Bitcoin Gets a Boltathon as Lightning Network Nears Three Million Dollars

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The first Lightning Network (LN) hackathon is to take place this April 5th, a very symbolic day for that is the self-declared Nakamoto birthday.

“By hosting the event online, we are able to reach a world-wide developer community that isn’t limited by hotel rooms or plane tickets. It also allows us to receive and process all payments into Lightning Bitcoin,” the organizers say.

Rusty Russell will be there, a top bitcoin developer who while working on the Linux Kernel was called by Linus Torvalds as one of his “top deputies” in 2003.

Alex Bosworth, lead dev at Lightning Labs, will also be there including a number of other developers announced and yet to be announced.

Tickets come at a very pricy $10,000, but in bitcoin to be paid through LN. If you’re a hacker, then all you need is a 100 sats “proof of node” deposit.

The presentations themselves are pretty tech heavy. We can count by hand for example the people able to follow Rusell’s “JSON Interface with c-lightning and Writing Extensions.”

We probably can sort of follow it if we super concentrate, but more interesting might be what the hacking teams come up with as LN now appears to be bringing bitcoin out of slumber and into some tech revitalization with its network capacity nearing $3 million.

Early Days

The Lightning Torch passed through Trustnodes earlier this month so we got a feel from an end-users perspective and its cool when it works, but it isn’t easy to diagnose the problem when it doesn’t if you’re not a techy.

“I do think the torch is a bit ahead of its time as we are working on the infrastructure to enable payments to route and people to have inbound capacity, which hadn’t been built out yet, but it’s been a cool experiment” Elizabeth Stark of Lightning Labs says. “Ideally non-advanced users don’t have to open channels at all, autopilot does it for them.”

Routing is one aspect an LN user needs to know about. That’s basically whether there is a connection between you and the receiver. If there isn’t, then you can just directly connect to the node. For that, however, as it stands now, you need to run both a bitcoin node and an LN node.

There’s work going on to allow LN nodes to run on light bitcoin wallets, as well as UX improvements to allow users to directly send payments to an LN node which gives you “the ability to send a payment to a destination without first needing to have an invoice,” according to Olaoluwa Osuntokun, CTO at Lightning Labs.

A more complex concept to understand might be liquidity as there is no simple rule like if you have 1BTC, then obviously you can’t send more than 1BTC or you can only send 50%, etc.

Like on-chain transactions, on LN you have a fee, then there’s a 1% reserve to keep you honest from misbehaving. Then there must be liquidity between the two of you for the amount you are willing to send.

A way to understand liquidity might be the amount of credit others are willing to extend to you. As you might know, Lightning works by locking bitcoin, then you exchange promisory hashes that say x will be given once x time has passed and here’s the hash proof of it.

Other channels or a liquidity provider then sees you have this amount and says ok, we’ll give you the green-light if you like, or we’ll extend you liquidity for x amount.

For now all of this is pretty rough. You can’t easily see how much liquidity you have, for example, nor can you easily tap into it if you don’t run a node, but there’s work going on to improve it.

“We’re aware of the current limits of the early phase of the network,” Stark says, with one very pressing matter being state backups.

As you’re exchanging hashes, the database might be corrupt and accidentally sends a previous hash or a malicious receiver tries to do so. At that point the network punishes you considerably by taking all your funds as you’re misbehaving.

Channel state backups might assist in these instances by basically auto saving “transactions” sort of like Microsoft Word autosaves as you go. We’re told these are to go out within about two weeks.

Finally, as these are early days, there’s a limit of .1677 BTC per channel and about 0.04BTC per transaction. These are client side limits, so you can change them on your own if you want and you’d still be part of the network, with the defaults to potentially be increased soon as well.

A Bitcoin Tech Revival?

For years it has appeared like nothing is going on in bitcoin tech wise, but that might be beginning to change.

One interesting, although very theoretical proposal, might be channels within channels, or channels squared, or as they more boringly call it, channel factories. They say:

“Instead of one blockchain transaction per channel, each user only needs one transaction to enter a group of nodes – within the group the user can create arbitrary many channels.

For a group of 20 users with 100 intra-group channels, the cost of the blockchain transactions is reduced by 90% compared to 100 regular micropayment channels opened on the blockchain.

This can be increased further to 96% if Bitcoin introduces Schnorr signatures with signature aggregation.”

This is more of a very long term thing with far many other more pressing improvements needed first. Interestingly, however, sidechains might make a comeback:

“I think that now if we want to do a real two-way peg, we probably need to get like full, efficient, general-purpose zero-knowledge proofs, and we need a way for Bitcoin validators to be able to validate what’s happening on the sidechain before allowing pegs to come back,” Andrew Poelstra of Blockstream says.

Sidechains are kind of like what Polkadot calls parachains or sort of like what in eth they call a shard. It basically allows the same asset to enter a different network of nodes and then get back to the “real” or the main network.

It can be a solution to scalability and it can allow for rapid experimentation as things can be tried within the far less used network prior to incorporation in the main one if such incorporation is desired at all.

Meaning bitcoin is now finally moving towards addressing scalability after a long debate that now appears very much over.

It might even be able to handle the entire Venezuelan economy one day. “We’ll find a solution that works” to handle that sort of volume, Stark says.

That day might be a few more years away with a heated race on-going in the blockchain space as projects run to be the first to handle a billion transactions a day and thus finally debut to worldwide mainstream usage.

Copyrights Trustnodes.com

 

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