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Please don't let this be an LLM. Please don't let this be an LLM. It's the only comment here that is worth responding to.
What I really appreciate about Rene’s work is that it pushes Lightning Network discussion into a more rigorous mathematical space. Too often, conversations get trapped in either anecdotal experience or surface-level technical chatter without probing the structural limitations in detail. By framing payments as shifts in wealth distribution across a constrained topology, Rene is essentially giving us a mental model for why certain payments fail before they even have a chance to propagate. That is a more fundamental insight than simply observing failed transactions in the wild.
Absolutely agree.
The point about multi-party channels is particularly important. If you care about Lightning reliability you cannot just tune fees or routing algorithms in isolation. You have to reconsider the architecture itself. Multi-party channels are not just a scaling trick; they alter the feasible state space of the network and that directly changes the economic behavior of participants.
Agree again. But I would go further and say multi-party channels are the only effective mitigation he offers in the paper. The other two (batch settlement and taming depletion) do not solve the bottleneck problem. Section 5.2 proves that for sparse two-party networks, the expected cut size scales with the average channel capacity. So if you want to increase network throughput without changing the protocol, increase the average channel size. While this is mathematically true, it is operationally useless.
That said, the critique about endogeneity of topology is spot on. In the real world channels do not exist in a vacuum. Operators will strategically open and close them in response to routing opportunities and this dynamic element needs to be incorporated into modeling if the ultimate goal is predicting reliability. In economics we often deal with systems where network formation is itself part of the equilibrium and Lightning is no different.
From the paper:
"Given the current incentives in the network, depletion is an emergent phenomenon even in a circular economy when all payments are net-zero. The existence of infeasible payments and depletion are consequences of the geometry of cuts and cycles under the given current protocol design. They are neither software bugs nor necessarily the consequence of poor node operator behavior."
Translation: Economically rational operator behavior will not fix depletion nor infeasible payments. See also
Aside: I would consider it a software bug. Surely LL intended to design a scalable offchain protocol.
If Rene’s framework could be expanded to include adaptive topology, it would bridge the gap between theoretical feasibility and the evolving reality of Lightning.
From the paper: "every infeasible payment needs at least one on-chain transaction to change the topology of the network"
Your line of reasoning sidesteps the real issue that topology changes are a response to infeasible payments i.e. not a solution. When payments are infeasible, the network is forced to adapt its topology. This behavior can be framed as self-repair, but it can just as accurately be described as damage caused by misaligned incentives. Wouldn't the more meaningful goal be to reduce the rate of infeasible payments?
A step in the right direction isn't wasted simply because they didn't arrive at (what you think should be) their destination yet.
I understand what you're saying and I hope so
we need zero utxo ~ self custody to get off the ground
Fees are like 15 cents. If someone cannot afford a Lightning channel at these rates... either miner incentives collapse (sort of happening) or it's not going to get any cheaper.
In my experience self-custody lightning can be pretty good on a phone-embedded
This is my problem with the current state...
Whether or not they eventually go down the route of claiming their freedom to transact is up to the individual.
If all I'm doing is sending sats... which are immediately converted to Dollars for the merchant what's the point? I might as well be spending the "gold ETF" in my brokerage because that way it's being 'sold to someone else' (ie square) and the 'merchant' could just get Dollars in its place.
What would be the difference between that and Bitcoin (if the merchant gets Dollars?)
But if it's a merchant and I spend Bitcoin privately... then no one would know about it, not even a 'brokerage'... because I had the Bitcoin to begin with.
If I don't have a reasonable ability to send it to anyone at any time, or reasonable ability to spend it to anyone, it's not Bitcoin. So it might as well be the "gold ETF" that I "sell" when I buy a haircut or purchase something from a merchant...
In which case there is no point for Bitcoin to exist.
All of this leads me to approach Bitcoin from first principles -
One laptop
One Linux distro (pick one) and
One full synced install of Bitcoin Core (pick your mempool policy).
Create a private key then have addresses and send/receive etc...
THAT'S Bitcoin the farther we stray from that I think the more we lose sight of the basic value proposition
ten times as many transactions will get fees well off the floor. ten more times will get them uncomfortably high.
With a median fee of 13 cents... at 1 sat/vb the total fees are around 1200$. Meaning that the subsidy is around 285,300$ with no fees.
If we needed ALL fees to replace that subsidy... then 285,300/1200 ~ 238.
So 238 x 13 cents is 31$ per median transaction fee. Assuming it's almost 2x to open a lightning channel, with NO subsidy and the same miner revenue opening a Lightning channel would be ~50$.
Would people pay that? If they understood the value of Bitcoin yes. In its current level of understanding? No. In fact fees are near record lows.
for the chain to be a place of settlement between custodians, and for us to not have to trust them. that's how we get to 10b wallets.
I can barely get my hairdresser to take it... and that's only because she gets $$$ & I have known her several years.
without them it gets pushed into regulated paper, and held in increasingly tighter boxes until people stop using it and it loses value
I feel we are already on our way 'there'. Sometimes I wonder if Bitcoin is just the 'blackberry'... to some other 'iphone' seriously
Most people in the developed world... don't really care about 'payments' they care about savings.
Unless they are making payments in a way that is super-private or to people they aren't supposed to pay and I don't mean terrorists obviously more like Proton mail in the 2010s when they got cancelled...
Most people just don't get self-custody.
mostly to prove to myself that it could work for anyone.
This was really important to me too
it's getting billions of people doing self-custody. what we use today works for some people, but definitely doesn't scale to all.
Technically that's our problem... but honestly blocks are so empty we don't have enough self custody imo it's not a scaling problem.
wallets that are free, making payments that cost somewhere between lightning and visa
People in the 'west' don't really understand the importance of payments... they have visa and Apple Pay. They understand "savings" sort of and for that all they need is [the] gold [ETF] so normies don't buy bitcoin at all
Pretty sure this whole thing is an LLM... but it's actually really insightful.
That is the paradox of mainstream adoption. As the technology matures we will see more people benefit from it without ever interacting with its complexities. This is good in terms of accessibility but it dilutes the radical essence that early adopters and builders care about.
That 'radical essence' isn't worth anything if people don't use it for censorship resistance... and at least to an extent for transactions. Otherwise it's just a ticker and tech stock that etf buyers don't really 'own' that even the 'believers' don't actually use and that's a shame.
If people don't self-custody it... where is the sovereignty? If they don't make the transaction sort-of-kind-of themselves... where is the censorship resistance?
And so if they don't have sovereignty, and they don't have censorship resistance and they don't know what a node is or care how many Bitcoin exist and they can't verify that with their own node...
Why wouldn't an American just buy the "gold etf" they can buy that in their brokerage and 'custody' that as much as the Bitcoin ETF. Buy it sell it when it goes up etc etc...
If you can't send it to who you want... and 'own it' then just buy the 'gold etf' and that's exactly what people have been doing.
"And it's okay if most of the people don't want to have anything to do with it."
I'm not sure how to process this honestly...
Bitcoin isn't especially good at privacy (in the best of cases) and it isn't especially fast (although Lightning certainly helps).
Bitcoin is good at... 'not changing' and 'being transparent' in the need for decentralization and transparency and sound money. But if 'mass adoption' means lots of custodians and fin-tech apps run by public companies... where is the censorship resistance? What is the point?
Will the State suddenly forget about Capital Gains for millions of tiny purchases by millions of people? Especially since it's mostly custodial anyway?
If they do... then Bitcoin becomes a de-facto 'currency' and I don't see government accepting that. If they don't... expect clampdown on things like Square?
Today my Twin Cities–based employer shared a notice, and the CEO sent an email, clarifying the company policy on access to our facilities.
In essence, any unplanned visits from government officials or law enforcement are not permitted, and if pressed, employees are instructed to state that a signed warrant is required.
I cannot say what specifically prompted management to take this stance, but even I was spooked over the weekend seeing ICE walk into nearby retail establishments and behave like they owned the place.
Lightning conceals your balance as a sender especially with 4+ hops... and it looked like the payment used Blinded Paths to reach Square.
But my 'counterparty' was custodial, and the fact I was 'there' was hardly private anyway she had never had someone ask about Bitcoin before.
Did she learn about Bitcoin? No... maybe she saw it in action. But all it tells me is that 99% of people if Bitcoin became an MoE would only know Lightning and might not know that "on-chain" even existed.
"On-chain" would become like the "sewers" underneath the city that no-one really even knows exist... except for the sewer-workers and rat-specialists basically us.
"Mass-adoption" of Bitcoin as a MoE might not be what the stackers think it is.
(Edit)
It also stands to reason imo that Bitcoin's adoption as a 'widespread' MoE and the government's treatment of Bitcoin as a 'speculative commodity' requiring the payment of Capital Gains... would eventually cause a major conflict.
Bitcoiners have grown SOFT and are now A BUNCH OF PUSSIES.
Whatever happened to wikileaks? To Silk Road? (NOT advocating for drugs just saying) whatever happened to censorship resistance and paying FEES? To ending the 'central banks' and real sovereignty?
Oh wait bitcoiners GAVE UP on that to 'pump their bags' and push treasury companies that have ZERO business model.
There's nothing wrong with a company 'buying Bitcoin' with their revenue... but the sad state of the 'community' is that the people who know better don't actually want to USE Bitcoin... they just want it to GO UP.
The once strong, proud, Bitcoin community that paid fees to overcome censorship resistance is terrified of JPEGS, rarely actually USES the network and doesn't want to "rock the boat" because then the government wouldn't "buy Bitcoin" and so nobody "gets rich!"
Well guess what... the government doesn't give a shit about you to begin with!
And the only Bitcoin the government has THEY STOLE!
What a sad, pathetic group of people that don't want to pay fees, and don't want to actively participate in one of the largest monetary revolutions in history.
Strong men make good times. Bad times ahead.