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A (hopefully mathematically neutral) comparison of Lightning network fees to Bitcoin Cash on-chain fees.

A side note before I begin
For context, earlier today, sherlocoin made a post on this sub asking if Lightning Network transactions are cheaper than on-chain BCH transactions. This user also went on to complain on /bitcoin that his "real" numbers were getting downvoted
I was initially going to respond to his post, but after I typed some of my response, I realized it is relevant to a wider Bitcoin audience and the level of analysis done warranted a new post. This wound up being the longest post I've ever written, so I hope you agree.
I've placed the TL;DR at the top and bottom for the simple reason that you need to prepare your face... because it's about to get hit with a formidable wall of text.
TL;DR: While Lightning node payments themselves cost less than on-chain BCH payments, the associated overhead currently requires a LN channel to produce 16 transactions just to break-even under ideal 1sat/byte circumstances and substantially more as the fee rate goes up.
Further, the Lightning network can provide no guarantee in its current state to maintain/reduce fees to 1sat/byte.

Let's Begin With An Ideal World
Lightning network fees themselves are indeed cheaper than Bitcoin Cash fees, but in order to get to a state where a Lightning network fee can be made, you are required to open a channel, and to get to a state where those funds are spendable, you must close that channel.
On the Bitcoin network, the minimum accepted fee is 1sat/byte so for now, we'll assume that ideal scenario of 1sat/byte. We'll also assume the open and close is sent as a simple native Segwit transaction with a weighted size of 141 bytes. Because we have to both open and close, this 141 byte fee will be incurred twice. The total fee for an ideal open/close transaction is 1.8¢
For comparison, a simple transaction on the BCH network requires 226 bytes one time. The minimum fee accepted next-block is 1sat/byte. At the time of writing an ideal BCH transaction fee costs ~ 0.11¢
This means that under idealized circumstances, you must currently make at least 16 transactions on a LN channel to break-even with fees
Compounding Factors
Our world is not ideal, so below I've listed compounding factors, common arguments, an assessment, and whether the problem is solvable.
Problem 1: Bitcoin and Bitcoin Cash prices are asymmetrical.
Common arguments:
BTC: If Bitcoin Cash had the same price, the fees would be far higher
Yes, this is true. If Bitcoin Cash had the same market price as Bitcoin, our ideal scenario changes substantially. An open and close on Bitcoin still costs 1.8¢ while a simple Bitcoin Cash transaction now costs 1.4¢. The break-even point for a Lightning Channel is now only 2 transactions.
Is this problem solvable?
Absolutely.
Bitcoin Cash has already proposed a reduction in fees to 1sat for every 10 bytes, and that amount can be made lower by later proposals. While there is no substantial pressure to implement this now, if Bitcoin Cash had the same usage as Bitcoin currently does, it is far more likely to be implemented. If implemented at the first proposed reduction rate, under ideal circumstances, a Lightning Channel would need to produce around 13 transactions for the new break even.
But couldn't Bitcoin reduce fees similarly
The answer there is really tricky. If you reduce on-chain fees, you reduce the incentive to use the Lightning Network as the network becomes more hospitable to micropaments. This would likely increase the typical mempool state and decrease the Lightning Channel count some. The upside is that when the mempool saturates with low transaction fees, users are then re-incentivized to use the lightning network after the lowes fees are saturated with transactions. This should, in theory, produce some level of a transaction fee floor which is probably higher on average than 0.1 sat/byte on the BTC network.
Problem 2: This isn't an ideal world, we can't assume 1sat/byte fees
Common arguments:
BCH: If you tried to open a channel at peak fees, you could pay $50 each way
BTC: LN wasn't implemented which is why the fees are low now
Both sides have points here. It's true that if the mempool was in the same state as it was in December of 2017, that a user could have potentially been incentivized to pay an open and close channel fee of up to 1000 sat/byte to be accepted in a reasonable time-frame.
With that being said, two factors have resulted in a reduced mempool size of Bitcoin: Increased Segwit and Lightning Network Usage, and an overall cooling of the market.
I'm not going to speculate as to what percentage of which is due to each factor. Instead, I'm going to simply analyze mempool statistics for the last few months where both factors are present.
Let's get an idea of current typical Bitcoin network usage fees by asking Johoe quick what the mempool looks like.
For the last few months, the bitcoin mempool has followed almost the exact same pattern. Highest usage happens between 10AM and 3PM EST with a peak around noon. Weekly, usage usually peaks on Tuesday or Wednesday with enough activity to fill blocks with at least minimum fee transactions M-F during the noted hours and usually just shy of block-filling capacity on Sat and Sun.
These observations can be additionally evidenced by transaction counts on bitinfocharts. It's also easier to visualize on bitinfocharts over a longer time-frame.
Opening a channel
Under pre-planned circumstances, you can offload channel creation to off-peak hours and maintain a 1sat/byte rate. The primary issue arises in situations where either 1) LN payments are accepted and you had little prior knowledge, or 2) You had a previous LN pathway to a known payment processor and one or more previously known intermediaries are offline or otherwise unresponsive causing the payment to fail.
Your options are:
A) Create a new LN channel on-the-spot where you're likely to incur current peak fee rates of 5-20sat/byte.
B) Create an on-chain payment this time and open a LN channel when fees are more reasonable.
C) Use an alternate currency for the transaction.
There is a fundamental divide among the status of C. Some people view Bitcoin as (primarily) a storage of value, and thus as long as there are some available onramps and offramps, the currency will hold value. There are other people who believe that fungibility is what gives cryptocurrency it's value and that option C would fundamentally undermine the value of the currency.
I don't mean to dismiss either argument, but option C opens a can of worms that alone can fill economic textbooks. For the sake of simplicity, we will throw out option C as a possibility and save that debate for another day. We will simply require that payment is made in crypto.
With option B, you would absolutely need to pay the peak rate (likely higher) for a single transaction as a Point-of-Sale scenario with a full mempool would likely require at least one confirm and both parties would want that as soon as possible after payment. It would not be unlikely to pay 20-40 sat/byte on a single transaction and then pay 1sat/byte for an open and close to enable LN payments later. Even in the low end, the total cost is 20¢ for on-chain + open + close.
With present-day-statistics, your LN would have to do 182 transactions to make up for the one peak on-chain transaction you were forced to do.
With option A, you still require one confirm. Let's also give the additional leeway that in this scenario you have time to sit and wait a couple of blocks for your confirm before you order / pay. You can thus pay peak rates alone and not peak + ensure next block rates. This will most likely be in the 5-20 sat/byte range. With 5sat/byte open and 1sat/byte close, your LN would have to do 50 transactions to break even
In closing, fees are incurred by the funding channel, so there could be scenarios where the receiving party is incentivized to close in order to spend outputs and the software automatically calculates fees based on current rates. If this is the case, the receiving party could incur a higher-than-planned fee to the funding party.
With that being said, any software that allows the funding party to set the fee beforehand would avoid unplanned fees, so we'll assume low fees for closing.
Is this problem solvable?
It depends.
In order to avoid the peak-fee open/close ratio problem, the Bitcoin network either needs to have much higher LN / Segwit utilization, or increase on-chain capacity. If it gets to a point where transactions stack up, users will be required to pay more than 1sat/byte per transaction and should expect as much.
Current Bitcoin network utilization is close enough to 100% to fill blocks during peak times. I also did an export of the data available at Blockchair.com for the last 3000 blocks which is approximately the last 3 weeks of data. According to their block-weight statistics, The average Bitcoin block is 65.95% full. This means that on-chain, Bitcoin can only increase in transaction volume by around 50% and all other scaling must happen via increased Segwit and LN use.
Problem 3: You don't fully control your LN channel states.
Common arguments:
BCH: You can get into a scenario where you don't have output capacity and need to open a new channel.
BCH: A hostile actor can cause you to lose funds during a high-fee situation where a close is forced.
BTC: You can easily re-load your channel by pushing outbound to inbound.
BCH: You can't control whether nodes you connect to are online or offline.
There's a lot to digest here, but LN is essentially a 2-way contract between 2 parties. Not only does the drafting party pay the fees as of right now, but connected 3rd-parties can affect the state of this contract. There are some interesting scenarios that develop because of it and you aren't always in full control of what side.
Lack of outbound capacity
First, it's true that if you run out of outbound capacity, you either need to reload or create a new channel. This could potentially require 0, 1, or 2 additional on-chain transactions.
If a network loop exists between a low-outbound-capacity channel and yourself, you could push transactional capacity through the loop back to the output you wish to spend to. This would require 0 on-chain transactions and would only cost 1 (relatively negligible) LN fee charge. For all intents and purposes... this is actually kind of a cool scenario.
If no network loop exists from you-to-you, things get more complex. I've seen proposals like using Bitrefill to push capacity back to your node. In order to do this, you would have an account with them and they would lend custodial support based on your account. While people opting for trustless money would take issue in 3rd party custodians, I don't think this alone is a horrible solution to the LN outbound capacity problem... Although it depends on the fee that bitrefill charges to maintain an account and account charges could negate the effectiveness of using the LN. Still, we will assume this is a 0 on-chain scenario and would only cost 1 LN fee which remains relatively negligible.
If no network loop exists from you and you don't have a refill service set up, you'll need at least one on-chain payment to another LN entity in exchange for them to push LN capacity to you. Let's assume ideal fee rates. If this is the case, your refill would require an additional 7 transactions for that channel's new break-even. Multiply that by number of sat/byte if you have to pay more.
Opening a new channel is the last possibility and we go back to the dynamics of 13 transactions per LN channel in the ideal scenario.
Hostile actors
There are some potential attack vectors previously proposed. Most of these are theoretical and/or require high fee scenarios to come about. I think that everyone should be wary of them, however I'm going to ignore most of them again for the sake of succinctness.
This is not to be dismissive... it's just because my post length has already bored most casual readers half to death and I don't want to be responsible for finishing the job.
Pushing outbound to inbound
While I've discussed scenarios for this push above, there are some strange scenarios that arise where pushing outbound to inbound is not possible and even some scenarios where a 3rd party drains your outbound capacity before you can spend it.
A while back I did a testnet simulation to prove that this scenario can and will happen it was a post response that happened 2 weeks after the initial post so it flew heavily under the radar, but the proof is there.
The moral of this story is in some scenarios, you can't count on loaded network capacity to be there by the time you want to spend it.
Online vs Offline Nodes
We can't even be sure that a given computer is online to sign a channel open or push capacity until we try. Offline nodes provide a brick-wall in the pathfinding algorithm so an alternate route must be found. If we have enough channel connectivity to be statistically sure we can route around this issue, we're in good shape. If not, we're going to have issues.
Is this problem solvable?
Only if the Lightning network can provide an (effectively) infinite amount of capacity... but...
Problem 4: Lightning Network is not infinite.
Common arguments:
BTC: Lightning network can scale infinitely so there's no problem.
Unfortunately, LN is not infinitely scalable. In fact, finding a pathway from one node to another is roughly the same problem as the traveling salesman problem. Dijkstra's algorithm which is a problem that diverges polynomially. The most efficient proposals have a difficulty bound by O(n^2).
Note - in the above I confused the complexity of the traveling salesman problem with Dijkstra when they do not have the same bound. With that being said, the complexity of the LN will still diverge with size
In lay terms, what that means is every time you double the size of the Lightning Network, finding an indirect LN pathway becomes 4 times as difficult and data intensive. This means that for every doubling, the amount of traffic resulting from a single request also quadruples.
You can potentially temporarily mitigate traffic by bounding the number of hops taken, but that would encourage a greater channel-per-user ratio.
For a famous example... the game "6 degrees of Kevin Bacon" postulates that Kevin Bacon can be connected by co-stars to any movie by 6 degrees of separation. If the game is reduced to "4 degrees of Kevin Bacon," users of this network would still want as many connections to be made, so they'd be incentivized to hire Kevin Bacon to star in everything. You'd start to see ridiculous mash-ups and reboots just to get more connectivity... Just imagine hearing Coming soon - Kevin Bacon and Adam Sandlar star in "Billy Madison 2: Replace the face."
Is this problem solvable?
Signs point to no.
So technically, if the average computational power and network connectivity can handle the problem (the number of Lightning network channels needed to connect the world)2 in a trivial amount of time, Lightning Network is effectively infinite as the upper bound of a non-infinite earth would limit time-frames to those that are computationally feasible.
With that being said, BTC has discussed Lightning dev comments before that estimated a cap of 10,000 - 1,000,000 channels before problems are encountered which is far less than the required "number of channels needed to connect the world" level.
In fact SHA256 is a newer NP-hard problem than the traveling saleseman problem. That means that statistically, and based on the amount of review that has been given to each problem, it is more likely that SHA256 - the algorithm that lends security to all of bitcoin - is cracked before the traveling salesman problem is. Notions that "a dedicated dev team can suddenly solve this problem, while not technically impossible, border on statistically absurd.
Edit - While the case isn't quite as bad as the traveling salesman problem, the problem will still diverge with size and finding a more efficient algorithm is nearly as unlikely.
This upper bound shows that we cannot count on infinite scalability or connectivity for the lightning network. Thus, there will always be on-chain fee pressure and it will rise as the LN reaches it's computational upper-bound.
Because you can't count on channel states, the on-chain fee pressure will cause typical sat/byte fees to raise. The higher this rate, the more transactions you have to make for a Lightning payment open/close operation to pay for itself.
This is, of course unless it is substantially reworked or substituted for a O(log(n))-or-better solution.
Finally, I'd like to add, creating an on-chain transaction is a set non-recursive, non looping function - effectively O(1), sending this transaction over a peer-to-peer network is bounded by O(log(n)) and accepting payment is, again, O(1). This means that (as far as I can tell) on-chain transactions (very likely) scale more effectively than Lightning Network in its current state.
Additional notes:
My computational difficulty assumptions were based on a generalized, but similar problem set for both LN and on-chain instances. I may have overlooked additional steps needed for the specific implementation, and I may have overlooked reasons a problem is a simplified version requiring reduced computational difficulty.
I would appreciate review and comment on my assumptions for computational difficulty and will happily correct said assumptions if reasonable evidence is given that a problem doesn't adhere to listed computational difficulty.
TL;DR: While Lightning node payments themselves cost less than on-chain BCH payments, the associated overhead currently requires a LN channel to produce 16 transactions just to break-even under ideal 1sat/byte circumstances and substantially more as the fee rate goes up.
Further, the Lightning network can provide no guarantee in its current state to maintain/reduce fees to 1sat/byte.
submitted by CaptainPatent to btc [link] [comments]

A (hopefully mathematically neutral) comparison of Lightning network fees to Bitcoin Cash on-chain fees. [X-post from /r/btc

A side note before I begin
For context, earlier today, sherlocoin made a post on this sub asking if Lightning Network transactions are cheaper than on-chain BCH transactions. This user also went on to complain on /bitcoin that his "real" numbers were getting downvoted
I was initially going to respond to his post, but after I typed some of my response, I realized it is relevant to a wider Bitcoin audience and the level of analysis done warranted a new post. This wound up being the longest post I've ever written, so I hope you agree.
I've placed the TL;DR at the top and bottom for the simple reason that you need to prepare your face... because it's about to get hit with a formidable wall of text.
TL;DR: While Lightning node payments themselves cost less than on-chain BCH payments, the associated overhead currently requires a LN channel to produce 16 transactions just to break-even under ideal 1sat/byte circumstances and substantially more as the fee rate goes up.
Further, the Lightning network can provide no guarantee in its current state to maintain/reduce fees to 1sat/byte.

Let's Begin With An Ideal World
Lightning network fees themselves are indeed cheaper than Bitcoin Cash fees, but in order to get to a state where a Lightning network fee can be made, you are required to open a channel, and to get to a state where those funds are spendable, you must close that channel.
On the Bitcoin network, the minimum accepted fee is 1sat/byte so for now, we'll assume that ideal scenario of 1sat/byte. We'll also assume the open and close is sent as a simple native Segwit transaction with a weighted size of 141 bytes. Because we have to both open and close, this 141 byte fee will be incurred twice. The total fee for an ideal open/close transaction is 1.8¢
For comparison, a simple transaction on the BCH network requires 226 bytes one time. The minimum fee accepted next-block is 1sat/byte. At the time of writing an ideal BCH transaction fee costs ~ 0.11¢
This means that under idealized circumstances, you must currently make at least 16 transactions on a LN channel to break-even with fees
Compounding Factors
Our world is not ideal, so below I've listed compounding factors, common arguments, an assessment, and whether the problem is solvable.
Problem 1: Bitcoin and Bitcoin Cash prices are asymmetrical.
Common arguments:
BTC: If Bitcoin Cash had the same price, the fees would be far higher
Yes, this is true. If Bitcoin Cash had the same market price as Bitcoin, our ideal scenario changes substantially. An open and close on Bitcoin still costs 1.8¢ while a simple Bitcoin Cash transaction now costs 1.4¢. The break-even point for a Lightning Channel is now only 2 transactions.
Is this problem solvable?
Absolutely.
Bitcoin Cash has already proposed a reduction in fees to 1sat for every 10 bytes, and that amount can be made lower by later proposals. While there is no substantial pressure to implement this now, if Bitcoin Cash had the same usage as Bitcoin currently does, it is far more likely to be implemented. If implemented at the first proposed reduction rate, under ideal circumstances, a Lightning Channel would need to produce around 13 transactions for the new break even.
But couldn't Bitcoin reduce fees similarly
The answer there is really tricky. If you reduce on-chain fees, you reduce the incentive to use the Lightning Network as the network becomes more hospitable to micropaments. This would likely increase the typical mempool state and decrease the Lightning Channel count some. The upside is that when the mempool saturates with low transaction fees, users are then re-incentivized to use the lightning network after the lowes fees are saturated with transactions. This should, in theory, produce some level of a transaction fee floor which is probably higher on average than 0.1 sat/byte on the BTC network.
Problem 2: This isn't an ideal world, we can't assume 1sat/byte fees
Common arguments:
BCH: If you tried to open a channel at peak fees, you could pay $50 each way
BTC: LN wasn't implemented which is why the fees are low now
Both sides have points here. It's true that if the mempool was in the same state as it was in December of 2017, that a user could have potentially been incentivized to pay an open and close channel fee of up to 1000 sat/byte to be accepted in a reasonable time-frame.
With that being said, two factors have resulted in a reduced mempool size of Bitcoin: Increased Segwit and Lightning Network Usage, and an overall cooling of the market.
I'm not going to speculate as to what percentage of which is due to each factor. Instead, I'm going to simply analyze mempool statistics for the last few months where both factors are present.
Let's get an idea of current typical Bitcoin network usage fees by asking Johoe quick what the mempool looks like.
For the last few months, the bitcoin mempool has followed almost the exact same pattern. Highest usage happens between 10AM and 3PM EST with a peak around noon. Weekly, usage usually peaks on Tuesday or Wednesday with enough activity to fill blocks with at least minimum fee transactions M-F during the noted hours and usually just shy of block-filling capacity on Sat and Sun.
These observations can be additionally evidenced by transaction counts on bitinfocharts. It's also easier to visualize on bitinfocharts over a longer time-frame.
Opening a channel
Under pre-planned circumstances, you can offload channel creation to off-peak hours and maintain a 1sat/byte rate. The primary issue arises in situations where either 1) LN payments are accepted and you had little prior knowledge, or 2) You had a previous LN pathway to a known payment processor and one or more previously known intermediaries are offline or otherwise unresponsive causing the payment to fail.
Your options are:
A) Create a new LN channel on-the-spot where you're likely to incur current peak fee rates of 5-20sat/byte.
B) Create an on-chain payment this time and open a LN channel when fees are more reasonable.
C) Use an alternate currency for the transaction.
There is a fundamental divide among the status of C. Some people view Bitcoin as (primarily) a storage of value, and thus as long as there are some available onramps and offramps, the currency will hold value. There are other people who believe that fungibility is what gives cryptocurrency it's value and that option C would fundamentally undermine the value of the currency.
I don't mean to dismiss either argument, but option C opens a can of worms that alone can fill economic textbooks. For the sake of simplicity, we will throw out option C as a possibility and save that debate for another day. We will simply require that payment is made in crypto.
With option B, you would absolutely need to pay the peak rate (likely higher) for a single transaction as a Point-of-Sale scenario with a full mempool would likely require at least one confirm and both parties would want that as soon as possible after payment. It would not be unlikely to pay 20-40 sat/byte on a single transaction and then pay 1sat/byte for an open and close to enable LN payments later. Even in the low end, the total cost is 20¢ for on-chain + open + close.
With present-day-statistics, your LN would have to do 182 transactions to make up for the one peak on-chain transaction you were forced to do.
With option A, you still require one confirm. Let's also give the additional leeway that in this scenario you have time to sit and wait a couple of blocks for your confirm before you order / pay. You can thus pay peak rates alone and not peak + ensure next block rates. This will most likely be in the 5-20 sat/byte range. With 5sat/byte open and 1sat/byte close, your LN would have to do 50 transactions to break even
In closing, fees are incurred by the funding channel, so there could be scenarios where the receiving party is incentivized to close in order to spend outputs and the software automatically calculates fees based on current rates. If this is the case, the receiving party could incur a higher-than-planned fee to the funding party.
With that being said, any software that allows the funding party to set the fee beforehand would avoid unplanned fees, so we'll assume low fees for closing.
Is this problem solvable?
It depends.
In order to avoid the peak-fee open/close ratio problem, the Bitcoin network either needs to have much higher LN / Segwit utilization, or increase on-chain capacity. If it gets to a point where transactions stack up, users will be required to pay more than 1sat/byte per transaction and should expect as much.
Current Bitcoin network utilization is close enough to 100% to fill blocks during peak times. I also did an export of the data available at Blockchair.com for the last 3000 blocks which is approximately the last 3 weeks of data. According to their block-weight statistics, The average Bitcoin block is 65.95% full. This means that on-chain, Bitcoin can only increase in transaction volume by around 50% and all other scaling must happen via increased Segwit and LN use.
Problem 3: You don't fully control your LN channel states.
Common arguments:
BCH: You can get into a scenario where you don't have output capacity and need to open a new channel.
BCH: A hostile actor can cause you to lose funds during a high-fee situation where a close is forced.
BTC: You can easily re-load your channel by pushing outbound to inbound.
BCH: You can't control whether nodes you connect to are online or offline.
There's a lot to digest here, but LN is essentially a 2-way contract between 2 parties. Not only does the drafting party pay the fees as of right now, but connected 3rd-parties can affect the state of this contract. There are some interesting scenarios that develop because of it and you aren't always in full control of what side.
Lack of outbound capacity
First, it's true that if you run out of outbound capacity, you either need to reload or create a new channel. This could potentially require 0, 1, or 2 additional on-chain transactions.
If a network loop exists between a low-outbound-capacity channel and yourself, you could push transactional capacity through the loop back to the output you wish to spend to. This would require 0 on-chain transactions and would only cost 1 (relatively negligible) LN fee charge. For all intents and purposes... this is actually kind of a cool scenario.
If no network loop exists from you-to-you, things get more complex. I've seen proposals like using Bitrefill to push capacity back to your node. In order to do this, you would have an account with them and they would lend custodial support based on your account. While people opting for trustless money would take issue in 3rd party custodians, I don't think this alone is a horrible solution to the LN outbound capacity problem... Although it depends on the fee that bitrefill charges to maintain an account and account charges could negate the effectiveness of using the LN. Still, we will assume this is a 0 on-chain scenario and would only cost 1 LN fee which remains relatively negligible.
If no network loop exists from you and you don't have a refill service set up, you'll need at least one on-chain payment to another LN entity in exchange for them to push LN capacity to you. Let's assume ideal fee rates. If this is the case, your refill would require an additional 7 transactions for that channel's new break-even. Multiply that by number of sat/byte if you have to pay more.
Opening a new channel is the last possibility and we go back to the dynamics of 13 transactions per LN channel in the ideal scenario.
Hostile actors
There are some potential attack vectors previously proposed. Most of these are theoretical and/or require high fee scenarios to come about. I think that everyone should be wary of them, however I'm going to ignore most of them again for the sake of succinctness.
This is not to be dismissive... it's just because my post length has already bored most casual readers half to death and I don't want to be responsible for finishing the job.
Pushing outbound to inbound
While I've discussed scenarios for this push above, there are some strange scenarios that arise where pushing outbound to inbound is not possible and even some scenarios where a 3rd party drains your outbound capacity before you can spend it.
A while back I did a testnet simulation to prove that this scenario can and will happen it was a post response that happened 2 weeks after the initial post so it flew heavily under the radar, but the proof is there.
The moral of this story is in some scenarios, you can't count on loaded network capacity to be there by the time you want to spend it.
Online vs Offline Nodes
We can't even be sure that a given computer is online to sign a channel open or push capacity until we try. Offline nodes provide a brick-wall in the pathfinding algorithm so an alternate route must be found. If we have enough channel connectivity to be statistically sure we can route around this issue, we're in good shape. If not, we're going to have issues.
Is this problem solvable?
Only if the Lightning network can provide an (effectively) infinite amount of capacity... but...
Problem 4: Lightning Network is not infinite.
Common arguments:
BTC: Lightning network can scale infinitely so there's no problem.
Unfortunately, LN is not infinitely scalable. In fact, finding a pathway from one node to another is roughly the same problem as the traveling salesman problem. Dijkstra's algorithm This is problem that diverges polynomial. The most efficient proposals have a difficulty bound by O(n^2).
Note - in the above I confused the complexity of the traveling salesman problem with Dijkstra when they do not have the same bound. With that being said, the complexity of the LN will still diverge with size
In lay terms, what that means is every time you double the size of the Lightning Network, finding an indirect LN pathway becomes 4 times as difficult and data intensive. This means that for every doubling, the amount of traffic resulting from a single request also quadruples.
You can potentially temporarily mitigate traffic by bounding the number of hops taken, but that would encourage a greater channel-per-user ratio.
For a famous example... the game "6 degrees of Kevin Bacon" postulates that Kevin Bacon can be connected by co-stars to any movie by 6 degrees of separation. If the game is reduced to "4 degrees of Kevin Bacon," users of this network would still want as many connections to be made, so they'd be incentivized to hire Kevin Bacon to star in everything. You'd start to see ridiculous mash-ups and reboots just to get more connectivity... Just imagine hearing Coming soon - Kevin Bacon and Adam Sandlar star in "Billy Madison 2: Replace the face."
Is this problem solvable?
Signs point to no.
So technically, if the average computational power and network connectivity can handle the problem (the number of Lightning network channels needed to connect the world)2 in a trivial amount of time, Lightning Network is effectively infinite as the upper bound of a non-infinite earth would limit time-frames to those that are computationally feasible.
With that being said, BTC has discussed Lightning dev comments before that estimated a cap of 10,000 - 1,000,000 channels before problems are encountered which is far less than the required "number of channels needed to connect the world" level.
In fact SHA256 is a newer NP-hard problem than the traveling saleseman problem. That means that statistically, and based on the amount of review that has been given to each problem, it is more likely that SHA256 - the algorithm that lends security to all of bitcoin - is cracked before the traveling salesman problem is. Notions that "a dedicated dev team can suddenly solve this problem, while not technically impossible, border on statistically absurd.
Edit - While the case isn't quite as bad as the traveling salesman problem, the problem will still diverge with size and finding a more efficient algorithm is nearly as unlikely.
This upper bound shows that we cannot count on infinite scalability or connectivity for the lightning network. Thus, there will always be on-chain fee pressure and it will rise as the LN reaches it's computational upper-bound.
Because you can't count on channel states, the on-chain fee pressure will cause typical sat/byte fees to raise. The higher this rate, the more transactions you have to make for a Lightning payment open/close operation to pay for itself.
This is, of course unless it is substantially reworked or substituted for a O(log(n))-or-better solution.
Finally, I'd like to add, creating an on-chain transaction is a set non-recursive, non looping function - effectively O(1), sending this transaction over a peer-to-peer network is bounded by O(log(n)) and accepting payment is, again, O(1). This means that (as far as I can tell) on-chain transactions (very likely) scale more effectively than Lightning Network in its current state.
Additional notes:
My computational difficulty assumptions were based on a generalized, but similar problem set for both LN and on-chain instances. I may have overlooked additional steps needed for the specific implementation, and I may have overlooked reasons a problem is a simplified version requiring reduced computational difficulty.
I would appreciate review and comment on my assumptions for computational difficulty and will happily correct said assumptions if reasonable evidence is given that a problem doesn't adhere to listed computational difficulty.
TL;DR: While Lightning node payments themselves cost less than on-chain BCH payments, the associated overhead currently requires a LN channel to produce 16 transactions just to break-even under ideal 1sat/byte circumstances and substantially more as the fee rate goes up.
Further, the Lightning network can provide no guarantee in its current state to maintain/reduce fees to 1sat/byte.
submitted by CaptainPatent to Bitcoincash [link] [comments]

[Table] IAmA: I am David M. Ewalt, author of the new book OF DICE AND MEN: THE STORY OF DUNGEONS & DRAGONS. Ask me anything!

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Date: 2013-08-20
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As someone who has never played dungeons and dragons, and with friends who are also interested in playing, where do I begin? There are a couple routes to getting started. My best advice is to join a group of experienced players first, for at least one game; you'll see how it's done and will get a chance to ask lots of questions. I've had good luck finding games online; look for local meetups or ask around on sites like Enworld or the various role-playing game subreddits. You might also go check out Wizard of the Coast's Encounters program, which sets up short games at local game and comic book stores.
If you can't find an existing game to get into, just buy yourself a Player's Handbook and Dungeon Masters Guide. Both books explain how to get started if you're totally new to the game. You could also download the free playtest materials for D&D Next. They won't be quite as clearly written, but the new rules are simple and an excellent place to start.
Did you find out anything unexpected while writing your book? A lot. One thing sure to get the RPG partisans up in arms: TSR owner Lorraine Williams, the woman who booted Gary Gygax from the company, isn't the one-dimensional evil figure many gamers have made her out to be. I certainly don't agree with many of her decisions, but TSR did a lot of interesting work with her at the helm, and she had good intentions for the company.
What do you think about the move from D&D that was, a complicated nerd right of passage, to 4th edition (and even the play tests of 5th) which has considerably simplified the rules, but broadened the user base? Theoretically: I understand what WotC was trying to do when it moved to the simplified, video-game mechanics of 4.0, and while that wasn't a decision that served my tastes, I understand that a lot of new and younger players really responded to it. The transition to 5.0 is something different; while the rules are indeed simplified, the intention is to emphasize the "core" values of role-playing and adventuring, not to mimic a different kind of game altogether.
Pathfinder was the solution to 3.5 ending for our group.. It's like 3.75. Pathfinder is a great game; the only reason my group didn't migrate is that we didn't want to have to buy a new batch of books. If someone is new to role-playing games and has tried and like "3.5-style" play, I'd heartily recommend that they get into Pathfinder as opposed to hunt down the 3.5 books.
I'm curious how you feel about the stereotypes surrounding tabletop gamers (i.e. unwashed, socially inept virgins living in their parents' basments) and how or if that's changed over the years, especially as we're now seeing people teaching the games to their kids as well as celebrities and successful people who have gamed or who still game. Any comments or insights? I think like most stereotypes, they're mostly (but not entirely) nonsense. One of the reasons tabletop games have been so popular over the years is that the community is very welcoming to geeky people who feel outcast from other pastimes; that's a very good thing, but it's helped saddle the hobby with some of the negative stereotypes you're referencing.
Perceptions are changing quickly, though. One big factor has been the general explosion of gaming as a pastime; today nearly everyone from grandmas to toddlers plays some kind of video game, so tabletop gaming doesn't seem so alien and weird anymore. The emergence of celebrity gamers is a big help, too: When respected people like Wil Wheaton, Felicia Day, Patton Oswalt and Aisha Tyler play games, it's hard to say that gamers are all sad, lonely neckbeards.
Got a favorite board game? Edit: Forgot to answer your board game question. Catan and Carcassone are favorites, naturally. I'm also very fond of Ticket to Ride, Dungeon!, and Puerto Rico. And I just played Shadows over Camelot at Gen Con, and really enjoyed it.
I've been playing tabletop rpg's off and on for nearly 30 years, and I love them, but even I would be a little hesitant to call D&D one of the most important games of our time. Would you care to elaborate on what makes it important, or expand on their cultural impact? D&D pioneered and popularized many game concepts and mechanics that are ubiquitous in modern tabletop and video games, from the basic idea of a character who persists and gains levels over time, to the idea of a dungeon crawl full of monsters and loot.
D&D gave birth to the modern video game industry; many of the earliest and most popular video games were essentially attempts to automate the D&D experience. And a huge percentage of today's most powerful and respected game designers say they got interested in making games because they played D&D as a kid.
D&D helped popularize the modern fantasy genre, and helped make fantasy films and tv a mainstream, marketable proposition.
D&D inspired a whole generation of writers, artists, and content creators. Just one example: Iron Man director John Favreau says he learned how to tell a story by playing D&D.
Hey, thanks for this reply. I guess I have a tendency to still see tabletop rpgs as a small phenomenon, mostly relegated to suburban basements, when it truly is branching out. The latter two points that you raise definitely have a lot of weight, and companies like WotC and Paizo have shown that RPG's can be valuable economic commodities. Any indie games that you like in particular? Have you checked out Monte Cook's Numenera game yet? Yes! I was a Numenera backer and it looks awesome. Monte's a brilliant designer and I can't wait to see what else he comes up with.
I have to upvote a Zork reference :) Happy Cake Day!
You enter a room lit with only a couple of torches, 24'x24', so it's fairly dark. There is a small dragon skull in the center of the far wall and a large treasure chest directly under it that looks like it's centuries older than the room itself. What do you do? Flatter the wizard and get him to cast a Light spell; convince the fighter that there might be something to kill hiding under the skull; tell the thief that the chest definitely isn't trapped and is probably full of gold. Hang out in the entryway until everything goes wrong, then collect any treasure once it's over.
Did or do you play any other RPG systems? I've played many different systems, including the two you mention. When I was in high school we played a lot of R. Talsorian's Cyberpunk, White Wolf's Vampire: The Masquerade, and FASA's Shadowrun.
The old West End Star Wars, RIfts, etc? At the moment, the two long-term campaigns I'm involved in are both D&D (3.5 and Next). But I like changing genres and trying new systems. Typically, I'll try other games at a convention or as a short one-off adventure with friends. When we like something we might return to it again later.
How did they compare in your experience? The latest discovery that we've tried several times and I recommend heartily: Dread.
How does one survive in the print journalism business? How to survive in print journalism? Be Malcolm Gladwell.
Seriously, though; there's only a handful of people that can survive as exclusively print journalists. Today you have to be a master of print, online, video and social media in order to survive. I think that's a good thing. Specialization is limiting: It doesn't give you an advantage in the medium of your choice, it shackles you in all the others.
Do you have a favourite d20 game/edition? The version I play the most with my friends (and the campaign I write about in Of Dice and Men is D&D 3.5. But we're also playing the D&D Next playtest, and I'm really enjoying those rules, so far.
Other systems I am especially fond of include Paranoia, Call of Cthulhu, Shadowrun, Dread and Adventurer Conqueror King.
Shadowrun is the one game I've always wanted to play, but I've never met another tabletop player in meatspace who was interested. Go to a convention! There were a bunch of Shadowrun games (across multiple editions) at Gen Con last week.
Living in the middle of nowhere and not having money for travel makes that a no-go. There are conventions all over the country, not just at Gen Con; not all of them will have Shadowrun games, but even if they don't you can try to set one up; I bet you'll find other people there who also want to try it.
Edit: As Menacing mentioned below, here is a more complete list of the Podcasts and videos. Fun fact: On on of my reporting trips to Wizards of the Coast's headquarters, I spotted Mike's painting of Jim Darkmagic hanging right outside the CEO's office.
Was Gygax cursed? It seems like he was gifted with creating amazing things that lots of people enjoy but then someone else would take that thing and mess things up in one way or another in the pursuit of profit. Gary's a complicated figure. He unquestionably got screwed by the actions of other people, and was a victim of circumstance and fate. But he wasn't an innocent, either: He contributed to the financial mismanagement of TSR, and he threatened a lot of small game-makers the same way TSR later harassed him.
D&D is an example. Was the sale of the game to WOTC and all the financial and legal fighting around that as bad as it seemed? The sale of TSR to WotC and all the various legal and financial battles in the history of the game were indeed as ugly as you've heard. There's a reason why people are still so polarized and angry about those events, even decades later.
Hey Mr. Ewalt, thanks for stopping by. Peterson's book is great, and an impressive work of scholarship. I highly recommend it for passionate RPG fans, but it's not for everyone; it's 700 pages, very detailed, and goes to great depth on the history of role-playing games.
I recently read Playing At the World, which seems to cover similar territory. What distinguishes your book from that one? I'm going to need a defense to tell my girlfriend about why I have two big histories of D&D. My intention with Of Dice and Men was to reach a mainstream audience, to explain D&D to people who have never played the game, or to share the basic history to casual players who like the hobby but don't know much about it. I believe that even the most hardcore fans will learn something from the book, but that it's also something you could give to a family member or friend who has never even picked up a 20-sided die.
As someone who has never played D&D, why should I start playing? Role-playing games offer a really unique and powerful form of entertainment; they're more interactive than video games, more engrossing than TV or film, and more social than books.
Just wondering some reasons on why people play this game. Mostly, they're just tremendously fun. Who doesn't want to sit around a table with their friends and tell a cool story?
How did you manage to get publishers to pay you to write a book about playing RPGs? The Charm Monster spell is surprisingly effective against even high-level publishers.
Are you planning on accepting bitcoin? I'd love to. I'm in the process of setting up a store on the book's web site to sell signed copies and a few bits of merchandise. If anyone has recommendations of a simple ecommerce solution that allows bitcoin transactions, please share it here!
Thanks for doing this OP. Interesting topic. Were there any contemporaries to the original D&D or AD&D that you think had potential to take off? And what did D&D do that made it stay and grow rather than get replaced by a different game at that stage? (How did that compare to what it did transitioning from 3.5 to 4 to Next?) Game Designers' Workshop's Traveller was a pretty amazing game, and I remain a little surprised it never got bigger than it did.
When I was younger and not yet a tabletop gamer, I remember D&D being on par with modern video games in the media blame game. Yes, there's a whole chapter called "The Satanic Panic" that deals with the hysteria over D&D leading to devil worship and suicide.
Does your book discuss the controversy of D&D that started movies like "Mazes and Monsters" (Tom Hanks' first movie role) and the whole demon/false god worship media frenzy? One of the most interesting bits of reporting I did for this book involved reading every magazine and newspaper article that mentioned Dungeons & Dragons over the last forty years; some of the news reports from that period of hysteria in the 1980s are unbelievably sensationalistic and just plain stupid. Made me ashamed to even work in the same business as those people.
Hey there. D&D is interesting to me even though i've never really played. i recently saw one movie on the subject that i believe was called "Dungeon Master," and i've seen a couple of LARP movies. i'm pretty sure one was called "Darkon." do you have any more movies on the subject you would recommend? The currently-in-progress DUNGEONS & DRAGONS: A documentary is going to be amazing. You might also check out a comedy called The Gamers, or on TV, the D&D episodes of Community and Freaks & Geeks.
Have you read "The Elfish Gene: Dungeons, Dragons and Growing up Strange" by Mark Barrowcliffe? What did you think of it? I liked Mark's book a lot; it's reassuring to know that you weren't the only nerdy kid in the world, and that so many other people around the world shared the same experiences.
Another book in a similar vein worth reading is Ethan Gilsdorf's Fantasy Freaks and Gaming Geeks.
Would you rather fight one horse-sized Chaotic Evil duck or 100 duck-sized Lawful Good horses? You can have a +1 sword. Considering how long I've been on Reddit, I can't believe I have never thought to make the players in the campaign I DM fight a horse-sized duck or 100 duck-sized horses. Our next session is going to be very interesting.
For the record: I'd choose one horse-sized duck. A hundred duck-sized horses just sounds exhausting.
What's the closest D&D has ever come to really going mainstream? Like, was it ever a possibility that we would see televised games? I always sort of wonder why poker on TV caught on and not other things. Check out Penny Arcade's Acquisitions, Inc live games. I can easily imagine a future where these sort of games appear on television.
What are your thoughts on (mostly) dice-less games like Fiasco that focus almost exclusively on storytelling? I have mentioned the game in a few other answers, but I'm completely enamored with the totally dice-less system used in the role-playing game Dread.
It's an indy RPG focusing on horror stories, and every time your character tries to take an action that might require rolling dice, you pull a single piece from a Jenga tower. It sounds silly, but it works perfectly for the horror genre; as you get further into the game and the plot starts to get scary, there's a physical manifestation of that tension right there on the table. It's beautifully executed.
I'm gonna steal a question from another interviewer's playbook. What's in your pockets right now? The book looks very interesting and I look forward to picking up a copy. Good luck with it and have a good day! A Fitbit activity tracker clipped around $48 dollars in cash (two twenties, a five, and three ones). My phone, a Galaxy Note II. And a Pilot Varsity disposable fountain pen, which is one of my preferred writing implements.
dnd is a good place to start. Plenty of info on different editions of the game, and a lot of people willing to help you with any questions! Reddit's various role-playing subreddits are great... not just /DnD but also /rpg, /DungeonsAndDragons and /lfg, to name a few.
I'm not Dave, but I am featured in his book. I can tell you that Dave's book is the best history of D&D ever written, and probably the best book ever written because I, the most humble person in the world, am featured in it. Phillip is "Genubi" in the D&D campaign I write about in the book!
Last updated: 2013-08-24 16:47 UTC
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A SOLO PLAYER'S REVENGE - Rust - YouTube Top 10 Magic Secrets Of The Year Finally Revealed  David ... Ian McKellen Explains The Difference Between Acting on ... timeanddate - YouTube YouTube

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A SOLO PLAYER'S REVENGE - Rust - YouTube

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