In the Lightning network it is assumed that the balances can always be settled on the blockchain if any of the parties along the channel has a problem. What if the fee on the settlement transactions is not high enough to enter the blockchain? You can't do replace-by-fee after the fact. Do the fees always have to assume worst case scenarios on the Bitcoin fee market?

On 9 August 2015 at 19:54, Mark Friedenbach via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
Tom, you appear to be misunderstanding how lightning network and micropayment hub-and-spoke models in general work.

> But neither can Bob receive money, unless payment hub has
advanced it to the channel (or (2) below applies).  Nothing requires the
payment hub to do this.

On the contrary the funds were advanced by the hub on the creation of the channel. There is no credit involved. if the funds aren't already available for Bob to immediately claim his balance, the payment doesn't go through in the first place.

On Sun, Aug 9, 2015 at 11:46 AM, Tom Harding via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
On 8/4/2015 4:27 AM, Pieter Wuille via bitcoin-dev wrote:

> Don't turn Bitcoin into something uninteresting, please.

Consider how Bob will receive money using the Lightning Network.

Bob receives a payment by applying a contract to his local payment
channel, increasing the amount payable to him when the channel is closed.

There are two possible sources of funding for Bob's increased claim.
They can appear alone, or in combination:


Funding Source (1)
A deposit from Bob's payment hub

Bob can receive funds, if his payment hub has made a deposit to the
channel.  Another name for this is "credit".

This credit has no default risk: Bob cannot just take payment hub's
deposit. But neither can Bob receive money, unless payment hub has
advanced it to the channel (or (2) below applies).  Nothing requires the
payment hub to do this.

This is a 3rd-party dependency totally absent with plain old bitcoin.
It will come with a fee and, in an important way, it is worse than the
current banking system.  If a bank will not even open an account for Bob
today, why would a payment hub lock up hard bitcoin to allow Bob to be
paid through a Poon-Dryja channel?


Funding Source (2)
Bob's previous spends

If Bob has previously spent from the channel, decreasing his claim on
its funds (which he could have deposited himself), that claim can be
re-increased.

To avoid needing credit (1), Bob has an incentive to consolidate
spending and income in the same payment channel, just as with today's
banks.  This is at odds with the idea that Bob will have accounts with
many payment hubs.  It is an incentive for centralization.


With Lightning Network, Bob will need a powerful middleman to send and
receive money effectively.  *That* is uninteresting to me.


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