The excitement around Lightning has died down. Even former loud supporters of the offchain network for Bitcoin transactions are more critical about the high complexity and fragility of the protocol. But Lightning’s main problem could be something completely different…

All misjudgments, Michael de Montaigne once said, “arise from the fact that we are taught to be afraid of admitting our ignorance.” You want to stick to the position you have once taken at all costs, even if it means losing touch with the truth.

The extent to which this need to keep the realization of one’s own error at bay can be marveled at every day in the crypto world. So many people remain loyal to the coin they’ve chosen until the end, even when the developers screw up one deadline after another, when the technology proves to not live up to its promise, and when the market value falls short Bitcoin rushes deeper and deeper…

Seen in this way, you have to give John Carvalho credit for apparently moving the heaviest thing that weighs on your own shoulders – your own opinion. Carvalho was a rabid small blocker and Lightning enthusiast, one who implemented Lightning payments for Bitrefill as soon as the first Lightning node went live and worked on Lightning for Now Carvalho sounds completely different. About last week in a podcast:

“The level of complexity and fragility of Lightning is immense, especially for the use cases that were planned, such as end users running their own nodes.” John worked intensively on the implementation of Lightning and “realized that Design is a joke.”

Lightning can be made to work “if we do our best, but all these narratives that have been there from the beginning, like Lightning killing Visa or everyone using Lightning,” are impossible to fulfill. “There are so many problems, problems with scaling economically, problems with dealing with the different implementations, the lack of compatibility, the force closes, and so on and so forth.” All the developers and engineers working with Lightning, “themselves If they think they see all the complexity, they don’t understand it yet, because it’s much worse than people think.”

In a way, John Carvalho is repeating the criticism that Mike Hearn made back in 2015 – that Lightning simply imposes too much complexity on users – and that has been repeated by Gavin Andresen, Roger Ver and more or less everyone in the big blocker camp . The usual reaction to this, including from John Carvalho, was hostile and condescending.

The fact that John has now changed camp and gone from being an unconditional Lightning supporter to being a Lightning skeptic does not mean that Lightning is dead, as some “big blockers” are already triumphantly proclaiming. But it means, as John rightly says, that the many narratives, promises and expectations were hopelessly exaggerated, and that the wider Bitcoin community would do well to no longer see Lightning as the only true savior.

John’s criticism also sheds light on how Lightning disappoints even with moderate expectations. The widespread enthusiasm that was evident for many even before the first nodes were created is still missing. The number of nodes – stagnates or decreases; the number of payment channels – stagnates or decreases; the capacity in Bitcoin – you guessed it.

If you have statistics on how often Lightning is used – you usually don’t have them – then it works, like CoinCards, reliably amounts to 2-3 percent of all crypto payments, far behind Bitcoin (onchain), far behind Monero and Ethereum, and also behind USDC or Litecoin. Even six years after its launch, Lightning just doesn’t want to ignite!

And perhaps that’s the bigger problem than a complex protocol. Because if there is a demand for something, if something is really NEEDED – such as Bitcoin onchain in the Darknet – users will also accept inconvenient wallets and there will be someone who reduces the highest levels of complexity in a user-friendly product. But there is no demand, no unique purchasing power, no unique selling point and so on. Nobody NEEDS Lightning. The most important application for it seems to be buying coffee at Bitcoin conferences in 2024.


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