Sergei Tikhomirov | Connect the World

What was your first experience with the lightning network and do you still know what you did/saw at that moment?

I learned about LN “theoretically” long before trying this out. I don’t remember the exact moment, it was some time in 2017. In December 2017, I gave a talk about LN at a meetup in Moscow, with like 10 people attending 🙂 Later on I installed various LN wallets to play with / pay for beer of coffee at conferences but to be honest I don’t have a genuine use case for LN myself yet.

Do you run a Lightning Node and if so what is your strategy with it? Or is it only for educational purposes?

Not really 🙂 I launched a node for some probing experiments, I’ve used a few mobile wallets just to try them out, but I’m not a regular LN user.

What can be improved on the LN so it can provide better quality service while discouraging monopolies ?

That’s the key question! At least, we should ensure that “small players” can join the network as routing nodes relatively easily. The protocol should not rely on central nodes too much, although it’s natural to node to want to connect to already well-connected nodes. It’s important that even if LN is monopolized, users can close their channel at any time and take their money out. In that sense, LN is less prone to vendor lock-in compared to a bank, for example. Still, the cost of exit is non-zero, especially under high on-chain fees…

In what way can a Lightning Node evolve in the future and also have some other purposes than only to make payment transactions?

People have been talking about implementing a messaging system on top of Lightning P2P network, but it doesn’t look like a good idea to me. LN is designed to forward payments, other use cases are in some sense abusing the protocol, or at least not using it for its intended purpose. Hopefully, such “secondary” use cases would naturally be priced out as payment-based use cases are willing to pay higher fees. If LN “only” does payments well, already that would be great.

We have at the moment 2 models “value-for-value model” & “pay-per-use model” that triggers the incentive to use of the Lightning Network. What other type of model could be used / implemented in LN ?

I haven’t been thinking about business models much to be honest. For me both existing models are good and not mutually exclusive. One thing that I’m not sure I want to see is financialization of any action online, where every click triggers a payment (via LN or other means), putting too much mental burden on users.

What does it take to get more attention to work in the Bitcoin and Lightning space? Do we need more use cases for Lightning for example?

It’s hard to judge for me because I’m already convinced that Bitcoin is very important… I’m mostly focused on the protocol issues (jamming in particular) and don’t pay close attention to use cases. I’m not convinced micro-payments are feasible long-term because LN security is based on potential on-chain dispute resolution, which requires on-chain fee. But what LN can offer in any case is nearly-instant settlement, which I think is very cool. Finally, we can implement the “electronic P2P cash” as Satoshi outlined, without making users wait for 10+ minutes until a transaction settles.

How do you view adoption among the mainstream in your role as a researcher and educator? So for the mainstream to use Lightning on a daily basis?

In the long term, it would be nice to see literally billions of people use Lightning, but I’m not holding my breath yet if we’re talking about the next 3-5 years. I’m not a fan of growth for the sake of growth – I want people to use LN / Bitcoin when / if they have a genuine need for it, and when they do, I want the protocol to be ready to accommodate them. If it’s 1 bn people – good, if “only” 100m – also not bad.

Do you have plans on building a startup one day? And if yes, what kind of product would you like to make?

Maybe, but the more I learn about modern startup building, the more I see that much of the business model is dependent on cheap investments and growth at all costs (fueled at least in part by that same money printer that Bitcoiners despise). I may start an independent business some day, perhaps something around my Russian-language podcast Basic Block Radio, but I wouldn’t be prioritizing exponential growth above all else, like Silicon Valley startups do.

The layer-two fee economics looks different from layer-one.

LN makes fees great dependent on the transaction value again. 

Like In traditional finance, it’s common to charge fees as a percentage of the transaction value.  Layer-two re-introduces the value semantics into protocols: relaying a payment requires liquidity, and intermediary nodes pay more in opportunity costs of locked capital when transferring a million dollars as opposed to one dollar.

Do you think routing will be a profitable business in the future like how mining is now?

I hope it will! This would make LN incentives well-aligned. If nodes can monetize via fees, they don’t have a strong incentive to monetize via other means, such as collecting users’ private data and selling it.

There are a lot of developments in using the Lightning Network as a multi-asset network. There is Taro for example, an open protocol (made possible by taproot) for transferring non-bitcoin tokens in Bitcoin transactions and LN payments. Do you think these developments are very important for the Lightning Network to grow further?

I have mixed feelings about multi-asset use cases. On the one hand, introducing another assets like stablecoins is genuinely useful for many people. On the other hand, it enables speculation (a-la DeFi on Ethereum), which in turn leads to blockchain congestion and high fees. I think Bitcoin / Lightning should primarily be money for common people to pay for things, not a speculation vehicle. But if speculation use cases bring more funds and attention to the space, this may be good in the long run for the money use-case too.

As LN grows, it may become infeasible for each node to store a full network snapshot.

Although the current LN size doesn’t sound like a lot by modern hardware standards, if we expect Lightning to grow by orders of magnitude, source routing may become challenging. 

We want Lightning to work even on an IoT device with a tiny battery, little storage, and sporadic Internet connection. Is lightPIR an example of a possible algoritm for alternative efficient route discovery?

The graph growth problem is not the most urgent right now, but it may be potentially. There are multiple approaches to it, and the general idea is to outsource part of route construction to some specialized nodes. The question, of course, is whether we must trust them, and how to make this scheme work while requiring as little trust as possible towards this special nodes. LightPIR is a recent paper I read and summarized in my blog. The authors leverage a cryptographic construction called “private information retrieval” (hence PIR) for privacy preserving route construction. This is an interesting approach but there are many practical roadblocks to implementing it in the LN.