Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Bitcoin Forum => Topic started by: uzair on August 23, 2018, 10:57:57 AM
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So I was thinking about LN's scalability and I'm pretty sure it's usability and scalability for Bitcoin will only be game changing once a lot of people receive their income from their jobs in Bitcoin.
LN is of course highly scalable, but it is held back by needing on-chain openings and closings of payment channels. This is limited by Bitcoin's roughly 6tx/sec throughput with segwit enabled (maximum ~14txs/sec with the smallest tx size but in the real world probably more like 5-6). What this does is limit the number of users that can use the LN, with the variable being how often payment channels are opened and closed. Realistically if the average LN user opens and closes a payment channel monthly, when combined with demand for normal on-chain txs, the on-chain fees are gonna skyrocket with probably even just a million LN users (or possibly far less since on-chain txs on their own will probably be filling up the blocks as Bitcoin's adoption grows).
People are going to need to open and close channels regularly as they run out of funds in their channels. The only way around this is if their primary source of income (their job) pays them in Bitcoin over the LN. This way they'd almost never need to close a channel. However this of course requires Bitcoin to have been adopted already to such a great scale that many companies are now giving the option to their employees to receive their paychecks in Bitcoin (or at least part of their paycheck in Bitcoin), but for this to happen Bitcoin needs to become massively adopted by merchants so that people can readily buy most things with LN.
So it's kind of a chicken and egg problem. LN is what Bitcoin needs to scale to be massively adopted, but LN itself can't scale due to its constraints from the blockchain until Bitcoin is massively adopted to the point where it becomes regular for companies to pay employees in Bitcoin and their is massive merchant adoption of Bitcoin using LN.
Thoughts?