delvingbitcoin

## Combined summary - Estimating Likelihood for Lightning Payments to be (in)feasible

The discussion centers on the nuances of network state weighting, liquidity distribution in channels, and their implications for node balance uniformity within the context of minimum cost flow (MCF) computations and wealth distribution.

The sender initially corrects a miscount in states to ten, which alters the basis of their argument regarding the probability models used to compare wealth distributions and payment feasibility. This correction leads to a refined analysis that challenges the equivalence of uniformly weighting all network states to independently choosing channel balances, arguing that such an approach does not accurately reflect the sum distribution of node balances.

As the conversation progresses, it delves deeper into the methodology of computing probabilities for feasible payments and MCF in networked systems. A significant focus is placed on a model illustrating wealth distribution across nodes, where the sender revises the probability calculation of specific payment scenarios based on corrected wealth distributions. Through detailed examination, the correspondence assesses how various distributions allow or disallow certain payment configurations, challenging initial assumptions with counterexamples backed by theoretical models. Specifically, it references a paper that suggests liquidity is uniformly and independently distributed across channels, which plays a crucial role in comparing different flows and their feasibility (read the paper). This part of the discussion highlights the complexity of accurately modeling payment systems and the importance of considering a wide range of assumptions about resource distribution.

Furthermore, the correspondence critiques an innovative approach by Rene Pickhardt, focusing on the comparison between the MCF probability and payment feasibility probability across different models. It emphasizes the distinct probability spaces these models operate within, suggesting that direct comparisons may be misleading. By dissecting the underlying assumptions and calculations of each model, the critique unveils foundational discrepancies in evaluating successful transactions within a network, urging for a nuanced understanding of their respective methodologies.

Exploring practical applications, the summary discusses how advanced analytical capabilities could revolutionize cryptocurrency transaction management through examples involving "Businessperson Bob" and "User Alice." Bob's node management software autonomously optimizes financial operations by assessing transaction likelihoods and liquidity advertisements, while Alice's wallet configuration addresses recurring payment challenges by adjusting retry intervals based on transaction success probabilities. These scenarios underline the potential of integrating sophisticated network analytics to enhance transaction efficiency and reliability.

Rene Pickhardt's development of a mathematical theory aiming to understand the Lightning Network's dynamics further enriches the discourse. His work proposes moving away from traditional liquidity estimation models towards assuming all feasible wealth distributions are equally likely, providing a novel method to compute payment success rates without detailed knowledge of liquidity distributions. This approach, highlighted through an iPython notebook (view the notebook), reflects a more accurate representation of wealth distribution realities within the network, challenging the feasibility of achieving 100% payment success rates due to the dynamic nature of network constraints and wealth distributions.