RE: Has Bitcoin's Lightning Network Failed?
Vitalik talked about the blockchain trilemma: Scalability, Decentralization and Security, you can only choose two out of those for a blockchain. Bitcoin lacks scalability. So the lightning network was the answer. But it's clearly a bullshit answer, since it doesn't scale Bitcoin, it simply is a sidechain which uses timelocks to the Bitcoin blockchain.
Any blockchain can do that. The lightning network can be used for any blockchain. the lightning network does not have the same security and decentralization as the Bitcoin layer.
Saying that the lightning network is a solution is like saying that any other blockchain with better scalability is a solution, disregarding decentralization and security. For some reason people assume that Bitcoin's qualities are passed down to the lightning network. Not true.
I'm just waiting for the day that the bitcoin community will finally understand all they have to do is raise the blocksize. As the cost of hardware goes down over time, it won't impact decentralization in a negative way. And no I don't think bitcoin cash will ever workout, it needs to be on bitcoin.
Blocksize itself can't be the ultimate solution as it won't scale as well. It not just the storage but prorogation speed which has variable such as geo location and bandwidth.
BCH funny enough are planning on going second layer after the blocksize reaches a certain point-not the LN though.
Blocksize is quick solution, one that works with some cost. But not the ultimate fix.
A good fix would of been doing a somewhat blocksize inc,going second layer. The problem with second layer protocol like payment channel ie LN is that once you go all in, hardforking becomes harder.
Blocksize inc can be soft fork ie extension block but no crypto has ever tried it. Litecoin might be the first to even attempt it and could possibly change the game.
LN is a great idea but the problem is in order to scale the LN you have to add more second layers to it ie statechains and channel factories. Nothing wrong with it but indeed Bitcoin's qualities are not passed. But timelocks and redemption is what counters it offering a safe haven. But that brings the dust attack problem where if tx fees are to high, the LN is not = to the quality of the mainnet bitcoins.
Statechain fix this by creating a noncustodial bridge to mainnet with ablity to redeem no matter tx fees.
Ironically BTC is following what Hal said: Bitcoin Banks.
These are better than trad banks but the idea of using secondary layers to scale bitcoin is happening before eyes.
It isn't an easy path but a blocksize inc buys time. Maybe this could of been done just to allow some fixes to go through but it be faking the results and pushing the problem into the future.
Yes I agree that currently block size is just a quick fix. However I also think that propagation speed can and will be improved one day. Communications have seen tremendous improvements over the years. Although that's a longshot I admit.
However, the Bitcoin network is already at 50% capacity, in a bear market. How do we expect adoption to spread if people won't be able to even transact between exchanges as soon as users double? A quick solution is definitely needed.
What about mimblewimble, do you think it could work?
Yeah propagation speed will inc but not enough to scale. You could use a second layer 0 base layer solution such as bloxroute that aims to fix the propagation issue. The problem with bloxroute is it skews chain interest by creating a new network interest-yikes.
Communications has increase but they also use second layers as well :P Exp, sharding is pretty big in database and other solutions.
To be fair centralized solutions could be done to transact between exchanges.
Mimblewimble is actually a pretty good solution but even they are working on second layers. Mimblewimble is also less feature rich so if you think Bitcoin has limited smartcontract features well Mimblewimble are way less....