📅 Original date posted:2015-08-10
📝 Original message:Hi,
On Mon, Aug 10, 2015 at 12:20:36AM +0200, info--- via bitcoin-dev wrote:
> Off-chain transactions, whether it's Lightning or something else,
> potentially extract fees, which may otherwise be paid to miners, if the
> transactions were actually on-chain.
>
> In this context, wouldn't it be contradictory, maybe even harmful, to
> aim for an environment, where some/many/most transactions are off-chain?
I think the fee market's long-term implications for mining rewards is
very important as well! However, opening and closing channels will not
be infrequent to the point that it will never happen with Lightning.
Individuals that fill up their channel will need to accommodate
accumulation (as well as those that do a lot of disbursement). These
fund flows are not too rare, and huge payments (think the equivalent to
wire transfers today) will probably be still on-chain. I think the
payment size of micropayments to credit cards are Lightning-scale, what
people use today for wire transfers (e.g. buying a house) will be
on-chain.
What Lightning does is it mitigates the advantages that doing an end-run
around bitcoin entirely via centralized systems provides to a sufficient
level, e.g. everyone transacting on Coinbase. Having everything on
centralized services will have significantly lower on-chain transactions
than Lightning and is one of the more viable alternative off-chain
payments.
Fundamentally, without off-chain transactions, there's a paradox within
a viable fee market. If you presume that fees should be relatively
competitive (i.e. not asymptotically close to zero), that implies that
higher-value transactions *will* be prioritized over low-value
transactions, as high-value transactions are willing to pay higher fees.
Wire transfers are cheap when it's a million-dollar wire.
In my view, different transaction values is the much larger risk for
on-chain transaction fee markets, with high-value transactions crowding
out low-value transactions on-chain. With lightning, it significantly
mitigates this problem by aggregating the low-value transactions
off-chain.
--
Joseph Poon
Joseph Poon [ARCHIVE] /
npub1ej…p9cq8
2023-06-07 17:34:33
in reply to nevent1q…p79z
Author Public Key
npub1ej6vep7y2km5l6awukffelg8yeppkth2vjkjk9jypd5w336rxggs3p9cq8Published at
2023-06-07 17:34:33Event JSON
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"content": "📅 Original date posted:2015-08-10\n📝 Original message:Hi,\n\nOn Mon, Aug 10, 2015 at 12:20:36AM +0200, info--- via bitcoin-dev wrote:\n\u003e Off-chain transactions, whether it's Lightning or something else,\n\u003e potentially extract fees, which may otherwise be paid to miners, if the\n\u003e transactions were actually on-chain.\n\u003e \n\u003e In this context, wouldn't it be contradictory, maybe even harmful, to\n\u003e aim for an environment, where some/many/most transactions are off-chain?\n\nI think the fee market's long-term implications for mining rewards is\nvery important as well! However, opening and closing channels will not\nbe infrequent to the point that it will never happen with Lightning.\nIndividuals that fill up their channel will need to accommodate\naccumulation (as well as those that do a lot of disbursement). These\nfund flows are not too rare, and huge payments (think the equivalent to\nwire transfers today) will probably be still on-chain. I think the\npayment size of micropayments to credit cards are Lightning-scale, what\npeople use today for wire transfers (e.g. buying a house) will be\non-chain.\n\nWhat Lightning does is it mitigates the advantages that doing an end-run\naround bitcoin entirely via centralized systems provides to a sufficient\nlevel, e.g. everyone transacting on Coinbase. Having everything on\ncentralized services will have significantly lower on-chain transactions\nthan Lightning and is one of the more viable alternative off-chain\npayments.\n\nFundamentally, without off-chain transactions, there's a paradox within\na viable fee market. If you presume that fees should be relatively\ncompetitive (i.e. not asymptotically close to zero), that implies that\nhigher-value transactions *will* be prioritized over low-value\ntransactions, as high-value transactions are willing to pay higher fees.\nWire transfers are cheap when it's a million-dollar wire.\n\nIn my view, different transaction values is the much larger risk for\non-chain transaction fee markets, with high-value transactions crowding\nout low-value transactions on-chain. With lightning, it significantly\nmitigates this problem by aggregating the low-value transactions\noff-chain.\n\n-- \nJoseph Poon",
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