<div dir="ltr">Ok good. We have established it to be a non-trivial cost.<div>Now, what is the growth complexity of the total cost of the network in terms of number of connections each hub has to other hubs? And then, consider a payment channel with many hops in it. The end-to-end users would have to swallow all the costs of the hubs in the channel.</div></div><div class="gmail_extra"><br><div class="gmail_quote">On 9 August 2015 at 22:57, Patrick Strateman via bitcoin-dev <span dir="ltr"><<a href="mailto:bitcoin-dev@lists.linuxfoundation.org" target="_blank">bitcoin-dev@lists.linuxfoundation.org</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div bgcolor="#FFFFFF" text="#000000">
The costs of operating a hub are as follows:<br>
<br>
Time value of the funds the Hub has locked up in payment channels.<br>
Enhanced risk of loss of control of private keys (the keys
necessarily need to be on an internet connected system).<br>
Operating costs (I expect this will be minimal).<br>
<br>
The hub can charge a fee for it's services to recoup these costs.<div><div class="h5"><br>
<br>
<div>On 08/09/2015 02:45 PM, Hector Chu via
bitcoin-dev wrote:<br>
</div>
<blockquote type="cite">
<div dir="ltr">Tom, my understanding is that the money that is
debited from a payment hub is simultaneously credited from
either another payment hub or the person making the payment, so
that the net funds flow at a payment hub always sums to zero. So
no, there is no credit advanced by the payment hub to anyone.
<div><br>
</div>
<div>Given Mark's previous answer of using CPFP and other tricks
to pay for the Bitcoin transaction fees, we can assume that
Bitcoin fees do not play a part in the payment channel
balances.</div>
<div><br>
</div>
<div>So, the interesting question is what are the costs of
running a payment hub? The tx fees that a payment hub would
have to pay to settle its Bitcoin transactions would be passed
on as a cost to the clients of the payment hub. Also there is
a cost to locking up funds in a payment channel (time value of
money). The lost interest or opportunity cost on those funds
would need to be paid for by its clients as well. And don't
forget normal running costs such as networking and
electricity.</div>
</div>
<div class="gmail_extra"><br>
<div class="gmail_quote">On 9 August 2015 at 22:27, Tom Harding
via bitcoin-dev <span dir="ltr"><<a href="mailto:bitcoin-dev@lists.linuxfoundation.org" target="_blank">bitcoin-dev@lists.linuxfoundation.org</a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><span>
<p dir="ltr">On Aug 9, 2015 11:54 AM, "Mark Friedenbach"
<<a href="mailto:mark@friedenbach.org" target="_blank">mark@friedenbach.org</a>>
wrote:</p>
<p dir="ltr">> On the contrary the funds were advanced
by the hub on the creation of the channel. There is no
credit involved.<br>
</p>
</span>
<p dir="ltr">That's a chuckle. </p>
<p dir="ltr">As I said, nothing requires the hub to advance
anything, and if it does, Bob can expect to pay for it.</p>
<p dir="ltr">We'll see whether hubs assess a fee for
depositing funds, whether the fee depends on the amount
deposited, and whether it depends on the amount of time it
stays there.</p>
<p dir="ltr">I predict "all of the above." There is a name
for these kinds of fees. Can you guess it?<br>
</p>
<br>
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