Author: Joseph Poon 2016-01-17 01:45:33
Published on: 2016-01-17T01:45:33+00:00
Lightning Network, a decentralized off-chain network that processes Bitcoin transactions, has developed a 2-of-3 party escrow system. This allows for a third-party mediator to verify whether a seller should be paid in a payment for goods and services. The system requires two of the three parties to agree on the transaction before the HTLC (hashed timelocked contract) is fulfilled. Each hop in the payment requires the 2-of-3 condition, with long timeouts to ensure security and give enough time for the escrow service. The sender and receiver can authorise payment in most cases where there is cooperation, and the escrow is only contacted if there is non-cooperation. The proposed HTLC wire message determines the type of resolution states, which include recipient paid, sender refunded via timeout, and payment immediately cancelled with sender refunded.
Updated on: 2023-05-23T22:00:33.546309+00:00