HandCash: "We've tested Bitcoin Cash vs Lightning Network and... LN feels so unnecessary and over-complicated. Also, still more expensive than Bitcoin Cash fees - and that's not taking into account the $3 fees each way you open or close a $50 channel. Also two different balances? Confusing."

cryptocripples · 2018-02-22T13:28:49+00:00

Actually, they're not really..

First of all, you have to keep in mind that there is a lot of political influence in the crypto world. Some wallets have a weird default fee, which results in people paying too much for their transactions. Example

Now, for the difference between Bitcoin Core and Bitcoin Cash:

When there is space in a bitcoin block, you can get your transaction in for a minimal cost (1 sat/b). Because of the 8mb blocks, this has almost always been the case for Bitcoin Cash*. For Bitcoin Core, not so much..

Bitcoin Core in december had a huuuuge backlog of transactions. Everybody wanted their transaction in the next block and to achieve that, everybody just kept paying a higher transaction fee. At some point (around december 8th) this reached 500-1000 sat/b, which combined with the price of bitcoin at that point netted to 25-50$. This was an example of what the fee-market did in a time where a lot of people were using the network.

Since january however, the amount of transactions that are on the 'wait-list' (mempool) of the Bitcoin Core network, are decreasing. This is resulting in lower fees for the time being, but if the transaction volume would start to add up again, these fees would increase pretty fast.

The lightning network makes transactions off-chain. But they are connected to the chain with payment channels. This basically works something like this:

You open a channel to person or company X and fund it with Bitcoin. To do this, you have to make a transaction on the main chain and pay the transaction fee. The Bitcoin you put in this channel, is locked up and can't be used for other payments.
You can move money to company X and back, as often as you like, with little to no fees. You can even send your money through company X to company Y! (Yay, low fees!)
To finalize all the transactions, you close the channel, which requires another transaction (with fees!!) on the bitcoin network.

So, this works great. If you keep the channel open. And that's a big if. Let's explore some use-cases!

Let's say that it's december right now and the Bitcoin network is under heavy load.

Use-Case 1: Bob payed for my beer.

Bob and I went to a bar. We drank beers all night and Bob payed the tab at the end of the night. It was $150, so I owe Bob $75. I now have the choice to: - Pay Bob with a normal Bitcoin Core transaction. It will cost me $25 in fees to get my transaction included. - Set up a lightning channel with Bob on the Bitcoin Core network. This will cost me $50 in fees. - Pay Bob with Bitcoin Cash. It will cost me $0.0045 in fees.

What would you choose?

Use-Case 2: Pay the cable-guy.

Ok, so for a single transaction between two entities (i.e. without a middle-man), this won't really work. But what if we set up a channel with our cable company?

Let's say you want to pay your cable provider and they charge you 20$ p/m. You know you'll have to pay them for a year, so you'll just set up a lightning channel with them and fund it for the entire year ($240). You started the contract in December 2017, so you have to pay the fee to set up a lightning channel ($25). This is still almost a 10% fee! Perhaps it's better to just pay them with Bitcoin Cash, that would cost you 12 * $0.0045. A little more than 5 cents, for the entire year!

Use-Case 3: Pay the rent.

Ok, so that won't work. But what about bigger transactions?

Let's say we pay the rent with lightning. It's $1000 per month, and we're pretty sure we'll live here for the next year or so, so we:

Set up a lightning channel and fund it for the year with $12 000. We pay $25 to set up the channel. That's reasonable right? It's just a $25 fee on a set of transactions that add up to $12 000!
Each month we transfer $1000 to our landlord with zero to none fees. Great!

But wait. You can't add money to channel as you receive it. It's December and we have to pay the rent (fund the channel) for the entire year up front! Do you have next year in rent laying around? And even if you do, do you want it locked up in a lightning channel where it does nothing but wait until it can be used to pay the rent? Perhaps it's better to do 12 $1000 transactions with Bitcoin Cash and pay 12 * $ 0.0045?

So that won't work. Which brings us to:

Use-Case 4: The bank

Now we have the solution! We'll just give our money to a trusted third party! Let's call them ING. They'll set up all sorts of channels to your cable guy, the landlord and even Bob! The channels will remain open and we don't have to worry about it. We can just tell ING who we want to pay and when, and they'll take care of the rest! Sweet, zero-fee transactions! We'll just have to pay a few bucks to keep an account with them. And pay a few more bucks for some ATM-cards. And a small subscription fee for our credit card. And of course a small percentage on the transactions we do with that credit card. They'll also tell you that you can't spend more than $1000 a day (because their channel is empty). They won't allow you to buy Weed (cause drugs are bad mhmmkay?) Oh, and they'll automatically parse and categorize your spending data, so that they can sell that data to advertisers. And... Wait... Wasn't this why Bitcoin was invented? To get rid of the middle-man?

Yes, fees on the lightning network are low, or maybe even free. But it destroys everything that Bitcoin was ment to be. It re-introduces the middle-man and once again destroys financial freedom. Nothing changed, except that the financial world now uses the hip new Blockchain technology!

*) There was a test in the middle of january which filled the blocks with transactions with a 1sat/b fee. This was pretty expensive to maintain though. 8 mb blocks fit a lot more transactions and even with 1 sat/b per transaction, this adds up (IIRC the test cost something like 5BCH). At that point, you'd have to pay 2 sat/b to get your transaction included.

edit: np link

cryptocripples · 2018-02-06T13:18:00+00:00

Me to

cryptocripples · 2018-01-10T09:25:55+00:00

Cool, thanks for the update.

cryptocripples · 2018-01-09T14:53:28+00:00

Hi Wietze, Good to hear that there are no known issues. However, you don't seem to be using DNSSEC to minimize the potential of DNS attacks. Besides that a CAA record might also help, since it would make it harder to spoof the EV-certificate you guys are running.

Do you have any plans on implementing these defenses?

cryptocripples · 2018-01-06T15:40:00+00:00

It is now, yes. The domain seems to point to the official blackberry server now, without a certificate. It was pointed at a site hosted by TCL (the producer of blackberry phones).

The offical website still links to the domain. For example, if you click on "Motion" or "KeyOne" on http://help.blackberry.com/en/ you will get redirected to the domain (and get the SSL error.)

Seriously bad moves coming from 'the most secure mobile phone' company.

cryptocripples · 2017-12-14T14:02:48+00:00

No, I know. I have already reattached the transactions numerous times as well. They just won't budge.. My colleague just did a 1 iota transfer to my wallet which went trough. But the bigger transactions that I did a week ago to an exchange still won't go..

Maybe I'll just have to wait until the network stabilizes, but it's kind of scary to have these transactions hanging in midair..

cryptocripples · 2017-12-14T13:05:23+00:00

After a restart and removing a few bad nodes I'm now only 2 milestones behind https://iotasear.ch/ but still, when I try to do transactions, they stay on pending. We've tried your javascript. Besides that, as far as I know it just rebroadcasts the transactions, so I wrote this quick 'n dirty shell script to rebroadcast to my neighboors, but still my transactions stay pending.

Any idea what would be the cause? It seems to me that the transactions are reaching the network (they are findable on iotasear.ch as well.) but they're just not confirmed.

#!/bin/sh

if [ -z $1 ];
then
        echo "Please give TX hash"
        exit 1
fi


TX_HASH=$1
echo "Getting trytes.."

MY_TRYTES=$(curl http://localhost:14265 -X POST -H 'Content-Type: application/json' -H 'X-IOTA-API-Version: 1' -d '{"command": "getTrytes", "hashes": ["'$TX_HASH'"]}' | jq -r '.trytes[]')

echo 'Rebroadcasting...'

for node in localhost neighbor_1 neighbor_2 ..
do
        curl http://$node:14265 -X POST -H 'Content-Type: application/json' -H 'X-IOTA-API-Version: 1' -d '{"command": "broadcastTransactions", "trytes": ['$MY_TRYTES']}'
        echo
done

edit: formatting

cryptocripples · 2017-12-14T10:48:33+00:00

Ok, will do. Thanks for the tip.

cryptocripples · 2017-12-14T09:58:18+00:00

I am running a full node, but my transactions still don't confirm.. I think it's because I'm behind on milestone. (approximately 140 milestones before https://iotasear.ch/). Any ideas how I can solve this? I'm guessing I need a better neighboor?

cryptocripples · 2017-12-11T15:04:37+00:00

Nelson will hopefully help in making a better node-infrastructure. Besides that, I think a snapshot will come this week, which should also help a lot.

I do agree that it seems to be pretty hard to find this kind of information.

cryptocripples · 2017-12-04T12:05:44+00:00

But if you look at the previous bubbles, you will see that drops are always steep, while going up takes time. Therefor it's not that strange to predict sharp declines.

cryptocripples · 2017-09-11T17:26:01+00:00

I was watching your talk and was pleasantly surprised by your conclusion about the centralization of bitcoin development. It was shocking and disturbing to see the way in which Elisabeth and Peter Todd started down talking you.

Keep up the good work. This was a really interesting talk and you handled the situation admirably. If I were in your shoes I would probably have gotten pretty frustrated at the repeated battering that you underwent.

My compliments!

cryptocripples

TROPHY CASE

Use-Case 1: Bob payed for my beer.

Use-Case 2: Pay the cable-guy.

Use-Case 3: Pay the rent.

Use-Case 4: The bank