For the HN crowd passing by, here's why this stuff could be interesting to you.<p>It's not possible to do extremely small micropayments on bitcoin directly as people use it today. Bitcoin's made a lot of promises around micropayments, but doing it in an economical way has tradeoffs, especially if you're talking about millions to billions of transactions per second. In fact it's not possible to extremely small micropayments on ANY platform. Try sending $0.001 to someone once. It's not possible. The closest you're probably going to get is sending someone an item on Steam (and there's no easy way to price the items). The reason for this is underwriting costs, it's too expensive for Visa to process it since they're assuming some liability. Even Paypal, who ostensibly should be doing this, charges $0.30 for payments for goods and services.<p>Lightning allows for micropayments to actually happen because custody is still pushed to the edges, so you don't have the same kinds of underwriting risk.<p>This means that something as simple as paying someone $0.001 over the internet one time will become viable this year. The amount of possible business models and use cases could dramatically shift. Users may not know they're using Bitcoin (your application could hide it and abstract it away), but people are getting paid in a way they could not before (even centralized systems did not exist, let alone decentralized ones). Pay-per-click webpages, massive decentralized CDNs, creating API services without a username/password to make onboarding seamless (you paid? you're done!).<p>We're working on code here: <a href="http://github.com/lightningnetwork/lnd" rel="nofollow">http://github.com/lightningnetwork/lnd</a>
It's MIT licenced and will soon have some pretty simple APIs to use. Of course, since this stuff will be in testing for a little while, make sure you only use small amounts/micropayments initially when it's released.
I'm still not sure how I feel about implementing a layer over the Bitcoin network like this instead of just fixing the inherent flaws with the protocol. Especially when said network is being pushed by the company Blockstream which is known for shady practices.
-Blockstream Playbook-<p>Step 1: Buy off all of the top developers of open-source project. Check.<p>Step 2: Refuse to support/fix basic network operations so that transactions stop confirming just as the network needs to grow. Check.<p>Step 3: Create a 2nd-layer solution for growth that allows the company to siphon Billions of dollars over many years. Check.<p>Step 4: Censor any forum where people alert others about secret get-rich playbook. Check.
This is from the same company that has seized control of the development of the main Bitcoin codebase and has been making changes to cause problems that their Lightning Network claims to solve.
At it's most basic, the Lightning network is just a way of implementing pre payment cards for Bitcoin.<p>Its over engineered and over complex. Which is demonstrated by the comments here trying to explain how it works.<p>No one has yet been able to explain how they will prevent one central hub from developing which by economies of scale will offer the lowest cost path through the network as it will have channels setup with everyone.<p>Ask yourself who will operate this hub and you'll understand why people want to implement this.
The lightning network is a pathetic scheme to suppress the liberties the original vision of Bitcoin provides.<p>Blockstream is a corrupt company which does not refrain from spreading lies and propaganda to further their agenda.<p>Everyone is free to look up what entities own them.
lower fees, but still no return of free transactions? core recently removed support for free transactions even though satoshi stated [1] clearly that free transactions should always be allowed.<p>[1] <a href="https://bitcointalk.org/index.php?topic=994.msg12168#msg12168" rel="nofollow">https://bitcointalk.org/index.php?topic=994.msg12168#msg1216...</a>
Similar work is going on in the Ethereum space, both with microtransactions and more generalized state channels for arbitrary computation and data distribution (see Raiden/Truebit/Swarm). But the problem remains the same: finding protocols that have the right (or even adjustable) centralisation/efficiency/privacy/risk/cost tradeoff. Another question is whether these systems will become purely financially incentivised or implement some form of social routing. While the trust conferred to the intermediaries can be quite low, some cooperation is still necessary and even in an initially free market, economies of scale could result in some actors having control over the entire system. Routing still requires consensus, but this time it's local.