Author: Corné Plooy 2018-02-07 10:00:09
Published on: 2018-02-07T10:00:09+00:00
The Lightning protocol allows for better possibilities in channel rebalancing compared to Amiko Pay. In Lightning, the source can explicitly specify the entire route and even make money by rebalancing other people's channels if any channels offer negative fee rates to have them rebalanced. Channel rebalancing may be useful to reduce risk that some channels on the 'others' path might be saturated at inconvenient moments. For example, if Bob receives monthly salary from Alice and regularly wants to buy things from Carol, he would probably want to transfer his funds from the A-B channel as soon as possible to the B-C channel. Another use case could be privacy protection where Bob-Carol could be a pseudonymous contact on the TOR network. Regarding the scenario of balancing channels, Bob can balance his channels by paying himself an invoice of 1BTC and making sure the route goes out through Alice and comes back via Carol. Bob pays fees so he isn't ashamed if it disturbs the other balances in the network. However, there is a risk that the entire network will start doing this and it will start oscillating.
Updated on: 2023-05-24T21:00:12.114896+00:00