| submitted by /u/DesignerAccount
I have attempted to set out some practical examples of how Lightning wallets could be used as I think this is an area which could benefit from better explanations, particularly for newcomers to Bitcoin.
In particular this graphic attempts to show how Lightning wallets will not 'lock up' funds in any practical sense, and will in fact operate very much like 'hot' spending wallets which we are already familiar with.
This post doesn't attempt to introduce all aspects of Lightning and does assume a basic understanding of the creation of channels, why it's trustless and how payments will be routed.
I hope this is helpful for some people and really happy to hear any comments and suggestions as to how it can be improved.
Graphic here: https://i.imgur.com/kJ94x5u.png
When you are dealing with platforms that are supposed to be the on-ramps to the money of the future it’s hard to accept worse performance than the systems of the past. Unfortunately, this an issue plaguing all major cryptocurrency exchanges at the moment with Coinbase being one of the leading examples right now.
Also Read: Binance…
Privacy coins are meant to be private: that’s their raison d’être. Without this functionality, they’re just altcoins, and dangerous ones at that for anyone relying on them for anonymity. Verge (XVG) is one of the best known privacy coins on the market, but it risks becoming famous for all the wrong reasons. A new website claims to list the IP addresses associated with hundreds of verge transactions, stripping bare the coin’s claims of anonymity.
Bitcoin's transaction fees and confirmation times are a result of a large user base and heavy usage.
Blockchain technology itself isn't good for scaling, with enough traffic, it will eventually get clogged up regardless of the coin.
This is why LN is needed, it's layer on top of blockchain that enables instant transactions, low fees and ultimately result in less traffic.
So when you see people shilling other coins on the speed, remember they don't have the userbase or traffic that Bitcoin currently has. Once Bitcoin utilizes Lightning Network, other coins lose their competitive advantage while Bitcoin will still have the largest userbase in crypto.
Bitcoin in it's current state is a store of value with massive adoption, Lightning Network will evolve bitcoin to being a currency.
I repeated Diane Reynolds' simulation, as described here, using her program. The only change I made was that instead of having "11 different fee policies evenly distributed among users", each node simply asks for 0.01% fee (= value x 0.0001) to route a transaction. Some of the 11 fee policies were quite complicated, like "trying to make channels more balanced".
Here are the main results:
Payments attempted: 500,000
Fee as a percentage of the payment 0.175
Routing failed: 7
Routing failed for bigpayments: 3
Routing failed for midsizedpayments: 1
Routing failed for micropayments: 3
Average lengths of routes: 17.5
So the payment failed for only 0.0014% of the payments. Note that for the last 100,000 payments, routing failed only once (1 midsizedpayment) and from 100,000 to 500,000 only 3 times (1 big, 1 midsize, 1 micro). The average total fee for a payment makes sense, as 0.01% x 17.5 hubs = 0.175% total fee. I didn't realize the program stopped after 500,000 payments and will now try to run it for more payments.