Re: SEGWIT & LN KILLING OFF the OnChain Miners (Better start looking for new Jobs)
My fear with LN is rather the opposite: that propagating "waves of panic" will overwhelm the block chain with transactions, because the amount of transactions pending on the LN network can in principle be orders of magnitude larger than what a block chain can handle (that's its main idea !). So if a block chain can handle, say, 100 000 transactions per hour, and the LN network has 10 million transactions pending in 10 minutes, and there's a panic wave going through the network, those 10 million transactions will need to go on-chain which will create a backlog of 100 hours, often passing the safety time limit of regularisation, and huge opportunities to scam.
Your fears are confirmed , article from Jul 5, 201612:28 PM EST by Kyle Torpey
https://bitcoinmagazine.com/articles/here-s-how-bitcoin-s-lightning-network-could-fail-1467736127/
Quote
The Lightning Networks Failure Mode
The Lightning Network failure scenario described by Todd, takes place when a large number of people on the Bitcoin network need to settle their Lightning Network disputes on the blockchain in a relatively short period of time.
We do have a failure mode which is: Imagine a whole bunch of these [settlements] have to happen at once, Todd explained.
Theres only so much data that can go through the bitcoin network and if we had a large number of Lightning channels get closed out very rapidly, how are we going to get them all confirmed? At some point, you run out of capacity.
In a scenario where a large number of people need to settle their Lightning contracts on the blockchain, the price for doing so could increase substantially as the available space in bitcoin blocks becomes sparse. At some point some people start losing out because the cost is just higher than what they can afford, Todd said. If you have a very large percentage of the network using Lightning, potentially this cost is very high. Potentially, we could get this mass outbreak of failure.
The way the Lightning Network works, a user must be able to issue a breach remedy transaction in order to keep their counterparty honest. If a user is unable to make the proper transaction on the blockchain in a certain amount of time, their counterparty may be able to take control of bitcoins tied up in the smart contract between the two parties.
The Lightning Network failure scenario described by Todd, takes place when a large number of people on the Bitcoin network need to settle their Lightning Network disputes on the blockchain in a relatively short period of time.
We do have a failure mode which is: Imagine a whole bunch of these [settlements] have to happen at once, Todd explained.
Theres only so much data that can go through the bitcoin network and if we had a large number of Lightning channels get closed out very rapidly, how are we going to get them all confirmed? At some point, you run out of capacity.
In a scenario where a large number of people need to settle their Lightning contracts on the blockchain, the price for doing so could increase substantially as the available space in bitcoin blocks becomes sparse. At some point some people start losing out because the cost is just higher than what they can afford, Todd said. If you have a very large percentage of the network using Lightning, potentially this cost is very high. Potentially, we could get this mass outbreak of failure.
The way the Lightning Network works, a user must be able to issue a breach remedy transaction in order to keep their counterparty honest. If a user is unable to make the proper transaction on the blockchain in a certain amount of time, their counterparty may be able to take control of bitcoins tied up in the smart contract between the two parties.
