On the scalability issues of onboarding millions of LN mobile clients

A key point of debate is the implementation of BIP 157, which aims to improve privacy for light client users but has raised concerns regarding scalability and potential strain on the full node network. Some community members argue that while BIP 157 might enhance privacy for light client usage, it does not offer substantial benefits to full node users compared to more efficient protocols like Stratum/Electrum. The possibility of a distributed denial-of-service (DDoS) attack on the full node network due to a surge in BIP 157 clients further compounds these concerns.

At the heart of the discussion is the principle that Bitcoin's security model depends on the assumption that a majority of the economy verifies transactions using their own full nodes. This model faces challenges as the adoption of the Lightning Network (LN) grows, which could potentially shift user reliance away from running full nodes to fast, affordable, confidential, and censorship-resistant payment services. Critics, including Luke Dashjr, warn that any deviation from this model could undermine Bitcoin's security, suggesting that efforts to improve the experience for users without full nodes should be avoided. They argue that without significant improvements to the ratio of full nodes, Bitcoin risks failure.

The idea of introducing monetary compensation for servicing filters, akin to the watchtower paradigm, is proposed as a solution to address free-riding by light clients. This approach, while still under analysis, suggests using micro-payment capabilities to price chain access resources, potentially aligning with the LN's security model which diverges significantly from basic on-chain transactions. The worst-case scenario for an on-chain attack involves a malicious light client server presenting an invalid PoW-signed chain for double-spending, whereas in LN, the entity controlling a user's view of the chain can mislead them about crucial details such as channel status or the blockchain's real tip.

Furthermore, the conversation extends into the practicality and ethics of relying on a few thousand full-node operators to service millions of LN mobile clients. The bandwidth scalability wall poses a significant challenge, with wallet vendors possibly reaching this limit in a few years if better solutions are not pursued. The distinction between client and peer roles is also debated, highlighting the lack of hybrid implementations that would allow clients to transition into relaying blocks.

In conclusion, the debate underscores the critical balance between fostering adoption through innovative technologies like LN and maintaining the robust, decentralized security model that Bitcoin was built upon. The discussions reflect a broader dialogue on how best to scale Bitcoin's infrastructure while ensuring its core principles remain intact.