<story><title>Lightning Network: “Bitcoin Doesn’t Scale” [pdf]</title><url>http://lightning.network/lightning-network.pdf</url></story><parent_chain></parent_chain><comment><author>bhouston</author><text>Interesting parallel to the growth and development of decentralized P2P networks around 1999&amp;#x2F;2000.&lt;p&gt;First there was Gnutella (as Napster had a centralized directory) - but it didn&amp;#x27;t scale, although it proved popular.&lt;p&gt;Then they added support to Gnutella for spoke&amp;#x2F;hub models, which had superpeers that reduced the load on most individuals.  But in the end Gnutella never really took off.&lt;p&gt;What replaced Gnutella was bittorrent, which actually only did transfer via P2P but the searching and discovery was centralized again PirateBay and Trackers.&lt;p&gt;But for all bittorrent&amp;#x27;s success, Netflix (and others), which are centralized and highly controlled alternatives, are far more popular and commercially successful for watching online video -- it is just less work to use Netflix, even though it doesn&amp;#x27;t have the benefits of being free and open.&lt;p&gt;So for all the attraction of P2P decentralization, often centralized, commercial focused easy solutions win out.  There are costs to be paid by being decentralized and often general people who are not ideological do not want to pay these costs.&lt;p&gt;But I am mostly an outsider with regards to Bitcoin so who knows.</text></comment>
<story><title>Lightning Network: “Bitcoin Doesn’t Scale” [pdf]</title><url>http://lightning.network/lightning-network.pdf</url></story><parent_chain></parent_chain><comment><author>sharpneli</author><text>Their assumption of 2 channel roll-overs per year per person is quite likely far too low. In their comparison they basically state that a person would be participant in a channel roll over per 3650 transactions made.&lt;p&gt;This seems to be overly optimistic considering that the acceptable credit card chargeback rate is 1%. 36 times per the rate of channel roll overs.&lt;p&gt;In addition even nicely working channel has to be created. So even without anything like chargebacks assuming 3650 transactions per year on a single chain seems to be extremely optimistic.&lt;p&gt;It might reduce spam on the network though. Bringing us from the 240G blocks into 24G blocks (Based on the well known Stetson-Harrison method). A fine improvement, but doesn&amp;#x27;t really seem to be a silver bullet for the scalability issues.</text></comment>