Topic: The Lightning Network FAQ - page 39. (Read 33287 times)

Let me throw in my two cents.

franky1 makes some good points. I am also a little bit concerned about large nodes which set the minimum channel funding value to ridiculously high values.

I don't agree with the statement that the Lightning Network as a whole consists of IOUs. I do agree that milisatoshis are backed only by trust, but...

I don't think that's a major issue. Putting the msats value aside, if you are the channel founder then you do not lose any money. The moment you decide to close the channel both balances are rounded down to whole satoshis and the remaining 1 satoshi is added to the transaction fee, which as a channel founder you have to pay anyway. If you are not the channel founder then... well, that's a negligible loss for you. By the time msats become valuable, the number of on-chain decimal places might have been already changed as a result of some hardfork.


While it's true that HTLCs are denominated in msats, they are still enforceable on the blockchain. The moment you send/receive an HTLC to/from someone, you also need to sign a new commitment transaction. Commitment transactions can include not only the current balance of both parties but also offered and incoming HTLCs. Both of these (locked) outputs obviously need to be rounded down to whole satoshis in order for the transaction to be valid.

I think that we have had enough. Please, move to some other thread if you wish to discuss it further. Feel free to quote me there. I will be removing any IOU related posts from now on.

to anyone(sems theres a few above) still confused about a few truths of LN
lets just use one bit of code example that debunks their thoughts and clears up the issue quick

confusions of some people
a. LN is for bitcoin only 'cos bitcoin'
b. values in LN are measured in things that bitcoin recognises


first note that it allows both pegging iou tokens to bitcoin and litecoin
then note that for:
bitcoin pegged iou
the measure of 50sat/vbyte is 125sat/byte = INSIDE LN 12500 msat tokens

litecoin pegged IOU
the measure of 200sat/vbyte is 50sat/byte = INSIDE LN 50000 msat tokens

heck github has soo many examples of the network being separate and functional for many pegs
and hundreds of examples of the tokens being a different denomination to the peg

..
atleast the liquid network can admit their tokens(L-BTC) are pegged tokens and not play the silly promo fluff of LN which pretends to be bitcoin itself

edit to respond to below
its not just that HTLC are in a different denomination.
but also requiring a separate contract(comitment) to make funds bitcoin network recognisable. where there is a separation between a 'commitment' and a 'HTLC'. where the HTLC is completely different and not bitcoin.

and then also the whole point of the 'dont trust zero confirms' of the commitment(settlement)
meaning a HTLC is 2 'layers' away from being a guaranteed settlement, and just a 'promise of 'i owe you x''

the funniest part is. i am a bitcoin(btc) maximalist. i dont want to go playing on other networks or made/forced to use other networks just to spend my value FAIRLY.
but the few trolls that think LN is bitcoin have also been saying that other altnets(crapcoins) which do have bitcoin compatible transactions that CAN BE REPLAYED on the bitcoin network, have been deemed NOT bitcoin.. very hypocritical and reveals they have no clue. and just trolling their hypocrisies by saying an altnet that CANT be direct replayed.. is bitcoin!!?.

The man is Hyperventilating - give him a brown paper bag and some room to breathe!

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I'm pretty sure the whitepaper for Bitcoin alludes to having the capacity for more zeros being added onto the number (already at eight decimal places) that bitcoin can have.

Exchanges have for a while now have enabled traders to trade in bitcoin for alt crypto at nine and even ten decimal places - have you ever noticed those evil exchanges doing such a terrible thing??

Have you ever received a letter in the mail (usually from a council or utility (power/water etc)) and noticed that even in this day and age their franked stamp is in a tenth of a cent postage paid?

I'm sure there's other pesky examples out there how you're being diddled by extra zeros without even knowing it's occurring.

signing a contract that is measured in millisats is not signing a bitcoin transaction

having a bank note saying "we promise to pay the bearer 10pounds of silver" is not actually silver

but as you say doomad
having Kyat and exchanging it for a more valuable currency
is what happens in LN
have millisats and then exchange it for bitcoin
(converting a htlc into a close session bitcoin transaction)

when you can understand the concept of an payment in millisats(htlc).. being a separate thing to an exchange to a bitcoin transaction at a different time. then you might understand that the HTLC(msat) payment (agreement of who owes what) is not the same as a bitcoin transaction.

you seem soo obsessed to the point of being misleading by only wanting to point at the close session exchange and broadcast part.. and completely arrogantly and ignorantly not thinking about the IN LN payment part

but for once. accept this topic is about what happens WITH IN LN at the payment of HTLC

seems you have been mis-informing windfury about the onchain(btc) gold. being exchanged for an offchain
token(msat)
where a protocol is 'trusted' to convert/exchange.. however.. as with all bitcoin principles:
unconfirmed transactions are never guaranteed. never accept zero confirms..
definitely dont trust(think its guaranteed) payments in converted/exchanged units of measure bitcoin does not even understand

..
its actually much safer to tell people the truth about the flaws and isssues and risks of LN so people can make informed decisions about using it. rather then being hyped up to use it and learn the hard way
telling people the risks and letting them try it. is more trusting than fluffing up and misguiding them and seeing them fall fowl to the risks

No one is disputing the existence of millisats.  You aren't "countering" anything.  We're disputing your total lack of logic in jumping to the completely flawed and asinine conclusion that a difference in the number of decimal places = IOUs.

Get hold of some Uzbekistani Som or Burmese Kyat and then try exchanging it for a more valuable currency.  Watch the rounding occur because there aren't enough decimal places to cope with the conversion.  Try and apply your same broken thinking there and your argument completely falls apart.

you mention words like trust and signed.
there are LN walets out their that create channels before a bitcoin transaction is confirmed and locked
there are probably wallets that are using elthree where the channels 'collateral' are not bitcoin transactions
but just purely a balance authorised by a factory where users have to request that balance to be converted to a bitcoin if they ever want to truly exit LN

friends in my neighbourhood know i have lots of funds and am good for it to give them money.
but i can sign anything and show them a bank statement that proves im worth it.
but what im signing is not actually the bank account.
there is still the trust that LATER i will pay what thy are OWED

a contract of whats owed is not the same as a confirmed settled onchain transaction

signing something measured in millisats is not signing a bitcoin transaction

you really do not know all the flaws do you.

devs can make LN wallets that can agree on any silly thing or ignore any silly thing they like. as LN is not a network wide audited payment system.. its just an agreement within the 2 individuals. where those and only those 2 individuals agree on their own terms

i could have channels of(im B)
     C  D
     | /
A--B--E
     | \
     G  F
where BA uses one protocol. where our agreements are measured in millisats
where BC uses another protocol where our IOU are measured in sats
where BD uses another protocol where our IOU are measured in bits
where BE uses another protocol where our IOU are measured in L-btc
where BF uses another protocol where our IOU are measured in furballs
where BG uses another protocol where out IOU are measured in memes

where by when its time to settle/exit LN then we convert the HTLC into a bitcoin transaction
much like HTLC converts millisats to sats

please learn about HTLC's it might really help you out

also each channel can do as many silly or trusted things between us as we can imagine.
as long as we agree on it.
heck it doesnt even matter if the 12 decimals are called millisats or kitten furballs..
it doesnt even have to be 12 decimals. we could use 24 if we wanted.

we dont even have to sign a htlc. we can instead decide to agree on using cat emoji's
the LN network of 32k peers is not auditing our payments within the channel
heck we could be using units of measure of kittyfluff if we want to.

secondly you obsess about the blockchain locks but you dont wish to understand the stuff happening inside LN


the in channel HTLC is not a bitcoin transaction. the denominations the format just dont fit into bitcoins onchain rules. try to understand that then all previous posts might make sense to you
HTLC do not and cannot be broadcast to the bitcoin network
please for the hundredth time.. learn this stuff

the other thing is take any historic IOU. 1890's bank notes dont need countersigning. but were an iou of gold
a cheque doesnt need countersigning. but until its cleared its not settled and thus an iou
even a unconfirmed bitcoin transaction is an IOU(spoiler dont accept zero confirms)

heck i have a raw TX here with gmaxwells address on it..
i signed my transaction..
but its not actually in any mempool or blockchain. soo the question "does it really exist and will gmax ever actually get it" (spoiler:no)
i know he might like to argue that on this forum i have just announced he is owed something.
but .. ofcourse.. not on blockchain=not real

lastly HTLC's get renegged all the time. thats the point. people renegotiate how much each other owes them without actually settling

im surprised it takes you years to even understand these basic concepts of trade, negotiations, contracts.. as its pretty common life stuff

But it’s NOT the same. No one signed, and issued a worthless piece of paper in Lightning, trusting the counterparty’s ability to pay. In Lightning, you literally need an onchain transaction to open/fund a channel, so you are not sending anything worthless to the counterparty.

so as you say IN LN you hold IOU

as for asking me about my LN usage
i am not a fangirl that uses LN for its intended use with its limited scope of trying to show off how it works
EG making penny value transactions for silly forum avatars just to show off LN
instead i have used it to see where the flaws are. i have looked at the code i have studied it and i have done many things.

unlike some

the bitcoin funds on the blockchain that are locked are the collateral
the millisats on LN or the L-BTC tokens on liquid are just pegged tokens and not the collateral.

EG 1950's bank notes were not the collateral of gold.. gold is the collateral of gold. and bank notes are just the IOU that can be redeemed for gold 70 years ago

there are no bitcoins in LN or liquid

atleast most liquid devs can be honest about calling the tokens, tokens. shame some people in this topic like doomad and windfury who are not even devs cant grasp the concept


the IN LN payments have no penalties..
what doomad and windfury keep talking about is the settling up/close session stuff

ill give them another example
you WIRE TRANSFER funds into paypal. and then you make paypal balance payments to ebay
when they can understand the paypal-ebay balance stuff is not the same as a bank wire deposit/withdrawal
then you might understand the differences between inside LN and outside LN

seems too many people are too hard pressed to either admit the difference or understand or even see the difference between a bitcoin transaction and a LN payment

so its no wonder they have no understanding

as for doomads usual superman to the rescue defence of windfury.. yet again doomad flew in too fast and tried to throw punches too fast without realising what he was doing.

so one more time
THIS IS NOT ABOUT THE BITCOIN ONCHAIN SETTLING TRANSACTIONS

this is about the IN LN PAYMENTS
they are measured in millisats and those contracts CAN BE RENEGGED ON in multiple ways
hense the IOU
an IOU is a contract that has not been settled

why.. well thats easy ..because the LN HTLC IN MILLISATS are not the same format or denomination as a bitcoin settlement transaction. and the funds are not settled/cleared/guaranteed to clear
there are many ways to reneg on the IOU
not just within LN
not just at the countersign of the settlement
not just at the broadcast
not just at the mempool

doomad can say all the BS he wants but i quoted something from the devs of a LN wallet from the LN wallet github that counters doomads fluff

so get the hint.. from the LN devs themselves: read it and weep
[/quote]

if you are still unsure.. try reading the code first. there are many examples but i showed the most layman version because it seems alot of people cannot read  anything more difficult that a glossy promotional advert graphic

and yes even i cant believe that doomad after 4 years is still saying the same fluff without checking
its as if he doesnt want to be truthfull. he just wants to be loyal to his wife windfury

I like this analogy, but you got it slightly wrong. In LN, you hold collateral over your friend. If he doesn't fulfill his IOU, it will cost him more, so he has a reason to be honest and it's very unlikely for you to lose your money.

Bad comparison: back when we still used checks, they had a guaranteed amount. Why else would anyone accept it?

You mean 3: the "m" is a standard metric prefix for 1/1000^th.

M stands for 10⁶, m stands for 10^-3, and you use both in the wrong way. Talk about irony.

@franky1: how often have you actually used the LN to make payments? Maybe you should just try it a few more times, and see for yourself that all the things you worry about aren't happening.