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May 11, 2023, 04:34:00 PM

Merited by hugeblack (3), ABCbits (1), nc50lc (1), Cricktor (1)

note: OP also opened a GitHub issue, where I replied in detail.
In short,
- when you open a channel, you cannot receive before sending some first
- and it is the channel-opener who pays for the on-chain fees of having the channel closed in the future, for which part of the opener's balance is set aside. When the on-chain fees are as high as recently (~500 sat/vb), the fee set aside can easily be approx 2 mBTC.
As OP opened a channel with a capacity of 2 mBTC (the minimum hardcoded value allowed by Electrum), he basically had no usable balance left.

LoyceV

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Quote from: D3l on May 11, 2023, 01:32:46 PM

May 11, 2023, 04:40:08 PM

There was force close option, and close option, i picked the latter because it said that the fees are lower that way. Only to immediately find out that Electrum placed a fee of 507 sats/byte which was around 20... I immediately looked onto mempool, and saw that all blocks (new and past blocks) are around 40 sats/byte.

This is one of the reasons I stopped creating my own LN channels and now use either Phoenix Wallet or custodial LN (for small amounts). I don't like the unpredictable fees, and I don't like that I (as a wallet user, I'm not a node owner) have no say in it.

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D3l (OP)

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May 11, 2023, 05:12:41 PM

Merited by LoyceV (4)

I only struggle to realize the point of the lightning if:
- It's not meant to be used with such small transactions or channels, that's the point of lightning.
- It's fees tend to be higher than on-chain transactions (except if you have 200 transactions per channel then maybe yes). Because for the amount I payed here, I could've sent many on-chain transactions with no hassle. (I've made 0 transactions other than opening/closing channel).

Also what's the point of saying that minimal channel capacity is 2mBTC if it's often impossible to use the channel with such small capacity? (since we have Ordinals now - I guess it will be impossible to use from now on). Which again brings me to the first point, which is "If i have to put a lot of money in a single Lightning channel, what's the point of lightning network when the purpose of lightning are payments equivalent of $5-$10? To save on fees? How If the channel creator will be charged heavily with unpredictable fee-spikes that are doubled... or tripled or whatever.

I know that I'm speaking in layman's terms, but it's so misleading and user unfriendly, it's killing the purpose of lightning when you are better of (and more secure) paying on chain even with higher fees. Electrum will end up being only used by small-group of tech savvy individuals, average bitcoiner shouldn't go through all that.

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May 16, 2023, 06:46:41 AM

- when you open a channel, you cannot receive before sending some first

Is this a feature of the Lightning Network or just the Electrum client?

I don't think it's good for the LN in general if users are unable to start instantly receiving bitcoins.

I know this isn't the case for Layer 1 but think about it, imagine if you generated a wallet, but Bitcoin's design was totally different from how it is right now and you could not receive any bitcoins in a transaction before you made an outgoing transaction first.

It's a strange design choice, if you ask me.

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LoyceV

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Quote from: D3l on May 11, 2023, 05:12:41 PM

May 16, 2023, 07:18:02 AM

Also what's the point of saying that minimal channel capacity is 2mBTC if it's often impossible to use the channel with such small capacity?

Fees weren't that high for many years. You tried to open a channel at a very bad moment.
If you would have opened a channel earlier, you'd be able to use it when fees were high.

Quote

I know that I'm speaking in layman's terms, but it's so misleading and user unfriendly, it's killing the purpose of lightning when you are better of (and more secure) paying on chain even with higher fees.

I hate to say it, but when fees are high, you're even better off just using your creditcard.

Quote from: NotATether on May 16, 2023, 06:46:41 AM

- when you open a channel, you cannot receive before sending some first

Is this a feature of the Lightning Network or just the Electrum client?

It varies per wallet. Custodial wallets don't have this problem, and Phoenix Wallet creates a channel larger than your deposit, so you have (sending and receiving) capacity in both directions.

Quote

I don't think it's good for the LN in general if users are unable to start instantly receiving bitcoins.

I know this isn't the case for Layer 1 but think about it, imagine if you generated a wallet, but Bitcoin's design was totally different from how it is right now and you could not receive any bitcoins in a transaction before you made an outgoing transaction first.

It's a strange design choice, if you ask me.

I don't think it's really a choice, it's inevitable given the way LN works. If you want to receive funds without sending some first, someone can open a channel to your node and send a payment.

Let's face it: Bitcoin can't scale on-chain, but LN can't be used to create many channels on-chain either. So for mass adoption, LN has to be largely custodial.

¡uʍop ǝpᴉsdn pɐǝɥ ɹnoʎ ɥʇᴉʍ ʎuunɟ ʞool no⅄

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May 16, 2023, 10:19:39 AM

Quote from: NotATether on May 16, 2023, 06:46:41 AM

- when you open a channel, you cannot receive before sending some first

Is this a feature of the Lightning Network or just the Electrum client?

It varies per wallet. Custodial wallets don't have this problem, and Phoenix Wallet creates a channel larger than your deposit, so you have (sending and receiving) capacity in both directions.

Quote

And this is exactly the kind of problem that we should be addressing not merely with bugfixes and new features, but also with new network ideas.

It is hardly an improvement in the scaling problem to tell everyone to use custodial LN channels to get paid BTC. We might as well increase the block size at that point. Not your keys, not your coins anyway.

However...

Mixers seem to have a lot of liquidity. If they team up with wallets so that they run Lightning channels that automatically connect to those non-custodial wallets by default when a user creates their own channel, then this whole custodial LN thing will evaporate.

Aaaand the "mixers are only used by criminals" narrative will also evaporate. There you go. That's what's called killing two birds with one stone.

(most) Mixers are very friendly to the Bitcoin community and would be happy to do such a thing if they get some kind of return from the channels they run.

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D3l (OP)

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May 16, 2023, 04:52:46 PM

Quote from: D3l on May 11, 2023, 05:12:41 PM

Also what's the point of saying that minimal channel capacity is 2mBTC if it's often impossible to use the channel with such small capacity?

Fees weren't that high for many years. You tried to open a channel at a very bad moment.
If you would have opened a channel earlier, you'd be able to use it when fees were high.

I've opened the channel when the mempool blocks were cca 50 vbyte, and closed it later that day when it was 35-40 vbytes per block.

Electrum decided that it's 507 vbytes because multiplying reasons... Anyways, I've moved from Electrum, and I advise others to do so. If an average user should spend their day reading github to open/close channel, then it is a failed experiment.
(and no they don't warn you regarding the insane fee upon closing the channel)

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May 20, 2023, 02:56:28 PM

Well, I don't want to blame you, but you have or had barely any knowledge about how Lighning works.

The screenshot you showed: ~40sat/vB was the minimum fee that got into the blocks

My Electrum (desktop) asks me to specify the transaction fee and I have choices and a fee slider, don't you had it? I can choose more time for confirmation of the on-chain transaction to open the channel and thus a lower fee level. Maybe Electrum's default is to choose a higher priority of confirmation than to save fees. How good is your knowledge about optimal fee choice based on current mempool state?

I would've chosen something like 60sat/vB for May 11th (assuming you tried around blocktime 789256), why haven't you? Why had you Electrum stick to 500sat/vB fee as that's likely the high priority fee choice (confirm in next one or two blocks)?
Could it be, you used the mobile app and there maybe fee selection is hidden first or needs to be activated? I played around a little with mobile Electrum but never seriously used it as I won't use a mobile BTC wallet with more than pocket money amounts.

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May 20, 2023, 03:11:38 PM

#10

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...Let's face it: Bitcoin can't scale on-chain, but LN can't be used to create many channels on-chain either. So for mass adoption, LN has to be largely custodial.

This is a bit OT from the OP, but why do you say that? For a while I was opening a channel every week or so. Yes I use my own HW & node so it's a bit different.
Even with the current fee spike if it was not for other external reasons [100% unrelated to crypto money fees or anything else] I still would be doing it.

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Quote from: DaveF on May 20, 2023, 03:11:38 PM

May 20, 2023, 03:50:18 PM

#11

...Let's face it: Bitcoin can't scale on-chain, but LN can't be used to create many channels on-chain either. So for mass adoption, LN has to be largely custodial.

why do you say that?

Because it's not even possible to have just a million people make one daily on-chain Bitcoin transaction each.

Quote

For a while I was opening a channel every week or so. Yes I use my own HW & node so it's a bit different.

For mass adoption, I'm thinking about at least hundreds of millions of users who each make daily LN-transactions. That's possible, but not if they all have to open their own channel first.

¡uʍop ǝpᴉsdn pɐǝɥ ɹnoʎ ɥʇᴉʍ ʎuunɟ ʞool no⅄

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Quote from: LoyceV on May 20, 2023, 03:50:18 PM

May 21, 2023, 06:04:44 PM

#12

Quote from: DaveF on May 20, 2023, 03:11:38 PM

BATTLE PASS
LOOTBOXES
20% CASHBACKS

...Let's face it: Bitcoin can't scale on-chain, but LN can't be used to create many channels on-chain either. So for mass adoption, LN has to be largely custodial.

why do you say that?

Because it's not even possible to have just a million people make one daily on-chain Bitcoin transaction each.

Quote

For a while I was opening a channel every week or so. Yes I use my own HW & node so it's a bit different.

For mass adoption, I'm thinking about at least hundreds of millions of users who each make daily LN-transactions. That's possible, but not if they all have to open their own channel first.

I was thinking of a slightly different scenario. You with your own money have to open up your own channel(s) that you control.

The difference is there are going to be, for lack of better wording, super hubs. Almost like we have now in the LN just places that for whatever reason have massive connections to them with massive amounts of money in them.

This would be where most people open their channels to. Not the DaveF or LoyceV nodes but bitrefill, walletofsatoshi and so on. So you don't have to think, you know they have the routes.

But, we should probably move this discussion elsewhere if we are going to peruse it, since this is the Electrum section....

-Dave

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