You are aware that those are:
"centralized trusted third parties that provide client applications that you fund . . . , but you trust them to control your [funds] in the payment channel"

Right?

If you like that solution, then you can use it (with or without Bitcoins).

If you prefer a decentralized solution with an offline counter-party, you can use on-chain transactions for a fee (something that Venmo and PayPal DONT offer).

If you want a decentralized solution with low fees, you can use Lightning Network whenever you and your counter-party are both online (something else that Venmo and PayPal DONT offer).

It seems to me that Bitcoin offers MANY options in how to use it.  It is up to the user to choose the solution that works best for them in any given situation.  Venmo and PayPal don't allow their users to make such choices at all.

The point of Bitcoin is to enable global, trustless, permissionless payments and to provide an alternative to already existing centralized services. Mass adoption is a nice-to-have but not the main goal -- at least in my opinion.

Now I'm not saying that user experience isn't important. I'm just saying that it's secondary to keeping Bitcoin as decentralized as possible. Also I'm fairly positive there's still room for improvement despite certain technological limitations. After all creating a good user experience is mostly a question of hiding and providing the right amount of control and information.



Most people already pay someone to check and make sure someone else isn't stealing your money. Banks, credit card providers, PayPal, etc do just that. With the exception of banks they merely got fairly good at hiding these costs from the average consumer.

That being said, I don't think watchtowers are a good solution either. Unless we find a trustless way to solve this issue, that is.

Bitcoin already is adopted for wide usage.  It has FAR more usage now than it did in 2013.  It had FAR more usage in 2013 than it did in 2009.

That's WHY we are talking about scaling and the related issues, BECAUSE bitcoin continues to be adopted for wider usage.

Build useful tools, the market will find ways to use those tools.  It is impossible to know what people will be doing in 10 or 20 years. Any attempt to predict the future of technology is futile. All we can do is build ever better tools that provide more options and then wait to see what the market does with those tools.

LN is just another tool providing yet another option.  Many people WILL be online when they are making their transactions.  As such, THOSE people will have LN as a low cost option to take nearly instant transactions off-chain without a centralized third party.  Doing so will free up space in the blockchain for those that need/desire a decentralized solution while they are offline, reducing congestion and cost on the blockchain.  Furthermore, as you've already pointed out, the "average person will choose to trust a third party". For low risk transactions and small values there are MANY people that will gravitate to centralized solutions for exchanging Bitcoin value. Those transactions ALSO will not be on the blockchain and will free up space for those that need/desire it.

There is no reason to think that additional tools won't be developed in the future to improve the scaling even more.

Perhaps someday everyone will be using Bitcoin every day.  Perhaps Bitcoin will never be more than a niche currency for special use cases.  Perhaps Bitcoin will become a backbone for settlement between local providers of value exchange. The point is for bitcoin to be a decentralized, global, trustless, permissionless payment system.  The market will decide the best use case for that system with the available tools at any moment in time.


LN scales just fine for online transactions.

Offline transactions can choose between on-chain solutions, or centralized solutions, or whatever new tools are created in the future.  Do you have any good tools you'd like to suggest to allow offline, decentralized transactions at scale?  If not, then all we can do is wait until someone else comes up with one.  Meanwhile, we'll scale where we can.


And LN offers a new feature that wasn't there before.  As such, people that wouldn't have chosen Bitcoin before may choose to do so now.


Or, being able to send money nearly instantly, easily, and cheaply from their computer or phone to anyone in the world that is online?


The number of users will grow to match the utility.  LN adds utility, it doesn't reduce it. As such, the number of users will increase, not decrease. LN isn't taking away the ability to perform on-chain transactions, it is just adding an option for online (off-chain) transactions.


I'm saying people can choose if they want to use bitcoin AS a "standard centralized service" (such as Coinbase.com) OR if they want to use bitcoin as an online instant service (such as with LN) OR if they want to use bitcoin as an offline approximately 1-hour service (such as with on-chain transactions) OR if they want to create a new tool for using bitcoin (there is no permission needed to create any tool you can think of).

It's that flexibility that allows bitcoin to grow and expand to the limits of what the users can think of for as long as it exists.

Of course. Yet people use services such as Coinbase as a wallet. Some people even seem to prefer centralized cryptocurrencies for whatever good they are, but that's a different matter.

Like Danny pointed out, it's all about options. If centralized watchtowers become a thing I would definitely recommend people to avoid using them, just like I recommend people to not store money on exchanges or other centralized services. Some people may prefer it for convenience or whatever other reason one could think of. But keep in mind that using LN is both optional and probably not the end of the road as far as scaling is concerned. The Bitcoin base layer, ie. on-chain transactions, can still be used as is and other scaling improvements or protocol layers may come up in the future.

LN does not have to become THE payment platform scaling solution for Bitcoin. But as long as it keeps some of the load off-chain it will definitely help.



Fair enough. Let's hope LN covers enough use cases to help keep transactions off-chain then



And that's exactly what I mean by good user experience mostly being a question of hiding and providing the right amount of information. Just because some aspects of LN's user experience are currently imperfect doesn't mean it has to stay that way.

Seems to me that OFFLINE transaction requires a ledger, if not blockchain then some similar product. Online LN has intrinsic privacy by not having that ledger. You can't have them both, and be capable of scaling.

I admit that it's possible to conceive of some functionality that has a public ledger and privacy, etc. There's usually a way to stretch a technology and find a way forward.

But we need to clearly conceptualize these issues, and their implications.

Depending on usage, this may not be particularly important.

If you only use LN for paying, you would use some kind of exchange service that converts from legacy fiat to LN Bitcoins, or onchain Bitcoins to LN Bitcoins.  While you are using that to refill your channels, you would keep yourself online until you confirm that you could receive all of the funds correctly on your LN node (because if not, you should go complain to the exchange service).

The use of proof-of-payment in LN also means that it would be possible to make use of some conversions (e.g. onchain Bitcoins, or an altcoin, to LN Bitcoins) in a trustless manner, by requiring an onchain HTLC to claim your onchain funds in exchange for a preimage that you provide for getting paid onLightning.  So in such a case, if the exchange service reneges on paying you onLightning for onchain funds (or vice-versa) then all you lose are onchain fees to offer the HTLC and reclaim it in case of failure.

Can we prevent hubs like exchanges to be controlled primarily by Banks, when large amounts of bitcoins are send? Let's say

you have 2000 BTC and you want to send that over the LN. Could multiple funds from several channels be combined to send

that amount or do you have to use a single pre-funded channel with 2000 BTC, to do that?   <And yes, I know on-chain

tx's would do fine and the LN is primarily meant for micro transactions..... but what if you want to use the LN?>

I could see exchanges implement LN channels.

But lets see a normal use case for users sending coins to exchanges:
I've got some coins in a wallet, I send it to an exchange, do a bunch of trades and at some point in time later send my coins back to my wallet. If I'm not gonna then close the payment channel but instead let it sit there to continue using at some later time, my money is put at risk of the exchange being a bad actor and closing the channel from the previous receipt in which they have all my funds. If my LN client isn't online to dispute that in time they get all my money. Hopefully the exchange wouldn't do that (and of course they get penalized if they are caught which should keep bad actors to a minimum), but speaking more generally about the LN that will always be a risk (losing all your money) for the average not always online user that takes payment over the LN at any point.

Now if I'm just gonna close my payment channel once I've sent my coins back to my wallet and therefore not put myself up for risk of losing funds, then why would I have used LN in the first place. I had to pay for two on-chain transactions to open and close the channel, which is exactly the same as if I didn't use the LN.

"Not always online" is less and less true: how often do you turn off your cellphone mobile data AND wifi?

In addition, we are already working on figuring out how to implement trustless blinded WatchTowers. https://lists.linuxfoundation.org/pipermail/lightning-dev/2018-April/001196.html

Until people receive their salaries as Bitcoin on Lightning, it is likely that people will convert legacy fiat to some exchange tokens, and then redeem the exchange tokens as onchain Bitcoin and/or onLightning Bitcoin.  So we can also expect that people who use Lightning for payment will periodically refill their channels from their preferred exchanges.

Even if exchanges do not directly support Lightning, most exchanges support transferring funds directly between users, and individual users may set up small businesses to convert the tokens of an exchange to and from onLightning Bitcoins, i.e. send me a Lightning invoice and your exchange tokens, then I will pay the Lightning invoice, or get a Lightning invoice from me and pay it, then I will transfer exchange tokens to you.  Such bridges would help both buyers (who get their salary/earnings in fiat) and merchants (who have to pay their employee salaries, taxes, and so on in fiat).

Further, even if exchanges do not build channels to each other, arbitrageurs (who make their living by moving Bitcoins between exchanges that have differences in exchange rates until the differences drop to negligibility) will want to use LN for the speed of transfer, which lets them move first to stabilize prices across exchanges.  This means arbitrageur nodes will make channels to many exchanges and effectively connect different exchanges together in the Lightning network; the more arbitrageurs there are, the more capacity exists to transfer funds between exchanges.