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I'm missing how you can have a transaction that is not broadcasted but that prevents a double spend. Can't I give two different people signed transactions for t
by tgb 5y ago
I'm missing how you can have a transaction that is not broadcasted but that prevents a double spend. Can't I give two different people signed transactions for the same bitcoins? How could the second recipient know I've already spent the balance on the first? Apologies for the no-doubt naive questions, it just sounds impossible.
- Jeff_Brown 5y agoIs it that the not-on-the-Bitcoin-blokchain account gets updated on a separate "layer 2" Blockchain that's cheaper? If so, why would that second chain stay cheaper?
- jallen_dot_dev 5y agoThere would first be 1 broadcasted on-chain transaction setting up the channel, with X of my bitcoin and Y of your bitcoin being locked up. This prevents double spend. Then, you and I pass n signed transactions between each other updating our balances Xt & Yt for each t, t+1, ...t+n. At any time, either one of us can broadcast the final transaction with the most up to date balance and unlock the coins.
- tgb 5y agoSo it requires one on-chain transaction per pair of parties instead of one per transaction? Clever and I suppose useful but seems a little limited in use, given that the funds are locked the whole time. Good for two parties that frequently have transactions going in both directions?
- jallen_dot_dev 5y agoThat's right. You can also form a chain of these channels, so Alice can pay Bob even though she doesn't have a channel with him, if they both connect to Carol using atomic transactions that update the 2 channels accordingly.
- danlugo92 5y agoTheres a timelock enforced by the blockchain.
- danlugo92 5y agoLightning transactions are all final and irreversible via cryptography mechanisms.