Not a miner here, just wondering what other changes might be coming to the space.
With Lightning fees are really low, how do miners manage this?
Does this have a simple answer or is any resource I can look?
Thanks in advance.
The Lightning Network is a smart contract system based on bilateral payment channels. Multi-hop payments are facilitated by third-party nodes forwarding payments along a route connecting sender and recipient. For this service, the forwarding nodes will likely require a small fee corresponding to the amount forwarded.
Payments are negotiated exclusively among the participants of such a payment route, and therefore miners will not directly benefit from Lightning Network fees at all.
However, since the Lightning Network's fees are relative to the sent amount and the Bitcoin on-chain fees are relative to the amount of blockchain space occupied by the transaction, it seems likely that the two layers' payment activity will establish a self-regulating equilibrium: smaller payments being shifted towards LN, bigger payments being executed on the Bitcoin blockchain.
In the past years, we've seen a trend of the average value of on-chain transactions increasing significantly. In the last year the average transaction's value increased from $4,000 to $18,000. Since the emergence of Lightning Network is expected to vastly increase the overall utility of Bitcoin, and the creation and resolution of LN payment channels will add further demand for on-chain transactions, it seems likely that the overall transaction fee revenue for miners will further increase.
Miners do nothing with Lightning Network due off-chain transactions.
Miners are confirming only on-chain transactions.
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1Note that miners have to confirm both the channel opening transaction and the channel closing transaction, they just don't see the intermediate exchanges while the channel is open – MeshCollider♦ Jan 21 at 13:09
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1Yes, I understand those concepts, however does it mean that miners get the same amount of fees using lightning than without using lightning? – Kibou Jan 21 at 17:00
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@Kibou, if you understand those concepts, why are you asking about miners? Miners aren't involved. – Jestin Jan 21 at 20:08
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1Still can't get it. I know miners are not involved. If I was paying 0.001026 BTC for a Tx, and now I am paying virtually nothing, it means miners are losing lots of money. So with these maths it seems like miners lose a lot of money. – Kibou Jan 22 at 11:22
Miner fees and lightning network fees are different things.
Miners are only involved in the opening and closing transactions of a channel. To them, those are just regular transactions, and as such, those transactions will have normal fees.
The fees on the lightning network are paid to hubs that bridge a transaction from one channel to another. There are no on-chain transactions involved in this, and thus no miner fees.
Miners will not directly care about the price of fees on the lightning network.
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If users do not pay the fees, who pays the fees? Maybe this is a very obvious question, sorry. – Kibou Jan 21 at 17:49
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Lightning network users pay fees, but not miner fees. They pay fees to the hubs that their transactions are routed through, but these fees are different than Bitcoin miner fees. The hubs pay miner fees for the opening and closing transactions of their channels, which are the only actual on-chain transactions of the lightning network, and thus the only time miners are ever involved. – Jestin Jan 21 at 20:06
