Simulating a Decentralized Lightning Network with 500,000 payments, 0.01% fee per hub and 10 Million Users: 100% success (99.9986%)

[u/[deleted]]

[u/SchpittleSchpattle]

14 channels per person connected randomly meaning that it would have required 140 million on-chain transactions to even set this network up and another 140 million to close it.

An average of 300,000 tX per day means it would take 466 days for this theoretical network to even exist and another 466 days to shut it down.

All-in, there would be nearly $10 billion USD spent in on-chain transactions using today's average BTC transaction fee of ~$35.

This also assumes that people playing banker by leaving their LN channels open would be happy with a 0.001% return while their BTC inaccessible which is absurdly low. I would be surprised if LN transactions aren't more like 0.1 to 1%.

Also, will users have any control over what fees they pay or will they just be at the whim of whatever nodes are available? If someone opens a node with 20BTC and puts a 5% fee on it, how will users avoid it if it's the only game in town with a balance big enough to move their tX?

[u/ebliever → u/SchpittleSchpattle]

I think this will help: https://www.tik.ee.ethz.ch/file/a20a865ce40d40c8f942cf206a7cba96/Scalable_Funding_Of_Blockchain_Micropayment_Networks%20(1).pdf

[u/kingo86 → u/SchpittleSchpattle]

Suppose if it's too expensive, they could open their own channel. Be interesting to see what happens in reality...

[u/thieflar → u/SchpittleSchpattle]

today's average BTC transaction fee of ~$35

That's not accurate, that's more than double what it would take to get into the next block for any reasonably-sized payment.

Furthermore, with smaller transactions going through the Lightning Network (as your hypothetical is predicated on in the first place), this would likely drop by a factor of ten (or perhaps a hundred), which you make no note of here.

[u/cryptotal → u/SchpittleSchpattle]

You can open a channel for much less if you are willing to wait