How fast does Lightning move?

Two and a half years ago, we wrote that Lightning is the future of bitcoin. A year and a half ago, we listed a number of UX challenges that Lightning needed to overcome on the road to wider adoption. In just the last year, Lightning has made a couple of giant leaps in usability, first with MPP and Wumbo to turn Lightning’s discrete payment channels into a borderless ocean of liquidity, and then Breez added on-the-fly, zero-conf channels to massively boost our users’ inbound capacity.

Lightning Pool, a liquidity market on the network, promises even more efficient allocation of sats on the network. The result will be faster payments, rationalized fees, and a better network overall. …

For some bitcoin is an asset with great speculative potential, and Lightning is bitcoin’s new toy. That’s fine, I guess.

For others, Lightning is about equality, emancipation, autonomy, and freedom. Imagine this kid entering a bank and applying for an account:

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(Image: J Rupee — Breez user. Thanks J.)

I don’t know who he is. I don’t know his name. But I do know that he runs his own business in Hyderabad. If he went into a bank to open an account, they’d probably ask for a place of residence, picture ID, a minimum deposit, and maybe even legal guardians that he may not have. He would be rejected. …

Our goal is to liberate the world from inflation, the heteronomy of (central) banks, and monetary hierarchies that equate money with power — to bury fiat. We’re building a decentralized, P2P, flattened world. But to change the monetary world, we first need to understand it.

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This is how I imagine fiat’s funeral. Just look at all those happy faces. (Image: PickPik)

Think about your last few fiat transactions. Buying groceries? Picking up dry cleaning? Buying some DLC in your favorite mobile game? Let’s consider two aspects of these transactions:

  1. Transaction fees of even a few bucks are unacceptable for such everyday microtransactions, as are confirmation times anywhere near 10 minutes.
  2. At the other end of each of those transactions, there was a merchant. …

Liquidity is all about flow. On the Lightning Network, bitcoin is the liquid, and the question is how much of it can move and at what speed. Payment channels are the network’s pipes, and until just recently, all pipes were fairly small, and a payment could only reside or flow through one pipe at a time. The liquidity was there, but it wasn’t flowing as well as it could have.

In the last few months, a couple of things have changed:

  1. Multi-Path Payments (MPPs) went live in May with LND 0.10, which splits payments into smaller parts and allows those parts to be and move in different places simultaneously. …

Bitcoin is revolutionizing the monetary system by decentralizing and democratizing it. Lightning is revolutionizing bitcoin transactions by making them faster and cheaper (I’ll never get tired of saying that) while preserving bitcoin’s openness, resistance to censorship, immutability, and decentralization. We must be moving in the right direction.

But there seems to be a contradiction. On the one hand, Lightning is mobilizing, liquifying, actualizing bitcoin. With Lightning, you can actually live on bitcoin and use it for day-to-day purchases. In the USA. In Europe. Probably everywhere.

On the other hand, HODLing is at a three-year high. Eight million bitcoin are static, immobile, in storage. That’s about 43% of the roughly 18.5 million bitcoin that have been mined so far. Nearly half of the world’s supply of the greatest cryptocurrency in existence is not liquid. A currency needs a current. …

By now, Clarke’s third and most famous law has firmly entered the tech vernacular:

Any sufficiently advanced technology is indistinguishable from magic.

But that’s not the end of the story. First comes that thrilling moment when we marvel at the new technology, when we remember how its functions used to be impossible and are now effortless, and we appreciate the magic. That honeymoon phase might last for a few months. Then we come to rely on the magic, forget what life used to be like without it, and get annoyed when it doesn’t work perfectly. …

Nobody asked for Corona or COVID-19 or whatever you want to call it, but it’s here. We’re all doing our best to deal with it. Our political and financial leaders are doing their best too. In order to staunch the spread, they’ve immobilized the meatspace economy. And in order to cushion equity and jobs from that blow, they’ve turned to a familiar tactic, a tool they think they understand: printing money. Lots of money.

Europe is printing 750€ billion, the UK is printing £200 billion, the Fed is printing ̶$̶7̶0̶0̶ ̶b̶i̶l̶l̶i̶o̶n̶ (Strike that. It’s from last week. Greenbacks are now to be printed in unlimited quantity. ~gasp~), and that’s just three currencies. And it’s just over the last week. …

A couple of recent reports have questioned Lightning’s vulnerability, and both are related to its network structure. One claims that an emerging form of centralization could make it vulnerable to “split attacks”. The other sees hubs as targets for “congestion attacks”.

Centralization was also a hot topic in 2019, in 2018, in 2017, and even in 2016.

It’s true that many forces militate against decentralization: economies of scale, convenience, brand recognition, etc. But Bitcoin and Lightning are designed to overcome them. Centralization leads to vulnerabilities, power imbalances, censorship … fiat. But that’s the past. We’re more interested in the future — how to build a strong, free, and useful network for bitcoin payments. To reach that goal, we need to keep Lightning decentralized. …

In any evolutionary process, members of each new generation keep some of their ancestors’ traits and gain some new — hopefully improved — ones. When looking at the system of fiat money, there are some traits we’d like to keep while surpassing the rest. For example, fiat is universally acceptable. It’s the medium of exchange. The UX is also hard to beat. It’s what users are accustomed to and expect.

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Don’t hate your ancestors; learn from them. (Source: Wikimedia)

We’d like to preserve both of those traits in the Lightning economy. …

Another year is almost over. For those of us working on Lightning, the pace of change has been so fast that it’s gone by in the blink of an eye, just like a … yes, a lightning bolt.

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Lightning moves fast — even in slo mo. (Source: reddit)

So much has happened in the last twelve months. So many new innovations have gone live. The network has come so far. With so much creativity and adaptation, it’s easy to forget that Lightning is not yet mature. …


Roy Sheinfeld

Co-Founder and CEO of Breez (

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