So we tried out Lightning tonight at ROOM77

[joecooin]

For many years now we have been accepting Bitcoin (with zero confirmations and directly, not through Bitpay) at our bar/restaurant in Berlin. Today we have deployed a testnet lightning node and accept testnet coins via the lightning network from a few customers to get a glimpse into the future. And that future looks shining bright!

- No more waiting for the customer's transaction being broadcasted, transactions arrive in milliseconds, not seconds (or sometimes minutes in case the customer uses coinbase or another bank wallet).
- No more looking out for double spend attacks. Not even Peter Todd is going to RBF us on LN.
- No more confusion during times of malleabillity attacks. Transaction malleabillity is a thing of the past.
- Massively advanced privacy for us as well as our customers as only we can see the transactions on our payment channel.
- And we will finally be able to offer free-of-cost payments to our customers.

As a merchant I can tell you that every merchant on the planet wants this stuff. It is like after all these years Bitcoin shows that with LN it can live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it.

Thanks to all the developers making this possible!

edit: pics http://imgur.com/a/64iwK

reddit thread: https://www.reddit.com/r/Bitcoin/comments/62uw23/lightning_network_is_working_room77_is_accepting/

[kiklo]

For many years now we have been accepting Bitcoin (with zero confirmations and directly, not through Bitpay) at our bar/restaurant in Berlin. Today we have deployed a testnet lightning node and accept testnet coins via the lightning network from a few customers to get a glimpse into the future. And that future looks shining bright!

- No more waiting for the customer's transaction being broadcasted, transactions arrive in milliseconds, not seconds (or sometimes minutes in case the customer uses coinbase or another bank wallet).
- No more looking out for double spend attacks. Not even Peter Todd is going to RBF us on LN.
- No more confusion during times of malleabillity attacks. Transaction malleabillity is a thing of the past.
- Massively advanced privacy for us as well as our customers as only we can see the transactions on our payment channel.
- And we will finally be able to offer free-of-cost payments to our customers.

As a merchant I can tell you that every merchant on the planet wants this stuff. It is like after all these years Bitcoin shows that with LN it can live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it.

Thanks to all the developers making this possible!

edit: pics http://imgur.com/a/64iwK

reddit thread: https://www.reddit.com/r/Bitcoin/comments/62uw23/lightning_network_is_working_room77_is_accepting/

Hmm,

Did you record your Customers Names & Address when you accepted Zero Confirmations, in case they ever used a DoubleSpend trick on you?
(It is quite easy to doublespend on a Zero Confirmation.)

LN is not safe at all until segwit is activated, so you have to trust all of your LN Clients Completely.
Counterfeiting and stealing BTC thru LN is not only a possibility but a probability.

Little word of warning , not waiting the required confirmations, is like playing Russian roulette , it is not a matter of if but When!

Smarter move on your Part would be using a Gift Card System , that people can fund with BTC instead of taking BTC directly.

 

FYI:
https://merchant.gyft.com/
All of the advantages of Offchain transactions without the shenanigans of the LN/Banking Cartels.

[Dude.Lebowski]

For many years now we have been accepting Bitcoin (with zero confirmations and directly, not through Bitpay) at our bar/restaurant in Berlin. Today we have deployed a testnet lightning node and accept testnet coins via the lightning network from a few customers to get a glimpse into the future. And that future looks shining bright!

- No more waiting for the customer's transaction being broadcasted, transactions arrive in milliseconds, not seconds (or sometimes minutes in case the customer uses coinbase or another bank wallet).
- No more looking out for double spend attacks. Not even Peter Todd is going to RBF us on LN.
- No more confusion during times of malleabillity attacks. Transaction malleabillity is a thing of the past.
- Massively advanced privacy for us as well as our customers as only we can see the transactions on our payment channel.
- And we will finally be able to offer free-of-cost payments to our customers.

As a merchant I can tell you that every merchant on the planet wants this stuff. It is like after all these years Bitcoin shows that with LN it can live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it.

Thanks to all the developers making this possible!

edit: pics http://imgur.com/a/64iwK



reddit thread: https://www.reddit.com/r/Bitcoin/comments/62uw23/lightning_network_is_working_room77_is_accepting/

I'm not sure how much you talked to your customers during beer but I'm interested which wallet software they used for the LN/test transaction

[Lauda]

LN is not safe at all until segwit is activated, so you have to trust all of your LN Clients Completely.

Testnet has Segwit activated. Read the thread.

Counterfeiting and stealing BTC thru LN is not only a possibility but a probability.

No.

[Dorky]

Is there any real case of double spending in LN so far?

[Lauda]

Is there any real case of double spending in LN so far?

No. Ignore the fear mongering. If there are certain risks, they will be clearly explained and publicly known.

[franky1]

Is there any real case of double spending in LN so far?

No. Ignore the fear mongering. If there are certain risks, they will be clearly explained and publicly known.

there are risks

the address re-use signing (sideattack) risk
the blackmail to invoke a revoke (chargeback fraud)
the risk that the close LN tx wont confirm(ONCHAIN fee locked into the values hours,days,weeks, before its ever broadcast)
the particiants of a multihop dont broadcast in the right order causing a few revokes.

hense those using LN are told to only use around ~$60 just to be safe.

remember its not a lock in forever utility for everyone to throw their entire hoards in.
and no one can predict what they will want to buy months in advance so expect more channel closing and openings than the utopian sales pitch

forget the utopian sales pitch of LN forever onchain never. and think LN voluntary side service. bitcoin forever

[Qartada]

Is there any real case of double spending in LN so far?

No. Ignore the fear mongering. If there are certain risks, they will be clearly explained and publicly known.

there are risks

the address re-use signing (sideattack) risk
the blackmail to invoke a revoke (chargeback fraud)
the risk that the close LN tx wont confirm(ONCHAIN fee locked into the values hours,days,weeks, before its ever broadcast)
the particiants of a multihop dont broadcast in the right order causing a few revokes.

hense those using LN are told to only use around ~$60 just to be safe.

remember its not a lock in forever utility for everyone to throw their entire hoards in.
and no one can predict what they will want to buy months in advance so expect more channel closing and openings than the utopian sales pitch

The Lightning Network is in early days and is a good concept.  Fortunately, it's not the whole of Core's solution and is not SegWit.  Unfortunately, BUgcoin actually is the whole solution.

[franky1]

The Lightning Network is in early days and is a good concept.  Fortunately, it's not the whole of Core's solution and is not SegWit.  Unfortunately, BUgcoin actually is the whole solution.

lol
care to try reading beyond reddit.. you might learn more

[Carlton Banks]

I think the fact that Lightning involves more trust (some attacks can be performed using Lightning's characteristics) is actually a good fit for its best purpose: bricks and mortar businesses, just like Room77.

The customers that go to Room77 all the time know the people working there, and the staff will know those customers. It's bad business to attack your own regular customers, and the clientele will run out of places to go shopping if they keep attempting attacks against places with good merchandise. So it's a little over-blown to say that Lightning is a big risk.

Online, it's a little different. I suspect middlemen Lightning processors, the infamous hubs, will be more popular on-line, especially with new or small businesses. But the centralisation criticism is overblown here too, there won't be any political or regulatory barriers to operating a hub style node, all you need is clients and cashflow. Competition amongst Lightning nodes should, therefore, be strong. (and of course, on-chain transactions will always a better option the higher the stakes are, no-one will be buying cars, houses, or making business deals on the Lightning network)

[manselr]

Good to see real progress being made in the middle of this FUD storm and the buggy unlimited ridiculousness. If only we could finally get segwit activated to bring bitcoin to the next level... sooner or later we will tho. If the remaining miners don't get with the program UASF will kick in.

[scox]

Heya, I'll be in berlin in around 2 months. Expecting to buy a round for all to test your btc merchant on high volumes lol.
See you then!

[Carlton Banks]

LN is great idea if users have trust over the operator, but i think it won't work with the nature of bitcoin and many bitcoiner won't risk their coins/privacy for it.

Privacy is enhanced hugely using Lightning.

It only works if the operator send the transaction to onchain regularly and can keep user privacy, otherwise the risks mentioned by other users will become true.

No it doesn't. BTC can remain in Lightning channels forever in cases where participants don't force one another to settle on-chain.

Also, some bitcoiner fear LN because company/services will force their users use LN. I still think on-chain transaction better option than LN in most condition.

No-one can force you to use it, and given that your fears are uninformed FUD, you're forgetting about the benefits, and concentrating solely on imaginary downsides.

Explain why on-chain is "better in most conditions", and please learn how Lightning works before you do so

[QuestionAuthority]

Ripple is ready to go and way past testing, why not use it instead? Besides, I trust Stefan Thomas (ripple) much more than the town crier for the failed Bitcoin Foundation pack of thieving liars.

[stdset]

Ripple is ready to go and way past testing, why not use it instead? Besides, I trust Stefan Thomas (ripple) much more than the town crier for the failed Bitcoin Foundation pack of thieving liars.

The last time I read about Ripple it was all about trust. List of nodes that you trust to honestly maintain the ledger, without them investing PoW nor having a stake in the system. IOUs that you trust. It's quite the opposite to what cryptocurrencies are trying to achieve: minimize trust as much as possible. Did everything change since then?

[jonald_fyookball]

Ripple is not decentralized trustless, so not a 'real crypto'

[spartacusrex]

For many years now we have been accepting Bitcoin (with zero confirmations and directly, not through Bitpay) at our bar/restaurant in Berlin. Today we have deployed a testnet lightning node and accept testnet coins via the lightning network from a few customers to get a glimpse into the future. And that future looks shining bright!

- No more waiting for the customer's transaction being broadcasted, transactions arrive in milliseconds, not seconds (or sometimes minutes in case the customer uses coinbase or another bank wallet).
- No more looking out for double spend attacks. Not even Peter Todd is going to RBF us on LN.
- No more confusion during times of malleabillity attacks. Transaction malleabillity is a thing of the past.
- Massively advanced privacy for us as well as our customers as only we can see the transactions on our payment channel.
- And we will finally be able to offer free-of-cost payments to our customers.

As a merchant I can tell you that every merchant on the planet wants this stuff. It is like after all these years Bitcoin shows that with LN it can live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it.

Thanks to all the developers making this possible!

edit: pics http://imgur.com/a/64iwK

reddit thread: https://www.reddit.com/r/Bitcoin/comments/62uw23/lightning_network_is_working_room77_is_accepting/

Wow..

Amazing! Congratulations for ACTUALLY sorting it out.

Well played Sir.
...

Ripple is not decentralized trustless, so not a 'real crypto'

Hello .. is that you Johnny.. ? 

[spartacusrex]

Gonna' have to add.. Since this is really VERY cool..

I'm seeing a scenario play out in slow motion :

So your bar runs a LN node.

Your customers have LN payment channels with you, on your LN node.

They can now pay you instantly with BTC, and you can refund them instantly. Either of you can cash out on chain at any time.

...Now.

Another bar starts an LN node.

Your node and the other node communicate.

Your customers can now pay at ANY bar with an LN node connected to yours, and VICE VERSA.. so their customers can spend at yours.

All instantly. Off chain. Trustless. With BTC.

.. it's pretty awesome. ( Come on Franky.. even you must be a little impressed..?)

..

( Just thinking about Vegas, and all those casinos.. )

[franky1]

.. it's pretty awesome. ( Come on Franky.. even you must be a little impressed..?)
..
( Just thinking about Vegas, and all those casinos.. )

never had issues with LN.. AS A VOLUNTARTY SIDE SERVICE
but i also see passed the utopia

[coolcoinz]

This is great news. The only issue I had with Bitcoin was the problem with confirmation times. Two years ago when this first came up the most common response was "don't wait for full confirmation, we have software that acknowledges payments after 1 confirmation." Years later even that single confirmation needed hours to come through. With this resolved nothing stands in the way of our Bitcoin becoming the fastest and most secure payment system on the planet.

[Malooka]

Ripple is ready to go and way past testing, why not use it instead? Besides, I trust Stefan Thomas (ripple) much more than the town crier for the failed Bitcoin Foundation pack of thieving liars.

Because Ripple is a bank coin.

[kiklo]

LN is not safe at all until segwit is activated, so you have to trust all of your LN Clients Completely.

Testnet has Segwit activated. Read the thread.

Counterfeiting and stealing BTC thru LN is not only a possibility but a probability.

No.

LN IS NOT SAFE UNTIL SEGWIT IS ACTIVATED. (On the Actual BTC Blockchain)
That is an accurate Statement.

Testnet is play money.

@Lauda ,
aside from being a paid shill, you don't have authority for jack.

Anyone that reads the LN Whitepaper , can see stealing BTC from LN, requires nothing more than evading their time locks.
So you know , you can shove your No where the sun don't shine.

 

[kiklo]

Gonna' have to add.. Since this is really VERY cool..

I'm seeing a scenario play out in slow motion :

So your bar runs a LN node.

Your customers have LN payment channels with you, on your LN node.

They can now pay you instantly with BTC, and you can refund them instantly. Either of you can cash out on chain at any time.

...Now.

Another bar starts an LN node.

Your node and the other node communicate.

Your customers can now pay at ANY bar with an LN node connected to yours, and VICE VERSA.. so their customers can spend at yours.

All instantly. Off chain. Trustless. With BTC.

.. it's pretty awesome. ( Come on Franky.. even you must be a little impressed..?)

..

( Just thinking about Vegas, and all those casinos.. )

LOL, don't wet your pants over it, it is not new.

It is called Banking, fractional reserves won't be far behind.

Like when you write a check or use a Credit card, you are trading fake money , in the hopes they honor it , when you need to withdraw.

Nothing new , old scam different package.

 

FYI:
Vegas could just let your deposit your BTC into an account and they give you an offchain representation of the value to use for your gambling, and let you cash out when finished.
The Plus side to this way, if they don't honor your withdrawal , you can Sue them.

If LN screws up , which it will , who are you going to sue, to try and reclaim your money.
Cause the other person is going to claim , you never had full possession of their funds anyway, so you had no actual right to claim them.  
By using LN service as a 3rd party in the transactions, it blocks you from being able to sue the other person if they cheat you.
LN will no doubt have a disclaimer denying you the ability to sue them, so you are fucked, when LN screws up.

[franky1]

Anyone that reads the LN Whitepaper , can see stealing BTC from LN, requires nothing more than evading their time locks.
So you know , you can shove your No where the sun don't shine.

there are a few techniques
even i wouldnt risk more then $60 and definitely not with someone i didnt trust.
and even then i wouldnt be comfortable

to me its just a side service. not something that should be treated as bitcoin. just a side service.. like escrow

segwit on the other hand. now that is a think of empty gestures and a shambles of code just made to set up a tier network and delay real onchain growth to try to push people into thinking LN is the end goal...
.... right up until the point that people use LN and then realise its limitations and then transfer out to sidechains(altcoins)

[QuestionAuthority]

Ripple is not decentralized trustless, so not a 'real crypto'

That's not true. I don't think anyone on this forum ever really understood ripple. Yes, some banks are buying into the idea because it's a smart move. It's a direct point-to-point settlement system with no central operator, a fully decentralized network and provides transaction immutability and information redundancy just like bitcoin. It will work with any and between any currency worldwide (that includes all cryptos). It's a blockchain product just like all the others popping up.

You do realize Lightning Network isn't bitcoin, right?  It's a private network of participants that agree to use smart contract scripting language to settle debts. It only uses bitcoin for its final reconciliation. You can completely work with LN transactions (even spending from them) without ever involving the bitcoin blockchain. Well, that's just another blockchain based payment system product like ripple. It ain't bitcoin.

[Carlton Banks]

It only uses bitcoin for its final reconciliation. You can completely work with LN transactions (even spending from them) without ever involving the bitcoin blockchain.

No

Bitcoin is used before, during and after Lightning transactions are sent. Not just after, as you falsely state.


1 Bitcoin transaction is used to open a channel to start with

That transaction is used to check that the BTC being sent over Lightning is the real thing (how else do you stop people just faking that they have some BTC on the Lightning Network, huh?)

1 Bitcoin transaction closes the channel


Furthermore, Lightning Network isn't a blockchain at all, it uses Bitcoin's blockchain, and that's the only blockchain involved. You don't know much about it, you need to actually be informed on a subject before you can make such confident comments.

[QuestionAuthority]

It only uses bitcoin for its final reconciliation. You can completely work with LN transactions (even spending from them) without ever involving the bitcoin blockchain.

No

Bitcoin is used before, during and after Lightning transactions are sent. Not just after, as you falsely state.


1 Bitcoin transaction is used to open a channel to start with

That transaction is used to check that the BTC being sent over Lightning is the real thing (how else do you stop people just faking that they have some BTC on the Lightning Network, huh?)

1 Bitcoin transaction closes the channel


Furthermore, Lightning Network isn't a blockchain at all, it uses Bitcoin's blockchain, and that's the only blockchain involved. You don't know much about it, you need to actually be informed on a subject before you can make such confident comments.

And you need to learn how to read dumbass. I said it's a scripting language fool. Reconciliation means that it uses Bitcoin as a ledger only not for the transaction. You're so fucking stupid why do you even bother reading?

[kiklo]

It only uses bitcoin for its final reconciliation. You can completely work with LN transactions (even spending from them) without ever involving the bitcoin blockchain.

No

Bitcoin is used before, during and after Lightning transactions are sent. Not just after, as you falsely state.


1 Bitcoin transaction is used to open a channel to start with

That transaction is used to check that the BTC being sent over Lightning is the real thing (how else do you stop people just faking that they have some BTC on the Lightning Network, huh?)

1 Bitcoin transaction closes the channel


Furthermore, Lightning Network isn't a blockchain at all, it uses Bitcoin's blockchain, and that's the only blockchain involved. You don't know much about it, you need to actually be informed on a subject before you can make such confident comments.

LOL,  

Sorry CB ,
QuestionAuthority is correct,  LN can be used with any segwit infected Blockchain.
Which is why LTC and others are also voting on the segwit trojan.

LN does nothing but place a timelock on the BTC or LTC or Altcoin, so no one can move it.
Once those timelocks expire the parties may move those BTC or LTC or Altcoin to different addresses,
unless of course, the locks had expired early , or were never actually there to begin with.
Any 51% attack can fund a LN channel , and then rewrite the blockchain , so the BTC was never time locked, Ie: Counterfeiting the LN Funds  

 

FYI:
BTC & Crypto onchain transactions Ended Counterfeiting
LN/Banking Cartels Offchain Transaction brings back the ability to Counterfeit funds, and fractional reserve system to Crypto

[stdset]

And you need to learn how to read dumbass. I said it's a scripting language fool. Reconciliation means that it uses Bitcoin as a ledger only not for the transaction. You're so fucking stupid why do you even bother reading?

Just quoted this for posterity. In the case the author later decides to delete/edit this reply.

LN does nothing but place a timelock on the BTC or LTC or Altcoin, so no one can move it.
Once those timelocks expire the parties may move those BTC or LTC or Altcoin to different addresses,
unless of course, the locks had expired early , or were never actually there to begin with.
Any 51% attack can fund a LN channel , and then rewrite the blockchain , so the BTC was never time locked, Ie: Counterfeiting the LN Funds 

I'm trying to look at LN from your perspective. Care to elaborate? More about timelocks? How an attack can fund a channel?

[spartacusrex]

Anyone that reads the LN Whitepaper , can see stealing BTC from LN, requires nothing more than evading their time locks.

That is true for any 'refundable' time locked txn, like Atomic Cross Chain Transfers.

If I can stop you from claiming the coins before the time lock expires, i can refund them back to myself (after I have taken your coins aswell that is).. Just have to prevent your TXN from getting on chain.

This is much harder to do than I think you are implying.

[kiklo]

And you need to learn how to read dumbass. I said it's a scripting language fool. Reconciliation means that it uses Bitcoin as a ledger only not for the transaction. You're so fucking stupid why do you even bother reading?

Just quoted this for posterity. In the case the author later decides to delete/edit this reply.

LN does nothing but place a timelock on the BTC or LTC or Altcoin, so no one can move it.
Once those timelocks expire the parties may move those BTC or LTC or Altcoin to different addresses,
unless of course, the locks had expired early , or were never actually there to begin with.
Any 51% attack can fund a LN channel , and then rewrite the blockchain , so the BTC was never time locked, Ie: Counterfeiting the LN Funds 

I'm trying to look at LN from your perspective. Care to elaborate? More about timelocks? How an attack can fund a channel?

Elaboration

We all know that LN is a Proposed Offchain solution to BTC backlog of Unconfirmed Transactions.

(Which could easily be fixed just with a blocksize increase or a faster BlockSpeed.)

But instead BTC core devs want to shove Segwit & LN down everyone throats.

Facts
LN Notes are a Offchain Representation of the value of a BTC (with the actual BTC locked in place on the actual BTC Onchain Blockchain)
LN Devs have continuously implied that BTC will be placed on LN and very rarely if ever be returned / unlocked on the real BTC Blockchain.
Combined the Chinese Mining Pools have over 51% necessary for an attack, (~68% at last count).
(With a 51% attack they can perform a history rewrite attacks, rewriting the blockchain.)
(A few years ago at the prompting of the BTC devs, a group (with over 51%) REWROTE the Last 12 Hours of the Blockchain to fix a fork, cause by a programming error.)
(So that was 76 Blocks that were rewritten.)
(We also know the Miners can choose which transactions are included in their blocks.)

So now back to the Title of this OP, Exactly how do you Counterfeit BTC on LN.

Option 1 :
Form a group of collusion between the Miners that control 51%,
Send 50 BTC to an address. Now follow the steps on LN to Lock up that 50 BTC on the Blockchain.
Whether LN requires 1 or 3 confirmations , as soon as LN confirms the representation of LN notes match your amount.
You and your colluding friends, rewrite the blockchain and include a transaction moving that 50 BTC to another address before the lock took place.
You now still have your 50 BTC Free & Clear Onchain, and a representation value of 50 BTC Offchain on LN .(Which you can use for LN transactions forever.)

BTC Onchain Transactions ended Counterfeiting , LN Offchain Transactions will bring Counterfeiting into Crypto.   


 

LN Does Needs Segwit so that LN can be trust less.
Otherwise LN requires a separate Trust system in place or very long extensive Time Locks , Both of which LN Devs don't want.

https://www.reddit.com/r/Bitcoin/comments/5eqm2b/can_ln_work_without_segwit/?st=izzovrzk&sh=b2fe8b0a

Yeah you can do LN without segwit. It's less efficient, and there are some features you won't be able to do.

With segwit, you can have a 3rd party "watch" your channel for you in case your counterparty tries to broadcast an old, fraudulent transaction.
The 3rd party can automatically grab your money back for you. And the watcher doesn't even know about your transactions or your balances while watching.

That whole feature is pretty much gone without segwit.
You'd have to tell the watcher everything about your channel, and the only thing they'd be able to do is e-mail you to let you know if fraud occurred.

The other main disadvantage to segwit-less LN is that channels would have a preset duration. That's a pretty big downside.

If segwit doesn't activate after a long time, we could re-program some of the current code to work without segwit.
I think everyone's hoping we don't have to as that'd be a bit disappointing, but doable.
As I meme'd at scaling HK, there are levels of LN we are prepared to accept

In Short , without Segwit any version of LN is going to be crap.

 

[kiklo]

Anyone that reads the LN Whitepaper , can see stealing BTC from LN, requires nothing more than evading their time locks.

That is true for any 'refundable' time locked txn, like Atomic Cross Chain Transfers.

If I can stop you from claiming the coins before the time lock expires, i can refund them back to myself (after I have taken your coins aswell that is).. Just have to prevent your TXN from getting on chain.

This is much harder to do than I think you are implying.

Hard for you & me , yes it is.

But the rich guys that can collude to 51% attack or the rich guys that can spam the network until your timelocks expire, it is easy as pie.
* The only poor people able to pull it off , are the Hackers that learn to Hack the LN Nodes, and modify the timelocks ahead of schedule.*

 

[stdset]

LN Does Needs Segwit so that LN can be trust less.
Otherwise LN requires a separate Trust system in place or very long extensive Time Locks , Both of which LN Devs don't want.

https://www.reddit.com/r/Bitcoin/comments/5eqm2b/can_ln_work_without_segwit/?st=izzovrzk&sh=b2fe8b0a

Yeah you can do LN without segwit. It's less efficient, and there are some features you won't be able to do.

With segwit, you can have a 3rd party "watch" your channel for you in case your counterparty tries to broadcast an old, fraudulent transaction.
The 3rd party can automatically grab your money back for you. And the watcher doesn't even know about your transactions or your balances while watching.

That whole feature is pretty much gone without segwit.
You'd have to tell the watcher everything about your channel, and the only thing they'd be able to do is e-mail you to let you know if fraud occurred.

The other main disadvantage to segwit-less LN is that channels would have a preset duration. That's a pretty big downside.

If segwit doesn't activate after a long time, we could re-program some of the current code to work without segwit.
I think everyone's hoping we don't have to as that'd be a bit disappointing, but doable.
As I meme'd at scaling HK, there are levels of LN we are prepared to accept

In Short , without Segwit any version of LN is going to be crap.

OK, we are getting somewhere.
First of all, I'd like to note, that when I mention LN without explicitly stating which version, I mean segwit LN.
Secondly, with CLTV and CSV (already adopted on Bitcoin mainnet), permanent channels are possible even without malleability fix: https://bitcointalk.org/index.php?topic=1711460.0 Their opening is a bit cumbersome and involves temporarily locking additional (to what is going to be put in a channel) funds, but after all, permanent channels are possible even without fixing malleability.

LN Notes are a Offchain Representation of the value of a BTC (with the actual BTC locked in place on the actual BTC Onchain Blockchain)
LN Devs have continuously implied that BTC will be placed on LN and very rarely if ever be returned / unlocked on the real BTC Blockchain.
Combined the Chinese Mining Pools have over 51% necessary for an attack, (~68% at last count).
(With a 51% attack they can perform a history rewrite attacks, rewriting the blockchain.)
(A few years ago at the prompting of the BTC devs, a group (with over 51%) REWROTE the Last 12 Hours of the Blockchain to fix a fork, cause by a programming error.)
(So that was 76 Blocks that were rewritten.)
(We also know the Miners can choose which transactions are included in their blocks.)

So now back to the Title of this OP, Exactly how do you Counterfeit BTC on LN.

Option 1 :
Form a group of collusion between the Miners that control 51%,
Send 50 BTC to an address. Now follow the steps on LN to Lock up that 50 BTC on the Blockchain.
Whether LN requires 1 or 3 confirmations , as soon as LN confirms the representation of LN notes match your amount.
You and your colluding friends, rewrite the blockchain and include a transaction moving that 50 BTC to another address before the lock took place.
You now still have your 50 BTC Free & Clear Onchain, and a representation value of 50 BTC Offchain on LN .(Which you can use for LN transactions forever.)

BTC Onchain Transactions ended Counterfeiting , LN Offchain Transactions will bring Counterfeiting into Crypto.  

LN isn't a separate blockchain. LN BTC are real, same BTC as BTC you are transacting today. Say Alice and Bob have a bidirectional channel. For outside world the channel looks like a 2 of 2 multisignature output. Both participants of the channel, as well as other interested parties, can very easily check existence of that output. If the output is gone, so is the channel with all it's funds.

[andrew24p]

Except lightning will not be working at its full capacity if segwit isnt put in place and that wont happen without a fork because BU wants to make a point rather than actually use good tech.

[kiklo]

LN isn't a separate blockchain. LN BTC are real, same BTC as BTC you are transacting today. Say Alice and Bob have a bidirectional channel. For outside world the channel looks like a 2 of 2 multisignature output. Both participants of the channel, as well as other interested parties, can very easily check existence of that output. If the output is gone, so is the channel with all it's funds.

LN's Code is nothing but a fancy series of Time Locking scripts.  

An LN Hub can place a time lock on any Segwit Infected Blockchain coins.
Meaning if BTC & LTC vote yes for segwit (doubt it) , you would be able to lock BTC or LTC in place on their respective chains.

LN is nothing but some code that lets you time lock the coins Onchain so they can not be moved.
LN Notes are like Bank Notes, completely worthless unless someone is willing to trade you something for it.
LN transfers happen Offchain , so their is no verification by the actual blockchain, that what you are trading for even exists, until you cash out.
When you cash out , then and only then do you find out if your coins were counterfeit or stolen before you tried to remove them.
Until that point you are trading Fake Notes, because they only prove to be real notes, if their is a payout of the value it is representing. 


 

[jonald_fyookball]

No one really has done a study on whether LN will be practical to do as a true P2P network  Vs. only big hubs/spoke-and-wheel/paypal2.0

[kiklo]

@joecooin, you never answered my question.

Did you record your Customers Names & Address when you accepted Zero Confirmations, in case they ever used a DoubleSpend trick on you?
(It is quite easy to doublespend on a Zero Confirmation.)

 

[stdset]

An LN Hub can place a time lock on any Segwit Infected Blockchain coins.

Even those which which are not part of the hub's channels?

LN Notes are like Bank Notes, completely worthless unless someone is willing to trade you something for it.

There are no LN notes. LN will be transacting BTC.

LN transfers happen Offchain , so their is no verification by the actual blockchain, that what you are trading for even exists, until you cash out.

Verification is very easy for channel participants. It's as easy as checking an address in a blockexplorer today.

Say Bob and Carol have a channel with current funds distribution Bob - 3BTC, Carol - 2BTC. Let's represent this as
Bob-3:2-Carol
Alice wants to pay Carol 1 BTC, but opens a channel with Bob (he plans to build a hub, charges no fee for now), she loads 1 BTC to the channel. So now our small piece of LN looks like:
Alice-1:0-Bob-3:2-Carol
There are 2 channels: Alice-Bob with 1 BTC in it and Bob-Carol with 5 BTC. Bob owns 3 BTC: 0 in his channel with Alice and 3 in his channel with Carol. Alice owns 1 BTC, Carol - 2 BTC.

Now Alice pays 1 BTC to Carol via Bob:
Alice-0:1-Bob-2:3-Carol
As expected, Bob still owns 3 BTC: 1 in his channel with Alice and 2 in his channel with Carol. Alice couldn't pay more than 1 BTC. But now she can use her channel with Bob for receiving up to 1 BTC. For the whole lifetime of a channel, this channel's BTC never leave it.
If now, due to a 51% attack, Alice-Bob channel is no more, this directly affects only Bob, he looses 1 BTC, Alice gains it and can spend again, effectively performing a doublespend, just like with good old onchain transactions. Carol isn't affected, she has all info about her channel with Bob. Bob's problems aren't her problems.

[Amph]

LN isn't a separate blockchain. LN BTC are real, same BTC as BTC you are transacting today. Say Alice and Bob have a bidirectional channel. For outside world the channel looks like a 2 of 2 multisignature output. Both participants of the channel, as well as other interested parties, can very easily check existence of that output. If the output is gone, so is the channel with all it's funds.

LN's Code is nothing but a fancy series of Time Locking scripts.  

An LN Hub can place a time lock on any Segwit Infected Blockchain coins.
Meaning if BTC & LTC vote yes for segwit (doubt it) , you would be able to lock BTC or LTC in place on their respective chains.

LN is nothing but some code that lets you time lock the coins Onchain so they can not be moved.
LN Notes are like Bank Notes, completely worthless unless someone is willing to trade you something for it.
LN transfers happen Offchain , so their is no verification by the actual blockchain, that what you are trading for even exists, until you cash out.
When you cash out , then and only then do you find out if your coins were counterfeit or stolen before you tried to remove them.
Until that point you are trading Fake Notes, because they only prove to be real notes, if their is a payout of the value it is representing. 


 

putting LN like this make it sound like sidechain isn't it? sidechin are also worthless until the proper amount of bitcoin are locked, for that particular chain and you cna use that value on that chain now

are they abandoned the initial idea of sidechain for LN? what i don't like about the LN is the centalized HUB, they want to get rid of possible centralization that major block would bring but then they want to go with LN...

[stdset]

No one really has done a study on whether LN will be practical to do as a true P2P network  Vs. only big hubs/spoke-and-wheel/paypal2.0

This is the only argument against LN. Such study would be very difficult to do, too few people would trust it. Because too many parameters are involved. If we can't reliably measure all those parameters, it's garbage in - garbage out study. People are different. Some will be OK transacting via an excessively big hub. Some won't be doing it, some will be running small low fee hubs on principle.
My opinion is that entry barrier is very low, so there will be enough hubs.

[kiklo]

An LN Hub can place a time lock on any Segwit Infected Blockchain coins.

Even those which which are not part of the hub's channels?

LN Notes are like Bank Notes, completely worthless unless someone is willing to trade you something for it.

There are no LN notes. LN will be transacting BTC.

LN transfers happen Offchain , so their is no verification by the actual blockchain, that what you are trading for even exists, until you cash out.

Verification is very easy for channel participants. It's as easy as checking an address in a blockexplorer today.

Say Bob and Carol have a channel with current funds distribution Bob - 3BTC, Carol - 2BTC. Let's represent this as
Bob-3:2-Carol
Alice wants to pay Carol 1 BTC, but opens a channel with Bob (he plans to build a hub, charges no fee for now), she loads 1 BTC to the channel. So now our small piece of LN looks like:
Alice-1:0-Bob-3:2-Carol
There are 2 channels: Alice-Bob with 1 BTC in it and Bob-Carol with 5 BTC. Bob owns 3 BTC: 0 in his channel with Alice and 3 in his channel with Carol. Alice owns 1 BTC, Carol - 2 BTC.

Now Alice pays 1 BTC to Carol via Bob:
Alice-0:1-Bob-2:3-Carol
As expected, Bob still owns 3 BTC: 1 in his channel with Alice and 2 in his channel with Carol. Alice couldn't pay more than 1 BTC. But now she can use her channel with Bob for receiving up to 1 BTC. For the whole lifetime of a channel, this channel's BTC never leave it.
If now, due to a 51% attack, Alice-Bob channel is no more, this directly affects only Bob, he looses 1 BTC, Alice gains it and can spend again, effectively performing a doublespend, just like with good old onchain transactions. Carol isn't affected, she has all info about her channel with Bob. Bob's problems aren't her problems.

LN are not transacting actual BTC, get that thru your head.
LN Notes are a representation of a BTC or a LTC or whatever segwit infected altcoin blockchain they lock up the coins on.
LN is nothing more than a Locking/Unlocking mechanism which gives 1 or 3 parties the right to move portions of it once the time locks are up.
Example: If those time locks expired due to a hack or network spamming, when you go to redeem your LN note, it will Fail.
Then your so called LN Notes prove to have been worthless.

Offchain Verification can not be trusted,
If they let you check the Onchain BTC address the actual BTC is locked up in, you can use a block explorer to confirm they are onchain.
This would inform you if someone 51% attacked and counterfeit LN, but you have to know the Onchain BTC address.
(Does LN even show the Onchain BTC Address so you can check it?)
But if someone evades the time locks so that the BTC can be stolen before you can redeem it, then above check was useless.
It is also useless if the 51% attack occurs after you checked the BTC address.

 

FYI:
LN security is not secured by the Coin's Blockchain,
LN security is nothing more than a series of complicated Time Locks.

[stdset]

An LN Hub can place a time lock on any Segwit Infected Blockchain coins.

Even those which which are not part of the hub's channels?

LN Notes are like Bank Notes, completely worthless unless someone is willing to trade you something for it.

There are no LN notes. LN will be transacting BTC.

LN transfers happen Offchain , so their is no verification by the actual blockchain, that what you are trading for even exists, until you cash out.

Verification is very easy for channel participants. It's as easy as checking an address in a blockexplorer today.

Say Bob and Carol have a channel with current funds distribution Bob - 3BTC, Carol - 2BTC. Let's represent this as
Bob-3:2-Carol
Alice wants to pay Carol 1 BTC, but opens a channel with Bob (he plans to build a hub, charges no fee for now), she loads 1 BTC to the channel. So now our small piece of LN looks like:
Alice-1:0-Bob-3:2-Carol
There are 2 channels: Alice-Bob with 1 BTC in it and Bob-Carol with 5 BTC. Bob owns 3 BTC: 0 in his channel with Alice and 3 in his channel with Carol. Alice owns 1 BTC, Carol - 2 BTC.

Now Alice pays 1 BTC to Carol via Bob:
Alice-0:1-Bob-2:3-Carol
As expected, Bob still owns 3 BTC: 1 in his channel with Alice and 2 in his channel with Carol. Alice couldn't pay more than 1 BTC. But now she can use her channel with Bob for receiving up to 1 BTC. For the whole lifetime of a channel, this channel's BTC never leave it.
If now, due to a 51% attack, Alice-Bob channel is no more, this directly affects only Bob, he looses 1 BTC, Alice gains it and can spend again, effectively performing a doublespend, just like with good old onchain transactions. Carol isn't affected, she has all info about her channel with Bob. Bob's problems aren't her problems.

LN are not transacting actual BTC, get that thru your head.
LN Notes are a representation of a BTC or a LTC or whatever segwit infected altcoin blockchain they lock up the coins on.
LN is nothing more than a Locking/Unlocking mechanism which gives 1 or 3 parties the right to move portions of it once the time locks are up.
Example: If those time locks expired due to a hack or network spamming, when you go to redeem your LN note, it will Fail.
Then your so called LN Notes prove to have been worthless.

Offchain Verification can not be trusted,
If they let you check the Onchain BTC address the actual BTC is locked up in, you can use a block explorer to confirm they are onchain.
This would inform you if someone 51% attacked and counterfeit LN, but you have to know the Onchain BTC address.
(Does LN even show the Onchain BTC Address so you can check it?)
But if someone evades the time locks so that the BTC can be stolen before you can redeem it, then above check was useless.
It is also useless if the 51% attack occurs after you checked the BTC address.

 

FYI:
LN security is not secured by the Coin's Blockchain,
LN security is nothing more than a series of complicated Time Locks.

Thanks for quoting my explanation of how LN works. The more people understand LN, the less they fear it.
Now LN is being tested on the testnet. You can check your claims there. The more attacks you try - the better, testnet exists exactly for that. Probably you can even convince people to conduct a 51% attack.

[Xester]

For many years now we have been accepting Bitcoin (with zero confirmations and directly, not through Bitpay) at our bar/restaurant in Berlin. Today we have deployed a testnet lightning node and accept testnet coins via the lightning network from a few customers to get a glimpse into the future. And that future looks shining bright!

- No more waiting for the customer's transaction being broadcasted, transactions arrive in milliseconds, not seconds (or sometimes minutes in case the customer uses coinbase or another bank wallet).
- No more looking out for double spend attacks. Not even Peter Todd is going to RBF us on LN.
- No more confusion during times of malleabillity attacks. Transaction malleabillity is a thing of the past.
- Massively advanced privacy for us as well as our customers as only we can see the transactions on our payment channel.
- And we will finally be able to offer free-of-cost payments to our customers.

As a merchant I can tell you that every merchant on the planet wants this stuff. It is like after all these years Bitcoin shows that with LN it can live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it.

Thanks to all the developers making this possible!

edit: pics http://imgur.com/a/64iwK

reddit thread: https://www.reddit.com/r/Bitcoin/comments/62uw23/lightning_network_is_working_room77_is_accepting/

If that is real that the clients does not need any more to wait for confirmation then that is a very good news to all of us bitcoin users. It maybe time for the merchants to come in and accept bitcoin without having to worry slow confirmation of transactions which very unpleasant. But the users also hope that with this automatic confirmation the fees will not sting us and instead enjoy lower fees compared to the fees at this moment.

[QuestionAuthority]

The Lightning Shit Network is unnecessary. It has four elements that it claims will solve problems with Bitcoin.

Instant payments without waiting for long confirmation times = my bitcoin transactions have always shown up instantly on the network. For security purposes you have to wait for multiple confirmations. So what, Bitcoin works best for international money transfer (buying online long distance). If you want to buy a beer or a cup of coffee use the ACH/EFT system or cash. Both are instant and have successfully worked for decades. If you're buying drugs on a street corner use cash. If you're buying drugs online use Bitcoin, before the dealer can package and ship your order the btc transfer will have 6 confirmations.

It's immediately capable of scaling to huge demand = bitcoin doesn't have a huge demand yet. It will be decades before bitcoin is overcome by demand and that can be corrected within bitcoin. There's no need for an outside fix. Bitcoin should never be used to grocery shop, buy a soda or a candy bar. That's not where its most useful. Bitcoin will never replace every payment system in the world. It certainly doesn't need to try to do it within the first decade of its life. Let's pretend bitcoin is only seven years old and will not be required to replace ACH/EFT tomorrow. We have decades to work on this problem.

LN is so cheap to use that we can start allowing dust payments again, yippee = this is just goofy. Why would anyone care if you can buy a piece of buttered toast or tip someone a penny with bitcoin. If you really feel the need to buy one slice of buttered toast with crypto then go start butteredtoastcoin and use that. Make a copy of a script coin like Litecoin and buy your toast and tip pennies all fucking day long. Leave bitcoin out of it. Stop being so fucking cheap and pay a fee. Up until now people have been paying $25-$50 for international wire transfers that took a week. Pay your fucking dollar to get same hour service.

Hurrah, cross-chain atomic swaps are possible with two coins that use the same cryptographic hash function. With Lightning Shit Network dogiedickcoin, titcoin, Litecoin, creamcheesecoin and bitcoin can all be lovers. =  I don't want bitcoin to have any strange lovers and catch HIV from some perverted blockchain. Leave bitcoin alone.

[spartacusrex]

Ok Kiklo - let's dance.

Anyone that reads the LN Whitepaper , can see stealing BTC from LN, requires nothing more than evading their time locks.

That is true for any 'refundable' time locked txn, like Atomic Cross Chain Transfers.

If I can stop you from claiming the coins before the time lock expires, i can refund them back to myself (after I have taken your coins aswell that is).. Just have to prevent your TXN from getting on chain.

This is much harder to do than I think you are implying.

Hard for you & me , yes it is.

This I agree with  

But the rich guys that can collude to 51% attack.. it is easy as pie.

As easy as mounting a 51% attack !? yeah - real easy.. (And this attack applies to EVERYTHING crypto-coin based - not just LN)

..the rich guys that can spam the network until your timelocks expire, it is easy as pie.

Nah.. Let's say I want to cash out $100. All I need to do is pay a fee higher than the LOWEST the spammer pays.. Sooo.. If I'm prepared to pay $1, the spammer would have to spam the network, with fees OVER $1 for 100's / 1000's of TXNS to prevent mine from getting on.. no way is that worth it.

* The only poor people able to pull it off , are the Hackers that learn to Hack the LN Nodes, and modify the timelocks ahead of schedule.*

Nope.. AT NO STAGE am I having to TRUST the LN node to sign anything on my behalf. All the clever crypto-shit is done by the client, on his machine, and he certainly isn't going to sign a txn that has 'funny' timelock schedules.. The worst the hackers can do is force me to cash out, if the LN node starts spewing rubbish.

[kiklo]

Ok Kiklo - let's dance.

That an oldie.   
https://www.youtube.com/watch?v=iNLXxDMxe18

..the rich guys that can spam the network until your timelocks expire, it is easy as pie.

Nah.. Let's say I want to cash out $100. All I need to do is pay a fee higher that the LOWEST the spammer pays.. Sooo.. If I'm prepared to pay $1, the spammer would have to spam the network, with fees OVER $1 for 100's / 1000's of TXNS to prevent mine from getting on.. no way is that worth it.

 ,
Let's Say 100 other users Time Locks are expiring at the same time as yours , and all drawing out at least $100.
Total amount is now 100users*$100=$10,000
Average # of transactions per block ~2000.
At $1 each , it cost me $2,000 bucks to spam the block locking out all of your transactions and including mine, that lets me steal the entire $10,000 .
So My Profit is $8,000  , not bad for less than 30 minutes worth of work.

* The only poor people able to pull it off , are the Hackers that learn to Hack the LN Nodes, and modify the timelocks ahead of schedule.*

Nope.. AT NO STAGE am I having to TRUST the LN node to sign anything on my behalf. All the clever crypto-shit is done by the client, on his machine, and he certainly isn't going to sign a txn that has 'funny' timelock schedules.. The worst the hackers can do is force me to cash out, if the LN node starts spewing rubbish.

Until segwit is activated, you have to trust them.  (Even LN devs warn you of this.)

If segwit is ever activated,
And a Hacker Hacks an LN Node,
he could have it Lie to you about the route or fees or maybe even corrupting the preimage , triggering a roll back of the payment.
http://bitfury.com/content/5-white-papers-research/whitepaper_flare_an_approach_to_routing_in_lightning_network_7_7_2016.pdf

Requirement (Security).
As some of nodes may demonstrate Byzantine behaviour (e.g., by lying about fees or routes),
routing in LN should have protection mechanisms to prevent or mitigate harm
from such actions and guarantee that a sender would not lose his money even in a worst-case scenario.
Such mechanisms should include:
•the ability to verify route existence
(seeAppendix A for the details on a possible implementation of the verification procedure)
•
the possibility to roll back the payment in case a node on the payment route provides the wrong
information on channel properties (this is already discussed in the LN white paper).

Slickest thing for an Hacker to do is Trick the Neighborhood Discovery
to forward the preimage to himself so he can steal the funds directly.
By updating one LN, Network Discovery Paths, you update all of them.
http://bitfury.com/content/5-white-papers-research/whitepaper_flare_an_approach_to_routing_in_lightning_network_7_7_2016.pdf
Page 15 , goes on about Network Discovery

 

[spartacusrex]

Let's Say 100 other users Time Locks are expiring at the same time as yours , and all drawing out at least $100.
Total amount is now 100users*$100=$10,000
Average # of transactions per block ~2000.
At $1 each , it cost me $2,000 bucks to spam the block locking out all of your transactions and including mine, that lets me steal the entire $10,000 .
So My Profit is $8,000  , not bad for less than 30 minutes worth of work.

They're going to have to fill more than 1 block. Unless they ALL try and cash out ON the block the time lock expires.. They won't..

Until segwit is activated, you have to trust them.

Until SegWit is activated - BTC ain't going nowhere.. and LN too.. so I'm assuming this all happens after that.

[d5000]

In my opinion, that's just the use case I would also use LN for: small transactions in real-life or brick-and-mortar businesses. So I encourage these experiments. When I'm again in Berlin maybe I'll try it out in your bar - hopefully with real coins and Segwit activated

For larger transactions, like my salary or a remittance, I wouldn't like to use LN. In these cases I would prefer other second-layer solutions like extension blocks and side/drivechains.