in my opinion the key is in "who can run a lightning node/hub?" as long as it is anybody who wants (which is the case and now there is incentive to run a node) then i don't see any kind of centralization in this.
what's the incentive? how much can you expect to make in fees? i guess it matters how well-connected your node is. you have to weigh that incentive against the risk of keeping your private keys online too.
for years people have been running bitcoin nodes but some of them have been complaining that there should be an incentive for it. the fees can be that incentive they were looking for. they may not be a lot but it is still viable. the thing is people have never been getting paid before and they were running nodes but now they have that perk.
yeah i get that. i'm just wondering if the fee incentive to run LN nodes is substantial enough to encourage a widely distributed network (as opposed to hub-and-spoke).
this question is sort of analogous to that of base layer node centralization. except i've always felt that trustlessly validating payments was incentive enough to run a bitcoin full node.
here, the question is more about whether people will bother becoming highly interconnected vs. just opening a channel with major nodes like exchanges or bitpay.
Some say that the Lightning Network is centralized, but from my point of view, it's still a decentralized solution to scale Bitcoin as anyone would be able to run a Lightning node at will. The huge advantages that it provides for Bitcoin such as dirt-cheap fees, and instant transactions would be too hard to ignore to implement in the future.
However, if the Lightning Network turns out to become a centralized solution for Bitcoin (like many claims it will), then it would be doomed as only those with a lot of wealth and power would be able to participate in this ecosystem.
What are your thoughts about this? Is Lightning really centralized? Or Decentralized?
However, if the Lightning Network turns out to become a centralized solution for Bitcoin (like many claims it will), then it would be doomed as only those with a lot of wealth and power would be able to participate in this ecosystem.
What are your thoughts about this? Is Lightning really centralized? Or Decentralized?
The Lightning Network will probably have top-notch privacy features. It will be much more anonymous than ordinary Bitcoin transactions.
Some businesses will run cheap Lightning Nodes to collect and sell data. Lightning users can either use these low-cost lightning nodes,or, use higher-cost, more privacy oriented payment channels.If the network is built by an organisation my take is it will be centralised
All Lightning nodes in the US will be forced to register as banks, thinking that they will be allowed to run a private bank without adhering to the AML ,
shows either a innocence or a stupidity on how things in the US work.
that seems doubtful. routing transactions doesn't equate to being a party to them. LN pre-images are just bitcoin transactions that aren't published to the blockchain. you realize that bitcoin nodes propagate many thousands of transactions across the network every day, right? if bitcoin nodes aren't financial institutions, how are LN nodes?
People that run Bitcoin Nodes are routing transactions , they are not creating their own separate note for the transactions.
However people that run LN Hubs
are holding/locking bitcoins and using their own hub created LN Notes to make transactions.
In the old days
Banks
hold your gold (now worthless fiat) , and use their own created Bank notes (Checks) to make transactions.
Both hold something of value and then make their own notes to make transactions.
LN Hub is by definition a bank as it was designed to be.
Banks & LN
Create their own notes for transactions
Both Charge Fees & Penalties
Both can seize control over the held asset under certain conditions
Both can refuse payment to 3rd parties if they so choose.
Bitcoin Full Nodes
Do not create their own notes
Can Not Charge Fees or Penalties
Can Not seize control over any assets
Can Not refuse payment to 3rd parties for any reason.
See the Difference.
** Bank Checks/Notes are nothing more than a promise by a bank that ownership of the underlying asset (Fiat) will be granted to the payee upon request. **
** LN Hub transactions are nothing more than a promise by the hub that ownership of the underlying asset (BTC) will be granted to the payee upon request.**
LN=Banks