Re: It is pointless if the BTC fees increases along with rise in BTC price!
Participating on Level 2 requires a transaction on Level 1 first. The system can't accommodate everyone's participation, nor will many people be able to afford participating.
The system can accommodate it, and people can afford it. To open a Lightning channel on the base layer requires a single transaction. Once your channel is open, you can theoretically make unlimited transactions through that channel, being limited only by the amount of funds you have in the channel. I can open a channel with 1 BTC in it, paying a few cents in fees at a rate of 1 sat/vbyte, and then I can buy myself a $5 coffee every day for 15 years at current prices, making ~5,500 transactions on Lightning, all without making another transaction on the base layer.What matters is how the channels will be used by most users.
According to the calculations of LN developers, the average lifetime of the channel will be 3 months. Don't ask me why so much, it's not my calculations.
Now we have the ability to make ~10 million transactions per month. The channel needs 2 transactions-opening and closing. This means that 10 million*3 months /2-> 15 million. That is, there will be 15 million channels. 15 million users if each has an average of one channel, or 7.5 million if the average is 2 channels per user. And this is if all transactions are set aside for creating and closing LN channels. And since this will not happen, some users will use blockchain transactions for their own purposes, this number can be safely reduced.
If someone tells you that using LN and 1MB. block we reach a billion users- don't listen to it. He's either an idiot or he'll cheat you.
Good point. What do you think is a fair transaction fee for Bitcoin transaction assuming that
a) Bitcoin is "scaled" to the Visa level so that there is enough space for every "coffee-transaction"
b) it remains as decentralized as now (~50k full nodes online)
c) users do not subsidize mining with tx fees and miners do not give "free ride" for users who haven't paid enough tx fees for "transaction processing"?
So how much should cost the tx processing in some abstract Lightning Network or other anticipated "highly-scalable network" designed to meet one's bold expectations?