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Bitcoin’s Lightning Network: Users can lose all their money through no fault of their own, says Peter R Rizun

Priya

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Bitcoin's Lightning Network: Users can lose all their money through no fault of their own, says Peter R Rizun
Source: Unsplash


Peter R Rizun, the Chief Scientist of Bitcoin Unlimited, was previously in the headlines following his comments about the Lightning Network, the second-layer protocol proposed to solve Bitcoin’s scalability problem. The Chief Scientist is in the news again after he claimed that a Lightning Network user can lose all his money, without doing anything wrong.

Lighting Network, the second-layer solution, allows users to make off-chain payments, thereby ensuring faster and cheaper Bitcoin transactions. The Lightning Network is dependent on the underlying technology i.e. the Bitcoin blockchain, and was mainly created to serve the needs of small transactions. It enables users to make payments without having to record them on the blockchain, until it is settled. Moreover, the Lighting Network can act as multi-currency routing network in the future.

Peter R Rizun had this to say about the LN on Twitter,

“A Lightning user can lose all of their money through no fault of their own, in an environment with high and volatile L1 fees. BTC’s block size limit ensures high and volatile fees whenever demand for block space spikes.”

To this, Emin Gur Sirer, a Professor at Cornell University, said,

“Satoshi did not design for blocks that are mostly full, and the devs who came afterwards have not been able to design a fee mechanism that leads to stable and predictable fees.”

Further, Jungans, a Redditor, questioned whether this was not the same for on-chain funds scattered across several UTXOs. Peter Rizun clarified that the two were different cases. He said,

Source: Reddit

Source: Reddit

The Lightning Network was in the crypto-space’s limelight recently after it crossed around $5 million per channel capacity, with the reason speculated to be the Bitcoin bull run. Further, the Lightning Network gained support from one of the leading cryptocurrency exchanges Zebpay, after it announced Lightning payments in around 131 countries.





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

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