The Lightning Network is viewed by many as a serious improvement for Bitcoin in terms of scalability , but there are still plenty of critics of the system who do not believe it is destined for success. During a recent event at the Coinbase offices in San Francisco, Lightning Network co-creators Joseph Poon and Tadge Dryja answered some questions about potential weaknesses of this generalized network for payment channels .
One of the key criticisms Dryja and Poon attempted to debunk during the event was that bitcoins are essentially “tied-up” once they enter the Lightning Network. Poon was the first of the duo to respond to this potentially negative aspect of the network. He stated, “It’s not necessarily tied up in the sense that they can [still] spend it.”
Bitcoins on the Lightning Network are Useful
Dryja took Poon’s point to another level by pointing out that, in certain situations, bitcoins on the Lightning Network may actually be more useful than those on the Bitcoin blockchain. Dryja explained: “It is tied up, as in it’s in this channel, but the thing is, having funds in channels that are on this network might be more useful than having a non-Lightning bitcoin because you can push it anywhere instantly.” While on-chain transactions require confirmations before they’re considered secure, transactions on the Lightning Network are essentially settled instantly. According to Dryja and Poon , on-chain transactions are also expected to be much more expensive than Lightning transactions once the system goes live.
The belief that funds are tied up on the Lightning Network comes from a misunderstanding of how the system works. In the past, some have wondered whether opening a payment channel with Uber would be useful if you don’t use that particular car service often. This misses the point that the Lightning […]
