[Lightning-dev] Rebalancing argument

[Dmytro Piatkivskyi]

Hi everyone,

I have been working academically on the Lightning network for a while now. I didn't not participate in the list to form my own vision of what it should be. So please, bear with me if I'll be saying nonsense sometimes.

There has been a lot of discussion on sending cycle transactions to oneself to 're-balance' the network. On LN mailing list<https://lists.linuxfoundation.org/pipermail/lightning-dev/2018-February/001005.html> [1] or numerous places elsewhere. There has been even a paper suggesting a smart mechanism to do the re-balancing (see Revive or Liquidity network [2]). My question is what do we actually get from it? [3] states that the distribution of funds in channels does not really affect the network liquidity. I can see cheaper fees or shorter paths if the network is kept balanced. But don't you think that a smart fee strategy will do the job?

To save your time, [4] explains the gist from [3].

[1] https://lists.linuxfoundation.org/pipermail/lightning-dev/2018-February/001005.html
[2] https://www.reddit.com/r/ethereum/comments/7bse33/were_very_happy_to_announce_the_liquiditynetwork/
[3] https://arxiv.org/abs/1007.0515
[4] https://medium.com/@dimapiatkivskyi/why-would-you-re-balance-a-payment-network-796756ad4f31
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