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Why the Liquidity.Network is not Centralized? How to define (de-)centralization: (1) Who owns the funds? (2) How redundant is a system? (3) Can a central entit
by tonytran 8y ago
Why the Liquidity.Network is not Centralized?
How to define (de-)centralization:
(1) Who owns the funds?
(2) How redundant is a system?
(3) Can a central entity censor?
Regarding Liquidity we have the following properties:
1. A user owns at any time its funds (with the private
key). Not the hub operator, or any other entity can “steal“
the users funds. A hub is not a bank nor a custodian.
2. Liquidity is designed such that many hubs can be
interconnected in a network of hubs to provide redundancy,
similar to a network of Lightning peers.
3. A hub can choose to not forward payments. If that
were to happen, the user can simply remove his funds
from the hub’s smart contract, which the hub operator
cannot prevent. The user would then join another hub.