Friday, 8 February 2019

A big problem I haven't heard talked about regarding the idea of using the Lightning Network for small cash-like payments...

I think anyone who has looked into the design of the Lightning Network (LN) and has a rudimentary comprehension of software usability / user experience (UX), will likely have come to the same conclusion as me. That being: the LN results in a very poor UX, making it unsuitable for general usage as a cash system layer on-top of a blockchain crypto currency.

If you haven't put in the time to look into the design of the LN and to consider the UX, I suggest checking out this article. TL;DR: the technically-skilled author tried out the LN and found it to be very unreliable and awkward to use. It's an old article now, but the situation cannot be much better because the LN design is fundamentally unsuitable for general usage as a cash system layer; especially so when built ontop of the BTC chain which, by-design, will yield high on-chain fees whenever it becomes popular.

The above is bad enough, but here's the big problem I haven't heard talked about...

If you're making small, cash-like payments (e.g. buying a coffee, a video game or even a single chocolate bar), the shop/service you are purchasing from will have built their business under the pretence that they will receive many, quickly made, low-friction transactions which require very little human time to complete and even more importantly: very little skilled worker time in order to complete.

Are you seeing the problem yet?

If not, imagine you run a coffee shop and you accept physical cash payments. This is very fast and easy to deal with. Transactions almost always go smoothly. One of the worse things that can occur is someone hands over a note, receives change and then claims that they handed a bigger note than the one entered into the till (e.g. they handed over a 20 instead of a 10). Till workers can be easily trained to keep the note on the till until the transaction is complete to avoid this situation. It's all pretty fast and simple.

Now imagine you run a coffee shop and you accept Bitcoin Cash payments. The complexity added over physical cash is worse IMO, but because the design of the system is simple, the wallet software is mature and the system almost always works, there shouldn't be too many problems. Most small payments should go through without issue. You also have the added bonus that Bitcoin Cash is digital, Internet money, so you can use it on websites where physical cash cannot be used.

Now imagine you run a coffee shop and you accept LN payments. There is greater complexity than the Bitcoin design (as implemented on Bitcoin Cash) and it is unavoidably less reliable. It can be more easily DOS attacked (denial of service). You can get routing errors that stop the payment going through (this is a very normal aspect of the LN; if you use the LN you should expect to get unrouteable payments).

If you are a business that deals with small cash-like payments, can you really afford the overheads of the LN? Imagine frequently getting complex technical problems that require a skilled worker to resolve over tiny payments! This is bad for the customer and it's bad for profit.

Part of the genius of the design of Bitcoin is the reliability and simplicity of the system. This is essential for the success of a digital currency.

The LN will not produce a popular p2p, electronic cash system.

submitted by /u/hapticpilot
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source https://www.reddit.com/r/btc/comments/ao862x/a_big_problem_i_havent_heard_talked_about/

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