š
Original date posted:2015-08-09
š Original message:On the contrary those costs are clearly very low.
Both the time value of money and operating expenses will be trivial with
even a small volume of transactions.
The true cost of operating a hub is clearly in the enhanced risk of loss.
It's clear that risk of loss will be moderated by market forces.
The hubs which are better at securing their systems will reduce their
risk of loss and obtain a competitive advantage.
It's also important to note that the risk of loss is the same whether
the hub is doing 1 transaction/second or 1 million transactions/second.
At 1 transaction/second the cost (but not necessarily the fees) is going
to be quite high.
At 1 million transactions/second the cost is going to be very very low.
On 08/09/2015 03:03 PM, Hector Chu wrote:
> Ok good. We have established it to be a non-trivial cost.
> Now, what is the growth complexity of the total cost of the network in
> terms of number of connections each hub has to other hubs? And then,
> consider a payment channel with many hops in it. The end-to-end users
> would have to swallow all the costs of the hubs in the channel.
>
> On 9 August 2015 at 22:57, Patrick Strateman via bitcoin-dev
> <bitcoin-dev at lists.linuxfoundation.org
> <mailto:bitcoin-dev at lists.linuxfoundation.org>> wrote:
>
> The costs of operating a hub are as follows:
>
> Time value of the funds the Hub has locked up in payment channels.
> Enhanced risk of loss of control of private keys (the keys
> necessarily need to be on an internet connected system).
> Operating costs (I expect this will be minimal).
>
> The hub can charge a fee for it's services to recoup these costs.
>
>
> On 08/09/2015 02:45 PM, Hector Chu via bitcoin-dev wrote:
>> Tom, my understanding is that the money that is debited from a
>> payment hub is simultaneously credited from either another
>> payment hub or the person making the payment, so that the net
>> funds flow at a payment hub always sums to zero. So no, there is
>> no credit advanced by the payment hub to anyone.
>>
>> Given Mark's previous answer of using CPFP and other tricks to
>> pay for the Bitcoin transaction fees, we can assume that Bitcoin
>> fees do not play a part in the payment channel balances.
>>
>> So, the interesting question is what are the costs of running a
>> payment hub? The tx fees that a payment hub would have to pay to
>> settle its Bitcoin transactions would be passed on as a cost to
>> the clients of the payment hub. Also there is a cost to locking
>> up funds in a payment channel (time value of money). The lost
>> interest or opportunity cost on those funds would need to be paid
>> for by its clients as well. And don't forget normal running costs
>> such as networking and electricity.
>>
>> On 9 August 2015 at 22:27, Tom Harding via bitcoin-dev
>> <bitcoin-dev at lists.linuxfoundation.org
>> <mailto:bitcoin-dev at lists.linuxfoundation.org>> wrote:
>>
>> On Aug 9, 2015 11:54 AM, "Mark Friedenbach"
>> <mark at friedenbach.org <mailto:mark at friedenbach.org>> wrote:
>>
>> > On the contrary the funds were advanced by the hub on the creation of the channel.
>> There is no credit involved.
>>
>> That's a chuckle.
>>
>> As I said, nothing requires the hub to advance anything, and
>> if it does, Bob can expect to pay for it.
>>
>> We'll see whether hubs assess a fee for depositing funds,
>> whether the fee depends on the amount deposited, and whether
>> it depends on the amount of time it stays there.
>>
>> I predict "all of the above." There is a name for these kinds
>> of fees. Can you guess it?
>>
>>
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev at lists.linuxfoundation.org
>> <mailto:bitcoin-dev at lists.linuxfoundation.org>
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>
>>
>>
>>
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev at lists.linuxfoundation.org <mailto:bitcoin-dev at lists.linuxfoundation.org>
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev at lists.linuxfoundation.org
> <mailto:bitcoin-dev at lists.linuxfoundation.org>
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
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Patrick Strateman [ARCHIVE] /
npub1l3ā¦69pvv
2023-06-07 15:45:18
in reply to nevent1qā¦hx2y
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npub1l3uf9m4yw2y7x8wyjeswhelsqyy8ql4jaca4nyy6en0s474yadssg69pvvPublished at
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Original date posted:2015-08-09\nš Original message:On the contrary those costs are clearly very low.\n\nBoth the time value of money and operating expenses will be trivial with\neven a small volume of transactions.\n\nThe true cost of operating a hub is clearly in the enhanced risk of loss.\n\nIt's clear that risk of loss will be moderated by market forces.\n\nThe hubs which are better at securing their systems will reduce their\nrisk of loss and obtain a competitive advantage.\n\nIt's also important to note that the risk of loss is the same whether\nthe hub is doing 1 transaction/second or 1 million transactions/second.\n\nAt 1 transaction/second the cost (but not necessarily the fees) is going\nto be quite high.\n\nAt 1 million transactions/second the cost is going to be very very low.\n\nOn 08/09/2015 03:03 PM, Hector Chu wrote:\n\u003e Ok good. We have established it to be a non-trivial cost.\n\u003e Now, what is the growth complexity of the total cost of the network in\n\u003e terms of number of connections each hub has to other hubs? And then,\n\u003e consider a payment channel with many hops in it. The end-to-end users\n\u003e would have to swallow all the costs of the hubs in the channel.\n\u003e\n\u003e On 9 August 2015 at 22:57, Patrick Strateman via bitcoin-dev\n\u003e \u003cbitcoin-dev at lists.linuxfoundation.org\n\u003e \u003cmailto:bitcoin-dev at lists.linuxfoundation.org\u003e\u003e wrote:\n\u003e\n\u003e The costs of operating a hub are as follows:\n\u003e\n\u003e Time value of the funds the Hub has locked up in payment channels.\n\u003e Enhanced risk of loss of control of private keys (the keys\n\u003e necessarily need to be on an internet connected system).\n\u003e Operating costs (I expect this will be minimal).\n\u003e\n\u003e The hub can charge a fee for it's services to recoup these costs.\n\u003e\n\u003e\n\u003e On 08/09/2015 02:45 PM, Hector Chu via bitcoin-dev wrote:\n\u003e\u003e Tom, my understanding is that the money that is debited from a\n\u003e\u003e payment hub is simultaneously credited from either another\n\u003e\u003e payment hub or the person making the payment, so that the net\n\u003e\u003e funds flow at a payment hub always sums to zero. So no, there is\n\u003e\u003e no credit advanced by the payment hub to anyone.\n\u003e\u003e\n\u003e\u003e Given Mark's previous answer of using CPFP and other tricks to\n\u003e\u003e pay for the Bitcoin transaction fees, we can assume that Bitcoin\n\u003e\u003e fees do not play a part in the payment channel balances.\n\u003e\u003e\n\u003e\u003e So, the interesting question is what are the costs of running a\n\u003e\u003e payment hub? The tx fees that a payment hub would have to pay to\n\u003e\u003e settle its Bitcoin transactions would be passed on as a cost to\n\u003e\u003e the clients of the payment hub. Also there is a cost to locking\n\u003e\u003e up funds in a payment channel (time value of money). The lost\n\u003e\u003e interest or opportunity cost on those funds would need to be paid\n\u003e\u003e for by its clients as well. And don't forget normal running costs\n\u003e\u003e such as networking and electricity.\n\u003e\u003e\n\u003e\u003e On 9 August 2015 at 22:27, Tom Harding via bitcoin-dev\n\u003e\u003e \u003cbitcoin-dev at lists.linuxfoundation.org\n\u003e\u003e \u003cmailto:bitcoin-dev at lists.linuxfoundation.org\u003e\u003e wrote:\n\u003e\u003e\n\u003e\u003e On Aug 9, 2015 11:54 AM, \"Mark Friedenbach\"\n\u003e\u003e \u003cmark at friedenbach.org \u003cmailto:mark at friedenbach.org\u003e\u003e wrote:\n\u003e\u003e\n\u003e\u003e \u003e On the contrary the funds were advanced by the hub on the creation of the channel.\n\u003e\u003e There is no credit involved.\n\u003e\u003e\n\u003e\u003e That's a chuckle. \n\u003e\u003e\n\u003e\u003e As I said, nothing requires the hub to advance anything, and\n\u003e\u003e if it does, Bob can expect to pay for it.\n\u003e\u003e\n\u003e\u003e We'll see whether hubs assess a fee for depositing funds,\n\u003e\u003e whether the fee depends on the amount deposited, and whether\n\u003e\u003e it depends on the amount of time it stays there.\n\u003e\u003e\n\u003e\u003e I predict \"all of the above.\" There is a name for these kinds\n\u003e\u003e of fees. Can you guess it?\n\u003e\u003e\n\u003e\u003e\n\u003e\u003e _______________________________________________\n\u003e\u003e bitcoin-dev mailing list\n\u003e\u003e bitcoin-dev at lists.linuxfoundation.org\n\u003e\u003e \u003cmailto:bitcoin-dev at lists.linuxfoundation.org\u003e\n\u003e\u003e https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev\n\u003e\u003e\n\u003e\u003e\n\u003e\u003e\n\u003e\u003e\n\u003e\u003e _______________________________________________\n\u003e\u003e bitcoin-dev mailing list\n\u003e\u003e bitcoin-dev at lists.linuxfoundation.org \u003cmailto:bitcoin-dev at lists.linuxfoundation.org\u003e\n\u003e\u003e https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev\n\u003e\n\u003e\n\u003e _______________________________________________\n\u003e bitcoin-dev mailing list\n\u003e bitcoin-dev at lists.linuxfoundation.org\n\u003e \u003cmailto:bitcoin-dev at lists.linuxfoundation.org\u003e\n\u003e https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev\n\u003e\n\u003e\n\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150809/07c84557/attachment.html\u003e",
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