#bitcoin-lightning FAQ: Why the 0.042 bitcoin limit?
In my previous FAQ post on lightning I mentioned the 32-bit value (“amount_msat”) in the protocol for HTLCs: this restricts any single payment to 4294967295 millisatoshi, or ~$40 as of this writing. This was agreed early on between Tadge, Joseph and myself (when it was closer to $10) and confirmed in the Milan Summit, but it’s worth delineating the reasoning behind it. Channels themselves are limited to 4x that amount, but that’s a simpler thing to change.
Software Has Bugs
All software has bugs; the first releases of bitcoin had an overflow bug which let you create money. I guarantee that early releases of lightning clients will have bugs, and people will lose money because of them; in the minor case because of channel breakdowns and the associated fees for unilateral close and re-establishment, in the major case because someone steals their keys and drains their channels.
People get extremely excited about this stuff! (Hey, me too!) Lots of people are spinning up related or similar projects, and everyone is itching to use it. And since nodes can charge fees for routing, some people have suggested that early adopters could get rich: they won’t, as my job is to make sure it’s so easy to run a node that there’s infinite competition, but that won’t stop some people trying.
Bad News Travels Poorly
No matter how many warning labels you apply, nobody reads them; they just get annoyed. Experts tell us not to keep our bitcoins on an exchange, or invest our life savings, or keep large amounts in online wallets, or assume bitcoins fees will remain insignificant, or warning about transaction malleability or the dangers of mining consolidation.
Yet we don’t listen very well: Our echo chamber contains a heady combination of enthusiasm, natural tribalism, vested short-term interest and growth amongst less-technical friends who don’t know the minutiae.
When Mt Gox collapsed (yep, I lost a few bitcoin too, see Bad News Travels Poorly) I started reading the threads of people who lost their children’s college funds, or who had to tell their Fiancée or partner but didn’t know how… I had to stop, because it was heartbreaking.
If you want a reality check on developing financial software or services, I recommend Googling for such tales and spending some times understanding what you’re risking, and who’ll pay if you’re wrong.
A Good Place To Start
Micropayments are a great place for lightning to start anyway: they get us more traffic and more growth to study the effects on the system, they solve something the on-chain network can’t do well and create many opportunities to explore, and fit well with lightning’s by-amount fee structure (vs. bitcoin onchain being by-weight).
The Training Wheels Are For Me, Too
I sleep better at night knowing that if you lose money because of my bug, and I can buy you a beer/coffee in exchange for your story and we’re about even.