Bitcoin enthusiasts often champion the Lightning Network (LN) as a solution to scalability issues, but certain inconveniences are often downplayed. In this article, we'll explore some of the challenges associated with LN that supporters may not readily disclose.
Bitcoin faces scalability constraints due to a 1Mb native block size limit and the 4Mb SegWit limit. Despite advancements in computer hardware and internet connections, the network struggles to scale. Current computer hardware and internet connections can support a 32Mb block-size network without compromising the decentralization of the nodes.
Using Lightning Network in a self-custody decentralized manner requires users to open on-chain channels, each involving at least two transactions. Maintaining a public or private node necessitates holding a minimum of 16 channels to remain decentralized, resulting in additional transactions. Even when batching transactions to open channels, individual transactions are still required for closure, tying up funds until the channel is closed that fee is called a reserve fee or commit fee.
Upgrading hardware, especially on mobile devices, poses a challenge as nodes cannot be easily backed up and transferred. Users must close channels, and start anew, incurring transaction costs for closure and reopening. With mobile phone upgrades occurring annually, this translates to a recurring cost of at least 16 transactions annually. You need to pay at least 16 transactions at $50 (enough for your LN node to be decentralized) a pop which is enough money to buy yourself a better computer and HDD and run the Bitcoin Cash BCH node
While this issue is less problematic for computer users, running a node on a computer requires a level of technical expertise. Being a supercomputer user is essential initially, and maintaining connectivity from a mobile device further complicates the process. Running open nodes on computers is not easy, you need to have fair computer knowledge and I will go as far as to say probably a computer science degree. You can backup your node but you need to know how.
For those who prefer avoiding these complexities, self-custody wallet solutions like Muun and Phoenix Wallet offer a more straightforward option. However, it's important to note that these wallets, while an improvement from custodians, remain centralized as they only allow connection to a single node (the developers' of that node are the developers of your wallet).
Bitcoin supporters often promote LN as a step towards mainstream adoption, likening LN accounts to wallets. However, these LN "wallets" are more akin to bank accounts without the insurance typically associated with retail bank accounts. Services like Wallet of Satoshi, Strike, and ChivoWallet are touted as symbols of Bitcoin adoption, but users should be aware that they lack the financial protections offered by traditional banks. In the event of custodians facing insolvency or malfeasance, users may find their funds uninsured, unlike regular bank accounts, which typically provide coverage against such risks and do so without the high upfront costs associated with LN transactions.
Bitcoin Cash on the other hand remains decentralized thanks to computer hardware improvements so running a 32Mb block-size blockchain is possible on every home with a regular computer and your current internet connection. And if you need 16 transactions to remain decentralized with LN you better just upgrade your node software instead of paying miners over $800.00 every time you upgrade your mobile device.
Conclusion: with Bitcoin BTC you will be able to run a node with 1998 hardware but you won't be able to use it. With Bitcoin Cash, you can buy a new computer to run a BCH node with the money you will save on fees.
All Lightning Network wallets are hot wallets because they must be online to work.
Phoenix Wallet may allow you to restore your channel state but you only connect to the ACINQ node so that means your wallet is centralized and because it only connects to one single channel it can be restored by the node operator.
Article from
https://memo.cash/a/628c46c129
No comments:
Post a Comment