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What are the drawbacks to the lightning network. How could this make adoption in El Salvador fesable when the average person still lives off less than $10 s day.
And here we are, three years later with Twitter implementing this technology to allow Bitcoin payments. Complex and fascinating at the same time. Bitcoin, NFTs, deepfake, etc. The world will never be the same.
A visa and Bitcoin transaction are both near instant, it’s the confirmation that takes time. A VISA transaction takes weeks to confirm. Bitcoin takes about 10 minutes. Every month business owners have to cover all the credit card payments that didn’t confirm and were reversed.
As the user you create an escrow account where another person has access to and you have access to their escrow account over an agreement. That's how it works
Well he is wrong because it can be shut down on exchanges. & if governments feel that bitcoin is a national threat then yes ,Bitcoin can be closed down so don’t listen to anyone telling you otherwise.
This will never work. You very very rarely buy and sell to the same person. Also what happens if you want to close the transaction but the fee is more than the amount of bitcoin in the payment channel.
Few questions. I'm still not clear about the logistics of how all this works and potential fees that the consumer will incur. 1) How does one use lightening network? I keep hearing about lightening work but have no idea how to sign up or where to go to use it. I feel like I'm missing something here. 2) What's the fiat onramp for the lightening network? Is it linked to your bank? 3) What will be the transaction fee for consumer to purchase something with Bitcoin? Even if the transaction fee is small to purchase the Bitcoin why as a consumer will I pay a transaction fee to buy something when I pay zero fees using my credit card? I can see the benefit from a merchant's standpoint of saving fees but as a consumer I don't see the point of using Bitcoin if it's going to be associated with a transaction fee to purchase something. Everytime I buy Bitcoin as an investment I have to pay a transaction fee. Same goes true if I sell it. 4) I feel like I'm really missing something here. For a consumer what's the real benefit of using bitcoin versus using a credit card? I don't see any.
A fiat onramp is a way for individuals to exchange traditional fiat currency (e.g. USD, EUR, etc.) for a cryptocurrency, such as Bitcoin. The Lightning Network does not have its own built-in fiat onramp, but there are several third-party services that allow users to buy and sell Bitcoin (the underlying asset of the Lightning Network) with fiat currency and then deposit it onto the Lightning Network. These services may or may not be linked to a user's bank, as it depends on the specific service being used. Some services offer bank transfers as a means of purchasing Bitcoin, while others offer payment methods such as credit/debit card or PayPal. It's important to do research and compare different options to determine the best fit for your needs and circumstances.
This chain of micropayments is only helpful if it includes repeat payments (if u are at the bar for instance and buy a new drink every hour), but it doesnt improve micropayments that are one time only
unless the person you are trying to pay is part of the extended network discussed at the end. You (A) already have a lightning ledger established with (B), and need to make a small payment to (E). The lightning network can chain you together, so your payment goes to B, who automatically forwards it to C, then to D, and then to E. Only one upfront payment is technically needed as long as enough people have open lightning connections.
This is a great solution... as it shows you can create other Block-Chain systems, on TOP of the BitCoin system, BitCoin then acts as a FOUNDATION for other systems. If this is the case, then utilization can truly be limitless...
From what i've been learning I've come to the conclusion that it's not necessarily bad that bitcoin is "Slow". A fast moving store of value leads to making decisions similar to how credit and inflated fiat leads people to make poor economic decisions. A slow moving deflationary currency leads to inherently better money decisions, and when necessary, "withdrawing" to a fast moving currency like dash would ensure that people understand what money is and should be, rather than just expecting everything to be their way right away for spending and consumption. I'm still very fascinated in the lighting network, but I feel that newcomers to crypto need to really shed the idea that it's just "fiat 2.0". It's gold 2.0, All the benefits with none of the drawbacks. Slow to move, deflationary, but inexpensive to secure and even the government can't mess with it like they've done with gold.
@@sasusan1 Iv'e since changed my view (knew a lot less about lighting before). Bitcoin has lightning and other than the fundamentals it's not too difficult to move money around. I think my turnaround has been due to the fiat standard by Saifedean Ammous, which outlined just what the problem with credit is. I conflated "fast moving" with "money without consequences". I think a lot of people view credit interchangeably with money, and due to being able to really rack up debt most people make poor decisions, because it's almost like it grows on trees. I also have seen that many people on exchanges (probably a good chunk) and canada really threw a wrench in my government argument. So alas, 4 months later and I pwned my 2 of the 3 arguments lol.
You can't choose faster or slower transactions with BTC you pay whatever the rate is at the time of transaction, not like ETH where you can choose to pay more or less depending on how fast you want your TX to go through. Correct me if I am wrong,
- Bitcoin network is decentralised and it is true Peer-to-Peer system - Lightning network is centralised and is not Peer-to-Peer system - Bitcoin miners are not acting as money transferring entities, this is why they cannot be regulated - Lightning network uses Hubs which do act as money transferring entities, and have to be regulated So in short, Bitcoin system is one that no bank or government can control or regulate while Lighting they can (and will). When Bitcoin Core developers who are employees of corporation Blockstream, who are funded by bankers, give reasons as to why Bitcoin cannot scale on-chain, they are literally lying, an the real reason they are doing this (preventing increase of block size which is artificially kept by them at 1MB) is because the people that fund them (tens of millions of dollars) are the only people that have to lose (their power and control over supply of money) - the bankers. Bankers have tried to kill Bitcoin as it is threat to their power and control. Bankers realised they cannot do this externally. Bankers then did what they always do, buy out people who have control of the code, and let them do the dirty work for them Bitcoin Core developers have successfully prevented more scaling on Bitcoin layer, they use censorship and propaganda against anyone that exposes their lies and secret agenda (which I just outlined). Just head to r/bitcoin (heavily censored controlled by Blockstream associates and pro-Bitcoin BTC) and you will see what I mean. BTC is literally a SCAM now and no longer works as Bitcoin system should and Lightning has absolutely NOTHING to do with Bitcoin. The Bitcoin system is actually BSV
Bitcoin's lightning torch died off back in March but Crypto media didn't report it. "The problem is that when some users try to retrieve the torch, they find out they can’t." - Liquidity problems. t.co/5B7K4vkbaA LN is not a scaling solution like I said many times.
A few questions....I was under the impression that the lightning network would allow the spending of less than 1 satoshi; not an issue in today's market but pretty important for the future when BTC should become worth perhaps even over $1 million dollars. Also I wonder about Atomic Swap being part of Lightning. I assume we all heard LTC was "already" on the Lightning network and over at the BTG website they stated they would be on the Lightning Network as it came out publicly. Also part of this was that any coin on the Lightning Network would be Atomic Swappable with one-another. Any coin that had the right programmers on their team would be jumping to implement the Lightning Network for their coin as well and they would all be exchangeable. I was thinking perhaps the big exchanges were interfering with this coming to release....
Not sure about Atomic swaps but regarding the "less than 1 Satoshi" - LN is built on top of Bitcoin's protocol so at the moment there's no way to send less than 1 Satoshi AFAIK. In the future, if needed, the protocol can be changed so that the smallest unit would be less than 0.00000001 Bitcoin (aka 1 Satoshi). This is a simple change as it won't change the final amount of coins, only allow a smaller division.
Hi, I had one question regarding the payment channel. The transaction that are happening between 2 entities in the channel, are they stored in an off-chain blockchain ledger or is it just a off-chain database? If should be a blockchain ledger, as in this way it would make it tamper-proof. Your thoughts?
i would like to say that you are incredible ...you make it so good and easy to understand what a talent ..learning about crypto has been a stretch ..who to listen to ...i m glad i found you ..your the real deal ...thank you
My question is will it work? You have to be online 24/7 to receive a payment? Can your presence be automated? Banks are going to do the off-chain channels? I hope it works, but I'll believe it when I see it.
I agree there's a lot of unknown factors here. My guess is that we will just need to see how it gets adopted by the public. Theory is nice but in the end reality tends to give you different answers, just like Bitcoin became more of a digital gold than digital cash.
hard to use on your own. custodial services work well though. as long as there's a lot of different services, and you don't put too much $ on them, it's good
Greatest Laymen videos on bitcoin technology on ALL of a youtube. I have so many security questions about the lightning network now if anyone is able to help me answer them.
Thank for continuing to make these awesome informative videos… Im going to be honest; the more I see info on bitcoin the more concerned am I about the long term success of it lol which just makes me wonder what the true and probably not invented cryptocurrency will take over fiat money.
What does it mean when they say Stakenet XSN combines Lightning Network and Connext to allow transactions on layer 3? Does anyone know about this crypto?
Alts aren't a substitute for Bitcoin as they lack it's network effect (which covers aspects like users, awareness, adoption, integration, etc.), first mover advantage, security, value, and so on. I don't know what makes Digibyte's tech so special but if it was truly superior to Bitcoin / Lightning without any downsides, I'm sure it would be more popular than most other altcoins.
So just wondering why not just limit mining by location and make it to extend location to a mining amont equal to a little over a fare amount of minners and implement a alpha protocol which lags the processing time of the big miners of set locations so that it can keep its by luck computing process and still be able to keep its processing amount the same and it's six blocks every 10 hours and with the addition of lightning the time it sends it to the Bitcoin blockchain if kept by location whith all of the pre-explained information it could be possible for it to exceed a credit card by leaps and bounds
@@jessicawiley9592 I don't think so Jessica, however, my TH-cam channel also focuses on Bitcoin the protocol, bitcoin the asset and the Bitcoin Lightning Network, I hope you can visit and find some helpful information.
Where do all the data saved in Bitcoin Network. if on average we have 3mb per block that ll lead to GB's/TB's of data on every computer on Network. Or is the block header with hash value ll only stored in every computer on Network?
Not all Bitcoin wallets store the entire blockchain. Only full wallets which don't employ pruning store the entire chain, which is currently around 250 gigs. That's not too much really and it grows at a pretty steady pace which means that affordable consumer hardware will be able to keep pace. The average block is smaller than 3 megs, currently it's about 1 meg. Lightning transactions aren't stored on the blockchain, which is why Lightning helps Bitcoin to scale beyond its block size limit.
Doesn't the network part (which is the most important) of LN envolve trust? If I have an open payment channel with someone that has a payment channel with a coffeshop & I want a coffee, in order for me to buy it it would envolve me trusting that someone to give my cash to the coffeeshop right? Also, can there be no security deposit (or very little)? As it would envolve a lot of money for the network effect to be put into place. Furthermore, we might get to a point where almost no transactions are made on the main BC, making LN almost entirely different from today's BTC protocol
Regarding the trust issue - it's hard to go into details in a text comment but there is a cryptographic mechanism that makes sure money isn't transferred to the 3rd party paid your counter-party first. It actually works more like you're taking a loan from the 3rd party, they pay your counter-party and only then you repay them back. Long story short - the system is still trustless (otherwise that would beat the whole point). Regarding the amount of LN TXs - there will always be mainnet TXs since you have to open / close channels on LN and that can only be done on mainnet. Also, LN is built on top of the mainnet protocol. This means you can't "break mainnet rules" because you're using them as foundations. LN works in a very similar way to how "normal" BTC TXs work - the main difference is that the TXs are just not broadcasted to the miners until the channel is closed.
Does that mean that using lightening network and chain of channels I can actually track people and their balances ? I think this is also affects anonymity of the bitcoin.. can someone clarify on this ?
Nope, that strikes me as an extremely unlikely possibility. Bitcoin is committed to the Proof of Work blockchain model and I don't see that changing unless something vastly superior is discovered, even then it would be a highly controversial change. Hashgraph is not considered technically superior to standard blockchains for various reasons.
That's a good suggestion, thanks. I personally use BlueWallet on my phone for Lightning stuff, as it allows you to easily swap BTC from your regular address into a Lightning channel and get started.
lightning = no transactions on chain no transactions on chain = no fees for miners no fees for miners = no incentive to maintain the network no incentive to maintain the network = no network
How can lightning be a solution if in order to make a simple payment to a peer ( a losing bet as in the example), it is now needed to make 4 on-chain transactions ( 1 per peer to open and close payments channels) instead of one? That means that we will have to pay 4 times the transactions fees for a lightning settlement whereas it would only need 1 fee on chain. And how does this work when a lot of people are using bitcoin while at the same time its blockchain still can't process more than 400000 transactions a day? WIth let's say 50 000 000 users on lightning wanting to close/open channels, it would take almost a year to settle everyone, wouldn't it? And another year for everyone to do something else with their coins right? Is that something sound for a "revolutionary" financial system? What I'm getting wrong here? Thanks in advance for your answers.
Hey Pablo. If you're talking about a one time bet then you're correct - it might be better to do in on chain. But if you're talking about a series of bets, or for example you and your friend frequently play poker and you want to have an open tab then that's much more efficient on the LN. Regarding your question about a lot of people using Bitcoin and the daily tx - the idea of LN is that you don't open and close channels that frequently. For example, let's say I but at Starbucks - I will open a channel and close it maybe once a month to settle the bill, maybe even once a year. This will reduce the amount of traffic on the main blockchain drastically. I think the best way to describe this is like what's happening with credit cards today. When you make a transaction with your credit card it doesn't get debited from your bank account immediately (i.e. on chain). What happens is that the credit company keeps a tab of all of your transactions throughout the month (i.e. off chain) and then only once a month transmits this to your bank. This reduces the amount of money actually going through the slow and expensive banking system dramatically. To sum it up - you don't open and close a channel each time you want to make a payment. You open a channel once and then keep it open for a relatively long time until one of the parties needs the money for something else. Hope this clears things up a bit.
@@99Bitcoins Nah doesnt answer it at all difs is visa can cope with settlement n choose when they do so n maps their accrual to match when they need it done for analysis. Still leaves the OPs question valid coz anyone chooses when to close a channel.. every business doing so independantly.isnt the same as them all using Visa as their credit line n it as a centralised body accounting for the info incoming for accrual.
@@99Bitcoins Sounds exactly like traditional banking to me, LN tokens are "IOU" pegged to Bitcoin just as Bretton woods dollars were fiat " IOU" pegged to gold. We all know how badly all of this ended. LN allows for the avenment of crypto bank runs while the whole point of the invention of distributed ledger tech as in bitcoin was to get rid of traditional banking risks of systemic failure...which happen to be rebuilt in through second layer on top of super tiny capacity ledger.
@@pablog4291 I think it's very different than the banking system since there's no possibility for a run on the bank due to 100% reserve (unlike fractional reserve with the banking system). Meaning , you can't pay more than you deposited in side the payment channel. Also there's no room for discretion by any party - it's all based on math. So no one can break the rules because the situation required it (again, unlike banks). The gold standard was broken due to Nixon's decision, which would be irrelevant in the case of the LN since there's no place for personal opinions here - only rules.
@@99Bitcoins There is a "pseudo bank run" problem ( timing wise) since LN settlements rate can't exceed main chain TPS. WIth a main chain capped at 400000 txs/day there is a hard limit of 200000 settlements ( aka opening or closing a LN channel, since this requires 2 "on chain" txs) a day. Any settlement rate superior to this hard limit will result in users waiting more than a day to open/close LN channels, with the appropriate multiplier depending on the number of settlement demand on LN. This is PURE MATH also. Basically, without block size increase on BTC part, there will be huge incentive for users to open/close channels only a few times in a lifettime and avoid settling as much as possible "on-chain", with one settlement being the most probable case for most users ( replace by fees will make the richest able to settle quicker and more often than the poorest, whom will probably never be able to do it more than once...) which would be very similar to opening a bank account with hard money, only to never see the hard money ever again. As for Bretton Woods, it was a "ruling" framework, and the "rules" were changed. Nothing prevent rules from changing on second layer. It is not because the pegging is 1:1 now that it can't be changed later overtly or covertly in some ways to something different and reminiscent of fractional reserves, since there will be no public blockchain to monitor all LN ( or other future protocol) econometrics.
Each lightning node verifies the funds in all channels it is a part of. Routing is done automatically. Transactions are trustless because they happen atomically (they can't happen partially where some nodes get a transaction but don't forward it properly to its destination).
Because of sequencing. Each transaction has +1 sequence number so both parties always know which one is latest and if your counterparty starts to broadcast tx 1 and you know (and have) latest transaction - you can broadcast it and take their channel balance.
"If for some reason I were to try to back out now and take my whole .5 bitcoins back, my whole deposit will be sent over to my friend." Wait, what? That sounds terrible. So if you accidentally tell it to do that you lose your entire balance? That just opens up a whole new realm of scam where people convince others to do it and then they lose everything.
Yes, you do. And you also have to pay when you want to register everything back to the main blockchain. Seems to me this only (partially) solves the problem of multiple transactions, but it does not solve the high fee problem for 1 time (or small amounts) transactions.
@@ElVerdaderoAbejorro This ignores the network effect, which sets lightning apart from normal bitcoin transaction. One does not need to have a channel directly with someone wish to pay. For example, if using Breez, Wallet of Satoshi, or similar app, those are lightning nodes with multiple channels, that link to other nodes that have multiple channels. So long as you have an open channel with a node that is highly networked like this, that is able to route your transaction where need it to go, not an issue. The only on-chain transaction affecting you is when open/close or add funds to what you are directly a part of (such as your account with Breez or Wallet of Satoshi), but you can send/receive funds with multiple other entities.
So if most transactions occur in the lighting network, how will miners make money? Wouldn’t they just turn off their machines? If enough do that, then the hashrate will decline and it’s only a matter of time until a 50% attack occurs. Bitcoin itself is ultimately doomed for failure. It’s written in the code. Play at your own risk, you can definitely make money, but just know that when the music stops, you better find a chair.
Remeber that to get BTC into and out of the Lightning Network, it's still necessary to have an opening and closing transaction processed on the main Bitcoin blockchain. Furthermore, the amount of value which can be easily sent over LN is still fairly limited, I believe one would struggle to send more than $50 - $100 Dollars in value at this time. For these and other reasons, it seems doubtful that LN will replace Bitcoin main chain usage, at least for the forseeable future. Also remember that miners get a block reward of 6.25 BTC for each block they find, so they will keep them mining too.
4:35 Something's fishy: what's wrong with that? Both will just end up with their money back, no? What am I missing? Why is it wrong to change one's mind and back out?
Doublespends are not possible, because a payment on LN is only considered finalized once both payment channel owners have revoked the previous state of the payment channel by handing their partner a breach remedy that invalidates the previous state. Thus, person A should not hand over whatever service person B was purchasing until the payment is finalized. Once the payment is finalized, person B can no longer broadcast the old state without opening himself up to the penalty transaction being broadcast by person A.
5:50: "It doesn't matter if that channel goes through a hundred intermediaries" -- am I the only person who thinks this is a HORRIBLE IDEA? "Hey Bob, can you help me pay my Comcast Bill?" THAT'S NEVER GOING TO HAPPEN. "Hey Sue, will you take time out of your incredibly busy schedule to transfer these funds from my Wallet to Starbucks to pay for my Latte?" "WTF? Pay it yourself!" Seriously, HOW IS THIS A GOOD IDEA? Scalability is one thing - but it all comes down to EASE OF USE!
so how do you go about opening up a payment channel? i've seen a lot of information on how it lightning works but not a whole lot about how to get there to use it.
That's because it's still in development phase and most of this stuff is pretty technical. If you do want to experience LN you can download Eclair wallet (play.google.com/store/apps/details?id=fr.acinq.eclair.wallet.mainnet2&hl=en) which is ready for LN payments
@@pablog4291 ive figured it out since this comment. i'm now running a full btc node, and a LN node. Lightning is up and running with 500btc of liquidity and growing daily
@@BMG154 Wow cool, i want to integrate a payment processor to a website for lightning network, could you suggest one? (like stripe). i have looked at them but can't see much difference between. if you have any experience with them it would be great to read.
L3J onchain transaction will never be faster than the current state. 1mb block size is for security and decentralization purpose. That’s why LN is invented.
Funny how Bitcoiners still think BTC is the only kid on the block. Very simple solution is to use one of the more modern cryptocurrencies. You don't have to use BTC you know. Lots of options out there we're not obligated to use that obsolete bitcoin.
Still, all these Lightning Network bills need to be settled far more often than 7 times per second. If this would be widely adopted, it would still amount to thousands of transactions on the Bitcoin network and this still is not possible. It seems nice, but it won't make Bitcoin scalable to a point where billions of people can use it on a weekly, or even a monthly basis. Store of value is the only use case for Bitcoin that I can see working globally.
Miners don't control the transaction fee, they receive it for confirming transactions. I think this video will give you a good overview about mining: th-cam.com/video/BODyqM-V71E/w-d-xo.html
I DON'T UNDERSTAND Let's say A has 0.5 and B has 0.5 den A loses bet pays 0.1 to B and they both sign: (A0,4 / B0,6) this signature document was signed by both OFFLINE so how can bitcoin network layer 1 know this happened? what if person A just says "i want to close this channel and get 0.5 and B gets 0.5) how does the network know which signed document is the last one that was signed? is there a place where it gets stored witch signed document is the latest one? because only like that it would make sense and where the heck can you store that it's impossible?
If person A pushes the old state of the channel to the blockchain, B can then submit the updated signed state, which then will give B the entirety of the channel to punish A for trying to cheat. A and B store their states locally (and watchtower service can do it too).
@@SAL-fs1mr thanks man this makes a lot of sense now I understand. I will try to push my questions even further even though I don't know if you know the answers or care to explain. but thanks anyway. How does the blockchain just know to cancel transaction and give entirety of the channel to B this seems like the bitcoin network needs a change even for basic lightning network opened channel thingy. does this mean someone can actually change core bitcoin? is this a fork? will the people that are making lightning network give update to all nodes that has this code and once more than 51% of wallets update the lightning network will work?
@@kobalov1 "How does the blockchain just know to cancel transaction and give entirety of the channel to B" - it achieved by there being a long delay for closing a channel in a one sided manner (such as a user trying to cheat the party at the other end of the channel). basically, if they cooperate, the channel can close quickly (funds settled on the blockchain), but if it is only one party doing it, there is a long delay of several days to give ample opportunity for the other party to submit a more valid/updated signature to the blockchain to cancel the other one. Lightning network upgrades in general do not require bitcoin nodes to upgrade - the various lightning implementations have their own shared specs called BOLT which is based on the current rules of the bitcoin blockchain.
@@SAL-fs1mr Someone closes channel with a previous sig cert that doesnt include the last trans of the offchain network, the other uploads the newest one.. the first person is considered tryna cheat n hence second person rewarded both sides deposit. basically a fork.. but a dude said its not like the BTC mainchain forks,coz its not a confirmed trans till it is So theres BOLT shared specs that operate on the same btc onchain network re forks.. uh huh ok but if one side closes the account n the other doesnt, it takes days for the onchain to accept it as the proper up to date closing of the offchain channel. I dont get this.. a bizness wants to close ya tab in effect with the channel n lodge it to the onchain for record keeping or dif >1btc reasons n does it auto send a msg to ya wallet that the chain is closing n if u agree its immediate? So it relys on someone to tick 'channel closed' on the other end to get the benefits of fast settlement coz it wants to 'allow time for the party to check its the most updated sigs n trans' ? huh? shouldnt the only sig stack sent to the onchain be auto inclusive of any settled up.to date onchain trans from lighting usage? Also, if i dont manually see the operator close the channel via a notification (why the hell ismt this a smart contract?) but the onchain accepts it n adds it to the blockchain n its missing up to date info n i cant then query it coz thatd be forking the onchain btc network.. so as a business i lose out if a punter closes the channel n lighting hasnt updated the latest trans but dont give additional info in time.. Also i get the channels will be everywhere n hence the btc network isnt flooded with trans but it will be flooded anytime someone joins a new channel right? As the initial deposit info is lodged onchain. If any party can close a channel anytime then wont the btc onchain network have heaps.of trans all the time as it writes the closure in..? I know once again not as much as each trans made on lighting but still more than 7per.sec.. so blocksize will have to be increased anyway to cope? cheers! New to LN
If I were operating a store making several bitcoin transactions an hour, I could use the LN to make one transaction and thus pay one fee. Is that correct, or am I misinterpreting your information? How do I access the LN?
If the transactions are with the same person all the time then yes. Currently the LN is very early stage, you can use this wallet to experiment with it: play.google.com/store/apps/details?id=fr.acinq.eclair.wallet.mainnet2 But I wouldn't put a lot of money in it since things can still go wrong.
@@universenerdd Rubbish! BTC Core goes against Satashi's vision, of cheap, peer 2 peer currency transactions. Taking longer is just an outright lie. Both protocols are designed to process a block +- every 10 minutes. But with BTC, unless you pay exorbinant fees, your transaction could be stuck for days. As for the double spend problem, try to double spend BCH, & let me know how you fare.
I'm not sure. There are a lot of coins that claim to be instant and feeless. A technological solution isn't necessarily the issue here. Altcoins aren't as battle tested as Bitcoin is that's why I'm very skeptical about them in the long run. So while NANO might be able to solve this (and I don't really know since I haven't looked into it) it doesn't come close to the market acceptance and maturity Bitcoin has. That's why I tend to overlook these solutions for now.
@@powerfultoa7 While there are alts which claim rapid and cheap transactions on par with Lightning, there are always plenty of catches to their claims, they not comparable to Bitcoin in terms of security, confidence, scale, economy, awareness, and so on.
@@99Bitcoins Hmm maybe not in price scale or adoption at the moment but my usage of IOTA results in really fast transactions with really no obvious drawbacks so far. I would like you to cover it if you could on your channel, really enjoy your videos
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What are the drawbacks to the lightning network. How could this make adoption in El Salvador fesable when the average person still lives off less than $10 s day.
I’m just hearing about lightning network today. While this guy is covering the topic two years ago. Must follow channel
Same here.
And here we are, three years later with Twitter implementing this technology to allow Bitcoin payments. Complex and fascinating at the same time. Bitcoin, NFTs, deepfake, etc. The world will never be the same.
Any reference to read?
A visa and Bitcoin transaction are both near instant, it’s the confirmation that takes time. A VISA transaction takes weeks to confirm. Bitcoin takes about 10 minutes.
Every month business owners have to cover all the credit card payments that didn’t confirm and were reversed.
the fact that nobody realizes this is ridiculous
That's true in the case of credit cards. Debit Card are instant.
Do you actually believe the lie you just wrote?
For real? So there is no protection for the business owner whatsoever?
This is my start to understand Lightening.....10-15 more hours of study....I'll be a "beginner"....thx.
The best explanation I've heard yet! Thank you!
As the user you create an escrow account where another person has access to and you have access to their escrow account over an agreement. That's how it works
Well he is wrong because it can be shut down on exchanges.
& if governments feel that bitcoin is a national threat then yes ,Bitcoin can be closed down so don’t listen to anyone telling you otherwise.
@@Smith6265 IF I said that any market cannot be shut down, that was wrong. You may have been referring to the 99coins dude.
start at 1:42
This will never work. You very very rarely buy and sell to the same person. Also what happens if you want to close the transaction but the fee is more than the amount of bitcoin in the payment channel.
I love the bloopers at the end!
And also, a great explanation. Thanks!
Thanks for the feedback!!
Few questions. I'm still not clear about the logistics of how all this works and potential fees that the consumer will incur.
1) How does one use lightening network? I keep hearing about lightening work but have no idea how to sign up or where to go to use it. I feel like I'm missing something here.
2) What's the fiat onramp for the lightening network? Is it linked to your bank?
3) What will be the transaction fee for consumer to purchase something with Bitcoin? Even if the transaction fee is small to purchase the Bitcoin why as a consumer will I pay a transaction fee to buy something when I pay zero fees using my credit card? I can see the benefit from a merchant's standpoint of saving fees but as a consumer I don't see the point of using Bitcoin if it's going to be associated with a transaction fee to purchase something. Everytime I buy Bitcoin as an investment I have to pay a transaction fee. Same goes true if I sell it.
4) I feel like I'm really missing something here. For a consumer what's the real benefit of using bitcoin versus using a credit card? I don't see any.
A fiat onramp is a way for individuals to exchange traditional fiat currency (e.g. USD, EUR, etc.) for a cryptocurrency, such as Bitcoin.
The Lightning Network does not have its own built-in fiat onramp, but there are several third-party services that allow users to buy and sell Bitcoin (the underlying asset of the Lightning Network) with fiat currency and then deposit it onto the Lightning Network.
These services may or may not be linked to a user's bank, as it depends on the specific service being used. Some services offer bank transfers as a means of purchasing Bitcoin, while others offer payment methods such as credit/debit card or PayPal. It's important to do research and compare different options to determine the best fit for your needs and circumstances.
This chain of micropayments is only helpful if it includes repeat payments (if u are at the bar for instance and buy a new drink every hour), but it doesnt improve micropayments that are one time only
unless the person you are trying to pay is part of the extended network discussed at the end. You (A) already have a lightning ledger established with (B), and need to make a small payment to (E). The lightning network can chain you together, so your payment goes to B, who automatically forwards it to C, then to D, and then to E.
Only one upfront payment is technically needed as long as enough people have open lightning connections.
@@giliansterckx ahh i see, thanks for the clarification!
This is a great solution... as it shows you can create other Block-Chain systems, on TOP of the BitCoin system, BitCoin then acts as a FOUNDATION for other systems. If this is the case, then utilization can truly be limitless...
From what i've been learning I've come to the conclusion that it's not necessarily bad that bitcoin is "Slow". A fast moving store of value leads to making decisions similar to how credit and inflated fiat leads people to make poor economic decisions. A slow moving deflationary currency leads to inherently better money decisions, and when necessary, "withdrawing" to a fast moving currency like dash would ensure that people understand what money is and should be, rather than just expecting everything to be their way right away for spending and consumption. I'm still very fascinated in the lighting network, but I feel that newcomers to crypto need to really shed the idea that it's just "fiat 2.0". It's gold 2.0, All the benefits with none of the drawbacks. Slow to move, deflationary, but inexpensive to secure and even the government can't mess with it like they've done with gold.
Very interesting view. Thanks
@@sasusan1 Iv'e since changed my view (knew a lot less about lighting before). Bitcoin has lightning and other than the fundamentals it's not too difficult to move money around. I think my turnaround has been due to the fiat standard by Saifedean Ammous, which outlined just what the problem with credit is. I conflated "fast moving" with "money without consequences". I think a lot of people view credit interchangeably with money, and due to being able to really rack up debt most people make poor decisions, because it's almost like it grows on trees. I also have seen that many people on exchanges (probably a good chunk) and canada really threw a wrench in my government argument.
So alas, 4 months later and I pwned my 2 of the 3 arguments lol.
You can't choose faster or slower transactions with BTC you pay whatever the rate is at the time of transaction, not like ETH where you can choose to pay more or less depending on how fast you want your TX to go through. Correct me if I am wrong,
Thank u for the explanation. Very helpful!
- Bitcoin network is decentralised and it is true Peer-to-Peer system
- Lightning network is centralised and is not Peer-to-Peer system
- Bitcoin miners are not acting as money transferring entities, this is why they cannot be regulated
- Lightning network uses Hubs which do act as money transferring entities, and have to be regulated
So in short, Bitcoin system is one that no bank or government can control or regulate while Lighting they can (and will).
When Bitcoin Core developers who are employees of corporation Blockstream, who are funded by bankers, give reasons as to why Bitcoin cannot scale on-chain, they are literally lying, an the real reason they are doing this (preventing increase of block size which is artificially kept by them at 1MB) is because the people that fund them (tens of millions of dollars) are the only people that have to lose (their power and control over supply of money) - the bankers.
Bankers have tried to kill Bitcoin as it is threat to their power and control.
Bankers realised they cannot do this externally.
Bankers then did what they always do, buy out people who have control of the code, and let them do the dirty work for them
Bitcoin Core developers have successfully prevented more scaling on Bitcoin layer, they use censorship and propaganda against anyone that exposes their lies and secret agenda (which I just outlined). Just head to r/bitcoin (heavily censored controlled by Blockstream associates and pro-Bitcoin BTC) and you will see what I mean.
BTC is literally a SCAM now and no longer works as Bitcoin system should and Lightning has absolutely NOTHING to do with Bitcoin.
The Bitcoin system is actually BSV
Bitcoin's lightning torch died off back in March but Crypto media didn't report it.
"The problem is that when some users try to retrieve the torch, they find out they can’t." - Liquidity problems.
t.co/5B7K4vkbaA
LN is not a scaling solution like I said many times.
A few questions....I was under the impression that the lightning network would allow the spending of less than 1 satoshi; not an issue in today's market but pretty important for the future when BTC should become worth perhaps even over $1 million dollars.
Also I wonder about Atomic Swap being part of Lightning. I assume we all heard LTC was "already" on the Lightning network and over at the BTG website they stated they would be on the Lightning Network as it came out publicly. Also part of this was that any coin on the Lightning Network would be Atomic Swappable with one-another. Any coin that had the right programmers on their team would be jumping to implement the Lightning Network for their coin as well and they would all be exchangeable. I was thinking perhaps the big exchanges were interfering with this coming to release....
Not sure about Atomic swaps but regarding the "less than 1 Satoshi" - LN is built on top of Bitcoin's protocol so at the moment there's no way to send less than 1 Satoshi AFAIK. In the future, if needed, the protocol can be changed so that the smallest unit would be less than 0.00000001 Bitcoin (aka 1 Satoshi). This is a simple change as it won't change the final amount of coins, only allow a smaller division.
It seems like between the rising difficulty and transactions moving off chain, the miners have dismissing incentive to mine.
Hi, I had one question regarding the payment channel. The transaction that are happening between 2 entities in the channel, are they stored in an off-chain blockchain ledger or is it just a off-chain database? If should be a blockchain ledger, as in this way it would make it tamper-proof. Your thoughts?
How would you display the balance sheet to the blockchain?
u are the best in Explaining these Concepts
4:35 Didn't understand the fraud prevention part at all. What exactly causes the stake go to your partner? What do you mean by "backing out now"?
i would like to say that you are incredible ...you make it so good and easy to understand what a talent ..learning about crypto has been a stretch ..who to listen to ...i m glad i found you ..your the real deal ...thank you
Great explanation
Is the Lightning Network only inclusive to BTC?
My question is will it work? You have to be online 24/7 to receive a payment? Can your presence be automated? Banks are going to do the off-chain channels? I hope it works, but I'll believe it when I see it.
I agree there's a lot of unknown factors here. My guess is that we will just need to see how it gets adopted by the public. Theory is nice but in the end reality tends to give you different answers, just like Bitcoin became more of a digital gold than digital cash.
No it's not. Routing fail most of the time.
If you wont be online, someone has to watch your transactions for you. Fuck banks.
It works, you can try it today.
hard to use on your own. custodial services work well though.
as long as there's a lot of different services, and you don't put too much $ on them, it's good
Greatest Laymen videos on bitcoin technology on ALL of a youtube. I have so many security questions about the lightning network now if anyone is able to help me answer them.
Thank for continuing to make these awesome informative videos… Im going to be honest; the more I see info on bitcoin the more concerned am I about the long term success of it lol which just makes me wonder what the true and probably not invented cryptocurrency will take over fiat money.
So basically if I run a lightning node I need bitcoin as well insifde of my btc wallet?
What does it mean when they say Stakenet XSN combines Lightning Network and Connext to allow transactions on layer 3? Does anyone know about this crypto?
What are the current developments with Lightning?
Why not use digibyte? Would that solve problem of scalability, security and transaction speed?
Alts aren't a substitute for Bitcoin as they lack it's network effect (which covers aspects like users, awareness, adoption, integration, etc.), first mover advantage, security, value, and so on. I don't know what makes Digibyte's tech so special but if it was truly superior to Bitcoin / Lightning without any downsides, I'm sure it would be more popular than most other altcoins.
So just wondering why not just limit mining by location and make it to extend location to a mining amont equal to a little over a fare amount of minners and implement a alpha protocol which lags the processing time of the big miners of set locations so that it can keep its by luck computing process and still be able to keep its processing amount the same and it's six blocks every 10 hours and with the addition of lightning the time it sends it to the Bitcoin blockchain if kept by location whith all of the pre-explained information it could be possible for it to exceed a credit card by leaps and bounds
Excellent Ned, I really appreciate this information, very simple and to the point. Until then next one.
@@jessicawiley9592 I don't think so Jessica, however, my TH-cam channel also focuses on Bitcoin the protocol, bitcoin the asset and the Bitcoin Lightning Network, I hope you can visit and find some helpful information.
Where do all the data saved in Bitcoin Network.
if on average we have 3mb per block that ll lead to GB's/TB's of data on every computer on Network.
Or is the block header with hash value ll only stored in every computer on Network?
Not all Bitcoin wallets store the entire blockchain. Only full wallets which don't employ pruning store the entire chain, which is currently around 250 gigs. That's not too much really and it grows at a pretty steady pace which means that affordable consumer hardware will be able to keep pace. The average block is smaller than 3 megs, currently it's about 1 meg. Lightning transactions aren't stored on the blockchain, which is why Lightning helps Bitcoin to scale beyond its block size limit.
Scalability? Proof of Work is not a good mechanism. Maybe good for Security.
This was very informative! Thank you! I look forward to an update on the lightning network in the future. :-)
How is the lightning payment maintained without miners and fees?
So the lighting Network is a least partially controlled by AWS and Google Cloud?
Didnt bitcoin SV fix this issue?
Doesn't the network part (which is the most important) of LN envolve trust? If I have an open payment channel with someone that has a payment channel with a coffeshop & I want a coffee, in order for me to buy it it would envolve me trusting that someone to give my cash to the coffeeshop right? Also, can there be no security deposit (or very little)? As it would envolve a lot of money for the network effect to be put into place.
Furthermore, we might get to a point where almost no transactions are made on the main BC, making LN almost entirely different from today's BTC protocol
Regarding the trust issue - it's hard to go into details in a text comment but there is a cryptographic mechanism that makes sure money isn't transferred to the 3rd party paid your counter-party first. It actually works more like you're taking a loan from the 3rd party, they pay your counter-party and only then you repay them back.
Long story short - the system is still trustless (otherwise that would beat the whole point).
Regarding the amount of LN TXs - there will always be mainnet TXs since you have to open / close channels on LN and that can only be done on mainnet. Also, LN is built on top of the mainnet protocol. This means you can't "break mainnet rules" because you're using them as foundations.
LN works in a very similar way to how "normal" BTC TXs work - the main difference is that the TXs are just not broadcasted to the miners until the channel is closed.
Does that mean that using lightening network and chain of channels I can actually track people and their balances ? I think this is also affects anonymity of the bitcoin.. can someone clarify on this ?
Why not just use bitcoin cash?
So Bitcoin is centralizing in an attempt to "hand optimize" archaic framework and keep up with useful cryptos. Got it.
Love your videos Nate!! Excellent explanations.
Are they using Lightning in El Salvador?
Could Bitcoin move away from the Blockchain to Hashgraph?
Nope, that strikes me as an extremely unlikely possibility. Bitcoin is committed to the Proof of Work blockchain model and I don't see that changing unless something vastly superior is discovered, even then it would be a highly controversial change. Hashgraph is not considered technically superior to standard blockchains for various reasons.
Bitcoin is the best-performing asset of the decade. Insane!
Are Carrot "rewards" a lightening payment from Carrot App to a Member?
Got it. Now how about some examples of how to actually use the lightning network - go through the real life motions of how it's done
That's a good suggestion, thanks. I personally use BlueWallet on my phone for Lightning stuff, as it allows you to easily swap BTC from your regular address into a Lightning channel and get started.
lightning = no transactions on chain
no transactions on chain = no fees for miners
no fees for miners = no incentive to maintain the network
no incentive to maintain the network = no network
How can lightning be a solution if in order to make a simple payment to a peer ( a losing bet as in the example), it is now needed to make 4 on-chain transactions ( 1 per peer to open and close payments channels) instead of one? That means that we will have to pay 4 times the transactions fees for a lightning settlement whereas it would only need 1 fee on chain. And how does this work when a lot of people are using bitcoin while at the same time its blockchain still can't process more than 400000 transactions a day? WIth let's say 50 000 000 users on lightning wanting to close/open channels, it would take almost a year to settle everyone, wouldn't it? And another year for everyone to do something else with their coins right? Is that something sound for a "revolutionary" financial system? What I'm getting wrong here? Thanks in advance for your answers.
Hey Pablo. If you're talking about a one time bet then you're correct - it might be better to do in on chain. But if you're talking about a series of bets, or for example you and your friend frequently play poker and you want to have an open tab then that's much more efficient on the LN.
Regarding your question about a lot of people using Bitcoin and the daily tx - the idea of LN is that you don't open and close channels that frequently. For example, let's say I but at Starbucks - I will open a channel and close it maybe once a month to settle the bill, maybe even once a year. This will reduce the amount of traffic on the main blockchain drastically.
I think the best way to describe this is like what's happening with credit cards today. When you make a transaction with your credit card it doesn't get debited from your bank account immediately (i.e. on chain). What happens is that the credit company keeps a tab of all of your transactions throughout the month (i.e. off chain) and then only once a month transmits this to your bank. This reduces the amount of money actually going through the slow and expensive banking system dramatically.
To sum it up - you don't open and close a channel each time you want to make a payment. You open a channel once and then keep it open for a relatively long time until one of the parties needs the money for something else.
Hope this clears things up a bit.
@@99Bitcoins
Nah doesnt answer it at all
difs is visa can cope with settlement n choose when they do so n maps their accrual to match when they need it done for analysis.
Still leaves the OPs question valid coz anyone chooses when to close a channel.. every business doing so independantly.isnt the same as them all using Visa as their credit line n it as a centralised body accounting for the info incoming for accrual.
@@99Bitcoins Sounds exactly like traditional banking to me, LN tokens are "IOU" pegged to Bitcoin just as Bretton woods dollars were fiat " IOU" pegged to gold. We all know how badly all of this ended. LN allows for the avenment of crypto bank runs while the whole point of the invention of distributed ledger tech as in bitcoin was to get rid of traditional banking risks of systemic failure...which happen to be rebuilt in through second layer on top of super tiny capacity ledger.
@@pablog4291 I think it's very different than the banking system since there's no possibility for a run on the bank due to 100% reserve (unlike fractional reserve with the banking system). Meaning , you can't pay more than you deposited in side the payment channel. Also there's no room for discretion by any party - it's all based on math. So no one can break the rules because the situation required it (again, unlike banks).
The gold standard was broken due to Nixon's decision, which would be irrelevant in the case of the LN since there's no place for personal opinions here - only rules.
@@99Bitcoins There is a "pseudo bank run" problem ( timing wise) since LN settlements rate can't exceed main chain TPS. WIth a main chain capped at 400000 txs/day there is a hard limit of 200000 settlements ( aka opening or closing a LN channel, since this requires 2 "on chain" txs) a day. Any settlement rate superior to this hard limit will result in users waiting more than a day to open/close LN channels, with the appropriate multiplier depending on the number of settlement demand on LN. This is PURE MATH also. Basically, without block size increase on BTC part, there will be huge incentive for users to open/close channels only a few times in a lifettime and avoid settling as much as possible "on-chain", with one settlement being the most probable case for most users ( replace by fees will make the richest able to settle quicker and more often than the poorest, whom will probably never be able to do it more than once...) which would be very similar to opening a bank account with hard money, only to never see the hard money ever again. As for Bretton Woods, it was a "ruling" framework, and the "rules" were changed. Nothing prevent rules from changing on second layer. It is not because the pegging is 1:1 now that it can't be changed later overtly or covertly in some ways to something different and reminiscent of fractional reserves, since there will be no public blockchain to monitor all LN ( or other future protocol) econometrics.
How does lightning know if a transaction is fraudulent? How does Lightning find its way through 100 users? Automatically or manually?
Each lightning node verifies the funds in all channels it is a part of. Routing is done automatically. Transactions are trustless because they happen atomically (they can't happen partially where some nodes get a transaction but don't forward it properly to its destination).
Because of sequencing. Each transaction has +1 sequence number so both parties always know which one is latest and if your counterparty starts to broadcast tx 1 and you know (and have) latest transaction - you can broadcast it and take their channel balance.
Do you think that this will solve the problem for real?
LN is Theory and it will take to long for implementation so we will need an altcoin before govs start making their own cryptos
700+ BTC is theory? :D When will it be reality then?
Where can I get lighting Bitcoin.?
"If for some reason I were to try to back out now and take my whole .5 bitcoins back, my whole deposit will be sent over to my friend."
Wait, what? That sounds terrible. So if you accidentally tell it to do that you lose your entire balance? That just opens up a whole new realm of scam where people convince others to do it and then they lose everything.
so the lightning network makes us lose anonymity if everyone see who im sending and receiving with?
not only that but wouldnt i incur a fee if someone else is trying to send bitcoin through me to my friend once it closes
wait, but don't you still have to pay to send the initial btc for the first transaction into the safe?
Yes, you do. And you also have to pay when you want to register everything back to the main blockchain. Seems to me this only (partially) solves the problem of multiple transactions, but it does not solve the high fee problem for 1 time (or small amounts) transactions.
@@ElVerdaderoAbejorro This ignores the network effect, which sets lightning apart from normal bitcoin transaction. One does not need to have a channel directly with someone wish to pay. For example, if using Breez, Wallet of Satoshi, or similar app, those are lightning nodes with multiple channels, that link to other nodes that have multiple channels. So long as you have an open channel with a node that is highly networked like this, that is able to route your transaction where need it to go, not an issue. The only on-chain transaction affecting you is when open/close or add funds to what you are directly a part of (such as your account with Breez or Wallet of Satoshi), but you can send/receive funds with multiple other entities.
So if most transactions occur in the lighting network, how will miners make money? Wouldn’t they just turn off their machines? If enough do that, then the hashrate will decline and it’s only a matter of time until a 50% attack occurs.
Bitcoin itself is ultimately doomed for failure. It’s written in the code. Play at your own risk, you can definitely make money, but just know that when the music stops, you better find a chair.
Remeber that to get BTC into and out of the Lightning Network, it's still necessary to have an opening and closing transaction processed on the main Bitcoin blockchain. Furthermore, the amount of value which can be easily sent over LN is still fairly limited, I believe one would struggle to send more than $50 - $100 Dollars in value at this time. For these and other reasons, it seems doubtful that LN will replace Bitcoin main chain usage, at least for the forseeable future. Also remember that miners get a block reward of 6.25 BTC for each block they find, so they will keep them mining too.
What is the typical amount limit for ln transactions?
The average channel capacity is around $300. I believe no channel can exceed 1/6th of a BTC at this time.
Brilliant idea. Well explained
4:35 Something's fishy: what's wrong with that? Both will just end up with their money back, no? What am I missing? Why is it wrong to change one's mind and back out?
Well, assuming the balance has changed since the opening transaction, it would be like trying to take back your money after paying for something.
@@99Bitcoins Ah (in German: Ach), I must have missed the "balance has changed part", duh. Thanks! (I'm not German.)
atomic swaps vs lighting network???
How does lighening network addresses double spending?
Doublespends are not possible, because a payment on LN is only considered finalized once both payment channel owners have revoked the previous state of the payment channel by handing their partner a breach remedy that invalidates the previous state.
Thus, person A should not hand over whatever service person B was purchasing until the payment is finalized. Once the payment is finalized, person B can no longer broadcast the old state without opening himself up to the penalty transaction being broadcast by person A.
Hello! How to wallet win32 setup?
How do I get rejected bit back to my wallet
5:50: "It doesn't matter if that channel goes through a hundred intermediaries" -- am I the only person who thinks this is a HORRIBLE IDEA? "Hey Bob, can you help me pay my Comcast Bill?" THAT'S NEVER GOING TO HAPPEN. "Hey Sue, will you take time out of your incredibly busy schedule to transfer these funds from my Wallet to Starbucks to pay for my Latte?" "WTF? Pay it yourself!" Seriously, HOW IS THIS A GOOD IDEA? Scalability is one thing - but it all comes down to EASE OF USE!
so how do you go about opening up a payment channel? i've seen a lot of information on how it lightning works but not a whole lot about how to get there to use it.
That's because it's still in development phase and most of this stuff is pretty technical. If you do want to experience LN you can download Eclair wallet (play.google.com/store/apps/details?id=fr.acinq.eclair.wallet.mainnet2&hl=en) which is ready for LN payments
LN will be ready in "18 months".
@@pablog4291 ive figured it out since this comment. i'm now running a full btc node, and a LN node. Lightning is up and running with 500btc of liquidity and growing daily
@@BMG154 Wow cool, i want to integrate a payment processor to a website for lightning network, could you suggest one? (like stripe).
i have looked at them but can't see much difference between. if you have any experience with them it would be great to read.
It seems there are agents inside BTC that are hell-bent against decentralisation.
Good explanation but it's sounds like more trouble than its worth, better hope they don't ban cash 👍😂
Yup. Seems complicated and u still have to pay fee when settle. So ending every LN channel will cost u 5 dollar extra. Its expensive
Go ahead and transact in cash. Inflation is making your cash worthless.
@@Alex-343 it has for 100s of years. ... I agree with you, hence the laugh emoji.
So how can I get this coin
This is so far away from satoshi's vision i can't believe no one is calling it out.
In what way :
this video starts at 0:41
These 2 are UNIQUE to Lightning Network
1. Pay a fraction of a cent
2. Stream money
Is there anything else? Reply to the comment ! 🤗
How do we buy LBTC
Thanks a lot
What did he say? "Instant and near fearless"?
Ohh "fee-less"
Is the lightning network operational yet?
Yes, it's been working with real money for about 2 years now.
99Bitcoins why are BTC transactions still at a snail’s pace?
L3J onchain transaction will never be faster than the current state. 1mb block size is for security and decentralization purpose. That’s why LN is invented.
Funny how Bitcoiners still think BTC is the only kid on the block. Very simple solution is to use one of the more modern cryptocurrencies. You don't have to use BTC you know. Lots of options out there we're not obligated to use that obsolete bitcoin.
Well said. If i want to send money to someone XRP does it in seconds with settlement. Bitcoin is a technical dead end.
Thanks for all your knowledge on crytocurrencies! you sure know your stuff!
Why am I still confused?
thank you for this.
interesting, it's like a decentralised clearing house
Still, all these Lightning Network bills need to be settled far more often than 7 times per second. If this would be widely adopted, it would still amount to thousands of transactions on the Bitcoin network and this still is not possible. It seems nice, but it won't make Bitcoin scalable to a point where billions of people can use it on a weekly, or even a monthly basis. Store of value is the only use case for Bitcoin that I can see working globally.
This is why the success of BTC is increasingly becoming an inevitability.
Could you explain how miners control the transaction fee?
Miners don't control the transaction fee, they receive it for confirming transactions. I think this video will give you a good overview about mining: th-cam.com/video/BODyqM-V71E/w-d-xo.html
lightning was designed to fail
ehhh
Except it's working better than anyone could have ever hoped.
This is the whole reason to convert to BCH.
@@jessicawiley9592 hi Jessica not to my knowledge ? 🙂
I DON'T UNDERSTAND
Let's say A has 0.5 and B has 0.5 den A loses bet pays 0.1 to B and they both sign: (A0,4 / B0,6) this signature document was signed by both OFFLINE so how can bitcoin network layer 1 know this happened? what if person A just says "i want to close this channel and get 0.5 and B gets 0.5)
how does the network know which signed document is the last one that was signed? is there a place where it gets stored witch signed document is the latest one? because only like that it would make sense and where the heck can you store that it's impossible?
If person A pushes the old state of the channel to the blockchain, B can then submit the updated signed state, which then will give B the entirety of the channel to punish A for trying to cheat. A and B store their states locally (and watchtower service can do it too).
@@SAL-fs1mr thanks man this makes a lot of sense now I understand. I will try to push my questions even further even though I don't know if you know the answers or care to explain. but thanks anyway.
How does the blockchain just know to cancel transaction and give entirety of the channel to B this seems like the bitcoin network needs a change even for basic lightning network opened channel thingy. does this mean someone can actually change core bitcoin? is this a fork? will the people that are making lightning network give update to all nodes that has this code and once more than 51% of wallets update the lightning network will work?
@@kobalov1 "How does the blockchain just know to cancel transaction and give entirety of the channel to B" - it achieved by there being a long delay for closing a channel in a one sided manner (such as a user trying to cheat the party at the other end of the channel). basically, if they cooperate, the channel can close quickly (funds settled on the blockchain), but if it is only one party doing it, there is a long delay of several days to give ample opportunity for the other party to submit a more valid/updated signature to the blockchain to cancel the other one. Lightning network upgrades in general do not require bitcoin nodes to upgrade - the various lightning implementations have their own shared specs called BOLT which is based on the current rules of the bitcoin blockchain.
@@SAL-fs1mr okay, thank you very much :D
@@SAL-fs1mr
Someone closes channel with a previous sig cert that doesnt include the last trans of the offchain network, the other uploads the newest one.. the first person is considered tryna cheat n hence second person rewarded both sides deposit.
basically a fork.. but a dude said its not like the BTC mainchain forks,coz its not a confirmed trans till it is
So theres BOLT shared specs that operate on the same btc onchain network re forks.. uh huh ok
but if one side closes the account n the other doesnt, it takes days for the onchain to accept it as the proper up to date closing of the offchain channel.
I dont get this.. a bizness wants to close ya tab in effect with the channel n lodge it to the onchain for record keeping or dif >1btc reasons n does it auto send a msg to ya wallet that the chain is closing n if u agree its immediate?
So it relys on someone to tick 'channel closed' on the other end to get the benefits of fast settlement coz it wants to 'allow time for the party to check its the most updated sigs n trans'
?
huh? shouldnt the only sig stack sent to the onchain be auto inclusive of any settled up.to date onchain trans from lighting usage?
Also, if i dont manually see the operator close the channel via a notification (why the hell ismt this a smart contract?) but the onchain accepts it n adds it to the blockchain n its missing up to date info n i cant then query it coz thatd be forking the onchain btc network..
so as a business i lose out if a punter closes the channel n lighting hasnt updated the latest trans but dont give additional info in time..
Also i get the channels will be everywhere n hence the btc network isnt flooded with trans but it will be flooded anytime someone joins a new channel right? As the initial deposit info is lodged onchain.
If any party can close a channel anytime then wont the btc onchain network have heaps.of trans all the time as it writes the closure in..?
I know once again not as much as each trans made on lighting but still more than 7per.sec..
so blocksize will have to be increased anyway to cope?
cheers! New to LN
If I were operating a store making several bitcoin transactions an hour, I could use the LN to make one transaction and thus pay one fee. Is that correct, or am I misinterpreting your information? How do I access the LN?
If the transactions are with the same person all the time then yes. Currently the LN is very early stage, you can use this wallet to experiment with it: play.google.com/store/apps/details?id=fr.acinq.eclair.wallet.mainnet2
But I wouldn't put a lot of money in it since things can still go wrong.
This hasn't aged well..just as i expected.
good one
Great explanation, however this lightning network is utterly unnecessary. I have converted to Bitcoin Cash.
Lol
Just raise the block size!
fuck you go use bitcoin SV
@@stephenkamenar he didn’t do anything. We don’t care about your shitcoin
BTC LN ⚡
Or you could use BCH
Bitcoin cash goes against the spirit of Bitcoin, which was a decentralized solution to the double spending problem! It is slower as well
@@universenerdd Rubbish! BTC Core goes against Satashi's vision, of cheap, peer 2 peer currency transactions. Taking longer is just an outright lie. Both protocols are designed to process a block +- every 10 minutes. But with BTC, unless you pay exorbinant fees, your transaction could be stuck for days. As for the double spend problem, try to double spend BCH, & let me know how you fare.
Doesn't NANO solve this issue?
I'm not sure. There are a lot of coins that claim to be instant and feeless. A technological solution isn't necessarily the issue here. Altcoins aren't as battle tested as Bitcoin is that's why I'm very skeptical about them in the long run. So while NANO might be able to solve this (and I don't really know since I haven't looked into it) it doesn't come close to the market acceptance and maturity Bitcoin has. That's why I tend to overlook these solutions for now.
@@99Bitcoins How about IOTA?
@@powerfultoa7 While there are alts which claim rapid and cheap transactions on par with Lightning, there are always plenty of catches to their claims, they not comparable to Bitcoin in terms of security, confidence, scale, economy, awareness, and so on.
@@99Bitcoins Hmm maybe not in price scale or adoption at the moment but my usage of IOTA results in really fast transactions with really no obvious drawbacks so far. I would like you to cover it if you could on your channel, really enjoy your videos
"Flexa has entered the chat"
Betting 1 Bitcoin will be whale bet move in 2030
Sounds like a Fractional reserve and shadow banking system that sounds really familiar 🤔