Lightning Network will define the future of Bitcoin — Christian Decker


[Music] Christian Decker I’m a software engineer for black stream and I work on the lighting specification and the sea lighting implementation of that specification I was doing my studies for master computer science distributed systems and distributed computing when I first heard about this strange little white paper about Bitcoin and it immediately I was I was pretty interested quite right away and so I dug in and it took me quite a few weeks to actually understand it and from there on I had a new hobby and that hobby later became my topic of my PhD and a few years later I’m the first-ever Bitcoin PhD my master thesis was about BitTorrent so not all that related with Bitcoin and PhD topic the PhD topic was so the final the final title was on the scalability and security of baked-on and it was it basically is the result of what I pitched a few years before which was a 16 page document outlining all the stuff that was wrong with Bitcoin and how we could address it I started working on it or following development and then discussing with people back in 2009 like it became my full-time job with a PhD in 2012 and it became my full-time as a software engineer in 2016 when I drank lobster I think of myself mostly as an enthusiast I I don’t I don’t see myself as as an as as an economist I don’t see myself as as a scientist I I’m just I’m just someone who cares about the technology that is behind it and finds it fascinating and I like to I like to dig dig in deep when when when I find something that I don’t know about and I like to learn about this stuff and try to improve it and tinker with it it’s it’s really it’s really all about about this challenge of having of building something new and sort of seeing something that doesn’t work so well one trying to improve it I don’t have a grand I don’t have goal in life it’s just follow your interest block stream is a company that was founded by people that were very much involved in in the development of the open source project for a long time and they did it in in their spare time and had had normal day jobs and at some point maintaining this project just becomes so so much work that you either stop working on it or you find a way to to basically get paid for your contribution to this infrastructure project and so that’s how that’s how blocks team got started it was a it was a group of of Bitcoin enthusiasts that wanted to that wanted to keep working on this project that was really that was really important for the for them and very very close to their hearts and they also needed a way to to fund their work and so the idea of creating blog stream as a way to support the Bitcoin the Bitcoin ecosystem by supporting the developers and then exposing the the knowledge that was that was collected by these developers to other companies that that was that was the Auris where as it’s often seen people often think that that blog stream is came from outside and and and then hired a bunch of people and then tried to grab onto onto power it’s very much a company that was founded by by enthusiasts that have that have a lot of longtime stake in this in Bitcoin itself and they just needed a way to to finance the the open source project and blog stream was one of the first but by now there is there’s a lot of companies that that have seen the value of supporting the open source project and the the developers of the VidCon client now are employed by a number of companies just just a name a few we have the MIT DCI which is funding which is funding a couple of engineers including vladimir shevchenko which is funding a lot of engineers and we have block stream that is still funding a lot of engineering efforts in Bitcoin and as always it’s always hard to explain how these people that that are interested in doing this work are not are not being controlled by somebody but if you if you look at it from from this important of view that these are enthusiasts from the first hour that just want to keep working on it because they’re interested in this project I think that makes it a lot easier to just to see why others the the whole Craig ride and satoshi thing is I think the search for Satoshi is a bit of a red herring Satoshi left the space in quite a few years ago and left left other people to take care of the project and if Satoshi is still with us then he has earned his his place even without without using the name Satoshi if he is no longer with us we’ve learned a lot since since the project was was left by him right and I don’t think that that we should take all of this there are things that that Satoshi said as their absolute truth but we have to look at it through the lens of what we’ve learned in the last few years about about stuff that was wrong and stuff that was right so I I think Satoshi might be with us today under a different name and still be one of one of the important contributors or he he’s lost interest and he’s just not not interested in having a say in the project if there were so if there was something wrong with with the project he would make his voice heard I guess the most obvious problem we have a scalability of blockchain systems in general they just don’t scale and I tried I tried for the entirety of my PhD I tried to find a solution to the scalability issues and what I what I settled on in the end was was his layer 2 or off chain protocols because they they scale much better than than having stuff on chain other problems involve basically the energy consumption it would be nice to have a system where the work you performed to secure the network also had other use cases I did not make any progress there that was that was probably more and that I could I could achieve what else I need to revisit that paper that thing has been a while the properties of proof of work are pretty restrictive in that you can’t really use that word for much else I think the only example of a useful proof of work besides securing the network that I found is its prime coin and prime coin basically finds prime numbers then the question is how useful are prime numbers it’s it’s really hard to to sort of back port or to inject this usefulness into into proof of work because there is a few properties that you need from proof of work system namely you need to have some way of committing to to the transaction data that you are you want to validate it has to be it has to be scalable in that I we are targeting one block every 10 minutes I think calling it waste is is a bit of a strong word because it is useful in that it secures the network but it would be nice to have additional use cases for it as well i I think lightning is it’s definitely a good development for for vidcon adoption because it adds many more use cases to to what what we can do with with Bitcoin we have we have the ability to do micro payments up to a down to a very very small amount we can have real-time payments we have we have the ability to use the scarce resources that we have in Bitcoin namely the blog space much much more efficiently and I think it’s this it’s this incremental but still very important features that make lightning important for the adoption of Bitcoin it’s definitely it’s definitely not going to replace VidCon but it adds use cases it makes it more useful we’re liking to it to actually work we need it we needed to have segment activated because the the way we we do we handle transactions in lighting is that we that we have these a chain of transactions that is unconfirmed at any point in time and if we have transaction malleability in in the system then we might break this connection from this transaction to this one and suddenly you don’t you don’t actually have a solution on how to handle funds on the this transaction because the connection network so when litecoin activated segwayed after years of work on it before Bitcoin was activated it I said basically I basically sat down and said okay how how hard can it be to to port lightning on to litecoin and assurance out it’s it’s it’s really easy so I did that in for noon and by a few hours before light-cone was to activate segwayed I I contacted some other developers of the other clients and and asked hey do you want to do the first-ever main net lighting transaction with me because it would be would be nice gesture to have it across multiple implementations sadly the other people I was a bit late and they didn’t have time to to adapt in time to to to make it for the segment activation so I basically set up to now it’s 1 in 1 in Zurich and run in I think it was San Francisco and I just sent over this patinas payments is a method for us to send a payment without having to exchange an invoice before so currently the way we we use lightning is that I go to a vendor or point of sale and I just and I put something on the counter and they create an invoice for me and I scan that invoice and then pay with that invoice and that’s that’s very much that’s very important for the lightning protocol because the way we ensure that the payment actually goes through is by having this set up using that invoice first with spontaneous payments we can we can do something without the setup where I basically say hey I want to pay Andrew I don’t want to talk to Andrew I don’t want to know – I’ll get an invoice from Andrew first but I want to still send you some money so I know you are your your name basically or node identity and I didn’t then create a liking payment and just say hey please somehow get to Andrew and once you once you receive the incoming payment I will give you the necessary information to claim that payment as well whereas whereas with the invoice workflow you’d be the one telling me how to send to you so that you can claim I am now the guy telling you hey by the way here’s the necessary information for you to claim that thing sounds like an important feature it absolutely is it’s one of the features that that is most requested the reason why we haven’t it wasn’t in the 1.0 specification is that this this flow of having an invoice and then paying that invoice matched more with what we expected people would do but yeah and the spontaneous payments actually needs more more work in that I need to tell you how to how to explain it there is also a small difference in in the assurances you get from from invoice versus spontaneous namely if if I get an invoice from you and I then perform a payment to pay that invoice I have them have proof that I paid that in was so have the invoice and a matching secret that you generated when when creating that invoice and so if I have the invoice and the matching secret I can then go to court and say hey I paid Andrew for my coffee but I never got my coffee with spontaneous payments I don’t have an invoice and that therefore cannot prove to anybody that yes indeed I did pay you or that you owe me a coffee for me the most important features that are on the roadmap are splicing which allows us to basically have all of our money in a lighting channel and then still be able to perform on chain payments from it or to take it try an existing channel and add some funds from from outside and what that basically allows us to do is to not care about which which funds are on chain and which ones are off chain it basically allows you to show a single balance and say this is how much money you have at your disposal and if you need to pay something with that money you can use up to this amount and then we have then we have the multi-part payment which i think is very important because it allows you to bundle multiple channels together and so you if I have if I currently have a single $10 channel then then I can transfer up to $10 in there for one payment I have 10 $1 channels I can only transfer up to one bit $1 in total payments because I need to have one path with multi-party channel with multi-party with multi-part payments always get your payment multi-part pay municipal we get a week we can have 10 $1 channels and still pay up to $10.00 because well we can bundle them again so that point you stop caring about who you open channels with and how much you put into those channels because you you can always combine multiple channels to perform your payment and I think those two are really fundamental for us to make user experiences that is very much easier than it is currently because currently you have to care a lot about okay I open this channel with this guy but he might not be online so I would don’t want to put too much money on there and it gives you a lot of flexibility and you stopped caring about who you open channels with you can automate a lot of that of that stuff in a background being able to open multiple channels and still have the total capacity available is very important because it it allows you not to not to have to connect to a big hub in order to be well connected you can actually start connecting to random people and still be able to transfer transfer the total amount currently we have we have this issue that if you open one big channel with one peer then you have you can pay up to that amount you if you were to open multiple channels with different peers then then the amount you can transfer is reduced but the this this forcing of having one big peer is is rather bad because you’re relying on that peer being online when you when you want to send a payment whereas if you open five smaller channels then even if one of those goes away 4/5 of your of your balance are still available and you can still less reliant on that on that one peer I think if somebody something really really innovative comes along and sort of fixes all of the nitpicking that we have with Bitcoin I think there’s likely a way for us to back toward it into a Bitcoin so I found I found that quite interesting that most of some of the stuff that that was that was pitched for a theorem for example we can actually back pour it into Bitcoin it might look more it might be more complex but we can actually do it like what so one of the examples that I usually use is there there was this construction of of payment channels for a flurry theorem and region of the state channels yes and and we can we can actually back port some of some of the functionality into Bitcoin quite easily on chain so the way that that these said that these state channels are managed and how they do the the updates we can actually backward that’s part of of the paper that I published last year called l2 is basically taking a new approach to how we do how we build lightning channels or how we build off chain contracts and and it takes it takes some and it took me some time to actually realize but it is very similar to how a theorem does it it’s a bit more complex it took a bit more work to actually get it working on it but we can do it and with with a lot of the innovation that innovations that we have that we are currently adding with with taproot and adapter signatures and all of these cool features we can we can back port a lot of the stuff into VidCon itself so I think it might not be the Bitcoin that we that we see and recognize today but I think Bitcoin itself will be around in one form or another for for a very long time I find lightning and Bitcoin very interesting because it it really got me interested in the first place right I started when when all of this was worth nothing and then and still to this day it’s it’s it’s the most most interesting and most challenging project that I’ve that I’ve seen so far and it always surprises me where new interesting stuff comes from it’s it’s a really really complex piece of software and it’s a really really hard problem to solve and it tackles some of the big issues I think it has this this this combination of technical aspects of social aspects of of economics that I find really intriguing it’s just something that I learned to love I think it’s in some form or another everybody will eventually use Bitcoin I’m not sure what level it is without everybody go run around with a Bitcoin wallet or with a bit cornice somewhere somewhere hidden from the user and and it’s just part of the mechanism that they use but I think it’s it’s a very important tool for for for people to use eventually and they they will use it in some form [Music]

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