Lightning appears to add more problems than solutions. It has a whole bunch of critical issues. Here is a short list.<p>1. You need to have a computer constantly online or your counter party can easily steal all your money. This leaves you vulnerable to all sorts of attacks.<p>2. The lightning network works by routing payments through a network to your destination. The issue here is that the routing for the lightning network is extremely complicated and is currently an unsolved (and probably unsolvable) problem. The core issue is that you have to route money though a network where channel capacities are changing with each and every transaction. Imagine trying to route internet packets if the size of the links changed thousands of times per second.<p>3. It's relatively expensive to create and destroy channels at about two transactions per channel. Lightning proponents claim that this will be rare, but that can only be the case if there is minimal net flow of money. This is trivially not the case because users will be sending bitcoin more than they recieve and the reverse for retailers.<p>4. Lightning has huge capital costs. You need to lock up large amounts of bitcoin in these channels for significant amounts of time. There is a real cost for this in terms of the lost interest. Channels are certainly not anywhere close to free.
Here's a shorter explanation of Lightning, with Solidity code: <a href="http://www.blunderingcode.com/a-lightning-network-in-two-pages-of-solidity/" rel="nofollow">http://www.blunderingcode.com/a-lightning-network-in-two-pag...</a>
Or perhaps replacing bitcoin with something that doesn't have fundamental flaws in its design.<p>Hence why a lot of us think it has no inherent value into the future. Of course, those in on the ponzi scheme will disagree with this sentiment.
I think that the end game of Lightning is very bad. Imagine that Bitcoin remains relevant and continues to have huge market cap for several years and that Lightning takes off to the point that most transactions use Lightning and the cost of an actual on-chain transaction drops to a few tens of cents. The reward for mining a block will drop significantly (as originally planned in the Bitcoin design), and the transaction fees per block will also drop significantly.<p>On the flip side, with Lightning, it's possible to steal quite a lot of money if you have the ability to prevent transactions from being mined (i.e. if you can mount a 51% attack). In particular, you can prevent any penalty transactions against yourself from ever showing up on the blockchain.<p>In other words, Lightning will drive the profit available from 51% attacks up and will drive the profit available from honest mining down. What happens when they cross over?
Bitcoin Cash seems to be doing just fine with on-chain scaling. There are concerns about centralization on miners with it, but in my understanding the incentives planned in the original Bitcoin paper account for that.
For a moment I thought this was an article about how mining groups could try to power their ASICs by waiting for lightning to strike and storing the energy in giant capacitors or something.<p>(Not because this is a good idea, but because I didn't know anything about the Lightning network.)
I honestly dislike how the author abuses terms like "lots" and "a handful".<p>For example: « That means you can use a single payment channel to make lots of payments to many different people—all while generating just a handful of transactions on the underlying blockchain.»<p>I am no bitcoin expert, but AFAIK the bitcoin network can currently process in the order of tens of transactions per second, and that is a low number compared to the 50-100k transactions per second that VISA et similia are currently capable of processing.<p>So, many are "lots"? How many are "a handful"?
I was wondering recently, why Bitcoin is even needed for a Lightning-like network? Just settle the channels in cash (or even bank transfers), it won't be any more traceable than Bitcoin. Moreover, there is a successful precedent of such network: <a href="https://en.wikipedia.org/wiki/Hawala" rel="nofollow">https://en.wikipedia.org/wiki/Hawala</a><p>Seems like a large enough "overlay network" over cache reserves and bank accounts can be made barely traceable and pretty efficient.
Bitcoin is both a currency and a payment method. Everybody knew right from the beginning that it's not a great payment method. The 10 minutes delay is a long time if you want to prevent double-spending.<p>For fast payments nothing beats a server with credit accounts. Naysayers will say that it defeats the purpose of bitcoin, but nobody thought bitcoin would entirely make banks and their fractional reserves system disappear. If anything, people will still want to borrow money.<p>Banks could function on top of cryptocurrencies, the difference would be that their clients would be able to withdraw their funds out of the banking system alltogether at any time, that is not just turning one credit into an other.
Savjee has a great 5 min video breaking down bitcoins proposed lightning network<p><a href="https://www.youtube.com/watch?v=rrr_zPmEiME" rel="nofollow">https://www.youtube.com/watch?v=rrr_zPmEiME</a>
Lightning will become centralized into services like banks and Paypal since it's too difficult to use for an average person, which completely defeats the idea of Bitcoin as P2P cryptocurrency.
Lightning is the solution and it's going to be great for making micro transactions w/ bitcoin again.<p>Lightning network is actual innovation and the next evolution in making Bitcoin easier to use for the masses. One step at a time.