Lightning Network Vs. Bitcoin Cash For the Non-Technical Person

In August of 2017, the Bitcoin network split in two. On one side of the split was Bitcoin Cash (BCH) which followed Satoshi Nakamoto’s plan by allowing the size of transaction blocks to increase over time.

The other side (BTC) adopted the Bitcoin Core Roadmap, limiting the block size while developing a “second layer” on top of Bitcoin, known as the Lightning Network.

For the non-technical person, weeding through the various opinions and (mis)information can be daunting if not impossible. I can’t give you a complete education in one article, but here’s a metaphor that may help you:

Cars vs Trains

Let’s say there’s a city with jam-packed traffic. To solve this, one group wants to widen the roads with more lanes — a simple plan that can be done quickly.

Another group says we should instead build a high speed train system. It’s more complicated, but claimed to be better in the long run because roads cannot be widened indefinitely.

But here’s the part of this metaphor that’s usually left out:

If the road capacity isn’t increased, you could be essentially forced into using the train system. You’ll lose the freedom to just hop in your car and drive wherever you want, whenever you want.

That ultimately means you’ll be dependent on getting permission to buy and use a ticket. Maybe some stations will force you to show ID.

Each station could decide its own rules, and its not like you can “just use another station” because if you’re trying to commute from home to work, you have to use the stations that offer the route you need.

Misusing Metaphors

Metaphors are powerful tools. Our minds almost always need a point of reference — a familiar starting place where we can grasp onto a new idea.

The problem is that metaphors can be used deceptively: overstating one aspect of a situation, understating or omitting another… or simply applying the metaphor in a way that doesn’t make sense.

When the misuse is pointed out, the deceptive party usually changes tactics, changes topics, or moves the goalposts.

Misplaced Principle of Efficiency

Technology is all about efficiency. From the earliest times, inventions like the wheel, the lever, and the pulley have made our lives easier. Everyone knows that it’s usually better to come up with a smart design than to brute-force a problem.

Because everyone is so familiar with this principle, it sounds like “second-layer solutions” are smart and “brute force” of just increasing the blocks would be dumb.

But not everything that “sounds more efficient” is in fact better.
Clean, sustainable nuclear energy sounds better than relying on fossil-fuels. Yet nuclear energy only accounts for 15–20% of the world’s power. Apparently nuclear energy might be complicated, challenging, risky and have drawbacks.

If there was an intelligent way to scale Bitcoin with second layers that doesn’t have significant flaws, I believe we never would have seen Bitcoin split apart. A clear and compelling direction would have obvious. But this wasn’t the case.

Ignoring Real World Parameters

Turning a blind eye to real world metrics is one way metaphors are misused.

In, say, New York City Manhattan, there is literally no more room to make the roads wider. Most people do in fact use public transportation there, because it works better. But that doesn’t mean we should prohibit widening the roads in other places.

But when it comes to Bitcoin:

Why did the BTC core developers choose to keep the capacity at 1–2 MB every 10 minutes, when gigabit/second internet speeds are readily available even to ordinary consumers?

Why do people say that the blockchain can’t be used for a global cash system when Bitcoin Cash already has 32MB blocks, which support 100 transactions per second (on the same level as Paypal transaction capacity)?

Why are ongoing technology improvements ignored when considering how Bitcoin can scale? (Processing power, memory, storage, and bandwidth keep getting better every year.)

Why do arguments against on-chain scaling devolve into Appeal to Extremes (“We can’t possibly do global cash plus internet-of-things today. Since we can’t do trillions of transactions per second on the blockchain we need to build more layers and not scale.”)


A common argument you hear from BTC/LN supporters is that “Sure, you could increase blocksize but at the cost of decentralization, because users with slower machines or internet can’t validate big blocks”.

First (again), this is not in line with today’s reality that includes Gigabit internet speeds, cheap hard drives, fast processors, and endlessly improving technology.

Secondly, home users validating the blocks is not what keeps Bitcoin secure or decentralized anyway. Bitcoin security has always been based on a proof-of-work system (mining).

Third and maybe most important: They are completely ignoring the centralization risks that come from forcing everyone to use a second layer. The liquidity constraints (each hop along a route must have the proper funds to lend to the previous hop) is what causes the LN landscape to inevitably coalesce into large centralized hubs, as we can already witness today:

Bitcoin Was Supposed to Be Permissionless

If we come back to “cars vs trains” one more time, it’s a proper use of the metaphor to compare Lightning hubs to train stations that can decide where, when, and how you get to use the network…and whether you’ll need to show ID.

Why? It’s because you can only use the train station near your house to get to work. In the Lightning Network, you can only use nodes that you have an open channel with. Changing that requires an on-chain transaction.

Peer to Peer Electronic Cash

By contrast, Bitcoin in its natural state (the way BTC operated from 2009–2015 and the way BCH operates today) is peer to peer. Miners can choose not to put your transaction into a block, but another miner will. To a user, one miner is the same as any other .

It’s like being able to get in your car and drive anywhere without anyone’s permission. If one road is closed, you can take a detour quite easily. It’s not like taking the train where there’s one station near your house. Sure, you could drive to a different station but if you’re already in your car, you might as well drive.

BTC is taking its own path with the Lightning Network. I’m all for innovation, but this experiment should not have been allowed to usurp the Bitcoin name and ticker symbol.

Thankfully, Bitcoin Cash keeps Bitcoin alive as peer to peer electronic cash. It exists because a large section of the original Bitcoin community wanted to continue with the brilliant setup of the original system.