Author: ZmnSCPxj 2017-05-05 10:00:40
Published on: 2017-05-05T10:00:40+00:00
The idea of combining on-chain and off-chain payments through onion routes has been deemed as a great feature with various potential applications. For instance, it can be used for exchanges where an individual can route from their Bitcoin Lightning Network (LN) node to a BTC/LTC exchange node and request the final hop to go to an LTC address they control via an on-chain HTLC transaction. This way, one can initiate Litecoin connections to Litecoin LN nodes directly without going through an exchange each time or hodl their LTC. This eliminates the chicken-and-egg problems that individuals face when trying to receive Litecoin via Lightning if they don't have LTC to initiate a channel on the LTC side.While the current 1.0 spec requires the initiator to be the one and only one to put up funding for the channel, there's no explicit reason why channel opens require the initiator to pay for the fees in setting up the channel. The "invitation to connect to me" to make a channel is set up to send money to an individual, which helps the new-business-node case (where Alice is setting up a business and wants to initiate receive channels rather than the default send channels). However, this request won't work in situations where an individual spams the network with requests, wasting everyone's time by making those channels, locking up their funds and wasting their transaction fees. Instead, allowing onion routes to start and end on-chain can modify channel states while ensuring that everyone is protected from bad actors on the Lightning Network. Although, there's some risk attached to making a request to make a route to a node and having that route end up to, say, 1.0 BTC to an on-chain public key an individual controls, and that node accepts. In such cases, one can use this information to assess if they want to hack that node's operator's computer.
Updated on: 2023-05-24T01:37:47.931872+00:00