When Lightning main net was launched in the beginning of this year the first pioneers have set up a node to play with the brand new and untested tech while risking their Bitcoin. Because they were helping the network by testing for bugs with real money the word ‘reckless’ became very popular in social media. Successful transactions were posted with the tag ‘reckless’. The Lighting Network is growing and improving fast and the risk to use it is heavily decreasing, while the risks in Bitcoin Cash continues to increase. The flippening is happening!
This graph is not based on absolute figures, but created to visualise the idea of the article
Lightning Network and Bitcoin Cash
LN and Bcash are both an attempt to enable cheaper and faster payments. The strategy of Bcash is to enlarge the block size so that the supply in the fee market increases and the fees go down. To make the transactions instant they removed the Replace-By-Fee function to enable zero confirmation transactions.
LN took another approach: Cheap and instant payments are enabled by creating a payment channel network on top of the Bitcoin Blockchain. This means that only for opening and closing channels onchain transactions have to be made, within the channels an unlimited amount of instant and extremely cheap transactions can be made to everyone who is connected to the network. LN is much cheaper than Bcash, a transaction cost a fraction of a cent.
This kind of messages were all over Twitter
Lightning Network is becoming less reckless
Over the previous half year the use of Lightning main net has become less risky and thus less reckless. Miscommunication between the 3 implementations have been fixed, security measures like watchtowers are being developed and bugs are removed. In the early days (few months ago LOL) payments often failed because the wallet failed to find a route, the success rate has increased dramatically since then.
Multiple wallets are being rolled out for desktop and Android as well and more merchants start to accept it. I use it myself already to top up my mobile phone with the Eclair wallet through Bitrefill, I never had any problem. Beside buying top up you can use Lightning already to pay for VPN service, gold, video games and more. Soon you will even be able to receive your salary via LN by using Bitwage! HERE is a growing list with LN accepting merchants.
As the Network grows and functions without major problems the security will increase. Firstly the amount of nodes is growing fast (overtook the amount of Bcash nodes already) what will add to decentralisation and resilience because it will become harder destroy the network through it’s nodes.
Secondly, everyday the honey pot is growing and the threat for alt coins being made obsolete by LN is increasing, so more expensive and better organised attacks will become more likely. This means that every day that LN exist and is growing the security model is tested under a heavier load and the track record is getting longer.
Bitcoin Cash transactions are becoming more reckless
The security of Bitcoin Cash is not increasing but going down over time, so holding BCH or transacting on the network becomes more reckless. This article is purely about security, so the price risk because of extreme overvaluation and the power of extremely rich whales to crash the price when they dump will not be mentioned.
Zero Confirmation is risky
Bcash will serve it’s users with instant transactions through zero confirmation transactions. Normally when you receive a transaction you will see immediately in your wallet that it is coming, but you wait for one or more confirmations before you count the transaction as received. One confirmation takes around ten minutes and the more confirmations you wait the smaller the chance of a double spend.
In a zero confirmation transaction you count the transaction as received immediately when you see it disappear in your wallet, so the miners didn’t touch it yet and didn’t include it in a block yet. Obviously this comes with a risk for the receiver, even Satoshi said that zero confirmation transactions can not be counted as received and must be seen as 2nd class citizen. RECKLESS!
Security of the network is weak
Bcash has only around 10 percent of the total hash rate, so miners can relatively easy execute an attack. There are multiple attacks possible, a 51% attack is the most known one and happened already on some other minority PoW chains. Since Bcash can be shorted with high leverage an attack by miners can be extremely rewarding because on top of the profit from the attack itself they can hugely profit by opening a leveraged short position to benefit from the panic when the news hit the public. RECKLESS
Hardforks are not carried out carefully
Bcash is hardforking regularly and not always smoothly. The hardfork that created Bcash introduced the flawed EDA that caused periods of hyperinflation followed by periods of extremely slow confirmations. The recent hardfork kicked 20% of the nodes off the network and 13% is still offline. With Bcash you never know whether you or your trading partner his software is still working after a fork event and you never know whether the network will be destabilised because of poorly written and reviewed code. RECKLESS
Introduced Op-codes could have dangerous bugs
Bcash implemented old Bitcoin op-codes with the last hardfork. The op-codes were removed from Bitcoin because serious bugs were found. One of the bugs would crash all the nodes and the other one enabled anyone to spend anyone’s coins. Of course these bugs are not implemented in the Bcash code, but all the other op-codes are very untested and there is a fair chance for more serious bugs. This is not a small risk, a fatal bug could appear any moment and destroy the entire network. RECKLESS!
The flippening
The use of Lightning Network becomes less reckless over time and the recklessness of Bitcoin Cash is greatly increasing. The flippening is taking place now, at this moment I would advise to choose for LN payments above Bcash payments when security is your first priority. LN is not accepted in many places yet, but things are moving fast!
Disclaimer
This is no financial advice, just my view on the market.
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cool analysis thanks, seems like the high cost and long processing time helped lead to the different bitcoins
Wow! Upvoted, thanks for the information! BTC to $100K!!
So right now Lightning Network may still be more reckless than Bitcoin Cash?
How was it so hyped?
The cross over is happening as we speak :)
From a network security standpoint the network with the most nodes and miners is the strongest.
bitcoin is hashing at 34.248 Ehash/s bcash = 4.577 Ehash/s
Granted most miners are honest and there is much low hanging fruit to attack but once it becomes a lot more profitable to attack bitcoin cash than it is to mine bitcoin then the risk of this increases especially considering bitcoin gold got hit with this with fingers being pointed at bitmain, one of the biggest miners and proponents of bcash.
I really do not trust Jihan as he also went onto say BTG was a fork of bitcoin cash which is simply not true!
How is it that a currency does not go to 0 once successfully attacked?
Or did you mean something else than a double spend?
Why would anyone want to buy a currency that was successfully attacked?
I think there is still a lot of dumb money in the game as verge is still doing quite well considering it was also attacked on numerous occasions, with new user buying into the marketing and not the coin hoping to get rich quick.
If you look at bitcoin gold in terms of value in btc it is slowly dying with pretty much non existent volumes.
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be continuous sir
its a very helpful post, thank you..
thanks for all informations , well done
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Have to agree wholeheartedly... Second layer solutions are necessary for scaling
From the moment I heard about Lightning Network and what they wanted to do, I immediately thought that was a good idea and the right path to reduce transaction fees. The adoption of LN is increasing every day, and in my opinion it's better than what Bcash has proposed.
"Zero Confirmation is risky", especially in crypto, we want fast trades and low fees, there are no doubts about it, but in my opinion, security comes first.
I think a lot of people do not know much about Lightning because nobody is explaining the difference between bitcoin cash and lightning. This article is well written. Hope to see more of this soon.
Im hoping the better technology wins. Plain and simple.
Interesting perspective and information on BCH versus Lightning
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