tag:blogger.com,1999:blog-4503292949532760618.post4544091416531797325..comments2024-03-28T13:39:27.601-07:00Comments on DSHR's Blog: Bitcoin's Lightning Network (updated)David.http://www.blogger.com/profile/14498131502038331594noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-4503292949532760618.post-34016461154054955762021-06-29T17:51:00.635-07:002021-06-29T17:51:00.635-07:00Back in 2018 Brazilian computer scientist Jorge St...Back in 2018 Brazilian computer scientist Jorge Stolfi's <a href="https://np.reddit.com/r/Buttcoin/comments/8407or/lightning_network_sounds_a_bit_wack_is_it/dvm0haj/" rel="nofollow">Reddit post</a> pretty much summed up the Lightning Network. Things haven't improved since.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-38844357133316816472021-04-20T19:06:27.621-07:002021-04-20T19:06:27.621-07:00David Gerard writes:
"Crypto guy loses a bet...David Gerard <a href="https://davidgerard.co.uk/blockchain/2021/04/20/news-coinbase-goes-public-bitcoin-hashrate-goes-down-nfts-go-down-proof-of-space-trashes-hard-disk-market/" rel="nofollow">writes</a>:<br /><br />"Crypto guy loses a bet, and tries to pay the bet using the Lightning Network. Hilarity ensues."<br /><br />You really have to read the <a href="https://archive.is/xb5N9" rel="nofollow">archived Twitter thread</a> to understand how not-ready-for-prime-time the Lightning network still is (and will remain).David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-69725318353255131642020-10-10T19:36:20.407-07:002020-10-10T19:36:20.407-07:00Joost Jager has a Twitter thread pointing out that...Joost Jager has a <a href="https://twitter.com/joostjgr/status/1308414364911841281" rel="nofollow">Twitter thread</a> pointing out that it is trivially easy to mount a <a href="https://threadreaderapp.com/thread/1308414364911841281.html" rel="nofollow">denial-of-service attack on the Lightning network</a>:<br /><br />"The underlying issue is that a channel cannot hold more than 483 htlcs at a time, regardless of the channel capacity. Sending 483 micro-payments to yourself and holding on to the htlcs is enough to incapacitate a channel for up to two weeks.<br /><br />By utilizing the max route length to add loops, each payment can consume up to 9 htlc slots on the target channel. If the script kid is lucky, they only need to send 54 payments to get it done. A single tiny channel takes double-digit amounts of #bitcoin out of business."<br /><br />htlcs are <a href="https://en.bitcoin.it/wiki/Hash_Time_Locked_Contracts" rel="nofollow">Hashed Time Locked Contracts</a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-86476886411168000902020-06-15T14:38:46.121-07:002020-06-15T14:38:46.121-07:00On the Great Wall of Numbers Tim Swanson asks 40 c...On the <a href="https://www.ofnumbers.com/" rel="nofollow"><i>Great Wall of Numbers</i></a> Tim Swanson asks <a href="https://www.ofnumbers.com/2020/06/08/40-cointroversies-to-look-into-over-the-summer/" rel="nofollow"><i>40 cointroversies to look into over the summer</i></a>. Many are interesting but part of #14 caught my eye:<br /><br />"When will LN hubs need to become compliant with the <a href="https://www.fincen.gov/resources/statutes-regulations/guidance/funds-travel-regulations-questions-answers" rel="nofollow">Travel Rule</a>?"<br /><br />The link is to FinCen's explanation of the Travel Rule:<br /><br />"1. Are all transmittals of funds subject to this rule?<br /><br />No. Only transmittals of funds equal to or greater than $3,000 (or its foreign equivalent) are subject to this rule, regardless of whether or not currency is involved. In addition, transmittals of funds governed by the Electronic Funds Transfer Act (Reg E) or made through ATM or point-of-sale systems are not subject to this rule.<br /><br />2. What are the "Travel" rule's requirements?<br /><br />All transmittor's financial institutions must include and send the following in the transmittal order:<br /><br />The name of the transmittor, The account number of the transmittor, if used,The address of the transmittor,The identity of the transmittor's financial institution,The amount of the transmittal order,The execution date of the transmittal order, and The identity of the recipient's financial institution;<br /><br />and, if received:<br /><br />The name of the recipient,The address of the recipient,The account number of the recipient, and Any other specific identifier of the recipient."<br /><br />Although:<br /><br />"An intermediary financial institution must pass on all of the above listed information, as specified in the travel rule, it receives from a transmittor's financial institution or the preceding intermediary financial institution ..., but has no general duty to retrieve information not provided by the transmittor's financial institution or the preceding intermediary financial institution."<br /><br />So the rule appears to apply only to the first node in a Lightning route. But the centralized nature of the Lightning Network means this applies to most transactions over $3K.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-62539238759268115232020-02-18T17:13:49.544-08:002020-02-18T17:13:49.544-08:00Lightning Network: a second path towards centralis...<a href="https://arxiv.org/pdf/2002.02819.pdf" rel="nofollow"><i>Lightning Network: a second path towards centralisation of the Bitcoin economy</i></a> by Jian-Hong Lin <i>et al</i> measures how centralized the Lightning Network is:<br /><br />"the average Gini coefficient of the node strengths (computed across the entire history of the Bitcoin Lightning Network) is, in fact, 0.88 causing the 10% (50%) of the nodes to hold the 80% (99%) of the bitcoins at stake in the BLN (on average, across the entire period) ... removing hubs leads to the collapse of the network into many components, an evidence suggesting that this network may be a target for the so-called <i>split attacks</i>."<br /><br />Told you so in <a href="https://blog.dshr.org/2018/10/gini-coefficients-of-cryptocurrencies.html" rel="nofollow">2018</a> and <a href="https://blog.dshr.org/2020/01/bitcoins-lightning-network.html" rel="nofollow">last month</a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-4986691777310572142020-01-30T16:41:19.212-08:002020-01-30T16:41:19.212-08:00Jonathon Ganor reports on a test of the Lightning ...Jonathon Ganor reports on a <a href="https://crypto-markets.news/news/lightning-network-torch-2-makes-some-gains-but-suffers-5-thefts/414" rel="nofollow">test of the Lightning Network community's cooperation</a>:<br /><br />"The Lightning Network torch is in essence a proof-of-concept of the Lightning Network's capabilities. At launch the torch started with 100,000 satoshis and every participant who receives the torch adds an additional 10,000 satoshis. The goal is essentially to pass the torch to as many participants in as many countries as possible until it "breaks", as <a href="https://twitter.com/i/web/status/1086703428791865345?lang=en" rel="nofollow">Hodlonaut said</a>. The first torch was eventually valued at $217 USD and was donated to Bitcoin Venezuela, a non-profit organization.<br />...<br />The first torch reached 56 countries and was passed 293 times over the course of 83 days. The second torch has reached 51 countries, was passed 148 times and is on its 9th day of activity. There is one problem however, the second torch was stolen by participants over 5 times.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-10071901753969564792020-01-11T11:57:37.974-08:002020-01-11T11:57:37.974-08:00Ben Munster sums up the year in cryptocurrencies i...Ben Munster sums up the year in cryptocurrencies in a 4-part series called <a href="https://decrypt.co/15025/cryptos-101-stupidest-moments-of-2019-october-december" rel="nofollow"><i>Crypto's 101 stupidest moments of 2019</i></a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-60163697612751078122020-01-09T02:13:48.896-08:002020-01-09T02:13:48.896-08:00The rewards schemes pay consumers
But merchants p...The rewards schemes pay consumers<br /><br />But merchants pays the fees not consumers<br /><br />So to a merchant the fee stays the same <br /><br /><br /><br />Leondavibehttps://www.blogger.com/profile/05859500473184363260noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-18515575101853289852020-01-08T15:16:01.299-08:002020-01-08T15:16:01.299-08:00> Because Bitcoin failed to achieve Satoshi Nak...> Because Bitcoin failed to achieve Satoshi Nakamoto's goal of supporting "small, casual payments"<br /><br />This is not correct.<br /><br />It is the BTC fork of bitcoin which failed to realise this vision.<br /><br />Those who didn't follow the BTC branch of bitcoin (ie. those who kept the original bitcoin protocol) are doing this just fine, and "small, casual payments" are just the smallest tip of the iceberg.<br /><br />The markets and people at large, are confused about this .... as the BTC fork of bitcoin did two things. It took the entire user base, and it took the "bitcoin name". This was done through corruption and misinformation .... but as the blockchain isn't a simple topic, most "people who cared", didn't get it, and fell for the "FUD".<br /><br />Like the internet.... the masses will not care (or understand) the underlying technology. They'll just care about the products and services built on top of it.davehttps://www.blogger.com/profile/04015826686468374161noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-21960446992248623852020-01-08T04:08:29.086-08:002020-01-08T04:08:29.086-08:00The "fees" assessed for running the netw...The "fees" assessed for running the network correspond to only a small fraction of the costs of transactions in our financial system. The Bitcoin promoters used to frequently site the 2.5-3% cost of credit card payments; but a good chunk is returned to consumers in rewards points. The actual "network" fee component of these transactions is miniscule.<br /><br />This point was so obvious back in 2015 when I first wrote about Bitcoin it is hard to believe those making it aren't either very ignorant or liars.<br /><br />Ben Horowitz is one example---he seems like an intelligent knowledgeable person, how could he make such ridiculous claims?Jonhttps://www.blogger.com/profile/02452892938623254025noreply@blogger.com