Reading Assignment: Lightning Details
Lightning Network, Lapps & Segwit
filip June 1, 2019, 3:26pm #1
It's time for another reading assignment on the lightning network. Read through the this blog post and answer the following questions. Make sure to post your answers in this forum thread before you continue.
How do two parties start a payment channel?
How are you punished if you try to do an invalid transaction?
What is the purpose of "watchtowers"?
bit June 2, 2019, 5:18pm #2
breach transaction remedy; the victim of the transaction gets the perpetrators balance. So there is a financial incentive or punishment not to cheat.
Police network as a node and ensure the correct reward or over sea the share of profits and ensure any breaches in TXN are correctly awarded to good party in that transaction.
draft to return too
CryptoDragon June 2, 2019, 8:18pm #3
Both parties open a payment channel buy a multi-signature transaction on the blockchain.
Breach remedy transaction: When trying to broadcast an invalid transaction, a secret is exposed, and the other party can use the secret to sign a transaction to get all funds, therefore counter attacking the bad actor.
In case of a fraudulent transaction, the victim has to be online to counter the fraud. But watchtowers can keep an eye on fraudulent transaction instead and sign the breach remedy transaction, and also get a share of the reward.
xactant June 3, 2019, 2:08am #4
By creating a multi-signature transaction on the blockchain.
By locking the funds for the instigator and allowing the other party to execute a Breach Remedy Transaction.
Watchtowers enable third parties to detect fraudulant transansactions and then collect a fee for executing a Breach REmedy Transaction on behalf of the injured party.
Goosie June 28, 2019, 9:19am #5
By setting up a multisig transaction on the bitcoin blockchain
The other party is able to publish a "penalty" transaction that will send the entire capacity of the payment channel to himself.
When you are not online and a party on the other site of the channel want cheat on you they are able to sign the penalty transaction and be paid a small proportion of the penalty transaction as a reward for keeping users honest
Alko89 July 9, 2019, 7:13pm #6
By publishing a funding transaction on the blockchain.
You loose all the funds in the channel.
They are guard towers that are watching for malicious transactions on the network.
csh2000 July 13, 2019, 5:33pm #7
How do two parties start a payment channel? Two parties can initiate a payment channel by creating a multi-signature transaction on the blockchain.
How are you punished if you try to do an invalid transaction? If Alice tries to publish any balance sheet other than the most recent one, her funds will be locked while Bob will be given the opportunity to publish a "penalty" transaction that will send the entire capacity of the payment channel to himself. This serves as a deterrent to cheating. In case Bob cannot access the internet, there are "watchtowers", which are LN nodes that look out for dishonest transactions being broadcast.
What is the purpose of "watchtowers"? LN nodes that look out for dishonest transactions being broadcast, and get paid for this service from part of the "recovery" funds.
paul1 October 1, 2019, 10:36am #8
by both parties each creating a signed btc funding multisig transaction and broadcasting them to the btc network.
You will forfeit your current balance to the other party (or a party/watchtower combination). This is done by a breach remedy transaction. When an invalid transaction is detected, a 'secret' is exposed and this 'secret' allows the 'good-actor' to get all the funds transferred to them.
watchtowers are nodes that specifically look out for fraudulent activity and when they detect it, issue breach-remedy transactions. The watchtower gets a % of the reward for providing this service.
samgamgee321 November 4, 2019, 10:34pm #9
By committing a multi-sig transaction to the base layer, funded by at least one of the two parties.
If you try to broadcast an invalid/old transaction you have a relative timelock on that transaction, and during that timelock the other party can broadcast the bread remedy transaction that will give itself all the funds in the channel, as a punishment for your sins
Watchtowers are like keepers of the network that listen for possible fraudulent transactions and act on the behalf of the party that is being cheated, broadcasting the breach remedy transaction on their behalf and earning a partial part of those funds as a compensation for the good work
KnutKurbel November 19, 2019, 4:47am #10
-> By creating a multi-signature transaction on the blockchain. At least one party must commit funds to this transaction.
-> funds will be locked while the other participant will be given the opportunity to publish a "penalty" transaction that will send the entire capacity of the payment channel to himself.
-> They look out for dishonest transactions being broadcast. If the watchtowers detect that one user tried to publish a dishonest transaction, they can sign the penalty transaction and be paid a small proportion of the penalty transaction as a reward for keeping users honest.
dave-dave December 3, 2019, 8:39am #11
Two parties can initiate a payment channel by creating a multi-signature transaction on the blockchain.
The other party of the channel will be given the opportunity to publish a "penalty" transaction that will send the entire capacity of the payment channel to himself.
They are LN nodes that look out for dishonest transactions being broadcast. If the watchtowers detect that one participant tried to publish a dishonest transaction, they can sign the penalty transaction for the other one and be paid a small proportion of the penalty transaction as a reward for keeping users honest.
Karolis_Abramavicius December 19, 2019, 4:51pm #12
Both parties have to open multi-signature transaction. At least 1 of the 2 parties has to commit funds to this transaction.
The remaining party can use a Breach Transaction remedy contract - publish "penalty" transaction. In that case, the person that fraudulently wanted to use other than the most recent commitment contract is blocked for the time of 100 blocks - as a result, the party in defense can claim all of the funds the fraudulent party has.
Watchtowers are supposed to automate supervision of the transactional activities - making sure that no one is trying to benefit from publishing other than the most recent commitment contract. If someone does try to benefit, the watchtower can enforce Breach Remedy contract and share the profits with the party that has been defended - by getting a percentage from the sum of money the fraudulent party had.
coinbit January 3, 2020, 10:08pm #13
they create a channel with an onchain funding transaction
there is a 100 block time lock, which allows the other party to redeem the remedy transaction and take all your funds
they look for fraudulent transactions and can use the remedy transaction to punish the fraudster