4 ms·
I still don't understand how the lightning network works and maintains the important blockchain feature of bitcoin.
by dariusj18 5y ago
I still don't understand how the lightning network works and maintains the important blockchain feature of bitcoin.
- staktrace 5y agohttps://github.com/lnbook/lnbook/blob/develop/03_how_ln_works.asciidoc https://github.com/lnbook/lnbook/blob/develop/03_how_ln_work... is a reasonable explanation of you're interested in the technical aspects.
- warkdarrior 5y agoLightning is basically a way to avoid trading on the Bitcoin blockchain by passing transactions through third parties.
- ulzeraj 5y agoIts like a giant bar tab. You have this liquidity pool with the network participants do all their transactions and go back to the chain when when they decide to settle.
- Iv 5y agoMy understanding is that you start by doing an actual BTC transaction of, say X USD, for which you pay the fee, and then you can "spend" up to X-fee USD in the lightning network. People who receive payment from you can opt for getting a BTC transaction from your stash or use it to do other payments. The base idea is that it uses the BTC network as a dispute settlement fallback. "It works but is expensive, let's just exchange through the lightning network". You can see Lightning as being a network that exchanges "BTC IOU". If the network decides for some reasons to be hostile to you and refuses to broadcast the transactions where you receive money, you still have a signed token that proves you have the BTC IOU and that are acceptable by the BTC network (for the cost of a fee)
- dariusj18 5y agoSo it's like withdrawing money from the bank as cash to use. I get that, but after I promise the money to bunch of people how does the system prevent me from double spending or just redepositing my money to my account?
- FreeRadical 5y agoEssentially it nets off contra positions so they don't have to hit the chain in a gross basis, but only on a net basis.