Published on: 2021-09-02T16:23:15+00:00
The cost of converting on-Lightning bitcoins to onchain bitcoins and vice versa is discussed in the context. Boltz, an exchange that facilitates the conversion, charges a fee for this service. The scenario presented involves Lady Gaga wanting to pay Madonna 0.6BTC using her on-Lightning bitcoins. She has two options: closing some channels to convert the on-Lightning bitcoins to onchain bitcoins or using Boltz for the conversion. Closing multiple channels would require significant onchain activity if Lady Gaga had made multiple channels.The second option, using Boltz, can be achieved with proper design of pathfinding algorithms. A pathfinding algorithm is necessary for delivering funds over Lightning Network to a Boltz Lightning node. The importance of Lightning Network as an attempt to provide fast, cheap, reliable, and non-censorable payments is highlighted.However, the author of the post points out the limitations of the current micropayment system in Lightning Network, particularly in terms of pathfinding with hops accommodating the necessary liquidity for larger amounts. They argue that for larger amounts, the probability and cost will not have any gain compared to going on-chain. To facilitate near-instantaneous settlement using LN regularly, setting up LN-Nodes in aggregate to facilitate transactions with such profiles would be necessary.The post also presents a hypothetical scenario where Lady Gaga wants to send 0.6 BTC to Madonna in a Lightning Network transaction for a designer purse. The author argues that they would need to onboard them first to facilitate the transaction. In a non-anticipated recurring flow, one would just go on-chain or open a channel with a push amount to minimize cost.The author proposes changing the protocol to accommodate an algorithm that makes larger payments possible in Lightning Network. However, they argue that the proposal fails directly because it uses a non-real world scenario as an argument. The post also mentions calculating the total cost in a balance transfer involving a MPP split to 500 120K transactions using a hop sequence as a-b-c-d, which would require 4000 ledger entries in 1002 LN-Nodes, and the probability of success is uncertain.In conclusion, the author emphasizes the need to refine the existing protocol and implementations of Lightning Network rather than spending time on hypothetical non-real world scenarios. They argue that there are more pressing needs for application developers wishing to use the LN protocol in a pure and interoperable manner.
Updated on: 2023-07-31T23:46:46.618598+00:00