Lightning network

Quote:

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Originally Posted by Voids

You deposit from your bank into your wallet so you can use it on a daily basis, or even like moving from a savings account into your current account.

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Close feature to this already exists in a way. You can batch transactions from certain wallets (Electrum supports it). Anyone can send 2 or more payments at once and saves the fees. Almost all but the biggest exchanges pay customers like that. You can pay 50 addresses from one your address at once and you pay just one fee.

This creates a lot of confusion and it sadly shows how little everyone understands about bitcoin. Because number of BTC blockchain transactions =/= number of financial transactions. Yet 99.9% of analysts use the logic blockchain transactions=number of payments over bitcoin. The number of payments over bitcoin is already many times higher than number of bitcoin transactions and the number is still growing. In few days or weeks coinbase will finally start batching transactions. It will again help BTC network. This stupid simple misunderstanding is fueling the altcoin frenzy.

I think that what I just wrote is absolutely obvious for everybody at least here, but honestly, idk.

Here is one example of batched tx: https://blockchain.info/tx/e1096c84f...cbc25413de6ea1

You see mass/bacth payments to hundreds of addresses from one addess. The overall fee was only 10 USD for 257 payments. That is 3 cents per financial transaction (but 10 USD for BTC transaction). That is even now, when fees are low, many times lower compared to situation when you are sending BTC 1 address to 1.

Quote:

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Originally Posted by Sherlock

Close feature to this already exists in a way. You can batch transactions from certain wallets (Electrum supports it). Anyone can send 2 or more payments at once and saves the fees. Almost all but the biggest exchanges pay customers like that. You can pay 50 addresses from one your address at once and you pay just one fee.

This creates a lot of confusion and it sadly shows how little everyone understands about bitcoin. Because number of BTC blockchain transactions =/= number of financial transactions. Yet 99.9% of analysts use the logic blockchain transactions=number of payments over bitcoin. The number of payments over bitcoin is already many times higher than number of bitcoin transactions and the number is still growing. In few days or weeks coinbase will finally start batching transactions. It will again help BTC network. This stupid simple misunderstanding is fueling the altcoin frenzy.

I think that what I just wrote is absolutely obvious for everybody at least here, but honestly, idk.

Here is one example of batched tx: https://blockchain.info/tx/e1096c84f...cbc25413de6ea1

You see mass/bacth payments to hundreds of addresses from one addess. The overall fee was only 10 USD for 257 payments. That is 3 cents per financial transaction (but 10 USD for BTC transaction). That is even now, when fees are low, many times lower compared to situation when you are sending BTC 1 address to 1.

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I'm well aware of batched transactions but that isn't what I was trying to explain. As I understanding lightning wallets, they are hot wallets that lock funds on the way into the lightning network and settle when channels are closed. This does not mean the orginal wallet becomes a hot wallet, simply the funds held in the lightning wallet are likely to be more exposed than a hardware wallet.

If this is not the case I'm sure I will find out when it becomes more widely adopted.

You are moving from a secure cold storage device into something less secure but more convenient.

Good way of thinking, but no, you get it wrong. The channel is not open like open wallet. The funds are not exposed. The whole BTC network is securing the channels. The money from channels can not disappear, can not be hacked and so on. The only way how to steal the funds is that your private key from channel is being exposed, so it is the same risk.

The bad things can still happen, but they are of course not that bad. The channel can be forcibly closed (by the other party), so most what any LN user can lose is the fee for closing and then reopening the channel. Other problems are whether the funds can find the channel to be transmitted with (as described in the article from RZ written by Fyookball) and exactly those problems will be now tested and improved.

But there is the same risk that you will lose the balance in LN as that you will lose it by onchain tx. The money can be stuck when for example there is abrupt hike of fees (but then can be probably released by RBF or user has just to wait), but it can never be lost. When the channel is closed, all movements are cleared.

Yes, I agree it is something to wait for, it will not be that fast as BTC hopers think, but it is the next step for BTC. (The step after LN will be Schnorr signatires).