Topic: Just a quick question on the lightning network (Read 314 times)

You are correct.

I was thinking about someone somehow closing the channel with the entire channel balance being stolen.

I hadn't thought it through far enough to realize that you only need one key in a channel to pretend to be that person and route just their funds to yourself.

Like I said:

In order to send money via LN to someone, you do not need to have a direct channel open with that person, you need to have available funds in a channel that has an open channel with that person, with available funds to be sent, either directly or via a series of channel links. This means someone who compromises private keys associated with an LN channel could simply send an LN payment to themselves provided this person has an open channel that can receive sufficient funds.

You are correct.


It is right.

The participants in a channel will share unbroadcast transactions.  At any time, either participant can close the channel by signing and broadcasting the most recent shared transaction (which will result in both participants receiving their appropriate portion of the funds in the channel).  The risk is that your channel partner might try and close the channel with an old expired transaction.  However, the transactions that close channels are time-locked, so that your partner will not have access to those funds for a predetermined amount of time. During that time, if you can prove that there is a more recent transaction in the channel, then the time-locked transaction will allow you to take ALL of the funds from the channel immediately (before your channel partner's waiting period has expired).  As such, your channel partner would be rather foolish to try and close the channel with an expired transaction unless he is VERY CERTAIN that you will not notice until the time lock expires.


Channels are currently being created with a limited amount of funds in them.  This means that there is a limit to the amount that you can send PER CHANNEL.  If you have multiple channels, then you can use them to send more funds.  As Lightning Network matures, channels will be opened with higher limits.


While Lightning Network will operate MOST EFFICIENTLY over channels that are running 24/7, it is possible and safe to shut down your node periodically as long as you are monitoring the blockchain for expired channel states more often than the predetermined lock time.


Only the keys for the funds that are in the lightning channel.  Funds that have not been placed into a channel can continue to be secured with offline keys.  Since a Lightning Channel transaction is a multi-sig transaction, I believe an attacker would need to gain access to private keys from BOTH sides of the channel.  This is a risk, so users should consider their own risk tolerance when deciding how much value to use when opening a channel.

Thanks guys for the replies.
Love this section, look like the only one safe from senseless posts

@newIndia
I am sorry but though the infographic isn't really explaining what LN is about, thanks for sharing I like reading such content.
But there is no answer to what I was looking for, and it rather briefly explains what is Bitcoin about and its popularity

I might be mistaken, but I foresee that future clients will give the ability for spender to just switch to on chain, if, for some reason, the limits of data (extremely unlikely) or of amount in channel (also unlikely once many interconnected channels happen) are reached. This probably will get to the point where the network seamlessly determines, and maybe even prompts channels if they would like to "top up" or connect to other channels to expand limits, or simply perform on chain txs.

Since by that time LN will free up mempool, tx fees would only be negligibly higher. That's what I predict anyway.

This of the lightning network as the server connected internet or TOR nodes. What's the limitations here? The bandwidth. In lightning network, the 'bandwidth' is the 'value' i.e. the amount of Bitcoin flowing through the network.

There is also information flowing, but that's a trivial amount of data for today's tech. The limiting factor is the amount of Bitcoin that each of the 'nodes' in the network can transmit.

This info-graphic might help u to better understand the lightning network...

The limit to how many LN transactions is constrained by your ability to communicate with other LN nodes and your ability to sign transactions, which for many end users, for all intents and purposes is unlimited.

LN will encourage people to store their private keys online, which although not directly related to the LN protocol itself, may lead to financial losses. Users can keep private keys associated with LN transactions in cold storage, however this will significantly slow the signing of transactions, and doing this would result in other LN nodes not using your LN channel as a node. Most of the time, for most users having a LN channel open with someone means that other person knows your IP address and a way to directly connect to the computer that contains your private keys -- this has the potential to have a lot of situations that result in tears.

The number of transactions depends on the number of opened channels and their capacity. There is a limit of maximum amount you can send, about 0.04 BTC.
The information you quoted is true, that's why some people don't think that Lightning Network will succeed - you will have to use HUB or setup your own node, which would need to run 24/7, in case you would like to make sure that nobody steals your money.

After reading a blog post I am confused and wonder if I haven't read a wrong information. There is no limit on how many transactions it can handle, am I correct?

 And is it right?