Some subsidiary points on Lightning Network

Who performs the Routing in Lightning Network?

  1. A cryptographic contract which commits Alice to signing over 1 mBTC to Bob if he can provide the secret.
  2. Designation of Carol as the next hop.
  3. A cryptographic contract which commits Bob to signing over 1 mBTC to Carol if she can provide the secret.
  4. An encrypted message to be delivered to Carol.
  1. A cryptographic contract which commits Bob to signing over 1 mBTC to Carol if she can provide the secret.
  2. The encryted message to Carol.

Observations

  • There is no centralized routing queue. Routing is performed by the sender with knowledge of their local neighborhood.
  • All participants in a multihop payment have to be online to agree on the contract for it to come to pass. Thus, the expected occurrence of unresponsive channels is low. If a node along the route dropped from the network, a failure response is returned.
  • The recipient is paid immediately. Others are incentivized to settle as quickly as possible. Only the amount locked to a contract is unavailable for transactions, the remaining capacity is free to be used in other payments.
  • Unresponsive behavior is easy to punish: Nodes that don't respond to payment requests will not be considered for later payment attempts. Eventually they lose their channel partners for not being useful. The network mends by finding routes around them.
  • Every participant in a multihop payment learns only about the previous and next hop in the chain. They also cannot tell if a neighboring hop is sender or receiver of the payment.

"Hubs" are just well-connected nodes

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Bitcoin enthusiast, interested in UTXO management and coin selection. Contributor to Bitcoin StackExchange.

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Murch

Murch

Bitcoin enthusiast, interested in UTXO management and coin selection. Contributor to Bitcoin StackExchange.

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