Small blocks and Lightning Network, the daydream of the Bitcoin Core development team

In early 2015, Joseph Poon and Thaddeus Dryja published the Lightning Network white paper, marking the birth of the Lightning Network. The Lightning Network is a decentralized system. The excellence of the Lightning Network is that it can achieve a real-time, massive transaction network without trusting each other and third parties. The creators of the Lightning Network expect that this network will eventually be able to process billions of transactions per second.

The Bitcoin expansion dispute has put the Lightning Network at the forefront. Blockstream has become the only company to fund the development of the Lightning Network. The company has also hired several core members of the core development team, who have a special liking for the Lightning Network. They regard soft fork segregated verification and the Lightning Network as the ultimate solution to Bitcoin expansion, force the community to use the core development team's client, and prohibit discussion of block size.

Isolate verification solves the scalability problem of Bitcoin transactions and some long-standing technical problems of Bitcoin. The Lightning Network is the core of the core development team's solution to the expansion problem. Transactions on the main chain are transferred to the Lightning Network for processing, thereby solving the problem of Bitcoin transaction congestion. The Bitcoin blockchain is only used as a backup processing system and can only play a role when someone does evil.

However, can the isolated verification + lightning network solution without large blocks really solve the Bitcoin expansion problem?

Due to the 1M block size limit of Bitcoin, once a large number of transactions need to be settled at the same time, and the Bitcoin network's ability to process transaction data is very limited, shutting down the Lightning Network at this time will cause a large number of transactions to be unable to be confirmed.

When a large number of people need to resolve lightning contracts on the Bitcoin blockchain, transaction fees will skyrocket due to the limited capacity of Bitcoin blocks, ultimately leading to the failure of the Lightning Network.

The Lightning Network is a complex and unpracticed technology. Isolate verification only paves the way for the implementation of the Lightning Network. Once problems arise in the Lightning Network, the main chain will not be able to handle so much transaction data, which will be a fatal threat to Bitcoin.

At this stage, the Lightning Network can alleviate the problem of Bitcoin transaction congestion in the short term. After Bitcoin is widely recognized and used around the world, the 1M limit of Bitcoin blocks will be inappropriate, and larger blocks will also be necessary.

In addition, Litecoin founder Charlie Lee also admitted that the Lightning Network will lead to centralization, and the nodes of the Lightning Network will be controlled by several large companies. Blockstream will use its first-mover advantage to gain an advantage in future competition and obtain high returns. At this time, if the main chain is not expanded, some users who want to choose the decentralization and security of Bitcoin's native blockchain transactions will not be able to return to the main chain to trade.

The Lightning Network is just a solution to the Bitcoin scalability problem. It proposed a mechanism for secure instant confirmation for the first time, and made small payments economically possible again. If the New York Consensus SegWit2x solution can be successfully implemented, the Lightning Network may be deployed in the future. The community is not opposed to Segregated Verification and the Lightning Network. What they are opposed to is the high IQ and low EQ performance of the core development team, and the expansion plan without large blocks.