Oddbean new post about | logout
 Lightning has never failed me. What is it that you can’t do that you want to do? 
 I'm delighted to hear that! 

There's an old proposal called "eltoo" (or, these days, called "ln-symmetry") where there's no penalty phase if one side accidentally publishes an old state: you just fix it up instead. This does some cool things:
1. No more risky backups, where you can lose all your funds by restoring an old backup. 
2. You can now have more than 2 parties sharing a channel, and build on top of that.
3. We can reduce latency for payments in some cases, making it twice as fast. 
4. It's generally simpler: you only need to remember the last state, as you can fixup and old ones 


As to not knowing who I am, that's totally fair!  I would much rather people evaluate a proposal on its merits, not the reputation of the proposer. As a non-expert, it can be impossible to distinguish someone who is good at their job, from someone who is good at self-promotion :(
 
 The problem with penalty-less channels is they destroy the strong disincentive to cheat. There needs to be a penalty for LN to stay secure. It doesn't need to be 100% of the channel capacity, just an amount high enough to deter abuse. 
 No, because the defense is now *also* much easier. Watchtowers are trivial, since they just spend the latest tx.

I was originally of the same mind as you, but this seems to be our direction anyway, since people want zero reserve for UX reasons...

 
 If I'm going to close the channel anyway why wouldn't I use whichever state is the most favorable for me? Sure with watchtowers the probability of success is low but I don't see any downside trying. If failure meant losing $5 worth of btc it'd be at least some reason not to. 
 Note that I do think that losing whole channel on backup failure is excessive punishment. No punishment is also a problem. 
 It's always cheaper to mutual close so it's only when you're going to close unilaterally. And at least this peer is very unlikely to open a channel with you again if you're a pratt. It's hard to quantify reputational damage though, to be fair. 
 Ostracizing may be harsher punishment than taking sats though.