6 things critics keep getting wrong about lightning network


Is Lighting Network the second coming for Bitcoin or the coming of centralization? Andreas Antonopoulos states his case for the former in his latest video.

A lot of misconceptions have arisen about the Lightning Network and the effect it will have upon Bitcoin. Look around the internet, and you’ll find videos such as this offering information on the Lightning Network that may not be accurate. To that end, Andreas Antonopoulos has created a video to detail the many things critics are getting wrong, which we have listed below.


“Lightning Network will centralize bitcoin, concentrating power with a few big players.”

This assumes that Bitcoin is not already centralized in some way. Without second layer technologies, there are two ways to resolve issues with capacity and increased demands.

  1. Increase base block size, putting costs of scaling onto node operators and leading to some centralization nodes and mining.

  2. Push transactions off-chain without current levels of security and trustless operation. This is already happening, whereby transactions are held in the private databases of the large exchanges.

So the choice isn’t between a totally decentralized or totally centralized system. It is a choice between off-chain private and off-chain secondary layers with trustless systems.


“Lightning Network requires each transaction to open and close a new channel.“

Many people think that each transaction operating on the Lightning Network needs to open a new channel. The cost of funding and settling each transaction in this case would be huge. A transaction actually just needs a path, and Lightning Network clients can deal with the routing of transactions automatically.

Some also believe that channels must be closed to get settlement, but this is also not true. Payments can be made again, so funds can stay within the network and don’t have to be cashed out. Most of this will be done with wallets and not manually.

People have taken these misunderstandings and created the impression the network will inevitably centralize into a hub and spoke analogy. This will become clearer in time, but there are several alt-chain options for those who prefer on-chain scaling.


“Lightning Network uses the ‘Hot Potato’ model of routing.”

In this model, each node passes the ‘Hot Potato’ to the next node willing to take it closer to it’s destination. Each intermediate knows the source and destination of the packet, but Lightning Network uses an entirely different model called source routing.

The originating node receives information about all available nodes, such as capacity and fees. It then creates an optimal path based on these parameters, such as lowest overall cost of route. This route is then encrypted at each step and onion-skinned. Each intermediate knows only the node which the transaction has arrived from. It then removes a layer of onion and discovers the next node that it must be sent to.

The final destination node is the only one which knows that it doesn’t need to go any further. The originating node is the only one which knows that it didn’t arrive from somewhere else.


“If each channel needs funding to stay open, that will lock up a lot of value in the system.”

Yes, each channel needs enough value at your end to send the capacity of transactions required. But channels can be refilled to make greater payments, for example, by sending bitcoin to the Lightning Network address.

In fact, this goes some way to prevent centralization. Trying to create a node connecting many channels holding a lot of bitcoin value becomes a target for hackers. It is more beneficial to have more channels to more nodes in a mesh network than very highly-funded centralized nodes.


“Node operators will face a lot of risk from AML regulation.”

Not necessarily. In most cases, Lightning Network is intended for the transfer of smaller amounts. In most places, money laundering only applies to money flow of much larger amounts.

It would be difficult to find and prosecute individuals running software on their home computers. If this does become a problem, then it will only make the network become stealthier.


“Lightning-enabled wallets come with all the confusion about channels and the need to open and close them.”

It is true that early implementations of Lightning Network did bring technical data to the surface and exposed elements that should have been hidden behind a user interface.

Lighting-enabled wallets should and will look exactly like multi-currency wallets. Sending and receiving will be achieved through QR codes, and the wallet will be able to tell if the address is for Bitcoin or Lightning Network. Everything should be done for you.


If you are interested in running a lightning node, then there are three which are BOLT complaint. This means that they will work with each other to form a unified network. Look for information on LND (lighting network daemon), clightning, or eclair on GitHub or Main Net.

As you can see, Andreas Antonopoulos sets the record straight on a number of misconceptions about the Lightning Network. One should always be careful in that misinformation is constantly floating around on the net and easily found.



@peter “Will it blend?”

that is the question I’ve been asking myself…

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Lol. I just make up shit. That’s how I do

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Last night I went to a local blockchain oriented meeting where they talked about this topic. A speaker indicated that some of the issues with Lightning nodes is their susceptibility to DoS attacks, the possibility that your node can be hacked, and your wallet emptied. The immaturity of the technology sounds like a dealbreaker to me (yeah, I understand that it’s still new technology).

Does anyone have an opinion about these issues (or others that I’ve not listed)?

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can happen to anything connected to the internet :thinking:

What is he referring to? How can a node be hacked?

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The same way any computer can be hacked - someone can sit outside your house and hack your network. if you have a node accessible and a keys for a wallet - they could steal them? or man-in-the-middle monitoring your traffic and installing key loggers etc.? the normal hacking stuff, especially if you’re using web wallets or exchanges.

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Bud, you’re talking to an accountant here. My definition of hacked is something you do with an Axe.

(no, I’m really not that bad but I do need assistance here).

I’m just learning the subject and was listening to technology gods last night!!

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sounds to me like the responsibility of the guy running the node. If you don´t take security serious your vulnerable. That applies to everything crypto related and isn´t a weakness expecially applying to LN.

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agreed. I was just answering the question about what they could have been referring to.


OK, (not wanting to be argumentative here) so what kind of security am I going to get running a cheap Raspberry Pi based node? By definition I’m trying to be careful.

Should I step up to something more resilient - say a two year old laptop with better processor, memory, drives and firewalls? How can I get through a DoS attack more quickly? (or is it my ISP that is responsible for that). And I understand that I can be social engineered.

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Processor or memory of the device won´t really matter. The device should only be used for the prupose of beeing a node and nothing else.

There are ways to improve your security, for example;

  • use strong passwords

  • use “fail2ban” (monitors SSH login attempts and bans a remote peer after 5 unsuccessful tries for 10 minutes)

  • set up a UFW firewall (denies all connection attempts from other peers by default and allows only specific ports to be used)

  • disable login with password and use SSH certificates

  • route your node through the Tor network

  • close all ports to your node that are not needed


Elizabeth Stark of Lightning Labs: “The Importance of Layer Two” | Blockstack Summit

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