As far as I understood a LN Channel is open and closed by their participants by broadcasting and confirming transactions on the chain, so they only pay those transactions fees and not all the other they may do while the channel is open.
Yes.
If that is right, the LN would work only for recurrent payments and not occasional transactions, right?
Kind of. Having an open payment channel with one party is really only good for recurring payments. However the lightning network expands beyond the one channel. You can have a channel open with someone who has a channel open with other people, and they have channels open with other people and so on. One of the main ideas of LN is that you can send occasional transactions by routing a payment through multiple payment channels that people have open with each other.
Suppose Person A has a channel open with B, and B has one with C. If A wanted to pay C, they could send money to B and B sends money to C via their respective open payment channels. The transactions used for this sending are special and make it so that the money will only actually move under specific circumstances. These transactions are called Hashed Timelocked Contracts. They make it so that B can only get the money from A if they have forwarded the money to C.
that was very enlightening. Thank you very much!
It seems just a question of it being properly developed and largely adopted, so there is liquidity in the system
Show Posts
