2 upvotes, 1 direct replies (showing 1)
View submission: ⚡ Lightning Network Megathread ⚡
It will be a market-based competition for lower fees. Your wallet's routing will find the cheapest route to your destination, and if there is any profit to be made somebody else will charge a lower fee to be the preferred route.. So I don't think there will be a agreed pricing, it will be a race to the bottom... extremely cheap.
Comment by Godspiral at 13/01/2018 at 16:07 UTC
1 upvotes, 0 direct replies
assuming there are no electricity/processing costs, and no other way to earn money/interest on bitcoin holdings,
The cost of a chanel is the bitcoin fee of opening and closing it (and topping it up). $50 is a reasonable number for this cost. Under 5cents for bitcoin gold though.
This is practically free for a chanel between coinbase and bitstamp. A merchant services (crypto paypal/visa) company would probably pay exchanges to have chanels with it.
But basically for a gateway that accepts random joe chanels, and needs to have "backbone" connections, the costs to close the chanel (paid by the gateway) would be the starting fee (balance to gateway) for random joe. Random joe would (need to) also be paying for a portion of all of the backbone connections (open+close+possible top up) fees.
This makes the LN have narrow (but important) use cases when the main chain has high fees. BTG has better use cases, when the insurance against centralized risks is much cheaper.
A mainchain fee reduction proposal: https://www.reddit.com/r/Bitcoin/comments/7pwu25/variable_blocksize_with_fee_market/[1] Though, LN will decongest the chain, and so lower fees, through the main narrow use cases that take up much of the chain space. Centralization (and LN facilitates cooperation among several centralized entities) is basically the solution to congestion.
1: https://www.reddit.com/r/Bitcoin/comments/7pwu25/variable_blocksize_with_fee_market/
There's still a use case for making a gateway service. You want to have a chanel between you and say coinbase for the main flow purpose of sending btc from coinbase account to you as "insurance" against coinbase fubar. That chanel is free if the fees are the insurance value. Offering gateway services though, helps maintain the flow back towards coinbase by having clients who mostly want to deposit there.
The business model that makes the most sense of all is LN wallets are centralized services that hold client (and merchant) bitcoin by default, but provide the option to set up a gateway chanel to whoever wants to create a node for security (perhaps makes sense when balance reaches $100k+ or so, (or $500 for btg... can be used as a test))
The LN wallet service can provide incentives for exchanges/large merchants to connect, and would also naturally connect to other LN wallet(services).
A gateway service business model would still most likely be one that offers diversification benefits while still holding clients' bitcoin... but this has little business profit model and high theft profit model.