Network. He introduces the concept of Zero Fee Lightning Network Routing, which encourages individuals to manage their own fees automatically rather than relying on interventions based on fiat and altcoin standards. The rationale behind this approach is that since Bitcoin nodes are already running and performing computations for free, it would be logical to eliminate fees on the Lightning Network. Daki suggests that the community's higher interest would blend into the overall price similar to how Proof-of-Work operates. However, he expresses concerns about using algorithms like Hill Climbing, as they may result in more computational work with uncertain outcomes.Daki extends his gratitude to ZmnSCPxj for his Algorithm For Channel Fee Settings and offers 5msat as a token of appreciation. Additionally, Daki shares a link to a YouTube video discussing the topic with Jordan P. Peterson and guests. Unfortunately, it is unclear at what specific time the topic is discussed in the video.In a conversation between Daki and ZmnSCPxj, ZmnSCPxj explains the difference between running a Bitcoin fullnode and a Lightning forwarding node. While a Bitcoin fullnode does not risk having its funds locked, a Lightning forwarding node involves the possibility of funds being locked and unavailable. During payment forwarding, the involved funds are held in an HTLC until the forwarding process is either successfully or unsuccessfully resolved. This means that the owner of the funds cannot access them until the forwarding process is completed. ZmnSCPxj further clarifies that having funds locked, even temporarily, is acceptable if there is a return on investment. However, the short timeframes and amounts involved in the Lightning forwarding process make any potential returns "ridiculously minuscule." As a result, most forwarding nodes earn zero or negative net income. Hubs with significant liquidity invested in them may charge a fee based on substantial total amounts and timeframes. The purpose of the conversation was to determine this feerate, but it is suggested that this information may be considered a "trade secret" and therefore not openly disclosed.Overall, the proposed alternative approach of Zero Fee Lightning Network Routing challenges the current paradigm of channel fee settings. It advocates for individuals to autonomously manage their fees, leveraging the existing computational resources of Bitcoin nodes. The author cautions against relying on complex algorithms like Hill Climbing and highlights the risk of having funds locked in Lightning forwarding nodes without a significant return on investment.
Updated on: 2023-07-31T23:43:40.641231+00:00