There are no banks, (at least not yet). Therefore, there are no "inter bank transfers".
Well if you want to pretend that someone with 50 channels open acting as a major hub is not acting as a bank then that's up to you
but this picture says that you could be wrong.
https://lnmainnet.gaben.win/- When you say "in the ledger connecting Bob", I assume you are talking about a Lightning Network channel?
Yes the channel is the ledger with deposits in it from both the user (who could also become a banking hub, inter bank transfer) and the banking hub in LN
- When you say "to the banking hub", I assume you mean to imply that Bob has chosen to only open a channel to ONE other Lightning Network user, and the user that Bob has established a channel with has chosen to connect to open channels with many other users?
Yes see the link, Bob only like one channel open, these things cost you know
- When you say "requires the bank to deposit $100 in it", I assume you mean that the ONE channel that Bob opened is funded with $100 worth of bitcoins by the person Bob chose to connect to?
Yes one channel and not connected to a "person" who has 50 channels, it's a banking hub and needs a ton of money to feed all
them other channel deposits. Miners have the money and hardware so they are the natural bankers running the banking hubs.
- When you say "Alice on the far side of the network", I assume you mean that Alice is a Lightning Network user, that she has at least one channel open, that there is a valid funded route for sending $100 worth of Bitcoins from her to Bob?
Yes and she is connected also with one channel to a banking hub.
- When you say "if she wants to send him $200 then it would not be allowed because money cannot be moved from ledger to ledger", I assume you mean that Alice can't send more to Bob than the net funds available in the channel that is connected to Bob?
Correct
- When you say "because the BTC-Block chain only allows the existing money to be settled on block", I assume you mean that funds in one Lightning Network Channel cannot move to another channel, and that users with an unbalanced channel might in some circumstances need to close the channel and use the funds from the closed channel to re-open a new channel?
Channel is the ledger with both ends keeping a copy but the key point shown in bold above. Money is not liquid in LN and is more like snooker balls
bumping into one another and money stays in the ledger. See white paper
https://lightning.network/lightning-network-paper.pdfThere are no banks (yet). There may never be banks.
Yes sure mate so what do you call something that charges fees on both lending and transactions fees and loves people so much
that they open 50 channels. Sorry you can keep repeating yourself but the links I gave you prove otherwise.
Regardless the process works the same, so lets substitute Charlie in for the user that you keep calling "Bank". It will make it clearer. Sicne you insist on using $ amounts instead of BTC amounts, we'll also assume that the exchange rate between $ and BTC doesn't change at all during that time.
Well if it looks, talks and walks like a bank then lets call "Charlie" Natwest bank in central Cambridge and I am sorry about
not using 0.00001000 BTC but I think we can live with it for now.
Bob opens a channel (Lets call it channel B-C) with Charlie.No lets call it "Natwest bank in central Cambridge"
Bob funds the channel with $100 worth of bitcoins, and Charlie funds the channel with $100 worth of bitcoins.
OK
Alice opens a channel with Charlie (Lets call it channel A-C) with Charlie.
Alice funds the channel with $200 worth of bitcoins, and Charlie funds the channel with $0 worth of bitcoins.
Alice establishes a route through Charlie to Bob and sends $100 worth of bitcoins
After that:
The A-C channel state has $100 worth of bitcoins that Charlie can send through the channel to Alice and $100 worth of bitcoins that Alice can send to Charlie.
The B-C channel state has $200 worth of bitcoins that Bob can send through the channel to Charlie and $0 worth of bitcoins that Charlie can send to Bob.
Yes if Natwest bank only deposits $100 then the channel is too small for Bob to receive $200 from Alice
If that is the ENTIRE network, then you are correct that no one can send him any money through Lightning Network (although they could still send a non-Lightning Bitcoin transaction if they want to. However, it is possible that Bob could already have (or could open) other channels with other users, or Bob could open a new channel with Charlie.
Yes but why should Bob keep paying the BTC miners money ?
Why do they need buttons? Can't they just use wallets that can establish a lightning channel?
Never seen a software wallet yet that does not have buttons have you but in the case of Lightning you
will need more than the usual few buttons to act as a banking hub so the banks will have specialist software.
Why won't Bob and Alice have access to similar software?
Well Jaxx and Exodus won't implement all that in the wallets and Bob would not understand things like
HTLC or how to maximize profits by acting as a bank even if he could share his wallet to become a hub
so his friend Alice could use it.
When you say "miners" I assume you mean "Mining pool operators"? Because most of the hashers that I've talked to most certainly do NOT "understand the nuts and bolts".
Just swap the name "Miner" for "Sub-Branch" and see "Mining pool operators" as "Nat west head office" and you about get the picture.
I don't think the word "Monopoly" means what you seem to think it means.
Cartel is just as good to me
I'm having a difficult time following what you are trying to say there. I have an account with my local Credit Union. I have an pleasantly low interest rate on my mortgage and car loan, and I don't pay any other fees for any of the services that I use. There are services that have fees, but I don't use any of those services.
Nice for you but I also bank with Ripple, all transactions are on-block and more or less free just like Bitcoin was before
it was taken over.
I've seen you use this "Virtually free transactions fees" statement multiple times now.
Then don't fall for it again.
I've checked the whitepaper and I don't see that statement in there at all. Can you please tell me where to find it, or did you just make that up so you can sound angry about something that doesn't exist?
Not in the LN white paper but original Bitcoin white-paper
Who is this "them" that you speak of? The bitcoin white paper was written by Satoshi Nakamoto. He was not involved in the creation of Lightning Network at all.
Them is the development team who roll over backs to please the miners and in many cases run mining themselves and it is the same
"Them" that own BTC from day one and it only cost "them" $0.15 per coin but we can agree that Satoshi Nakamoto was not involved in LN