Published on: 2023-04-28T15:57:57+00:00
The Lightning Network is a payment routing system that uses channels instead of nodes. Channels are categorized as physical or logical, with logical channels being negotiated by users for routing fees. Rusty Russell's proposal for channel_update_v2 messages can aid in understanding the concept. Gossiping channel capacity is reasonable when using channel_update_v2 messages and comprehending logical channels.John Newbery has discussed scaling Bitcoin through Hierarchical Channels and Timeout-Trees as a solution for resizing channels off-chain. However, creating channels off-chain remains a challenge, which Timeout-Trees could potentially address. Newbery also suggests instantiating all off-chain channels without the need for factories, ensuring the creation of numerous channels. While he seeks feedback from the community, he acknowledges that his proposal requires further development.A contributor to Lightning-dev raises a question regarding routing to a "channel" rather than a node in relation to a paper. The contributor highlights complications in linking "FG" back with "F" and "G," setting fees, and communicating fees/max_htlc/etc. This poses challenges to gossiping channel capacity, but gossiping the overall factory's capacity can still provide an estimation of the Lightning network's capacity.John Law introduces a construction for two-party lightning channels called "tunable penalties" that imposes penalties on cheating without resulting in complete loss of funds. This differs from eltoo, where older states can still close the channel. However, tunable penalties add complexity as the counterparty can hold channel funds hostage indefinitely if an old transaction is broadcasted.John responds to Dave's comments on his paper about tunable penalties, explaining the benefits of off-chain channel resizes and hierarchical channels. Hierarchical channels allow for flexible off-chain resizing without limitations of a single pool. Challenges include distributing output funds to individual users, accommodating more than two users per channel, and resolving HTLC outputs. The Tunable-Penalty Factory protocol appears promising for updating hierarchical channels off-chain.Implementing hierarchical channels could enhance the scalability, efficiency, and usability of the Lightning Network without requiring changes to the underlying Bitcoin protocol. The article provides links to related research and proposals for further exploration.
Updated on: 2023-08-01T01:05:59.629816+00:00