Post
Topic
Board Development & Technical Discussion
Re: Dynamic Scaling?
by
Elliander
on 13/12/2017, 06:24:28 UTC
I'd like to add that I don't believe that Lightning Network is the best solution to scalability. While it can certainly address the currently high fees, I have some long-term concerns about relying on it. The thing is, the Bitcoin network was designed such that less coins are minted over time so that the miners can gradually transition to being paid in fees. Eventually the only financial incentive miners will have is transaction fees, which means more transactions would lead to better mining incentives.

Using the lightning network to open channels through which several transactions can flow without fees circumvents that and can actually lead to higher average fees for everyone else. At present, it would work great because that would remove from the Bitcoin network large amount of transactions that would otherwise congest the network and improves usability for smaller transactions, but that doesn't side step the need to address network scalability issues. If anything, it seems like the lightning network would be better used as a tool for decentralized exchange between cryptocurrencies, but shouldn't replace the ability of any particular coin to act as an exchange of value.

If node operators were rewarded by the network the way miners currently are according to their bandwidth they would have a financial incentive to scale up their capabilities leading to the network as a whole scaling up if dynamic scaling was implemented. That would ensure that transactions everywhere confirm cheaply, and the lightning network can still be of use for quicker in person transactions at stores where you don't want to wait more than a few moments for the transaction to confirm.

If we go the route of relying on secondary networks to exchange value, how exactly are the miners going to be paid when there are no coins to mint and no on block transactions to confirm?