Lightning Network -- Fundamental Limitations 04 Apr 2022
Summary
- Channel-open transactions must be broadcast on L1, but there is simply not enough L1-space. - “Factories” can onboard more users per L1 txn. Unfortunately, they can be sabotaged for free. CoinPool has the same problem (when it comes to LN-onboarding). The limitation is fundamental. - There are scenarios where LN-users consume more bytes than L1 “onchain” users. These are interesting, especially when it comes to use of HTLCs.
The “conventional layer2 strategy” (of: “Core + LN + nothing else”) is almost certainly not viable. But a modified strategy, of “Core + Largeblock Sidechain + LN” is viable.
