Author | Protos Staff
Compiled by GaryMa Wu Talks about Blockchain
The original article was published on March 25. Some data may be delayed. The views expressed in the article do not represent those of Wu Shuo.
Original link:
https://protos.com/critics-claim-buggy-bitcoin-lightning-network-is-slowly-dying/
This article is reported by Protos and does not necessarily reflect the views of Wu Shuo.
Bitcoin’s Lightning Network was supposed to be the key to expanding global bitcoin adoption. Its backers touted cheaper, faster transactions and an emerging social graph for a new bitcoin economy.
Seemingly magical demonstrations by influencers like Jack Mallers heralded Bitcoin as peer-to-peer electronic cash. With transaction fees so cheap and transactions so fast, Bitcoiners began buying coffee and groceries over the Lightning Network.
The idea is simple: sign a simple smart contract to trade indefinitely via a “bar bill” type of paper contract, instead of paying on-chain transaction fees each time.
Unfortunately, Lightning usage began to stall in late 2023, and since then, several long-time Lightning believers have given up the faith.
In short, critics believe the Lightning Network is slowly dying.
Lightning Network capacity reduction
The amount of Bitcoin that users can access by joining publicly available Lightning Network channels, known as Lightning Network capacity, began to decline in December 2023. Currently, Lightning's capacity is below 4,700 Bitcoin, after months of steady decline.
Editor's note:
The original article was published on March 25. The capacity of the Lightning Network has indeed been steadily declining for 4 months since December 2023, falling by about 700 bitcoins, a drop of about 13%; but as of the time of publication of the translation, the capacity has gradually returned to its historical high level.
The average Lightning payment channel has a capacity of 10,427,216 satoshis, worth about $6,000. This capacity is just a fraction of Bitcoin’s approximately 19.5 million circulating supply.
Crucially, Lightning is also plagued by vulnerabilities.
Expensive to collect payments
On top of that, Lightning is counterintuitive and surprisingly expensive. To join the network, new users must pay a regular Bitcoin on-chain transaction fee. They can then send and receive the same amount of Bitcoin — their initial deposit — through Lightning payment channels, paying only a tiny fee without having to go through an on-chain transaction through a Lightning payment channel.
However, every time a user wants to receive more Bitcoin than they initially deposited into their Lightning Network channel, they must pay additional on-chain transaction fees to increase the Bitcoin capacity.
Finally, to leave the network, they must again pay an on-chain settlement transaction.
While these three (or more) on-chain transactions may ultimately save a lot of on-chain transactions for users with high transaction needs, it is annoying and counter-intuitive for ordinary users.
In particular, many new Lightning users complain about the inverted design of having to pay extra money to receive extra money. In normal commerce, recipients are free to receive unlimited amounts of money; senders pay extra for large amounts. Lightning turns this on its head, with recipients being charged.
As a temporary solution, custodial Lightning companies launched wallets that offer additional free inbound capacity to new users. This eliminated complaints and improved the user experience, but these custodial solutions centralized Lightning and moved away from Bitcoin’s promise of true decentralization.
In fact, on the first page of the Bitcoin white paper, Satoshi Nakamoto wrote: “What is needed is an electronic payment system based on cryptographic proof rather than trust, allowing any two willing parties to transact directly without the need for a trusted third party.” In this context, introducing a trusted third party to make Lightning simple and cheap for ordinary recipients doesn’t seem like a Bitcoin proposition.
Channel Freezes and Other Lightning Network Vulnerabilities
In October 2023, Lightning developers disclosed a vulnerability to the so-called replacement cycle attack faced by Bitcoin Lightning Network users. Soon after, they disclosed another vulnerability, the "jam" attack. In November 2022, another unconfirmed Lightning routing vulnerability was exposed.
A bug in a popular Lightning Network implementation, LND, froze funds within the Lightning Network for hours after a developer named Burak decided to broadcast a Taproot transaction with 998 signatures.
Key developers leave Lightning Network
Back in 2019, even Lightning Network co-founder Tadge Dryja admitted that the Lightning Network might be overhyped.
“Everybody says, ‘Lightning Network is going to be the best thing ever.’ And so on and so forth, but LN doesn’t actually do that,” he said.
Dryja co-founder Joseph Poon also stopped contributing to the development of the Lightning Network.
Lightning Network developer Antoine Riard also stopped working on the Lightning Network soon after the replacement loop vulnerability was exposed. He said that this vulnerability puts it in a "very dangerous position" and can only be fixed at the basic level. Riard left to focus on Bitcoin Core development.
Another Lightning Network developer, Rene Pickhardt, expressed concerns about the ability to maintain privacy on the Lightning Network.
Chainalysis confirmed these concerns, offering tracking services for Lightning Network transactions starting in December 2021.
Matt Corallo, one of the oldest Bitcoin developers and the tenth contributor to Bitcoin Core, called the Lightning Network “a bit of a joke.” John Carvalho of Synonym also agreed with this assessment, concluding in a recent interview with Vlad Costea that the Lightning Network has failed to live up to the community’s expectations.
Corallo was dismissive of Lightning invoices that were unpayable on BTC PayServer, arguing that the Lightning Network needs to be accessible to the general public, not just enthusiasts.
The list of Lightning Network complaints continues to grow
Bitcoin developer Paul Sztorc thinks the Lightning Network has little chance of success. In fact, he predicts it will “collapse like Theranos,” a company that was touted to revolutionize medical diagnostics but then collapsed. He ran down a list of dozens of complaints and third-party predictions of its demise.
Regardless, the Lightning Network’s capacity is already declining, its many bugs don’t inspire confidence, and many developers have stopped contributing altogether. The Lightning Network remains an interesting application of valid Bitcoin smart contracts, but unless someone can find a way around its many issues, it will likely remain the domain of enthusiasts rather than the global revolution it was once thought to be.
