Author: Samuel Kremser 2016-04-01 18:37:10
Published on: 2016-04-01T18:37:10+00:00
The email conversation is about a proposal for Decentralized Service Provider (DSP) to grant end users access to the Lightning Network and offer much larger channels, allowing them to send and receive more money. DSP would consist of several entities, geographically distributed, that manage Bitcoin deposits and withdrawals, Lightning Network Channel(s), and communication with end-users and the Lightning Network. Deposit addresses for the DSP are multi-sig addresses, so a majority of DSP's entities is required to sign withdrawals. The Lightning Network channels are managed in this multi-sig style. Due to this multi-sig construction, a single entity of a DSP couldn't steal the end-user's Bitcoins. DSP's entities communicate with signed messages with their end-users and with each other, so everything is provable. Another advantage of DSPs is that fewer channels are required, thus saving even more space on the Blockchain than Lightning alone. However, one limitation is that service providers will need to promote themselves in open as they unfortunately cannot be anonymous and hide behind TOR, for example, because if a customer picks a consortium of 7 anonymous providers, they could very well be the same person. These providers would be exposed to DDoS attacks.
Updated on: 2023-05-23T23:09:02.284918+00:00