Concerns regarding SegWit + Lightning Network?

BITCOIN
#1

Dear bitcoin community,

I’m an ordinary user of Bitcoin and shortly I came across some information regarding Bitcoin vs. Bitcoin Cash and I kindly ask for your support to help me to better understand these issues.

It was this open letter which got my attention: https://theflippening.github.io/open-letter-to-bitcoin-miners-from-another-miner/

Some of the complaints of the author contra Bitcoin Core:

a) Bitcoin Core via the BlockStream team is too much influenced by investors like AXA. As a traditional insurance company AXA’s interest may not be the best for the Bitcoin future.
Link: https://blockstream.com/about/#investors

b) The upcomming Lightning Network is patented software. The patent is held by BlockStream.
Remark: I have read BlockStreams explanation why they patent their software (https://blockstream.com/about/patent_pledge/). Which leads me to a sub-question:

b2) Wouldn’t it then make sense for most Bitcoin devs and open-source devs in general to patent their software? Which I assume would not be compatible with the spirit of open source, would it?

c) The Lightning Network could impair the decentralisation of Bitcoin. Citation: “To reach anyone in a big network with a series of branching channel connections, you either need a large number of channels [-> users have to divide up their funds and can’t do anything except tiny purchases], or a large number of hops [-> everyone’s money will be tied up routing everybody else’s money].”
One conceivable solution: “the system depends on large centralized hubs”

d) The feature “Replace By Fee” broke the much more useful (for daily life transactions) feature “Zero-Conf”. Zero-Conf would very quickly allow to see that a transaction is triggered. Instead with RBF a receiver of a payment needs to wait until a transaction is really processed by miners in order to be sure that the transaction will be made. Since with RBF a dishonest payer could overwrite a transaction and send it to a different address.

Further assertion of another author:
e) SegWit could decrease the security of transactions. (https://bitcrust.org/blog-incentive-shift-segwit)
As far as I understand with SegWit miners could be motivated not to verify transactions securely.

On the other hand:
f) In one video Andreas Antonopoulis explains that just increasing the block size (like Bitcoin Cash) is a too simple, short-term solution. If some day Bitcoin may have tens of thousands of transactions per second the blocks would be in the high gigabyte range - every ten minutes! Which could barely be processed by common nodes and lead to a centralisation trend as with mining today.

Ok, that’s my amateurish summery. If anyone could reply to one or more of those issues and provide more insight I would be very thankful. Thank you very much!

Marcel

1 Like
#2

Yes, I agree with your claim on (c.). Here is what I wrote on another forum post about it.

“That is why I am worried about the implementation of The Lightning Network. The Lightning Network steers away from the mission of bitcoin to the consolidation of BTC into payment-channel bearing full nodes for the creation of a network. This network is no longer decentralized. The Lightning Network creates incentivization to create a consolidated network of hubs of BTC payment channels for maximum fee earning. I do not understand why the BTC community supports The Lightning Network, especially since it goes against the mission of Bitcoin. Hopefully, I am very wrong on this.”

I agree that the scalability of the Bitcoin Blockchain is a serious problem, but Lightning Network is not the solution. I will need to read your sources on SegWit, as I do not know much about the topic. I would appreciate it if you could send me some more links and blog posts on the SegWit.

Cheers,
Dennis.

#3

Fixing BTC / Blockchain by not using it can’t be the correct fix. Blockchain needs a geometric redesign to allow more (async?) ON-CHAIN bandwidth. It has to happen. DAG or some similar multiplexing MUST happen. Free the protocol to find the solution. In the mean time use Byteball and watch BCH (because their position allows them to do whatever is required and pragmatic without embarassment).

#4

From my point of view, they are open source to:

  • establish initial trust in the network,
  • to open the code up to a wide range of developers, in a geographically distributed environment
  • because bitcoin / the blockchain was given to the world, to be evolved by the world.

From my view you can actually run a cryptocurrency without open source software, if there is established trust in what you are doing.

To date, the only one that could really rightfully patent bitcoin is Satoshi Nakamoto, he/she/them would be acceptable as an owner by the general community. Others do have patented technology, take hashgraph as an example, they have some seriously clever ideas but in order to use hashgraph yourself and develop on it, you need to acquire their SDK, I.e. it is patented tech.

Last I read, there is a 4MB limitation on the block size in Bitcoin and similar networks, they cannot - currently - go up to gigabyte range simply because the network wouldn’t be able to handle more than 4MB blocks.

I do agree, while lightning network is a very interesting concept and solution, it brings too much centralisation to Bitcoin (which is already struggling with this due to mining).

#5

Block stream is failing.