Published on: 2019-03-14T15:09:51+00:00
In a recent discussion about the fee structure of Bitcoin's Lightning Network (LN), John-John Markstedt clarifies his agreement with ZmnSCPxj and Andrea on the issue. Initially, John-John had suggested that the fee would be higher for every satoshi used closer to the far end of the channel. However, ZmnSCPxj points out that the final state of the channel has a subtractive relationship from the payment size. John-John admits that they were talking past each other and clarifies that he was seeking clarification rather than arguing.The conversation revolves around the proportional fee for forwarding payments in the Lightning Network. The fee is greater when the payment being forwarded is larger. It is also discussed that the fee's proportionality is influenced by the state of the channel and the size of the payment. However, it is concluded that the final state of the channel has a subtractive relationship from the payment size, and the exact mathematical models may not be relevant in the practical use of LN.To address concerns and manipulations of the fee structure, the "standard" solution is to make the proportional feerate proportional to how much the other side owns on the channel. This approach ensures a balanced channel in the long run, despite potential inaccuracies in the short term. JIT Routing is suggested as a superior alternative as it provides direct evidence that rebalancing would be beneficial under the current network conditions. JIT Routing handles cases where a balanced channel cannot serve a forwarding request and requires transferring funds from another channel.The discussion highlights that the size of the payment does not affect the proportional fee paid in LN. Instead, the fee is determined by how far along the channel the payment is sent. John-John asks about the relationship between payment size and fees, and ZmnSCPxj clarifies that the fee paid is proportional to the size of the payment. Therefore, a larger payment passing through a channel will result in a higher fee.John-John Markstedt acknowledges his mistake in assuming that channel balances needed to be known to create a route. He realizes that this approach wouldn't scale well and would compromise privacy. However, he learns that it is possible to make changes to the channel fee within the protocol without broadcasting balance changes. Caution must be exercised to avoid leaking information about payments by spamming `channel_update` messages. A heuristic approach is proposed to achieve reasonable results with minimal leakage.The Lightning Network specification currently uses source routing, which requires sending nodes to attach fees to payments. If incorrect fees are sent for a channel, an intermediate node responds with an update message containing the actual fees. Maintaining balance on a node's channels can be achieved by scaling the feerate based on the channel state. However, care must be taken to avoid spamming `channel_update` messages to prevent leakage of payment information. JIT Routing is considered a more sensible approach as it rebalances only if it benefits the node. By attempting rebalancing when sufficient time and fee are available, the probability of earning money and routing success increases.Andrea and John-John discuss the current fee structure of the Lightning Network in a mailing list conversation. The current version of the spec uses source routing, where fees are attached to payments. Incorrect fees for a channel prompt an intermediate node to reply with a channel_update message containing the correct fees. John-John suggests a proposal to incentivize balanced channels, involving a scheme of brackets with different prices for each satoshi in a channel. Channels would broadcast a cost function instead of a fixed fee, incentivizing payments to keep channels balanced for higher throughput. However, this method may be complex and require deterministic ways to calculate integrals over multiple systems, suggesting the need for better solutions.In conclusion, the discussion highlights various aspects of the fee structure in Bitcoin's Lightning Network. It emphasizes the importance of proportional fees based on payment size and channel state. Several possible approaches, such as the "standard" solution and JIT Routing, are suggested to address concerns related to balance and fee structure manipulation. Additionally, proposals for alternative fee structures and incentives for balanced channels are explored, acknowledging their potential complexity and need for further investigation.
Updated on: 2023-07-31T21:30:18.489402+00:00