I enjoyed writing and researching this a lot.

A short summary:

  • scalability trilemma means BTC can't be scalable, secure and decentralized at the base layer
  • Bitcoin Cash, going the big block way route of 32MB blocks, can only do 50 transactions per second on the base chain
  • if you wanna scale via big blocks, you'd have 190TB of data a year to support 24,000 transactions per second. No node can keep this much, not to mention syncing
  • Lightning solves this beautifully
  • The default LND node is able to do 33 payments per second on a 8vCPU 32GB memory cloud machine
  • Assuming most Pis running LND can do 4 payments a second, the Lightning Network right now should be able to scale to 16,264 payments a second.
  • That number is 2.2x the average transactions from Visa in 2021, so more than enough to overcome them
  • At the same time, Lightning's transaction fee is 13 times less than visa. 0.1% vs 1.29%
  • Lightning hasn't even started prioritizing scalability or performance. Reliability has been at the forefront
  • As River shared, its payment success rate is 98.7% at an average payment size of $46. 4 years ago, Lightning had $5 transactions fail 48% of the time.

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Really interesting research, thank you! You might find this old report from Joost Jager at Bottlepay interesting re: benchmarking tps for a given node.

Would love to see somebody redo the analysis and see what the theoretical maximum looks like today!

Thanks! His reports are exactly what I was referencing.

I tried to be realistic with the numbers I presented. The benchmark you linked is more proof that higher throughput per node is achievable, but none of what he did has made its way to the implementations (with reason I suspect, there are tradeoffs at each point)

A benchmark from Bottlepay again, a month or so earlier than this one, showed that an LND node running decent hardware (8vCPU, 32GB RAM) can do 33 payments per second.

I wanted to estimate this in a realistic way given that most of the network is running Pis, and ran with the conservative "4 tps" number, which again proves more than enough!

119 sats \ 0 replies \ @nout 24 Nov

"solved" and "scalability" don't go together.

Ln is a good start but it’s not battle tested and full of bugs.

0 sats \ 0 replies \ @Kaffi 5h

ive been using it since yesterday after opening a Phoenix wallet and its amazing to be able to just log into this site with no friction. Just scan a QR code. Also I assume money is being sent to the devs just by replying and interacting with the platform which seems like a much better model than ads.

Scales payments, not users.

But onboarding users to Lightning is still a layer 1 bottleneck without additional solutions like fedimint where multiple users share a UTXO.

or centralized companies, like most wallets/Strike/etc. which I suspect will be the thing adopted by mainstream