sipa changed the topic of #bitcoin-wizards to: This channel is for discussing theoretical ideas with regard to cryptocurrencies, not about short-term Bitcoin development | http://bitcoin.ninja/ | This channel is logged. | For logs and more information, visit http://bitcoin.ninja
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<srpx>
On lightning networks, what bad things could happen if we had a single central hub which everyone used?
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* bsm1175322
boggles at the motivation for such a question...
<bsm1175322>
"what would go wrong if there was just one big world bank controlling all money?"
<mryandao>
nothing good. basically.
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<gmaxwell>
that doesn't make sense even with how lightning works, the whole innovation of lightning over prior payment channel schemes is that there isn't a reason to have hubs.
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<srpx>
@bsm1175322 yes now actually stop to think about what I asked
<srpx>
bsm1175322 the centralized hub would do all the processing, the power is still on the decentralized blockchain. It can't double spend, because it is just bitcoin and bitcoin signatures. It can't double spend (just force it to order transactions, and if it ever signs two transactions at the same ordering, punish it)
<srpx>
And so on, many restrictions and obligations like those could be written on and enforced by the blockchain... it would be just a centralized processor for efficiency sake, but it would have no real power
* bsm1175322
puts some oil and vinegar on the word salad.
<srpx>
also sorry if I'm saying something stupid, I'm just trying to understand and make sense of this complicate subject
<srpx>
@gmaxwell my bad, you're right
<bsm1175322>
I think you're totally missing the point from several angles...
<bsm1175322>
It can censor and de-anonymize.
<gmaxwell>
bsm1175322: well deanonymize is "make things work like without it" :)
<srpx>
bsm1175322: I'd be so thankful if you could help me not missing the point anymore! It sucks not to understand something as important as this :/ so,
<srpx>
bsm1175322: before grasping the need for channels and/or lightning networks I need to convince myself the centralized solution doesn't work, right? On those two problems,
<bsm1175322>
Lightning uses onion routing to hide the sender and receiver from intermediate nodes. A single central node sees all senders and all receivers.
<bsm1175322>
Most people don't *want* to broadcast to the world what they're paying for.
<srpx>
bsm1175322: 1. Couldn't anonymity be implemented with linked ring sigs, monero-like? 2. Censoring sounds like a more complicate problem. Couldn't, though, that be softly solved by having users vote on the centralized hub? If there is ever an evidence it is censoring transactions, they just swap and severely punish that hub on the blockchain.
<srpx>
I just completely invented the solution (2) though and it is probably wrong in many levels
<bsm1175322>
Doesn't matter what you do with ring sigs, the central server knows your IP.
<srpx>
bsm1175322: good point.
<srpx>
And you can't anonymize the IP without some sort of routing, so that convinces me for that use case a central hub isn't sufficient. Just for the sake of knowledge, *if* anonymity wasn't important, would a central hub work (and be more efficient)?
<srpx>
also, gmaxwell if you have any recommended resource on the current design of lightning networks I'd be very thankful. Googling gives mixed results, not sure which to pick.
<gmaxwell>
srpx: Not my area of expertise but the way the most things are working is establishing channels as a side effect of payments. So the channels end up all between parties that pay each other.
<srpx>
hmm
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<bsm1175322>
Centralization is not necessarily more efficient, but the protocols are a lot easier. Decentralization has the *potential* to scale horizontally, with capacity growing with the size of the network. (for a properly designed protocol)
<srpx>
Yep, now that I think about it I also had an incorrect assumption that centralized is necessarily more efficient, but as I watch LN videos, a clever enough setup could be much more efficient, it seems
<gmaxwell>
bsm1175322: I think you're conflating terms.
<gmaxwell>
A centerally administed/controlled sytem (the opposite of the usual use of 'decenteralized') can have a horontally scaled distributed implementation.
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<srpx>
actually, yes it could
<srpx>
so, then again there is nothing making the centrally administered system inherently less efficient than a decentralized solution... hmm
<srpx>
the more I think about it the more I'm convinced a centralized payment processor could actually work, Bitcoin already solves sybil, double spending and so on, a central party, chosen by btc-weighted vote (and easily replaceable) serving as am ere performance amplifier actually makes sense to me
<srpx>
a mere*
<srpx>
but again somebody would obviously have thought of that so I'm clearly missing something (or perhaps it is all about anonymity...?)
* srpx
sighs
<srpx>
btc is hard
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<waxwing>
srpx: another advantage of decentralization, as well as privacy improvement, is robustness
<waxwing>
consider bitcoin has like a ridiculous number of 9s uptime
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<waxwing>
well ok in theory distributedness is enough for that part, but i think in practice you can't get to quite the same level of robustness without the heterogeneity of a large number of genuinely different agents
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<srpx>
waxwing: 9s uptime looks quite bad
<srpx>
seriously though, the setup I'm thinking would involve the ability to quickly swap the central party if it goes down even for a few secs
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<waxwing>
i was talking about the traditional "five nines", "four nines" style of measuring uptime, but i shouldn't have really, it doesn't apply to this kind of system in any exact sense.
<waxwing>
well, it would for your proposal of a centralized hub of course
<srpx>
I know, I was just joking :)
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