Jiang Zhuo’er: Using Lightning Network to Solve Bitcoin’s Scalability Issues is Doomed to Fail
Jiang Zhuoer, the founder of bitcoin mining pool BTC.TOP, casts doubt on the capacity of Bitcoin’s Lightning Network (LN), saying it will eventually turn out to be a much-hyped concept without a huge user base, and using LN to solve bitcoin scalability issues is doomed to fail, according to China’s blockchain news media platform Gyro Finance.
The Lightning Network, a second-layer scaling solution on the Bitcoin network, that is designed to allow huge numbers of Bitcoin transactions to occur instantaneously while reducing costs significantly, even continues growing amid the crypto bear market.
Data from 1ML shows there are currently a total of 6,723 reachable nodes, which has increased by 17.76% since last month. The number of channels on the LN main net has also increased by a massive 36.8% to 30,458 , while the network capacity has reached 725.44 BTC ($2.77 million).
The Lightning Torch, a relay transaction being bounced between nodes, is helping increase the public’s awareness of the LN, Jiang, however, throws cold water on hopes for the LN’s massive adoption.
In the recent interview with Gyro Finance, Jiang said in the short term, the Lightning Network is merely a concept and is difficult to use because it needs to lock BTC in the channels and most payment networks are unidirectional.
“ For example, most of funds flow from crypto exchanges to payment gateways in a unidirectional way and BTC is consumed in the channels in a short period of time. Thus executing the open and close of the channel simultaneously in each transaction will increase transaction fees, dampening merchants’ willingness to adopt LN.” Jiang said.
He believed crypto exchanges will not favor the bitcoin’s layer 2 solution for commercial reasons because exchanges are unable to control users’ tokens if they adopt the lightning network allowing bitcoins to just stay in the channels, while have to bear technical risks.
Considering that at present, there are only a few users and nodes on the lightning network which has little economic significance, Jiang said in the short term, bitcoin miners and bitcoin prices will not affected by the LN.
He stated on weibo on Feb. 25 that “ LN applications have limited scope. The network will not solve bitcoin network’s congestion issues unless a highly centralized super lightning hub arrives.
“ We can predict a severely congested bitcoin network during the next bull run in 2020-2021,” Jiang said, “ But of course, Bitcoin Core developers will see it as a ‘transaction fee market’ rather than the ‘ congestion’.”
He indicated that the Bitcoin Core team will drive themselves up a blind ally if they hope to solve bitcoin’s scalability issues by using the LN. “ The BTC community has already and will continue to pay a huge price for it.” Jiang added.