There is no lending of money. It is not an IOU system, there is no lending. All money exists and is accounted for on the blockchain.
Yes agree but they need to lock money in the main BC as i understand it so you cannot owe a hub more than
you have on deposit in the main BC and this also happens between Hubs
Anyone can become a hub but for the conversation lets stick to saying wallet if only one channel opened even if Tor type routing is involved
and uses wallets to achieve this. (think South Korea here)
It isn't a chain, it is a route. The graph of nodes is not the extremely degenerate case of a linked list or hub and spoke model. Sure the maximum amount is limited by the smallest amount in the route, but if that amount is too small, another route can be chosen that allows for more money to be transferred if necessary. Furthermore, each route is for one use only, they aren't permanent and do not always have to be used for payments to the same person.
Major hubs that have many channels open can find a route but opening a channel effectively locks money on
main BC so they can both used set amount in private ledger
Bob----->HubUK<><><><>HubUSA<><><><>HubIndia<------Alice
or
Bob----->HubUK<><><><>HubEurope<><><><>HubIndia<------Alice
Both HubUK and HubUSA would each lock $1m on main BC so they have working
capital flows which could well shift backwards and forwards $100m over a month
but on settlement (close a channel) both locks are removed and if HubUK owes say $50,000
balance to HubUSA then UK gets to pay the BTC miners fees.
Hub discovery is going to be like node discovery and each hub keeps a private ledger
so what happens if HubUK goes down or can the hubs be configured star shape to offer
redundancy ?
Bob already has a channel open to HubUK and has locked $1000 on BC, sent $500 out, received no payment
so has a balance of $500 with HubUK but Bobs friend Paul uses Bob as a hub and wants to send $2000 to
Ebay but this would not be possible because Bobs channel does not have the balance to cover Paul's purchase
Are we in agreement so far ?