@cypherdoc every once in a while the hub operators still have to use the main chain to settle all the micropayments belonging to an hub, no?
Gold collapsing. Bitcoin UP.
- Thread starter cypherdoc
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Zarathustra
Well-Known Member
- Aug 28, 2015
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I guess he meant block the stream blockers at blockthestream corp.
This is one of the concern it's also a good reason to have control over what code changes can be made to layer 0 in order to preserve your layer 1 business.
This would imply all other implementations that are popular would be a threat. Mike and XT serve as an example on how to avoid total control of layer 0 in implementing a layer 1 application, he's done it with Lighthouse.
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Yes, but it's just a net settlement tx which would be a fraction of what the hub itself charges in fees.
Yep, and don't expect any back porting of innovations from a SC competing with the MC. Why? Because if I was a corporation or institution that paid Blockstream millions of dollars to dev and maintain my SC, I'd have an airtight non compete signed ahead of time preventing just such a back port.
Unless you expect all these thousands of SC owners to be as benevolent towards Bitcoin as the Blockstream investors and founders claim they are.
Thanks @elehal I know how hard it can be from both ends. It's always important to mange the person it seems likely that frustration and lack of respect was a likely trigger.
Even though cypher has a bit of an ego I admire the fact that he has never resorted to banning participants once a conversation has degraded to an unproductive level. It's actually morbidly entertaining sometimes.
Still there is lots of inexperienced in Bitcoin I'm seeing people actually trying to be band by theymos as a badge of honour. It kind of like Peter's throwing you're weapons as a last chance.
Even though cypher has a bit of an ego I admire the fact that he has never resorted to banning participants once a conversation has degraded to an unproductive level. It's actually morbidly entertaining sometimes.
Still there is lots of inexperienced in Bitcoin I'm seeing people actually trying to be band by theymos as a badge of honour. It kind of like Peter's throwing you're weapons as a last chance.
Compare the dates of these posts
https://np.reddit.com/r/ethereum/comments/380q61/i_know_this_may_not_directly_be_ethereum_related/
That admission that you don't actually have full control over your money until you perform an on-chain transaction is exactly what aminok was talking about here:
Lightning Network is a much easier sell to users when you can tell them "it's just as good as a transaction on the blockchain!" without mentioning that, "actually, you only get the same security properties as Bitcoin if you pay Bitcoin transaction fees (which we will deliberately make as high as possible)"
PS: how do I disable the auto-embed of reddit posts?
https://np.reddit.com/r/ethereum/comments/380q61/i_know_this_may_not_directly_be_ethereum_related/
Whoever posted that was apparently extremely knowledgeable about how Lightning Network functions, despite being new to community as evidenced by having only created his account only 6 days before making that post.
That admission that you don't actually have full control over your money until you perform an on-chain transaction is exactly what aminok was talking about here:
I don't see any Lightning Network supporters rushing in to correct /u/AnonobreadII in the first thread, or rushing in to correct /u/110101002 in the second thread. which is odd because both of them can't be right at the same time.
Lightning Network is a much easier sell to users when you can tell them "it's just as good as a transaction on the blockchain!" without mentioning that, "actually, you only get the same security properties as Bitcoin if you pay Bitcoin transaction fees (which we will deliberately make as high as possible)"
PS: how do I disable the auto-embed of reddit posts?
I haven't done flow analysis on money but common sense indicates that this "net settlement" would likely mostly be a "sum".
I mean, the average joe spends money for 2 weeks straight, and gets a lump sum payment every 2 weeks. Brick and mortar stores receive money steadily, and then pay out a lump sum for employees and restocking every 2 weeks/ 1 month.
So unless your LN session spans multiple weeks, a single LN session is not going to "net" near zero in practice.
This is very important when thinking about how supply and demand of Bitcoins is affected by LN and about LN fees.
Let's define a "bitcoin-second" as the amount of bitcoins required to make a payment times the time those bitcoins are not available for a subsequent payment.
So the blockchain's transfer cost is on average kind of 600*N bitcoin-seconds, because it takes 600 seconds for 1 confirmation on average. (This simplistic analysis ignores the fact that you can spend unconfirmed txns, so the bitcoin-seconds is arguably much lower).
But LN is much higher for 2 reasons:
1. If LN flows are mostly in one direction, the coins can only be spent once per session. The minimum LN session time is 2 blockchain txns so we are at 1200*N bitcoin-seconds, but ofc there is no value to LN if session times were that short. Weekly or even daily LN session times blows this to 1000 to 100 times the baseline
2. I pay LN node, LN node pays another LN node (with different bitcoins), that LN node pays the destination (with different bitcoins). So right away LN uses 3X the bitcoin-seconds as a blockchain transfer.
What's the opportunity cost of having all these bitcoin-seconds tied up in transfers?
Well, its whatever value could be extracted at low risk with these bitcoin-seconds if they were NOT tied up in transfers. So its probably reasonable to use the average long term appreciation if this money were invested in a stock market index fund.
Using the above analysis, you can put a floor on the LN fee. The LN fee has to be greater than the opportunity cost of the bitcoin-seconds used by all LN nodes involved in the txn.
The discussion is fairly scattered between here, Reddit and the dev list. I just made a thread to continue discussion of more technical aspects of this paper:
http://bitco.in/forum/threads/block-space-as-a-commodity-a-transaction-fee-market-exists-without-a-block-size-limit.58/
(I'm never really sure when to make a new thread; on the one hand it's nice to have lots of discussion here in Cypherdoc's thread and watch as the topics ebb and flow, but on the other hand it's nice to have posts build up in a more organized fashion in dedicated threads for easy referencing later.)
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Peter_r and awemany, how is that bip proposal to move the blocksize decision from the protocol layer to the transport layer coming along? I think it's pretty interesting, although I am not sure how exactly it would work in practice.
to be fair, the old gold threads were never moderated, in the sense that i could delete certain posts ala rpietila has done. i chose to set it up that way.
otoh, i never once reported any of my numerous trolls to a mod to try and get a post deleted or a troll banned.
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Wouldn't it be best to put more control into miners hands and less developer control? I've always thought of miners as "shareholders" in the system who have real infrastructure costs that would be useless without bitcoin. They also have a means of voting that can't be gamed and they know their stake is healthiest if there are many shareholders. If BIP100 was implemented wouldn't they rationally vote for high limits anyways? As long as 51% are thinking long-term? It seems if we let miners control the network, as long as 51% are thinking long-term, wouldn't they will do what's best for both parties anyways?
- Aug 29, 2015
- 536
- 2,597
Speaking of Lightning Network, it strikes me that exchanges would be an ideal use-case for LN channels.
Instead of sending bitcoin to the exchange, you would set up a Lighning channel with the exchange would act as the hub. Buying/selling trades would be accompanied by transactions in the Lightning channel between buyer and seller. This would remove all Bitcoin counterparty risk from the exchange, and once you're done trading simply drop the latest transactions on the blockchain to settle the trades. No more Goxxing! Of course if one is trading for Dollars, there would still be counterparty risk for the dollar portion.
Instead of sending bitcoin to the exchange, you would set up a Lighning channel with the exchange would act as the hub. Buying/selling trades would be accompanied by transactions in the Lightning channel between buyer and seller. This would remove all Bitcoin counterparty risk from the exchange, and once you're done trading simply drop the latest transactions on the blockchain to settle the trades. No more Goxxing! Of course if one is trading for Dollars, there would still be counterparty risk for the dollar portion.
there have been plenty of objections to the way the voting process has been set up. there seems to be a difference in opinion as to what would be considered a fool proof non gameable way of conducting a vote and i've seen several suggestions. that seems problematic. i do agree that miner self determination in terms of block size is way better than core dev though.
it seems to me that that if you didn't have a limit at all, the entire mining group would inch forward ever higher with block sizes in step with tech innovation, assuming the attack scenarios are indeed too costly to execute due to orphaning and game theory. the way i see it, this monolithic inching forward allows individual miners to test ever so slightly bigger blocks at their own individual risk of orphaning. this seems like an ideal ongoing realtime competitive process according to free mkt principles.
I see it as the panacea for bitcoin (along with decentralized oracles like Truthcoin -- assuming they can work) to become the reserve currency it needs to be. Fiat / btc exchanges would simply become gateways as Lightning hubs dealing in bitcoin-settled derivatives (options, futures, etc) offer superior security. Once they become liquid enough, people would never have to leave the bitcoin ecosystem. They could hedge to any currency they wanted through Lightning derivatives exchanges.
@Mashuri
i don't necessarily disagree that we might need LN in the far future. but as for the present, we should strive to get Bitcoin used and accepted by everyone worldwide just like gold is accepted to have value by everyone worldwide. the vast majority of human beings haven't even heard of Bitcoin yet. i strongly believe it has the chance to achieve this type of network effect but it needs to be unleashed so it can grow and spread. choking it to today's level of acceptance is a severe crippling of its potential and a dangerous form of centralization in and of itself.
i don't necessarily disagree that we might need LN in the far future. but as for the present, we should strive to get Bitcoin used and accepted by everyone worldwide just like gold is accepted to have value by everyone worldwide. the vast majority of human beings haven't even heard of Bitcoin yet. i strongly believe it has the chance to achieve this type of network effect but it needs to be unleashed so it can grow and spread. choking it to today's level of acceptance is a severe crippling of its potential and a dangerous form of centralization in and of itself.
@cypherdoc
LN hubs / exchanges are the way to do this. Bitcoin needs a robust derivatives market to become more useful. If people can easily hedge btc vs other commodities / currencies, then they will be more incentivized to buy in and stay in. LN couldn't happen soon enough. IMHO, it is THE catalyst bitcoin needs to get to the next level.
LN hubs / exchanges are the way to do this. Bitcoin needs a robust derivatives market to become more useful. If people can easily hedge btc vs other commodities / currencies, then they will be more incentivized to buy in and stay in. LN couldn't happen soon enough. IMHO, it is THE catalyst bitcoin needs to get to the next level.
@Mashuri
i'm not convinced of that as LN network is actually advertised as being a platform upon which BTC tx's can be diverted away from the blockchain for faster processing at the expense of centralization. in that sense, they will be diverting tx fee income away from miners who need those tx fees to transition away from rewards. to me that means a potential loss in security.
furthermore, why can't BTC derivatives exist on a completely separate system of their own? we already have this on several exchanges. they don't have to directly tap into the blockchain. it's like the stock futures mkt is traded separate from the stocks themselves.
i'm not convinced of that as LN network is actually advertised as being a platform upon which BTC tx's can be diverted away from the blockchain for faster processing at the expense of centralization. in that sense, they will be diverting tx fee income away from miners who need those tx fees to transition away from rewards. to me that means a potential loss in security.
furthermore, why can't BTC derivatives exist on a completely separate system of their own? we already have this on several exchanges. they don't have to directly tap into the blockchain. it's like the stock futures mkt is traded separate from the stocks themselves.
