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littlecranky67 • yesterday at 12:15 PM • 1 reply • view on HN

It is as much an IOU as the US Dollar was pre-1971. That is a pretty good image for Lightning/Bitcoins relationship. Lightning is the dollar with a guarantee that you can convert it to gold anytime you like by presenting it at the central bank. Very few people ever converted their USD to the underlying gold as a settlement transaction. The difference with lightning is, the government can't just rug-pull you and stop exchanging those paper bill IOUs - it is cryptograhpically secured that you can always convert to bitcoin. Since no one would consider exchaging dollars as settling in gold, lightning settlement is not tied to on-chain transactions.

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rglullis • yesterday at 12:58 PM

Payment channels are possible on other networks as well. Once again, there is no inherent advantage to Bitcoin here. I know because I worked on one (https://raiden.network/). I also dealt with many of its failure modes:

  - insufficient liquidity on intemediate nodes
  - network partitions
  - uncooperative nodes
  - nodes that were liquidity sinks and forced other participants to bear the costs of deposits
  - insufficient market makers
But more than anything: people do not want to use crypto for payments. It gives them no significant advantage over traditional credit/debit cards, it has no built-in solution for appeals or reversals and it forces them to learn a bunch of stuff to be minimally safe...
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