EOS Creator Dan Larimer Points Out Possible Flaws in Relation to the Lightning Network

Over the course of the past few months, many crypto proponents have hailed the Lightning Network (LN) as being a “one-stop solution” for all of BTC’s existing scalability issues. However, in the same breath, there are also people like EOS Founder, Dan Larimer who believe that this technology carries with it it’s own set of problems.

Thus, in this article we will look at some of the key issues raised by Larimer and whether they are as serious as he makes them out to be.

A Closer Look at the Matter

In a recent back and forth with Reddit’s global crypto community, Dan Larimer stated that the Lightning Network is designed to “hijack Bitcoin’s core protocol”. Not only that, in his opinion there currently exist “a host of other problems” within LN’s framework which he refused to elaborate upon due to certain “time constraints”,.

Also, it should be pointed out that Larimer is not the only person to hold this view, as recently crypto expert Peter Ruzin too published a blog on Medium highlighting some of the main issues associated with the layer-2 scaling solution.

In regards to the matter, he was quoted as saying:

“The Lightning Network is a solution for high transaction fees that only works when transaction fees are low.”

Not only that, Ruzin also went on to add that he would not be surprised if in the near future (when BTC’s blockchain would primarily consist of small blocks and high mining fees) lightning entities/ service providers started to lose customer funds due to flaws related with the technology’s existing framework.

He then added that in the coming 5-10 years we could see LN operators resort to things like:

  • Preventing customers from moving their money
  • Charging clients exorbitant “routing and liquidity fees”

    As a result of the above mentioned problems, the BTC network could possibly become more and more centralized.

Other Key Findings Highlighted by Ruzin

From a technical aspect Ruzin pointed out that LN payments below the $0.02 mark aren’t “trustless” — as a result of which, in the future we could also see some issues rise in regards to this problem. Also, since Hashed Time-Locked Contracts (HTLC) do not work well with small tx’s, some of LN’s native security protocols may be severely compromised if hackers are able to find a way around this loophole.

Lastly, as things stand, LN’s default minimum fee rate stands at10 nBTC/vbyte. As a result of this, it is currently quite uneconomical to claim a “routed micro-payment below the 2,000 nBTC threshold”.

Additional Problems Worth Noting

  • Ruzin and Larimer have also highlighted a lack of “absolute trust” in relation to the Lightning Network as a result of which the scaling technology might not be an optimal solution for voluminous monetary transfers (later down the road).
  • There also exists a liquidity issue when talking about the LN — as a result of which payment failures might become more and more commonplace, especially as widespread adoption of the technology continues.
  • Ruzin believes that Lightning hubs will magnify the issue of centralization but will allow for a reduction in problems related to routing and low-liquidity.

Final Take

With all of these criticisms out there, it should also be pointed out that LN has also been praised highly by a number of other developers who believe that while there are certain issues that need to be addressed in relation to this nascent technology— they are not major and can be rectified quite easily.

In the words of BTC proponent David Harding:

“While certain issues do certain exist with the Lightning Network, they just aren’t worth bothering about at the moment”.

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide