Opinion
The Metric That Matters for the Lightning Network
Published
2 months agoon
By
adminThe Lightning Network is a revolutionary scaling solution for Bitcoin, enabling fast and inexpensive payments that make everyday transactions with Bitcoin possible. As the network grows, it’s essential to measure its health and efficiency accurately, so we can unlock its full potential.
Traditional metrics like node count, channel count, and capacity have been used to assess the Lightning Network, but they only tell part of the story. To truly understand the performance of this second-layer solution, we need to focus on flow—specifically, Max Flow, a metric with a long history of optimizing complex systems.
Max Flow: The Key to Understanding Lightning’s Health
Max Flow is a powerful metric that calculates how much value can theoretically flow through a network, considering constraints like channel capacity and liquidity. It’s an essential tool for evaluating network effectiveness and reliability, particularly in systems where smooth, uninterrupted flow is the key to success.
Max Flow has been used for decades in industries ranging from telecommunications to logistics. It’s already been applied to solve problems in:
- Telecom Networks: Max Flow helps allocate bandwidth efficiently, ensuring that data flows seamlessly across the internet.
- Supply Chains: Companies use Max Flow algorithms to optimize the movement of goods across their global distribution networks, reducing delays and maximizing efficiency.
- Transportation Systems: Cities apply Max Flow to traffic management, ensuring that vehicles move smoothly across road networks by optimizing flow through intersections.
These examples showcase how Max Flow improves efficiency in complex systems where resources need to move quickly and efficiently. Now, it’s being applied to the Lightning Network as seen in new data science research from René Pickhardt about feasible lightning payments. Applying Max Flow to the Lightning Network will help ensure that Bitcoin can flow smoothly between users, even as the network scales.
Max Flow isn’t about measuring the actual movement of value, but rather about understanding the probability of feasible payments across the network. By focusing on Max Flow, we gain a more accurate understanding of the Lightning Network’s true health. Instead of just counting channels or capacity, Max Flow shows us the likelihood of payment success, allowing node operators to optimize their liquidity and improve the overall performance of the network.
Traditional Metrics Fall Short
Metrics like node count, channel count, and capacity provide a snapshot of the Lightning Network’s infrastructure. But much like counting the number of roads or intersections in a city, these numbers don’t tell us how well traffic is flowing. In the case of the Lightning Network, what really matters is how efficiently Bitcoin can be routed through the system.
Critics who focus solely on these traditional metrics often draw limited conclusions about the network’s performance. While it’s important to know the size of the infrastructure, it’s far more valuable to understand the probability of successful payments.
Max Flow offers that deeper insight. By measuring the success probability of payments, it helps us see where liquidity is well-distributed and where bottlenecks might be forming. This enables operators to make data-driven decisions that improve the network’s performance and ensure that payments are routed reliably.
Max Flow Shows Lightning’s Performance Rises with Bitcoin Price
The Lightning Network is designed to scale with Bitcoin, offering fast and cheap transactions without overloading the Bitcoin blockchain. As Bitcoin’s price appreciates, the network’s capacity to handle larger payments grows naturally.
For example, if a channel holds 0.1 BTC and Bitcoin is priced at $50,000, that channel can route a $5,000 payment. If Bitcoin’s price doubles to $100,000, that same channel can handle $10,000—without any changes to the underlying infrastructure. As the bitcoin digital economy grows, so too will the capabilities of the Lightning Network. Bitcoin price increases coupled with data-driven changes to the Lightning Network will help expand the capabilities of Lightning.
Max Flow plays a critical role here, helping to measure the success probability of payments as the network scales. It provides an essential tool for monitoring payment reliability and ensuring that the network remains efficient as demand for Bitcoin transactions grows.
Max Flow is the Future of Lightning Monitoring
Max Flow is the next-generation metric that will help drive the Lightning Network forward. By moving beyond superficial statistics like capacity or node count, it offers node operators and investors a more accurate picture of the network’s performance. This, in turn, helps them make smarter decisions about liquidity allocation and payment routing.
For investors, Max Flow offers a more reliable measure of network health, revealing the underlying potential of the Lightning Network. Those who focus on Max Flow will gain deeper insights into the scalability and efficiency of Lightning, positioning themselves to capitalize on future growth.
For node operators, understanding Max Flow means being able to optimize their channels for better performance. It helps them manage liquidity more effectively, ensuring that payments flow reliably, and improving the user experience for those interacting with the network.
Conclusion: Max Flow is the Metric That Matters
As the Lightning Network evolves, Max Flow will be essential to its health and performance. While traditional metrics like node count and channel capacity offer a limited view of the network, Max Flow reveals how efficiently value can move through the system—a critical insight as Bitcoin grows and the demand for reliable payments increases.
Max Flow is more than just a new way to measure the network—it’s the key to unlocking the Lightning Network’s full potential. By focusing on the metrics that matter, node operators and investors can help the network scale smarter, ensuring that Bitcoin’s role in the global economy continues to expand.
TL;DR
- Traditional metrics like node count, channel count, and capacity don’t provide a full picture of the Lightning Network’s performance.
- Max Flow is the right metric to assess network health, as it evaluates the probability of feasible payments and liquidity optimization.
- As Bitcoin’s price appreciates, the Lightning Network’s capacity to handle larger payments grows naturally, and Max Flow helps monitor this process.
- Max Flow has proven its value in optimizing complex networks in industries like telecommunications, supply chains, and transportation.
- Max Flow will play a critical role in helping the Lightning Network scale efficiently, making it an essential tool for both investors and node operators.
This is a guest post by Jesse Shrader. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
About Amboss:
Amboss is building the infrastructure for the Bitcoin Lightning Network, enabling seamless, real-time transactions across industries. With machine-learning-powered routing and liquidity optimization, Amboss ensures billions of low-cost payments happen securely and efficiently. As AI-driven economies emerge, Amboss provides the backbone for autonomous systems to transact at scale.
Source link
You may like
Most Layer 2 solutions are still struggling with scalability
Here’s why Stellar Price Could Go Parabolic Soon
Perp-Focused HyperLiquid Experiences Record $60M in USDC Net Outflows
Experts say these 3 altcoins will rally 3,000% soon, and XRP isn’t one of them
Robert Kiyosaki Hints At Economic Depression Ahead, What It Means For BTC?
BNB Steadies Above Support: Will Bullish Momentum Return?
Blockchain
Most Layer 2 solutions are still struggling with scalability
Published
7 minutes agoon
December 23, 2024By
adminDisclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.
Since pivoting to a layer 2-centric approach, the Ethereum (ETH) ecosystem has relied heavily on L2 solutions to scale. However, these solutions are struggling to compete effectively, especially under pressure from alternatives like Solana (SOL). During the recent meme coin craze, Solana attracted much of the activity due to its advantages: low fees, high transaction speed, and user-friendliness.
To understand the challenges, it’s essential to examine why L2 solutions have not demonstrated the scalability and cost advantages that were widely anticipated.
Why meme projects favor Solana over Ethereum L2s
Meme projects have significantly contributed to the recent surge in market activity. These projects favor Solana for several reasons beyond user-friendliness:
- Low fees: Solana’s low transaction costs make it ideal for fee-sensitive applications like memecoins.
- High speed: Solana’s multithreaded architecture enables high throughput, ensuring seamless user experiences.
- Better developer experience: Solana’s tools and ecosystem are optimized for ease of use, attracting developers and projects.
Why is scalability important?
Scalability is fundamentally measured by the number of transactions a blockchain can process. A highly scalable blockchain can handle more TXs while offering lower fees, making it crucial for widespread adoption and maintaining a seamless user experience.
This is especially important for grassroots projects like meme coins, many of which are short-lived and highly fee-sensitive. Without scalability, these projects cannot thrive, and users will migrate to platforms that offer better efficiency and cost-effectiveness.
Why Ethereum L2s aren’t up to the challenge
Architectural limitations of Ethereum. Ethereum has long faced scalability issues, and L2 rollups are its primary solution to these problems. L2s operate as independent blockchains that process transactions off-chain while posting transaction results and proofs back to Ethereum’s mainnet. They inherit Ethereum’s security, making them a promising scaling approach.
However, Ethereum’s original design poses inherent challenges. Ethereum’s founder, Vitalik Buterin, has admitted that “Ethereum was never designed for scalability.” One of the key limitations is the lack of multithreading in the Ethereum Virtual Machine. The EVM, which processes transactions, is strictly single-threaded, meaning it can handle only one transaction at a time. In contrast, Solana’s multithreaded architecture allows it to process multiple transactions simultaneously, significantly increasing throughput.
L2s inheriting Ethereum’s limitations. Virtually all L2 solutions inherit Ethereum’s single-threaded EVM design, which results in low efficiency. For instance, Arbitrum: With a targeted gas limit of 7 million per second and each coin transfer costing 21,000 gas, Arbitrum can handle about 333 simple transactions per second. More complex smart contract calls consume even more gas, significantly reducing capacity. Optimism: With a gas limit of 5 million per block and a block time of 2 seconds, Optimism can handle only about 119 simple transfers per second. Gas-intensive operations further reduce this capacity.
Unstable fees. Another major issue with Ethereum and its L2 solutions is unstable fees during periods of high network activity. For applications relying on low and stable fees, this is a critical drawback. Projects like meme coins are especially fee-sensitive, making Ethereum-based L2s less attractive.
Lack of interoperability between L2s. The scalability argument for having multiple L2s only holds if contracts on different L2s can interact freely. However, rollups are essentially independent blockchains, and accessing data from one rollup to another is as challenging as cross-chain communication. This lack of interoperability significantly limits the potential of L2 scalability.
What can L2s do to further scale?
Embed features to enhance interoperability. Ethereum L1 needs to do more to support interoperability among L2s. For example, the recent ERC-7786: Cross-Chain Messaging Gateway is a step in the right direction. While it doesn’t fully resolve the interoperability issue, it simplifies communication between L2s and L1, laying the groundwork for further improvements.
Architectural updates: Diverge from the existing L1 design. To compete with multithreaded blockchains like Solana, L2s must break free from Ethereum’s single-threaded EVM design and adopt parallel execution. This may require a complete overhaul of the EVM, but the potential scalability gains make it a worthwhile endeavor.
Future milestones
Ethereum’s L2 solutions face significant challenges in delivering the scalability and cost-effectiveness that applications like meme coins demand. To stay competitive, the ecosystem must address fundamental architectural limitations, enhance interoperability, and embrace innovations in blockchain design. Only by doing so can Ethereum L2s achieve the scalability needed to support widespread adoption and fend off competition from emerging blockchains like Solana.
Laurent Zhang
Laurent Zhang is the president and founder of Arcology Network, a revolutionizing Ethereum layer-2 solution with the first-ever EVM-equivalent, multithreaded rollup—offering unparalleled performance and efficiency for developers building the next generation of decentralized applications. With an executive leadership and innovation background, Laurent holds a degree from Oxford Brookes University. Laurent’s professional journey includes over a decade of experience in science, research, engineering, and leadership roles. After graduating in 2005, he joined MKS Instruments as an Algorithm Engineer. From 2010 to 2012, he worked as a research engineer at the Alberta Machine Intelligence Institute, followed by a position as a research scientist at Baker Hughes from 2012 to 2014. He then served as vice president of engineering at Quikflo Health between 2016 and 2018. Since 2017, Laurent has been the president of Arcology Network, being a visionary of a future where blockchain technology reaches its full potential, offering unmatched scalability, efficiency, and innovation.
Source link
Recently, BlackRock released an educational video explaining Bitcoin, which I thought was great—it’s amazing to see Bitcoin being discussed on such a massive platform. But, of course, Bitcoin X (Twitter) had a meltdown over one specific line in the video: “There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.”
HealthRnager from Natural News claimed, “Bitcoin has become far too centralized, and now the wrong people largely control its algorithms. They are TELLING you in advance what they plan to do.”
Now, let me be clear: this is total nonsense. The controversy is overhyped, and the idea that BlackRock would—or even could—change bitcoin’s supply is laughable. The statement in their video is technically true, but it’s just a legal disclaimer. It doesn’t mean BlackRock is plotting to inflate bitcoin’s supply. And even if they were, they don’t have the power to pull it off.
Bitcoin’s 21 million cap is fundamental—it’s not up for debate. The entire Bitcoin ecosystem—miners, developers, and nodes—operates on this core principle. Without it, Bitcoin wouldn’t be Bitcoin. And while BlackRock is a financial giant and holds over 500,000 Bitcoin for its ETF, its influence over Bitcoin is practically nonexistent.
Bitcoin is a proof-of-work (PoW) system, not a proof-of-stake (PoS) system. It doesn’t matter how much bitcoin BlackRock owns; economic nodes hold the real power.
Let’s play devil’s advocate for a second. Say BlackRock tries to propose a protocol change to increase bitcoin’s supply. What happens? The vast network of nodes would simply reject it. Bitcoin’s history proves this. Remember Roger Ver and the Bitcoin Cash fork? He had significant influence and holdings, yet his version of bitcoin became irrelevant because the majority of economic actors didn’t follow him.
If Bitcoin could be controlled by a single entity like BlackRock, it would’ve failed a long time ago. The U.S. government, with its endless money printer, could easily acquire 10% of the supply if that’s all it took to control Bitcoin. But that’s not how Bitcoin works. Its decentralized nature ensures no single entity—no matter how powerful—can dictate its terms.
So, stop worrying about BlackRock “changing” Bitcoin. Their influence has hard limits. Even if they tried to push developers to change the protocol, nodes would reject it. Bitcoin’s decentralization is its greatest strength, and no one—not BlackRock, not Michael Saylor—can change that.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Source link
Opinion
It’s Time to Admit It – There Are Only 2.1 Quadrillion Bitcoins
Published
2 days agoon
December 21, 2024By
adminIf the above statement offends you, you might not have read the Bitcoin source code.
Of course, I’m sure you’ve heard that there are 21 million bitcoin – and this is true, the Bitcoin protocol allows for only “21 million bitcoin” to be created, yet these larger denominations can be subdivided into 100 million sub-units each.
Call them whatever you want, there are only 2.1 quadrillion monetary units in the protocol.
This dollars and cents differential has long been the subject of debate – in the time of Satoshi, Bitcoin’s creator, the dual conventions, Bitcoin having both a bulk denomination, and a smaller unit, was not much of a concern. There were questions about whether the software would work at all, and bitcoin were so worthless, selling them in bulk was the only rational option.
Rehashing this debate is BIP 21Q, a proposal to the Bitcoin users authored by John Carvalho, founder of Synonym, creator of the Pubky social media platform, and a tenured contributor whose work dates back to the days of the influential Bitcoin-assets collective.
In short, the BIP proposes that network actors – the various wallets and exchanges – change how Bitcoin denominations are displayed, with the smallest unit of the protocol renamed “bitcoins,” as opposed to “satoshis,” as they have been commonly called.
Here are the specifics of the BIP:
Redefinition of the Unit:
- Internally, the smallest indivisible unit remains unchanged.
- Historically, 1 BTC = 100,000,000 base units. Under this proposal, “1 bitcoin” equals that smallest unit.
- What was previously referred to as “1 BTC” now corresponds to 100 million bitcoins under the new definition.
Terminology:
- The informal terms “satoshi” or “sat” are deprecated.
- All references, interfaces, and documentation SHOULD refer to the base integer unit simply as “bitcoin.”
Display and Formatting:
- Applications SHOULD present values as whole integers without decimals.
- Example:
- Old display: 0.00010000 BTC
- New display: 10000 BTC (or ₿10000)
Unsurprisingly, the debate around the BIP has been hostile. For one, it’s not a technical BIP, though this is not a requirement of the BIP process. Suffice to say, it’s perhaps the most general BIP that has been proposed under the BIP process to date, as it mainly deals with market conventions and user onboarding logic, not any changes to the software rules.
However, I have to say, I find the proposal compelling. Nik Hoffman, our News Editor, does not, preferring to stick to the market affirmative.
Yet, I think the proposal raises relevant questions: why should new users be forced to compute their Bitcoin balances using only decimals? Surely this has the adverse side effect of making commerce difficult – it’s simply antithetical to how people think and act today.
Also, in terms of savings, at an $100,000 BTC price, it isn’t exactly compelling to think you could be spending a whole year earning 1 BTC, though that may be.
Indeed, there have been various debates for all kinds of units – mBTC, uBTC – that play around with the dollars and cents convention, but Carvalho here is wisely skipping to the end, preferring just to rip the band-aid off. $1 would buy 1,000 bitcoins under his proposal.
What’s to like here, and I argued this during a Lugano debate on the topic in 2023, is that it keeps both the larger BTC denomination and the smaller unit, now bitcoins. They are both important, and serve different functions.
My argument then was that having a larger denomination like BTC (100 million bitcoins) is important. If there was no “BTC unit,” the press and financial media would be faced to reckon that “1 bitcoin” is still worth less than 1 cent.
How much mainstream coverage and interest do we think there would be? I’d bet not very much.
In this way, BIP 21Q is a best-of-both-worlds approach.
The financial world, press, and media can continue championing the meteoric rise in value of “BTC,” while everyday users can get rid of decimals and complex calculations, trading the only real Bitcoin unit guaranteed to exist in perpetuity.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Source link
Most Layer 2 solutions are still struggling with scalability
Here’s why Stellar Price Could Go Parabolic Soon
Perp-Focused HyperLiquid Experiences Record $60M in USDC Net Outflows
Experts say these 3 altcoins will rally 3,000% soon, and XRP isn’t one of them
Robert Kiyosaki Hints At Economic Depression Ahead, What It Means For BTC?
BNB Steadies Above Support: Will Bullish Momentum Return?
Metaplanet makes largest Bitcoin bet, acquires nearly 620 BTC
Tron’s Justin Sun Offloads 50% ETH Holdings, Ethereum Price Crash Imminent?
Investors bet on this $0.0013 token destined to leave Cardano and Shiba Inu behind
End of Altcoin Season? Glassnode Co-Founders Warn Alts in Danger of Lagging Behind After Last Week’s Correction
Can Pi Network Price Triple Before 2024 Ends?
XRP’s $5, $10 goals are trending, but this altcoin with 7,400% potential takes the spotlight
CryptoQuant Hails Binance Reserve Amid High Leverage Trading
Trump Picks Bo Hines to Lead Presidential Crypto Council
The introduction of Hydra could see Cardano surpass Ethereum with 100,000 TPS
182267361726451435
Why Did Trump Change His Mind on Bitcoin?
Top Crypto News Headlines of The Week
New U.S. president must bring clarity to crypto regulation, analyst says
Will XRP Price Defend $0.5 Support If SEC Decides to Appeal?
Bitcoin Open-Source Development Takes The Stage In Nashville
Ethereum, Solana touch key levels as Bitcoin spikes
Bitcoin 20% Surge In 3 Weeks Teases Record-Breaking Potential
Ethereum Crash A Buying Opportunity? This Whale Thinks So
Shiba Inu Price Slips 4% as 3500% Burn Rate Surge Fails to Halt Correction
Washington financial watchdog warns of scam involving fake crypto ‘professors’
‘Hamster Kombat’ Airdrop Delayed as Pre-Market Trading for Telegram Game Expands
Citigroup Executive Steps Down To Explore Crypto
Mostbet Güvenilir Mi – Casino Bonus 2024
NoOnes Bitcoin Philosophy: Everyone Eats
Trending
- 3 months ago
182267361726451435
- Donald Trump5 months ago
Why Did Trump Change His Mind on Bitcoin?
- 24/7 Cryptocurrency News4 months ago
Top Crypto News Headlines of The Week
- News4 months ago
New U.S. president must bring clarity to crypto regulation, analyst says
- Price analysis4 months ago
Will XRP Price Defend $0.5 Support If SEC Decides to Appeal?
- Opinion5 months ago
Bitcoin Open-Source Development Takes The Stage In Nashville
- Bitcoin5 months ago
Ethereum, Solana touch key levels as Bitcoin spikes
- Bitcoin5 months ago
Bitcoin 20% Surge In 3 Weeks Teases Record-Breaking Potential