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I'm curious if anyone has found a good writeup on how watchtowers work. My understanding is that with the normal lightning network, there is a reward built in
by xur17 9y ago
I'm curious if anyone has found a good writeup on how watchtowers work.
My understanding is that with the normal lightning network, there is a reward built in that you receive if your counterparty tries to fraudulently close the transaction. You receive your money + some of what they owned. From what I remember, watchtowers can be incentivized by receiving a portion of this money. This way you only pay something if your counterparty tries to screw you, and the amount you pay doesn't come out of your money.
tldr; I think the watchtower fees are only paid if a problem occurs, and even then your counterparty is the one that effectively pays the fee.