The Future of the Lightning Network - Expert Interview Part II
Last week we were busy moderating the lectures of Bitcoin Lightning Hackday #3. Besides the very interesting keynotes from Blockstream and RGB Project, the general atmosphere of this event was super chilled and warming. It wasn't just another Bitcoin Meetup, but an un-conference of truly die-hard thinkers. Even greater was the joy of being part of this very cool and exciting movement!
The Interview: The Future of Lightning
We've asked different experts in the space about the 'Future of the Lightning Network' and how it could affect your daily life in 2030.
We had the joy to talk to René Pickhardt. He is one of the most active contributors to the Lightning Network in the German-speaking space. He has published lots of useful information about the technical side of Lightning.
He is currently working to improve the autopilots for implementations of the lightning protocol and has provided the lib_autopilot.py together with a c-lightning integration which could also be integrated to lnd and eclair or other future implementations (e.g. Elektrum).
René is also actively invested in political debates and has run as the top candidate for the German Pirate Party.
Here's the interview:
Hi René! You've been very active introducing new Lightning Apps. What are the most promising applications that Lightning could make possible?
Obviously, the single most important application is the instantaneous transfer of wealth which does not require any custodian or third party other than the bitcoin blockchain which is trustworthy due to its consensus-based decentralized design. But I guess the question was meant in a little bit of a different way. So if you ask me what products and applications I see rising from the possibilities which come from lightning I'd say:
There is currently a market for micropayments which is used especially by working-class migrants in industrialized countries who send home money to their families. This usually takes an unbelievable high fee of up to 10%. This market will just collapse if lightning is out.
Also, I see that business models like flatter had in the past where you do micropayments for web content could become realistic. I think when you look at the trends in semantic web or artificial intelligence I imagine an ecosystem in which computers pay each other with micropayments for doing API calls. In this way, it would become much easier to make computing power and APIs available to other people because they will reimburse you for your costs in running such a service.
How would you personally like to see people using the LN in 2030?
In the case bitcoin and the lightning network, in particular, succeed, I guess end users might not even realize that they are using it. A "perfect" lightning network enables atomic swaps - allowing for instant, decentralized exchanges. This enables changing bitcoin to other cryptographic currencies or even to fiat if the lightning network will implement virtual payment channels (a concept for local channels based on trust which I recently proposed). Having that said it could happen very well that a consumer wants to pay a bill in Euro and the merchant directly has the money on his bank account (or bitcoins in his lightning payment channel) and in the background, the lightning network was being used.
Which are the downsides, risks and uncertainties for the Lightning Network in the future?
I think the biggest risk lies in the too early adoption of the technology. Even though I think that the bitcoin ecosystem will grow in the future I hate to say that there seems to be a huge hype. This includes a tendency to check out a new - feature incomplete - technology like the lightning network. Once many people have bad experiences with the lightning network they might come to the conclusion that is just won't work (which is a pity because it does). It would not be the first time in history that a good technology does not get adopted. Another risk is the fact that it is kind of the nature of the lightning network that your funds are on a hot wallet. I guess especially with the eltoo update for payment channels - which would allow payment channels among several people - we could have some kind of custodians watching over the funds but this does not change the fact that if your server is compromised and the custodian doesn't know, people can easily steal your funds. I am not sure if this problem is of fundamental nature in the sense that we have to decide whether we want quick payments with funds on a hot wallet or secure storage of wealth and a blockchain technology which is slow by nature.
Infobox - Counterparty Risk
You can easily lose access to your server, especially when a 3rd party service is hosting it for you. What we need is Two-Factor Authentification for any remote access as well as an automated tool against attack vectors including bots and attackers that could do unwanted actions on your server.
What are effective strategies to push the adoption of Bitcoin and Lightning?
As mentioned above I don't want to push the adoption at this moment. Don't get me wrong I am extremely excited about this technology. I just think at this time it is not feature-complete and too early to be pushed.
Once we have splicing, atomic multipath routing, watchtowers, and other features I think adoption will come by itself. Many companies would love to save money for bank transfers or credit card fees when receiving payments from their customers. So therefore if the technology works they will just want to switch to lightning. Maybe one thing that could help with adoption is that people start building services around the lightning network. For example, an accounting software which would help me with my tax declaration would probably be a huge plus for the industry to adopt lightning.
Lightning is a complete non-governmental project. Should governments intervene?
I think it is always a good idea to protect consumers. So a certain amount of regulation might be nice. But it is as difficult as the world wide web. The http protocol is out enabling the web.
A government could hardly demand a change in http. However, it can regulate what use cases we as a society believe should be ok or not ok.
So running a web server you can do massive copyright infringements. That should be prohibited. But a government should not regulate this on a protocol level. Similarly, with a xerox machine I can do the copyright infringements. The government also does and should not interfere with the functionality of such a machine.
How could governments benefit from the technology and how can they promote technical integration?
I don't think it should be the goal of any government to try to benefit from technological breakthroughs. I think they should just do their job which might include creating some regulation of services that utilize bitcoin and/or the lightning network. I am not demanding for such regulation but I see that some regulation might be useful or even be demanded by the people. For example, if you consider what has happened with Mt. Gox we could regulate exchanges or banks in a way that they have to be able to prove ownership of the funds to the customers at any given time. This could easily happen by publishing balance sheets signed with the private keys of the addresses they claim to own and the blockchain itself is public anyway.
Infobox - Glass Books Protocol
The Vaultoro Glass Books Protocol was developed to give users the ability to see a proof of above 100% reserve of both bitcoin and gold holdings while protecting user privacy. With our Glass Books Protocol, we are the most transparent gold exchange in the industry. Vaultoro prides itself on being one of the most transparent exchanges and hopes to inspire the industry with its easy to use solution.
If you are interested in Rene's thoughts and latest projects make sure you check out his Youtube Channel and his latest presentation during the LightningHackDay#3.
There's also a voting for upcoming tutorials so check out and help to create the most stable Lightning Network ever!
Do you want to support Rene's courageous voluntary work?
He will appreciate the kindness if you leave a few satoshis as a tip.
BTC Address: 1CWtSk58d3rN1R3oGwMobJ6Ets9E2gvPj5
Lightning Node: firstname.lastname@example.org:9735
Click here for Part I of the expert interview series.