Bitcoin's Lightning Network liquidity problem and the idea to solve it

in #hopdh2 years ago

Ignoring the problems of Lightning Network and Protocol Stack seems to be a very popular thing nowadays. It is currently the second most widely accepted and used tier of the Bitcoin network, and the fastest growing in terms of further development. It also has a lot of flaws that make it easy to sweep the floor and work around, due to the fact that it is very small and in the very early stages of adoption. But it does not remove those problems, nor does it change the reality that with much larger ranges and more adoption curves, those problems become very real, requiring real measurable solutions.

One of the main problems with lightning is the lack of fluidity. It is not possible to get any funds through Lightning Network without ensuring liquidity from someone else's node. This is a fundamental and inevitable limitation of using the Lightning Network in a non-custodial manner. Obviously, you can hack around this problem using things like Wallet of Satoshi or BlueWallet's default LNDHub (which is Custodial), but only because someone else solved it for you and you are not really in control of your funds. While dealing with things in self-custody, you actually have to solve the problem.

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