Author: Joseph Poon 2015-07-29 19:50:06
Published on: 2015-07-29T19:50:06+00:00
In a discussion regarding Hashed Time-Lock Contracts (HTLCs) on Bitcoin's Lightning Network, Joseph Poon and Rusty Russell pointed out two implications. Firstly, constantly watching the blockchain is required due to the de-facto low interval of HTLC-TIMEOUT. If a channel's balance changes drastically, the minimum HTLC-TIMEOUT would be the maximum time between watching the chain, leaving the party not paying attention at risk of losing funds. Secondly, doubling the HTLC timeout may bias towards less graph centralization, but will result in higher fees. The cause of these implications is derived from the fact that the HTLC timeout and the OP_CSV revocation are interlinked. Poon was more concerned with the reserve balance concept, which limits transactional flow and reduces liquidity by 4x in best-case scenarios.
Updated on: 2023-05-23T18:40:17.047451+00:00