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LN questions

LN questions

Bitcoin Reddit

Reddit / Bitcoin Reddit 51 Views

Hi everyone

Can we talk about some simple figures involving the LN and the reality?

The power behind BTC lies in it being not censorable. The way it achieves it is by a decentralized Proof of Work. Ecologically this is not feasible, but that’s another story and it is not nearly as decentralized as one would like it to be.

In order to get into the LN I need to make a transfer. Thereafter I require a wallet at a custodian, because I simply cannot open unlimited channels due to the cost involved or I will rely on my personal LN wallet linked to a bigger custodians wallet. Any transaction thereafter will remain on the off-chain. A check if the balance is true and correct, will only be performed once the channel is closed. This step involves again costs.

I assume one of the powers of the LN is that the underlying BTC value can always be verified by closing a channel. But even if we tenfold the transaction amount to 70 tx/s. The limit of monthly transactions equals roughly 181.44Mio. This means: Should people send one transaction a month to their LN wallet and one transaction back, that would allow a max of 90.5Mio users. That’s not that many.

In a nutshell how I understand it :

I must trust a custodian, I need to pay the custodian and potential anti-fraud technology companies calling themselves Watchtowers(?) and I need to send/withdraw money for a high cost to the main chain.

So what exactly is the revolution on LN compared to a traditional bank except for the Bitcoin branding?

Edit:

I've also posted the same question to /r/Bitcoin . Lets see what happens :-)

submitted by /u/SpankyMC
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