delvingbitcoin

Estimating Likelihood for Lightning Payments to be (in)feasible

Estimating Likelihood for Lightning Payments to be (in)feasible

Original Postby renepickhardt

Posted on: June 25, 2024 22:38 UTC

The innovative application of node management software in facilitating Bitcoin transactions, specifically within the context of the Lightning Network, presents an interesting approach to optimizing payment processes.

Bob's utilization of his node management software to assess and act upon the feasibility of receiving payments up to 0.05 BTC showcases a strategic method to enhance transaction efficiency. The software conducts background calculations to determine the average likelihood of a successful 0.05 BTC payment from every node to Bob's node, considering current liquidity advertisements on the network. By simulating potential scenarios where Bob could establish new channels with advertisers, the software proactively seeks out opportunities to increase the probability of successful transactions.

An additional perspective on enhancing this system involves analyzing the distribution of payment amounts Bob could receive, based on various wealth distributions across the network. By employing specific libraries and methods, such as those detailed in this Python library and further explained in associated notebooks, it's possible to model and understand feasible network states more accurately. Techniques like Gomory-Hu Trees offer efficient solutions for calculating all-pair maximum flows in the network, offering a refined view of potential payment channels' capacity and feasibility.

However, the practicality of applying these models faces challenges as the size of the Lightning Network grows. The difficulty lies in sampling realistic Bitcoin wealth distributions that are feasible within the network's constraints. The process not only demands substantial computational resources but also requires a sophisticated understanding of the network's dynamic liquidity. The conversation with Stefan Richter, for instance, highlights the complexity of determining feasible wealth distributions, pointing to the necessity of solving multi-source multi-sink minimum flow problems through linear integer programming or other advanced mathematical techniques.

In parallel, the described use case involving Alice's monthly bill payments via BOLT12 offers further illustrates the practical benefits of evaluating payment feasibility. By configuring her wallet to assess the likelihood of transaction success and adjust retry intervals accordingly, Alice's approach mitigates the risk of payment failures. This adaptive strategy underscores the potential for leveraging network analytics to inform user decisions, ensuring more reliable and efficient payment experiences on the Lightning Network.

Together, these discussions and methodologies underscore the evolving landscape of cryptocurrency transactions. By integrating advanced mathematical models and software capabilities, users and developers alike can navigate the complexities of the Lightning Network with greater precision and success.