Why Bitcoin's Lightning Network Faces Fee Challenges

As Bitcoin transaction fees continue to soar, this assumption is unraveling, threatening the very foundation of Lightning Network’s functionality.

In this article, we try to summarize what is going on with the core problem related to scaling on-chain fees in Bitcoin’s Lightning Network.

The Fee-Dependent Design in the Lightning Network

The Lightning Network was conceived as a second-layer scaling solution. Its goal is to alleviate congestion on the Bitcoin mainchain by enabling off-chain transactions. But, it was designed assuming that the fees for on-chain transactions would be low, making it cheap to open and close channels. In the following thread, you will discover a critique that brings attention to the LN fees and existing Lightning channels.

Nowadays, Bitcoin transaction fees have been on an upward trajectory, challenging the feasibility of Lightning Network’s design. This can make existing LN channels useless due to the excessive reserves required for a single payment. As Bitcoin and dollar fees are sure to rise, we need to address this problem urgently.

Real-World Experiments About Bitcoin’s Lightning Network )LN) Fees

To prove how high the are fees in the LN, Samson made an experiment with three popular Lightning Network wallets: Breez, Phoenix, and Wallet of Satoshi (WoS). The results paint a vivid picture of the challenges users face in the current fee environment.

1) Breez: High Setup Fee Hurdles

In this option, the Brezz wallet has a 1% setup fee. The fee is too high for bringing in new Bitcoin users, making us wonder if Lightning Network is scalable.

2) Phoenix: Fee Configuration Quandary

Phoenix presented difficulties in sending funds, requiring users to set a maximum fee amount. So, despite attempts to exceed estimated fees, the experiment faced roadblocks. This underscores potential usability issues for new users and the risk of losing a significant portion of incoming payments.

3) WoS: Stuck in Pending Limbo

The wallet of Satoshi remains a preferred option for many due to its no-KYC feature. However, not everything is good for this tool. In this experiment, he attempts to remove all funds from the wallet resulting in a persistent “pending” status, raising concerns about the reliability of Lightning Network operations.

The core problem with Lightning Network lies in its fee-dependent design. Ben’s observations and real-world experiments with popular wallets underscore the pressing need for addressing these concerns.

As Bitcoin transaction fees show no signs of abating, a critical reevaluation of Lightning Network’s design and functionality becomes critical to ensure its long-term viability as a scalable solution.


The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.


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