Observer for the Lightning Network

I recently came across some tweets about the Lightning Network. I've always been a fan of LN and have tracked various metrics for a while, so I'd like to get back into it. To kick things off, here's a quick recap of where the network stands: The growth has been impressive, especially considering the rise in BTC prices. When we check the LN capacity, it’s clear that a lot of the increase has happened just in the last few weeks. We're seeing a parabolic growth pattern: Looking at this graph, we can see the balances that have been added over the last few months: Of course, adding 250 BTC to the network when BTC is at 30k is a totally different situation than adding 300 BTC when it was at 8,000 back in March 2019. So yeah, the capacity is definitely on the rise. Just curious if the actual use of that capacity is picking up. I think the "low" fees on the main chain aren't really boosting adoption, but investing in these unseen assets is still crucial. I plan to post updates, reports, and insights about LN in this thread whenever I find something interesting. Would love some help from you all! Here are some resources for the Lightning Network: Threads here: The Lightning Network FAQ Basics of the Lightning Network, Lightning Network Basics (documents, data pages, files, plots) by tranthidung Dashboards: txstats.com, BitcoinVisuals.com External Resources: Jameson Lopp's LIGHTNING NETWORK RESOURCES, Lightning Network Stores

You can get some more data from txstats.comBitcoinVisuals.comAlso I invite people who want to discover the Bitcoin Lightning network to my topic. I am not an expert about it but you can find some topics, articles there. Lightning Network -- Basics (documents, data pages, files, plots)

Absolutely. My intention on this thread is not to provide a technical reference, or a reference directory. Rather I would like this to become a nontechnical, casual talk thread where to discuss LN and his development. I am adding your thread, together with some other, in the OP.

Coindesk reports on LN growth: Nodes on Bitcoin’s Lightning Network Double in 3 Months

total capacity is meaningless, much like bitcoins market cap is meaningless as it doesnt show actual utility EG. i have no intent on spending anything for next 6 months. but i could. if i wanted to bloat up the total capacity by multiples of current total capacity. by just locking alot of my coin to LN and doing absolutely nothing with it .. a better metric to follow is the average capacity per channel because then you can see the potential liquidity amount of what payment routes could achieve (EG the success rate of payments) 50% of network only has $200 liquidity per channel (success rate is low for weekly rent/grocery payments but ok for coffee and gum)   in short it doesnt matter if the network say its has 1 million bitcoin.... because payments are only a regular success for chewing cum amounts

Another tool for visualising Network Growth: https://twitter.com/DocumentingBTC/status/1415660912804048896 Lightning Network 4 years agoLightning Network today Network growth has been impressive so far.

this is beautiful - reminds me of the pictures comparing the internet in the beginning and how it looks now

I guess you were looking for something like this: https://bitcoinvisuals.com/ln-capacity-per-channel So capacity has actually been pretty much stable during this last year. But again, we don't know how many payments and liquidity flowed through those channels.

well 50% of all channels had a max capacity of ~$200 so even without crying about exact stats of how many micropayents.. you know for sure that there were bottlenecks of anyone trying to spend more then $200 in one go and if say average was $2 spend per payment. 50% would have had to close and re-org their funds after just 100 payments think of it this way Alice [$4000><$200] bob [$200><$200] chuck [$200><$200] Dave [$200><$200]starbucks alice might be in the top 10% with $4k... but do you think she will ever get to spend her $4k without closing imagine scenarios. dave has made 10 payments for himself of $4 each for HIS starbucks Alice [$4000><$200] bob [$200><$200] chuck [$200><$200] Dave [$160><$240]starbucks chuck done the same Alice [$4000><$200] bob [$200><$200] chuck [$160><$240] Dave [$120><$280]starbucks bob done the same Alice [$4000><$200] bob [$160><$240] chuck [$120><$280] Dave [$80><$320]starbucks now how much can alice spend if she was a caffiene addict trust me.. its not $4k .. its not $200.. ill give you a hint.. its only $80 some might say $80 is still good but now your forgetting the reality that bob doesnt just have alice and chuck as partners. 'others' may use bob to route to starbucks. thus diluting the dave outbound to starbucks even more chuck doesnt just have bob and dave as partners. 'others' may use chuck to route to starbucks. thus diluting the dave outbound starbucks even more .. point being if you know that 50% of the network only has $200 capacity.. then you can work out that alot of outbounds are going to get exhausted very quickly (average $2 payment = exhausted in 100 payments) (average $4 payment = exhausted in 50 payments) (average $8 payment = exhausted in 25 payments) (average $20 payment= exhausted in 10 payments) you can also work out if you know it will cost about $3 lock-in and $3 unlock of a onchain fee.. thats $6 of the $200 the people will want to recoup even to allow their balance to be used by others so you can work out that as a minimum break even (logic/common sense) they are going to charge 3% fee ($6 of $200=3%) heck.. you can then do some math. if you know the average is 3 hops to the destination you can work out that it ends up costing the spender 9% (3% per hop) so you start to get a picture about how expensive it is within LN compared to just buying coffee onchain vs buying a single $80 giftcard via fiat so yea there is alot you can learn from knowing what the majority of the networks channel liquidity is. even without knowing each precise payment heck if you know that some 'lightning pizza' promotion is being done for $25 of pizza you know that the network will start showing massive amounts of payment failures within 8 payments along routes ('fold' lightning pizza' experiment had 90% payment failure rate) https://decrypt.co/5321/folds-bitcoin-lightning-pizza-turns-out-to-have-been-a-success

What matters with BTC more than price action at any given time is the rate of adoption --lightening network is a key piece of adoption because it makes bitcoin viable as what it was originally intended for (peer to peer electronic cash) -- versus primarily as a store of value. LN growth = bullish for bitcoin. ... to state the obvious. :-)

bank notes made gold viable(the promotion)...... until people didnt want to withdraw their gold out and instead opted to swap their bank notes for nickel and brass coins 'coz gold too heavy to manage' 'coz gold too expensive to withdraw with' 'coz convenient' see the pattern when LN devs are literally screaming it in your face 'bitcoin onchain fees expensive' 'atomic swap to altcoin' LN does not make bitcoin viable for average joe. it makes average joe viable for altcoins, while custodians take the btc

franky1: you were basically banned from gmaxwell in the "The Lightning Network FAQ" thread and now continue here with whatever you are doing...

Interesting point made to a user answering this tweet: https://twitter.com/kerooke/status/1417961486253764609 This is the usual update by @kerooke about network growth. An user pointed out a few interesting points, corroborated by some numbers: https://twitter.com/pablogallegos1/status/1418202181803544581 Is centralisation necessarily a problem?

so, the argument is: "decentralize the money"? how do we do that, by sending any extra money we don't need to pablogallegos1@twitter.com?

Ah! Not at all, this experiment would be pronte to the “Chamberlain argument”! I know the subject has been debated many times. But still there is a lot of issues on the matter. I think it’s very useful if a payment system is centralised/decentralised/peer-to-peer. Each of those network structures has a set of features, there might not exists an absolute winner. But honestly recognising the status of the network could be the first step for an analysis. Having said that: After 4 years from launch the 90% of the liquidity is provided by 1% of the nodes. I hardly see any explaination of why this should be the product of free market, rather than a sort of accident, whose causes and effect I ignore.Given the above structure, and the stability of the capacity of the median channel, I struggle thinking LN is gaining traction. Something I think it would be a net positive effect. I don’t think this centralisation is a problem. It is very similar to the hash power being concentrated at 90% in China: did I like it? No, of course. Was it a problem? Not at all: when China “banned bitcoin” mothers network readjusted by itself. Something probably would happen if the 1% of node would drain their liquidity overnight. Which is the best measure for network decentralisation? Capacity? Network usage? Transaction numbers? Which of those metrics can help us assess the LN success and how reliable are them?

either these 1% of nodes are doing alot of high value txs over the network, or they're staking channels so they can sit around waiting for users to arrive. Probably mostly the latter. Seems like natural behavior, some will be purely speculative/service oriented, while others will be rich people who already use Bitcoin for their business payments taking advantage of the cheaper tx fees. Until a large proportion of merchants and regular people start to use the liquidity (and add their own), the network will continue to be balanced this way.

For now it's more of a concern.  It's all about potential.  Centralised points of failure aren't generally perceived as a problem until they fail.  So it's better if something could be done to encourage a wider distribution of the load.  But what that "something" might be, I sadly have no idea.  Hopefully it's something that happens organically through market forces and competition, but there's no way to tell right now. Something things do have to go wrong before people adjust their behaviour.  When mistakes happen, some people learn right away and change their habits, while others don't.  But gradually, over time, there are fewer central points of failure and the whole thing becomes more resilient.  A similar situation could arise here.  If any of these major nodes have failures, people may be more likely to use smaller nodes in future. All I can suggest is keep a close eye on it, see what develops, then make contingency plans if it looks like it's getting worse.

Bitcoin Magazine aked Erin Malone, an article about how to run a successful Lightning Network Node: FOUR TIPS FOR RUNNING A PROFITABLE LIGHTNING NETWORK NODE Also, she correlates the explosion in LN liquidity to PlebNet. Any insight here?

yep this option lots of services offering "free inbound balance" using 'stake' they locked months-years ago where the 'stake' is not locked to any onchain multisig funding tx between the service and the temporary channel user offering temporary(30 day) and instant(no confirmed) inbound balance:- without any onchain activity needed (there are many security flaws with this method, but i wont rant.. this time)

i am also interested in this - from my point of view it looks more like correlation than causation. one big reason for the rise in liquidity (also mentioned in the article) might be the nearly empty mempool