In his recent talk, Andreas Antonopoulos said "By probably the end of 2016, Bitcoin will have a hybrid proof-of-work/proof-of-stake system." and then continues to label the Lightning network as a POS system.

Is the Lightning network a proof-of-stake system?

2 Answers 2


Calling the Lightning Network (LN) a Proof-of-Stake (PoS) system is orthogonal to the concept usually labeled as PoS.

What we usually describe as PoS is a mechanism to achieve distributed consensus among a network of participants. Staking is hereby providing updates to the whole network's state, by which participants earn fees for contributing to the validity and the security of the network.

On the other hand, there is no global consensus in the LN. The LN is a system of bilateral smart-contracts, where you may earn a fee by providing liquidity to other users. Nodes along a payment path forward payments, but even these contracts are created, verified, and executed between a small number of participants. Conflict resolution is achieved by publishing on-chain transactions which indirectly leverages the proof-of-work of the Bitcoin network. While nodes announce themselves and their channels to their peers, there is no datum on which the whole LN must agree.

In fact, not even the two channel owners locally run a consensus protocol. If one side proposes an HTLC, the other side can accept or decline it. When the channel owners disagree on something, e.g. feerates, or collaboration breaks down in another manner, the process breaks down. They will not reconcile, but shut down the channel and disconnect rather than converging on a shared state.

  • I could see the LN as being considered a kind of proof-of-stake network, only insomuch as nodes with large amounts of bitcoin tied up in their channels will be more likely to be used as central hubs and for larger transactions. Still, this is vastly different from other proposed and implemented proof-of-stake systems.
    – Jestin
    Commented Apr 25, 2016 at 18:59
  • 1
    @Jestin: There is stake involved, but where is the "proof" part?
    – Murch
    Commented Apr 29, 2016 at 9:06
  • I don't think there is any proof. It's more like a network effect, where those who have the most bitcoin to lock up in various channels will eventually become the central hubs of the network, and therefore earn the most fees. The decentralized control comes from the Bitcoin network, itself, not the overlay that is the LN. Your stake invested into your channels doesn't really give you any more control of the network than anyone else. For example, a majority stake holder could not prevent a transaction from going through, since it could be routed to bypass that stakeholder's nodes.
    – Jestin
    Commented Apr 29, 2016 at 13:27
  • @Jestin: Agreed. (Continuing to be the devil's advocate here:) It's not a consensus system, there is no proving involved. Why would you then call it "a kind of proof-of-stake"?
    – Murch
    Commented Apr 29, 2016 at 13:54
  • A pure proof-of-stake network has proven to be hard to implement, and many of the attempts/proposals are hybrid with some other form of consensus or trust. I can see AA's point how the LN might not be so different, since a larger stake gives you an advantage in the network...but I also don't really agree with him. The larger stake gives competitive advantage, but not any power of control. Stake plays a role, but not the same role as is played by hashing in Bitcoin. However, since none of the other PoS proposals I'm aware of rely 100% on stake, I can see why AA made the connection.
    – Jestin
    Commented Apr 29, 2016 at 14:17

Let me disagree with the one asking the question and answering it, the Lighting Network is using PoS, the network connects nodes by channels that are created using a transaction on chain (the funding transaction), no LN connection is possible without it, this transaction is the stake.

Also, the strength of the connection is given by the bitcoin blocked on the funding transaction, limiting the volume that can be transacted on that channel.

That make a clear PoS based network.

What @Murch is pointing is that it: "is orthogonal to the concept usually labeled as PoS." and I partially agree with that, given that the term "PoS" is very commonly used for blockchain consensus, and as he mentions "there is no global consensus in the LN".

But, while there is no global consensus on the LN, there are local consensus on each channel, and also on all the channels involved on each transaction (the payment path), so there are many local consensus and those are based on a PoS.

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