Author: Mark Friedenbach 2015-06-28 17:12:35
Published on: 2015-06-28T17:12:35+00:00
The lightning network enables participants to send and receive coins through various hub connections without the need for on-chain settlements. Like a TCP/IP data chain, when settlement occurs, the network only sees the net amount of coin that has gone through each segment without any context, making it difficult to track who sent what to whom. Each lightning channel can be considered to have a pseudonymous identity, which is closed when funds are needed for non-lightning reasons or when hubs need to rebalance. The closure of each channel can even be coinjoin'd with the cooperation of the other party. Lightning solves a problem where participants have semi-long lived payment endpoints. Every lightning transaction is a valid bitcoin transaction that could be posted to the Bitcoin network to reclaim funds if a hub went permanently offline. It has been described as a write coalescing write cache layer for Bitcoin.
Updated on: 2023-06-10T01:24:59.227262+00:00