Post
Topic
Board Bitcoin Discussion
Re: Is the Lightning Network centralized?
by
franky1
on 28/04/2018, 22:05:41 UTC
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.
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.

no, that's inaccurate. intermediaries on LN are not creating new transactions. they are not issuing "notes" or "checks" or anything like that. they are only routing transactions, like bitcoin nodes. the only difference is they are routing transactions via their established channels rather than propagating them to any and all connected nodes.

actually zin-zang is kinda accurate

for instance
a paypal dollar is not the exact same as a bank account dollar.
you cant pay anyone thats not a paypal accepting merchant with a paypal dollar

much like you cannot pay someone not using LN with an LN time locked multisig

it has to be authorised and broadcast into the normal 'community'(national banking) system and fully settled before a customer can then pay a merchant outside of paypal.

same as a american express dollar is not the same as a dollar bank note..
many amrican express usrs have to find an ATM get their paymnt authorised to get bank notes to then pay a bill with a merchant that does not accept american express

so if we were to say bitcoin was a decentralised "be your own bank" then LN is a centralised paypal2.0 network
.. but thats just going an extra layer deep into the anaology of analogies

so to keep it simple without multitudes of analogies inside of analogies

in my view
LN is a banking network like swift(US) or 'fasterpayment(UK)
a hub(hundred to thousands of channels) is a bank branch..
a user(node with just 1-3 accounts) only using it to spend is a bank customer
though it appars like a traditional bitcoin transaction. the locks and new features of 2014+
means that while inside the LN network. a tx cannot be handled by the blockchain (the locks)

anyway

the other parts about withholding funds (CLTV)
reversing/punishing users with chargebacks(revocation keys/CSV)
fee's for service
requiring authorisation
are all things that banks do. which is not what traditional bitcoin does

LN is the banking network for a currency that used to be 100% decentralised



the problem with trying to compare crypto to fiat in analogies of banking is that the fiat banking is a farse/scam.

take credit unions vs banks
credit unions do not create credit out of no where. they actually do use other account holders funds to give to others for loans
banks do not actually use other account holders funds to give others loans. they actually do create credit out of nowhere

which is where the banks have been for decades been lying to people about how FIAT and banking works, which is part of why satoshi dsigned bitcoin. to get away from banks/places that people have to store funds and require second partys authorisation.

yet LN it bringing it full circle back to being like the farse of banking(reality of credit union)