Author: Benjamin Mord 2017-11-16 16:01:18
Published on: 2017-11-16T16:01:18+00:00
In response to Ivan's query on the scalability and decentralization issues with the Lightning Network, Ben refutes the claim that it cannot scale to 100,000 users due to routing difficulties. He points out that scale-capable routing protocols are possible as demonstrated by IP and the internet itself. While centralizing flow through a small number of liquidity providers seems economically probable, this risk can be mitigated with off-chain channel rebalancing mechanisms, like the recently proposed "revive" protocol. Ben suggests that while Bitcoin script is not currently revive-capable, Ethereum is, and therefore, Bitcoin revive could be enabled via two-way pegged sidechain protocol with Ethereum or even better, through a purpose-built extension to Bitcoin script in the future. However, the Lightning network seems like the key first step towards achieving this goal. He acknowledges that even if off-chain payment rebalancing were not possible for some odd reason, the Lightning network would still be valuable and scalable. The centralization risk posed by the Lightning network is not an existential one that affects the safety of the money supply itself, and these centralized hubs would be more dispensable or swappable versus the mining centralization risk that people more often talk about in Bitcoin. As for transaction fees, he suggests that only channel setup and tear down require fees, which would greatly reduce fees. Even if transaction fees made fraud claims marginally unprofitable (yet practical), that would still be okay as people go beyond self-interest when sufficiently ticked, as proven by the judicial systems of most countries. Therefore, there is no need to worry about the routing difficulties and scalability issues of the Lightning Network. Ben plans to post more about this on his website ben.mord.io.
Updated on: 2023-05-24T02:57:41.351110+00:00