Bitcoin's Lightning Network, Simply Explained!
HTML-код
- Опубликовано: 21 окт 2024
- Bitcoin has a 7 transaction/second limit, so how can we overcome this? The Lightning Network is one of the proposals and in this video I'll explain how it works.
💌 Sign up for Simply Explained Newsletter:
newsletter.sim...
Monthly newsletter with cool stuff I found on the internet (related to science, technology, biology, and other nerdy things)! No spam. Ever. Promise!
💰 Get $10 of free Bitcoin:
Use my Coinbase affiliate link, and we'll both get $10 of free Bitcoin when you deposit $100:
coinbase.com/j...
🌍 Social
Twitter: / savjee
Facebook: / savjee
Blog: savjee.be
❤️ Become a Simply Explained member: / @simplyexplained
--------------
📚 Sources can be found on my website:
www.savjee.be/...
#bitcoin #crypto #blockchain #scaling #simplyexplained 
Наука
In 25 years, everyone will talk about how Bob set up a payment channel to spend 10 million dollars on a coffee!
@Hrvoje Batrnek Craig Wright is the real Satoshi! Bitcoin fork is the real Bitcoin!
@Hrvoje Batrnek It costs nothing, because no one uses it
@Hrvoje Batrnek When writing this the price of BSV is $201.78. BTC is $19 078.04.
See you on 25/11/2022 :)
@Hrvoje Batrnek $35,000.00, still very early. time will show BCH wil beat bitcoin
@Hrvoje Batrnek Bitcoin's value comes from its history. It was the first of its kind and dealt with multiple attempts of other currencies surpassing it's market cap. All other currencies have failed to do so. At the end of the day the market decides what they want and that is Bitcoin. BSV surpassing bitcoin would not be beneficial because that would just open the door for an infinite amount of crypto currencies upending the previous one. If BSV surpasses BTC, than another crypto would eventually beat BSV, and so on. This destroys the whole aspect of saving into the future because your savings would be constantly debased by new cryptos. At that point Bitcoin and other cryptos would be no different than Fiat.
Finally someone made a proper video explaining the lightning network. Thank you so much.
Here is an even better explanation of the LN ruclips.net/video/UYHFrf5ci_g/видео.html
I would not call it proper, just do the math it does not add up, Mauricio's link explains it a bit better if you just check it out
Mauricio Gomez I’m under the impression TeFaZ saw that video but didn’t like what it was telling him. He prefers this one because it’s tamer on the ears...
gussi123 But... What about the content?
Now hopefully people will see how ridiculous it is and how miners will happily choose a network that allows for more transactions, not less
2021: Bob actually using the lightning network to purchase a cup of coffee in El Salvador
really is this a solution now you think?
And he‘s paying a whole lotta money on it
Ummm, does cuong know that El Salvadorian bob is actually using algorand to settle his BTC transactions because the company El Salvadorian govt uses didn't choose to go with lighting network and is doing it on Algo 's network instead
Love this 🥰
@@h4bbqpenger 🤫 they don’t know
I'd like to add that this is all taken care of by the wallet, the user doesn't have to open the channel manually. this going to be done in the background and we don't have to open and close channels nor find routings to the final destinations of the payments. Great video!
Yes you're right. I've seen some people getting confused by how much 'work' this is. Should've pointed out that it's indeed all handled by the wallet...
@@simplyexplained How does the system ensures that only the latest balance sheet is valid?
@@simplyexplained Isn't "Bob" effectively the Lightning network?
I contributed with Spanish subtitles. Please approve it! I even corrected the mismatch between the 0.01 BTC and 0.05 BTC of the initial tx.
Thanks! I'll check it out! Edit: it's published! Thanks so much!
Where is it posted at?
Where?
Activate the subtitles in this RUclips video.
It was not 0.01 BTC for the coffe but 0.001 BTC.
Okay so basically Lightning Network can be used where we make repeated payments (through Bitcoin) and instead of multiple transactions creating a burden on the Blockchain network, we record these mini recurring transactions in a separate ledger and then capture the final balance as a single transaction in the Blockchain.
Thanks for the video, very nice work, but there is one concern:
So you do not need to open a channel, it will just use the channels of other people. You send 0.001 BTC and one of those guys between decides to close the channel, meaning your funds will be written to the chain and you pay a big part of the fees. Doesn't sound like a solid concept, if you ask me.
That's an expensive coffee
Hah, yeah! Someone else pointed it out as well. I originally wanted to use 1BTC to make it simple to explain. But that was just completely outrageous :p
Tasty Kopi Luvak it is :D
I don't need you to tell me how fucking good my coffee is. I'm the one who buys it. I know how good it is.
Still cheaper than the pizza!
we are already in the future
Thanks for the video. I have one clarifying question: where is the balance sheet stored? How are they able to change the balance sheet without accessing the main blockchain?
Hi Mitchell, the Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed. So the balance sheet basically is a smart-contract multisig-wallet that allows to transact without broadcasting. The smart contract is on the bitcoin blockchain.
What mechanism ensures only the latest balance sheet is used? If the network is unaware of these balance changes, how could it possibly know a newer one exists? Also how is each key validated off network exactly?
Thank you for taking out time to make this video! I kept hearing about the lightning network and how it could be helpful to bitcoin but didn't understand it. This presentation helped a lot! It clear it up quite a bit. I am glad this was created do bitcoin could be used to do everyday transactions. Keep up the good work! 😊 #bitcoin #BTC #blockchain #Lightning
Please explain (at 3:45): "The system ensures that only the latest signed balance sheet can be used to unlock the money." How does the Lightning system ensure that only the latest balance sheet is valid? What's stopping Bob from just broadcasting an earlier copy of the balance sheet and closing the channel?
Good question
A balance sheet is created when both sides have signed it with their transaction keys so it is impossible for it to work the way you are thinking.
I can think of one solution here.while opening the channel, both parties deposit btc and sign that transaction and it's stored at a common location, and after each transaction both parties get their own copy of balance sheet. While closing the channel, the common sheet and the one owned by the party can be compared.
Great explanation! There's a discrepancy in the price of the coffee: it says 0.005 BTC on the animation, but you said 0.001 BTC. Gets the point across though :)
Damn it! Good catch!
Bob got scammed xD
PlantMan was thinking about the same thing. then i figured that he bought 5 coffee.
Also you should just use round numbers. Like 1btc for the coffee and 50 in the channel. You based your prices on current btc rate but it doesn't matter. Nice video!
Thank you for stating, I was questioning my math and my listening abilities... lol
Thank you for the explanation. Also, what software did you use to make this video? It's very well done.
What happens if I try and spend a bitcoin on the main chain and the lightning network at the same time? Is there risk of double spending?
You cannot, because your coins are locked in a Hashed TimeLock Contract signed by both sides of the channel (multisig).
Yep, exactly!
what happens in general when miners stop mining? will it eventually become unattractive to them way before all bitcoins have been mined - due to difficulty?
Michael Xz the supply of bitcoins won’t run out until the year 2140.
Also any amount being transferred cannot exceed the ammount on any one of the links in between you and the recipient. This WILL create the need for larger lightning network hubs (the intermediates Anontony talks about). The hub will be easy for anyone to connect to and it will have many connections to other people. Thus it must also hold a LARGE amount of bitcoin in order to serve all these people when large sums are transferred. So you get a large hub, with many connections and a lot of BTC in that hub taking fees for all transactions. That sir is a bank.
We needed this video. Great work!
Thank you so much Savjee. You are the best!
thanks so much! I can hop safely to the technicals now.
Thanks for this great explanation that even helps newbies like me in Fall of 2021!
That's an expensive cup of coffee.
If people worry about future value, there is a diminishing incentive for them to use the currency as a means of exchange.
nano (xrb) or bitcoin lightning network ? which will be adopted ?
Hi Savjee! Big fan of your explanation videos! Could you please explain the difference between Proof of Work, Proof of Concept, and other Proof, like Proof of Stake or Proof of Burn
yes please please!
Nicely explained. A lot clearer than other videos on this matter.
Thank you, that was very well explained. Also bridged nicely between payment channels and lowest cost routing.
Simple and concise explanation. Thanks !
Great video. I would really have liked to see example fees included so we could get a sense for how realistic this actually is. If BTC really isn't going to adjust block size fees are going to be over $100 to open/close a channel eventually. Maybe a new TV should have been the example instead of coffee?
The old world has taken over bitcoin. That is why they have offered this "solution". Courtesy of DCG.
Luke Lorenzo The lightning network solution considers that it must be combined with an increase of the bitcoin block size to 150 megabyte in the case of a world adoption of Bitcoin. With only a block size scaling solution like bitcoin cash the block size should be increased to several tens of terabyte. That is why lightning is a relevant solution.
lol get real noob. Stop thinking you can just hop on the next fast crypto of the month and expect to have the real gold.
Gold has utility. If crypto cannot be used it will have none.
No the fees will only get smaller because there will be less transaction on the main chain since there can be a lot of transactions on the side chains. The more side chains there are equal a smaller fee per side chain because they won't be as congested.
How does lightening network compare to Spend the Bits ? which also uses a layer 2 protocol to purchase goods.
That's a lot of work for a cup of coffee!
It's also a lot of work to pay with a card ;)
will all be handled by the wallet software. You can then buy 100's of coffee or online purchases. Software will make it simple.
not really .
You're right! Same as a single video on YT you're watching, or a single page of a website you're reading :)
BitcoinCash would have been a whole lot simpler!
I watched videos like this, but with this I understood a lot. thank you for this short and simple video.
On today you would have to pay 20 $ for the transaction to the multi adress channel and at least 20 $ to cash out again. You have to buy a lot of coffee to make this look in any way as a good deal.
Can't the devs just enlarge the 1mb to 64mb without a fork?
Or you can read more about LN and how third and fourth layers fix that issue
They can, but it would lead to fewer people being able to mine. And it would improve the transaction capacity by just 64x ,or 384 transactions per second, compared to the current 6.
It's all about trade-offs.
Or you could just use XRP and the payment will be made and settled before the coffee is even poured for fractions of a penny transaction fee.
Your videos are the best sharing with everyone.
Great job on the video. Is there a guarantee that when Alice sends BTC to Bob to be sent to the coffee shop, that it will actually happen other than just trusting Bob to do so? Does the pass through happen automatically because what if Bob decides not to send it or he takes too long for whatever reason?
It's all assured through automatic smart contracts. This happens naturally in the background. The funds simply find the path of least resistance through the other members on the network. The more on there, the better it is.
How I setup this lightning network?
the real question here, which is not answered, is:
how many transactions / second is Bitcoin expected to do when the Lightening Network is implemented?
I did answer that questions. The Lightning network itself can scale almost endlessly. It's only limited by how fast you can sign transactions and send them to your counterparty. The limitation of the Bitcoin blockchain will however remain at 7/s with the current blocksize.
Savjee thank you for your response! maybe a rewording might help then: even if the potential of LN is endless, what is realistically expected in the short/medium term after it is implemented? if there is an actual number :)
It adapts to demand.
still, no hard numbers or percentages? no data from tests? just theoretical information..
something else would be beneficial, to get a better grasp of what LN really can do for BTC
Bernardo O'Neill - It is currently being tested on Bitcoin's testnet.
Here is an video of lightning being used: ruclips.net/video/a73Gz3Tvx3k/видео.html
Ok but what happens if I pay for the coffee, get the coffee, and the. I broadcast the old balance without the coffee shop knowing?
Great explanation, great presentation, graphics and detail. Good Job!
Thanks a lot!
EXCEPT THAT YOU DONT MENTION THAT BOB WILL BE A BANK!!!
Please understand that this is run by the BANKERS so they can control bitcoin and charge lots of fees!
Hello , I wish to start investing but i dont know where to begin. Any advice or contact for help?
Hi @savjee coluld you please make a video about Market Cap! There is a misconception that is growing that it's only the price of a coin that matters. I'm very tired of explaining the importance of market cap.
that's not something that needs to be explained, it's common sense. people who are that dumb worry me
Thank you for the clear and concise explanation
It is the best explanation so far to me...
Tabs and gift cards?
Would this mean that the funds allocated to the payment channel are not spendable?
Seems so confusing just to get one cup coffee
Sure, the things that happen in the background are always pretty complicated!
That's the same with on chain transactions tho.
The wallets that will support lightning will of course manage all the complicated stuff in the background,
so the end user has a flawless experience!
Maui Joey what goes on behind your Visa transactions is WAY more confusing that this.
The confusing part is for the implementors of the technology to worry about. From your end it would be seemless.
Maui Joey when someone makes an app for this it will be no more than clicking a button
Maui Joey Its in its early stages - in the future all of this would be instant and we wont need to know why or how
AMAZING EXPLANATION!! thank you so so much.
The "payment channel" sounds a lot like a preloaded credit card. Is everyone going to want to preload a channel for every vendor they deal with? That sounds like a hassle of its own.
So is it sort of like prepaying?
after this implementation, how many transactions per second the lightning network will allow globally to blockchain?
Millions of tx per second is what they are claiming.
'Globally to Blockchain' -> this limit will remain at 7. But there is no limit on transactions that happen through the payment channels. These can scale up to millions of transactions.
BTC cannot scale with 1MB blocks as the Devs refuse to hardfork. The Lightning Network white paper itself states that a 130MB block size limit would be necessary for mainstream adoption to be possible, even with various Layer 2 scaling options.
130mb is ok. Better than 1000 terrabites.
Is this figure based upon a certain number of working nodes? If so, how many?
OMG, this youtube channel is amazing. Subscribing right now
Your video is good but I don't like the solution to the bottlenecks. It requires trust in another separate network of third parties so it really doesn't solve the scaling issue. I don't believe just because I trusted one node for one transaction that I want to always trust that node for future transactions. Furthermore it lowers the anonymity of transactions because the network needs to remember the relationships of nodes. I fail to see how any of this is better. Am I misunderstanding? Let me know.
There’s nothing anonymous about the bit coin black chain, it is an immutable record. There is an argument that off chain transactions will therefore be more anonymous. Also the side chain transactions do not require trust exactly because they’re basically automated smart contracts that have to be agreed-upon by both parties and all this. However I think the whole thing stinks and it basically seems like a way for banks to warm their ways in the middle of transactions and start sucking fees like a bunch of fucking parasites
Aaron Wermuth - well said!
it does require trust, you have to trust miners and node operators aren't colluding to steal your funds
Hamza Syed - is this true!?
What the Lightning protocol does is essentially it implements the regulatory punishments within the system: nodes can try to steal funds, but doing so is expected to be unprofitable, because the protocol allows for automatic punishment of theft.
In most circumstances Lightning punishments have a high probability of success.
But not all: a majority of miners _can_ censor Lightning punishment transactions, and thus steal funds. We should not underestimate that risk.
words of peter todd - respected core developer
Very nice solution .
Hello, great job,
What happen if bob's side come to zero ? Can he refund his lightning channel or does he need to close the channel and open a new one ?
yes, the channel can be topped up with more btc, that requires another on-chain transaction though.
They also work on that idea that you can transfer fund from another canal with fund off chain to a canal that is empty.
I reject all white papers that mention bob and alice.
Bob could also top up his balance through LN so he doesn't have to make a new transaction.
that's only if bob has btc locked in another channel, but yes, you're right, though why would bob send money to himself if he could just send them to the vendor?
I have one question. When you open a channel with another party and want to do a transaction does this means that you need to have btc allocated to that multisig channel or the channel just picks it up from your wallet as needed? Because if that is the case, then there will be the need to have lots of btc spread around in the multiple multisig channels that everyone will create. Will there be even enough btc for that to be used on a massive scale?
Excellent lightning starter for 10.
Is it live yet
So basically, you open a tab... managed by some technology expert.... like blockstream... and you don't use the bitcoin network... but to simplify things you could open a general tab between shops in an area and... Where have I heard this before?
No that is incorrect. This Blockstream conpsiracy is a brainwashing technique Bcash users have been using to attack Bitcoins scaling solutions with incorrect information.
Blockstream has only a few developers out of hundreds of people who contribute to Bitcoins development, they would have no more control nor will it benefit them anymore than anyone else in the world by using the lightning network because it is decentralized. Anyone can create a lightning node simple and easy by just downloading a lightning wallet and throwing a little Bitcoin on it. A lighting node will have no more control over the funds that transfer through it than a Bitcoin node would have at making modifications to the blockchain ledger.
Literally anyone can manage payment channels. The most obvious managers will be mobile wallet providers like Mycelium, Copay, Breadwallet and SPV wallet providers like Electrum but also hardware wallet provider like Ledger, Trezor. I don't see Blockstream having much chance compared to them but they sure can try.
SuperResistant it will be the banks man
Ikr the banks. This is sooo stupid
My understanding was that in order for a transaction to go through a node in the first place, it must "have liquidity". Supposedly, only banks would have such a liquidity.
Well done explanation, thank you! Subscribed!
More I hear about the lightning network less I like it.
It's such a hacky solution I don't even see how it could work at scale.
@Patriot D5 Link please
…and the less I understand it.
How much is the transaction fee to open and close a multi-sig payment channel?
I'm new to Bitcoin and would like to invest. But I've got no idea on how to make real profits. Can someone please tell me how to go about it.
I really need to get startedd. how good is Tiffany Morris.
so will my pending confirmations , which are over a month now get finally confirmed ??? or do i have to wait finally for BOB
unfortunately side chain will be handle by corporation not by bob himself. RIP bitcoin , now it is just like fiat
Andrea a word of silence before we move on to bigger and better and faster things
Even if corporations act as big nodes for LN, what is the worst thing that could happen? they can not alter the signed transactions and if they try to close channels only the latest transaction will pass and whoever is using that channel does not get ripped off.
IRS could enforce taxes on users using those nodes because a US corp. runs it as they can through coinbase with user records.
Why don't you run your own lighting node then? What if it was profitable for you to do so. Think some of your friends would he interested too?
No, still handled by block chain.
Ok. This was very easy to understand. Thank you.
Great video, lightning network = poor solution
Great explanation..going to share it everywhere. Thanks man!
I dont think this is good solution tho.
Getting instant transactions in not a good solution?
Seems you like buying gift cards everywhere you go dude.
Care to elaborate?
Best explanation I have seen so far?
This is not for all day use cases!
Why not?
This is for day use case.
I think it could make transferring BTC between exchanges free. The exchanges would have massive payment channels simply because of all the users they have. When you transfer it should mostly go through the lightning network.
I don’t like the solution but as long as it works and is free I guess it won’t matter if it’s a patch to old technology.
There are already better networks out there that scale and are free.
+Drew consider bitcoin as the beginning times of paper money but digitally... it will be interesting
Is it possible to make a BTC transaction on hashgraph? No blockchain there and its faster and secure rather than this multi signature thing? Thoughts?
Bob could just use Bitcoin Cash and pay 1cent fees and have his transaction processed in the next block, rather than using a BTC Top-up card. >.
Bitcoin Cash can process more transactions because nobody uses it, so it has capacity (for now). But Bcash can not scale until Visa because it would require a 100 GB block, which cannot be transmitted effectively every 10 minutes to all nodes. Lightning network is a long-term bet and it can truly scale without compromising security and decentralisation of the network. Bitcoin Cash is the wrong short-term fix.
Dear sir , from whre can we buy lightning network coin ? Brgds.
You forgot to address the huge elephant in the room: how much all of that is going to cost. Opening a channel is, what, $20 in tx fees? Closing - the same. And if there's no route between your channel and the store, you have to open another one. And then you have to fund these channels. So to justify that $2 coffee you will have to buy hundreds of them without all the fees being more ridiculous than the credit card ones.
Why would anyone use this ridiculous scheme over something like Ethereum, Bitcoin Cash, IOTA?
If the mempool wasn't clogged as it is now it wouldn't cost that. On a best case scenario with segwit transfers and using the Lightning Network the fees are 0, as the mempool is empty.
If people start using lightning, you will make 10's or 100's of payments before closing it out on the blockchain. Thus the blockchain will be less full and fees low. Also, the merchant (and thus maybe you) will save 2-4% in credit card fees for every one of those 100's of transactions.
jannyrg I don't believe it will ever reach 0, but if you can get the fees to 1$ for example, you can settle after dozens or hundreds of TXs, which will dillute the fee over all of them making them pretty cheap
"An increase in the block size limit would also likely mean that the requirements for full participation on the Bitcoin network would increase. With more transactions taking place on the network, the system requirements for operating a full node will also increase. If those requirements are increased too much, Bitcoin would become more centralized and look more like PayPal than the decentralized, censorship-resistant network that everyone has come to know."
www.nasdaq.com/article/why-the-bitcoin-block-size-debate-matters-cm645644
It is my understanding that if Bob creates many transactions - ex: 200 - with Starbucks (i.e. buys 200coffees), Starbucks will only get paid after the channel closes. So, at $6 per coffee, will Starbucks be OK with being out $1200?
Hows the transaction being approved if buyer(A) buy coffee from coffee shop via channel (B) & (C)? (A)-->(B)-->(C)-->coffee shop. Does all this records need every nodes to approve?
Search for and read: "Lightning Network Will Likely Fail Due To Several Possible Reasons"
It's not without its flaws, thats for sure!
Search for and read: "Lightning Network Will likely Succeed All Expectations"
Nice try. You only hope your article exists.
But the flaws are significant and likely show-stoppers.
Keep it nice! There is a lot going for the lightning network but also a lot going against it. This is by far the biggest potential issue: medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800
Lightning could compromise Bitcoin's decentralized nature because people with more money can open up more payment channels and thus becoming more important on the network. But it's not impossible either. This article shows that it's possible to keep the decentralized nature (although it makes some assumptions): hackernoon.com/simulating-a-decentralized-lightning-network-with-10-million-users-9a8b5930fa7a
great work but how to ensure that only the latest signed "document" gets distributed? Let's say one party decides to kill the contract and distributes an older version of the contract where he / she has a higher amount to the blockchain? How can miners ensure the rejection because it is not the latest version. They do not know that do they?
sounds good, but as usual, the devil is in the details...it can't be that easy, can it?
The system really is that 'easy'. However many people fear that nodes with a lot of bitcoins will have an advantages over others because they can commit more coins to a payment channel. That creates a whole discussion about how decentralized this approach really is...
so richer people might get better service, essentially? that's a little hard to understand, if a channel is just between two primary parties...if the coffeeshop's computer is connected to your computer via a TCP-like channel, why would it matter how much money is involved, and why would it matter what anyone else in the world is really doing? if you are only writing to the blockchain once a month even waiting a few hours would be no big deal, either, would it?
I hope Bob enjoys his $50 coffee.
Will BCH replace BTC ? in case lightning network is not working out?. Nowadays btc cant be used in everyday life becuz of the slow transaction and tons of fees.
Hmm maybe. Depends on how fast it catches on. But don't give up on bitcoin just yet ;)
I cant see BCH taking over. Even Litecoin is better than BCH, and if Lightning Network works as promised BTC will still be king, imo.
If Bitcoin Cash starts to be used more frequently and by more users, my understanding is that it will eventually run into the same issues as Bitcoin is now facing, higher transaction fees and slower transactions.
... except LTC being better than BCH is simply not true. BCH is cheaper and faster. LTC has a headstart on adoption but BCH is closing that gap extremely quickly. By what metric is it better?
@jvaish this is not actually the case. The block size increase allows the network to "burst" large blocks in one shot when it gets congested. Currently it can include 8x more transactions than BTC in one shot. In may, it will be over 30x when block cap moves to 32MB. Additionally, BCH may be implementing subchains, graphene and other really innovative techniques to further improve its utility. It's going to be VERY hard to beat.
Great video ever, thank you!
This solution does not work at all :( - Bitcoin need to react quickly or other Cryptos are going to take his place on the market
It works
Proper video. You're awesome. Subscribed!
People are applauding this like it's some kind of revolution for Bitcoin. It's the most backwards system they could have developed! Imagine opening payment channels to spend your debit card money every time you went out to eat, got gas, or went shopping. You'll have a payment channel open with every store you interact with and in order to avoid fees you'll have to pre-deposit several months worth of funds into each payment channel. Opening and closing these channels is just as expensive as the current Bitcoin transactions are now.
The market is not going to use a coin that is so complicated to spend. This "solution" will not provide any relief for the network congestion because it is too complicated for the average Joe to ever want to use. Mark my words.
Smart money is investing in Ethereum and Bitcoin Cash. Get out of Bitcoin (BTC) while you still can afford to.
Bitcoin is going to get as* r*ped by ETH, IOTA and Litecoin soon.....we need quick transactions within 15 seconds..end of....
what makes you think you would have to open a channel every time? When this becomes robust nearly everyone will be connected in some way, you can open one channel and pay nearly anyone who has a channel open with someone else who has a channel open with someone you are connected to in some way. This is just a basic explanation video. You'll be able to just leave some bitcoin in a channel and keep paying people until it's empty and then open a new one or refill it.
You do not need to open a channel everytime. But you need to keep your account full of money. For people without a surplus of cash this is impossible. Meaning huge fees every time they need to settle their accounts (monthly?, weekly?) This is not a solution for the worlds poor or unbankable.
You don't need to open multiple channels. One can be enough if all participants are already connected. The channel can be automatically opened by the wallet provider so the user don't even know and enjoy infinite and almost free transactions.
I actually was a big BTC supporter until watching this. I've heard of the lightning network before and just had faith in the development community to solve the scaling issue properly. This is literally the worst possible fix for the problem. I wonder is the Raiden network on Ethereum is set up similar to this. If it is, then I will be transferring most of everything into IOTA and EOS.
well explained, great video thank you!!
That's to damn complicated. Im just going to stick with with bitcoin cash.
this video is very usefull for me . Thanks .
This is beyond stupid I'm sorry. And exactly what happens when the lighting network becomes as congested as the current state of transactions? It's like going to universal, paying to get in, then buying a fast pass to skip everyone but then you see everyone bought one too. I got rid of mine because of the simple fact that there's already TOO MANY PEOPLE ON IT!
Not quite true. The lightning network cannot get congested so easily as the main blockchain. It is a solution to the problem. But the question is: is this the best solution?
It cannot get congested. Ever.
when will this network be implemented
You clearly do not understand how the lightning network operates. There is no limit to the transactions on lightning because transactions are bilateral. They don't have to be broadcast to the entire network. That is the bottle neck on the current system. Lightening uses a totally different method, so it scales much, much better.
how many done per second, with the current value to 7 on blockchain
Question is is it going to be so complicated or it will be like like an option - choose high/low priority or try to send with LN option when trying to pay for something
Great, so you have to deposit money in advance and do a lot more work to buy a cup of coffee. Or just swipe your credit-card or pay with cash. This is not a good solution.
Bitcoin is going to die soon.
You don't have to do this work manually. Companies could offer you a VISA/Mastercard and hide this complicated process from you.
Savjee so youll have a credit card for everyone you want to pay?
So you will hand over your wealth to a third party so they can make your life easier? We already have banks for that, and historically, they haven't done a very good job.
Lightning wallet will be your checking account, Blockchain wallet will be your savings account. Also give it some time, this is brand new technology so in a year or two you will most likely be using a wallet that handles all this in the background for you without you even knowing.
Once added by wallet providers, there will be no process at all. It will be managed automatically in the background.
But if you only want to send one transaction surely it’s the same as just adding it to the blockchain?
If Blockstream had allowed to raise the block size from 1MB to 8MB none of this multisig-sidechain-hardfork nonsense would be needed. You see we would still have only one BTC. But the powers that shouldn't be are well aware of the old adage "divide and conquer" Again, Just raising the block size was a simple and elegant solution that could have avoided a contentious hardfork, while allowing thousands or tens of thousands of people to have access to their funds in a timely manner.
Mauricio Gomez amen! Accumulating BCH as we speak!
No you're wrong. Because even the increase in block size will not get you anywhere near Visa or Mastercard transaction speeds. You get like up to 40 transactions a second. It's a laughable solution to just keep increasing the block size. What should we take it in order to compete? 5 terabytes? You can see it is not an elegant solution and does nothing to solve the initial problem. That's why BTC didn't want a block size increase. The only way to scale BTC is layer 2 solutions.
Good luck with that. No miner is going to support a network that fucks them over.
Bullshit, going to 8M wont be anyway near enough. 8M would increase the tx/s from 7-> 56. That would be 144 million transactions / month. How many users would that sustain if ppl were actually using btc to pay for things? No way nearly enough. Visa has apparently around 2000tx/s, and that kind of scale would require around 285M blocks. That would be around 15TB worth of data per year. Now, since the promise of btc was to be cheap and scalable enough to allow micro payments, the real goal would be to be able to handle way more transactions than that. Lets say 10x or 100x. That would be 2.8 or 28G block every 10 minutes and 150TB or 1.5PB every year....
larposan where’s the facepalm GIF when I need it
I am curious about the following use case:
Let's say I am visiting a city for the day and decide to buy a coffee from Coffeeshop. I know that I will only order one coffee since I do not live there, so I pay using the lightning network, opening up a payment channel with Coffeeshop. Since I am only visiting, I decide to close the payment channel directly after the transaction takes place.
I understand that the transaction would be instant using the lightning network (correct me if I am wrong), but would I not have to pay the same transaction fee for the one coffee using the lightning network as I would using the Bitcoin network directly?
I can see where the lightning network would benefit multiple purchases through one vendor, but I am having a difficult time understanding the value for the one-time transaction use case mentioned above. Thanks in advance.
ah a segwit 2.0
Jasper Miguel yes! Everything off the chain! Fuck the miners! Let’s complicate the fuck out of a beautifully simple and scalable network!
Rick Tastic scalable...?
I'm still new to all of this, but from what I've heard, if you close an account before the transaction is processed, then isn't that money gone? There are a lot of issues with the lightning network from what I hear.
This is a great video and explanation!! However, this is soo bad. Reminds me of how the banks work. I recommend everyone to not get into this. Because you can get tracked.
It's totally different from how banks work!
All transactions are trustless and way more anonymous than normal blockchain ones.
You can already be tracked lol part of your ip is usually on your btc address lol. Bitcoin is not a privacy coin.
It uses onion routing, like tor. So no. It's faster, cheaper, AND more anonymous than on chain transactions. The logical next step really. I predicted it all the way back in 2011 because it just seemed obvious for scaling micro transactions. It is truly "streaming money".
yeah, tell the users of Silk Road who are in prison...oops, a little late. Bitcoin is not anonymous, bro. Monero is the future.
B. Alvn actually the dealer's on silk road such as dread pirate Roberts where found for reasons unrelated to using BTC
Very good explanation for a fairly complicated topic. Thank you.
*Lightning Network Explained:* Okay... so our first network sucked and didn't scale. Now we are going to make a second shitty network to patch the first one. Who's with me?
Umm... guys?
When i look at that solution, it reminds me of writing workaround code in software to fix some issue for the moment. Known as FOO. :D
it seems a lot easier to just make a better coin from the start or even using an existing one that's functional
So does the 'Coffee Shop' in this example not get paid until the payment channel is closed? If so then this will fail and problably increase transactions not decrease them. What business is happy to wait an unknown amount of time to be paid?
thanks for introduction..
How does Hydranet combine Lightning Network with Connext and allows cross-chain swaps on layer 3?
Incredibly helpful, thank you!