Author: Abhishek Sharma 2018-02-04 18:21:48
Published on: 2018-02-04T18:21:48+00:00
Abhishek Sharma, a Computer Science student from Brown University, shared an idea on how to modify the Lightning Network to minimize the number of channels needed to be open. He proposed a specific type of transaction where three parties commit their funds all at once and can move their funds between the three open channels between them. These channels would be Lightning Network channels, and the three of them could transact with each other and modify balances in their individual channels at will. This special agreement between the three parties enables them to move their funds *between *channels provided they have the permission of the counterparty to the channel they move their funds from. In his proposal, A, B, and C create a commitment transaction committing .5 BTC (3 BTC in total) on their end of each channel. After some amount of time transacting normally using the Lightning protocol, these channels' balances are updated. If A wants to send .5 BTC to C but does not have enough funds in that channel to do so, she asks for B's permission to move those funds over to her account with C. She gets this signed slip from B and presents it to C. A, B, and C continue trading on their updated balances until they wish to close out their channels.Sharma believes this mechanism works because C always knows exactly how much should be in channel AB if she follows the protocol, and can prove this. If some parties collude to trade on an old balance, C has proof of collusion. In the example where there are parties A, B, C, D, and E, and the following channels and balances exist, D can send E 1.0 BTC by asking B to move A's 1.0 in channel AB to channel AC, enabling D to route 1.0 BTC from A to C and finally to E. Sharma seeks feedback on his idea and welcomes any questions for further explanation.
Updated on: 2023-05-24T19:06:41.162883+00:00