[OUTDATED] The Lightning Network FAQ

[Wind_FURY]

if you dont understand that Msats are pegged tokens
if you dont understand that HTLC's are just agreeing who owes who wht but a HTCL is not and will never 'settle'

then you have not learned anything about LN

as for your over meanders about bigblocks and altcoins.. my stand is about scaling BITCOIN. not deburdening BITCOIN and scaling alternative networks

franky1, listen. You need to update your understanding of the Lightning Network. You have been using the same debate that it's an "IOU system" from 2 - 3 years ago. You are simply wrong.

In Lightning, not one user "deposited" Bitcoins to another party, and then issued with a worthless token. They are actually signed transactions made by both participants of the channel that can be broadcasted and included in a block in a later time. It's actually a smart contract between two parties.

The newbies are beginning to understand, https://bitcointalk.org/index.php?topic=4792622.msg50781071#msg50781071

Always DYOR.

[franky1]

if you dont understand that Msats are pegged tokens
if you dont understand that HTLC's are just agreeing who owes who wht but a HTCL is not and will never 'settle'

then you have not learned anything about LN

as for your over meanders about bigblocks and altcoins.. my stand is about scaling BITCOIN. not deburdening BITCOIN and scaling alternative networks

franky1, listen. You need to update your understanding of the Lightning Network. You have been using the same debate that it's an "IOU system" from 2 - 3 years ago. You are simply wrong.

In Lightning, not one user "deposited" Bitcoins to another party, and then issued with a worthless token. They are actually signed transactions made by both participants of the channel that can be broadcasted and included in a block in a later time. It's actually a smart contract between two parties.

The newbies are beginning to understand, https://bitcointalk.org/index.php?topic=4792622.msg50781071#msg50781071

Always DYOR.

windfury
learn the difference between a CLTV contract (the lock/vault) and HTLC(the iou/pegged denomination). they are 2 different types of contracts/agreements.
as for saying my info is out dated. sorry but playing with only CLTV was the old crap. now they use HTLC for the payments which is where new things like factories and ELtoo come into play, as well as turbo funding and no collateral funding channels to allow instant use without confirms and such.

please its of benefit to you to really try to learn LN
as for saying there is no token issued. again check out msats

[WhyFhy]

You guys should stop arguing here, @BitCryptex made this to be educational and informative.

[Wind_FURY]

if you dont understand that Msats are pegged tokens
if you dont understand that HTLC's are just agreeing who owes who wht but a HTCL is not and will never 'settle'

then you have not learned anything about LN

as for your over meanders about bigblocks and altcoins.. my stand is about scaling BITCOIN. not deburdening BITCOIN and scaling alternative networks

franky1, listen. You need to update your understanding of the Lightning Network. You have been using the same debate that it's an "IOU system" from 2 - 3 years ago. You are simply wrong.

In Lightning, not one user "deposited" Bitcoins to another party, and then issued with a worthless token. They are actually signed transactions made by both participants of the channel that can be broadcasted and included in a block in a later time. It's actually a smart contract between two parties.

The newbies are beginning to understand, https://bitcointalk.org/index.php?topic=4792622.msg50781071#msg50781071

Always DYOR.

windfury
learn the difference between a CLTV contract (the lock/vault) and HTLC(the iou/pegged denomination). they are 2 different types of contracts/agreements.
as for saying my info is out dated. sorry but playing with only CLTV was the old crap. now they use HTLC for the payments which is where new things like factories and ELtoo come into play, as well as turbo funding and no collateral funding channels to allow instant use without confirms and such.

please its of benefit to you to really try to learn LN
as for saying there is no token issued. again check out msats

Ok, I will do my research and ask around. If this is another one of your misinformation, then I don't know why you're doing your misinformation rampage.

You guys should stop arguing here, @BitCryptex made this to be educational and informative.

Sorry if our debates annoy some of you, but it's also an educational experience if you do it, or follow the debates.

Here's something franky1 said, help me do the research on why he believes Lightning is a network for "IOU pegged promises to pay tokens",

learn the difference between a CLTV contract (the lock/vault) and HTLC(the iou/pegged denomination). they are 2 different types of contracts/agreements.
as for saying my info is out dated. sorry but playing with only CLTV was the old crap. now they use HTLC for the payments[/b] which is where new things like factories and ELtoo come into play, as well as turbo funding and no collateral funding channels to allow instant use without confirms and such.

He's usually gaslightng, but it's good to always give someone the benefit of the doubt and verify for yourself through research, if the information was correct.

[franky1]

throwing out the word "gaslighting, misinformation, fud" as your repetative response. does not actually prove a damn thing apart from show you have not done any research

again
learn the difference between a cltv and htlc
learn about msats
learn about factories

JUST LEARN!!!
dont reply until you have learned
dont reply saying personal comment as a response to delay why you have not learned. just go and learn this stuff
dont reply trying to twist the conversation into a different meander. just go learn this stuff

and if you are going to learn by chatting to a echo chamber of friends. ask them for CODE, data proof. and if they can only reply saying "gaslighting, jiberish, technobable" then they are not explaining the tech they are avoiding explanation and just trying to avoid teaching. so go else where and learn independently

do not reply to me.
go learn about LN and then make a full descriptive reply explaining msats, HTLC factories.
only counter the details of msats, htlc's, factories when you have learned about them.
again dont reply to me about the why's and if's and the whos's of 'franky1' just talk about LN and msats, factories, HTLCs

have a good month

if you reply to this topic in the next 2 days then you have not given self adequate research time.
if you reply just to comment about my comment you have just been ignorant to the point.
if you want to discuss LN LEARN LN

[Wind_FURY]

throwing out the word "gaslighting, misinformation, fud" as your repetative response. does not actually prove a damn thing apart from show you have not done any research

I will repeat and repeat, until proven wrong.

JUST LEARN!!!

have a good month

I WILL learn, and I hope I won't be disappointed to "learn" that you're gaslighting again.

Newbies, DYOR with me.

Plus on the real topic, Lightning Labs' desktop app is out of testnet, and live with an alpha version.

https://bitcoinmagazine.com/articles/out-of-testnet-and-into-alpha-lightning-labs-desktop-application-is-live/

[franky1]

with LN
Neutrino is a compressed blockchain of all tx's... making a 1.4mb block appear as 20kb (70th of the size)
yet requires full nodes to go through a process of re-orging data, compressing it. and sending it.
yet the receiving LN node doesnt need to know about every spent/old tx of history.

what would be more practical, task saving, data size saving and less demanding on full nodes. is to use the UTXO set
not only is the current UTXO set less data than what neutrino compressed data would be.
but the information of UTXO is already readily existant in fullnodes(doesnt need new code/new database/new re-org protocol/new encryption)
the data contained in a UTXO set is more directly what LN wallets need to view(locked funds aka UNSPENTs)

so why create a new protocol/dataset for full nodes to have to process and manage, when they already have a dataset that provides the more direct data LN would need.
seems too many want to re-invent the wheel and try turning a bike into a trike and then a car then a truck(more wheels) instead of just using the well balanced wheels of a simple bike more efficiently

[DooMAD]

so why create a new protocol/dataset for full nodes to have to process and manage, when they already have a dataset that provides the more direct data LN would need.
seems too many want to re-invent the wheel and try turning a bike into a trike and then a car then a truck(more wheels) instead of just using the well balanced wheels of a simple bike more efficiently

In terms of scaling, it should go without saying that the vehicles with a larger number of wheels do tend to have a larger capacity.  So thank you for highlighting the very reason why we're doing what we're doing.

[franky1]

so why create a new protocol/dataset for full nodes to have to process and manage, when they already have a dataset that provides the more direct data LN would need.
seems too many want to re-invent the wheel and try turning a bike into a trike and then a car then a truck(more wheels) instead of just using the well balanced wheels of a simple bike more efficiently

In terms of scaling, it should go without saying that the vehicles with a larger number of wheels do tend to have a larger capacity.  So thank you for highlighting the very reason why we're doing what we're doing.

i got to laugh
much like core fans shouting about 4mb weight, yet the 'scaling capacity' does not = x4 tx throughput
which is my point. spending too much time re inventing a wheel to pretend its a better wheel rather than using the well balanced wheels of simplicity and scaling more efficiently

[Wind_FURY]

so why create a new protocol/dataset for full nodes to have to process and manage, when they already have a dataset that provides the more direct data LN would need.
seems too many want to re-invent the wheel and try turning a bike into a trike and then a car then a truck(more wheels) instead of just using the well balanced wheels of a simple bike more efficiently

In terms of scaling, it should go without saying that the vehicles with a larger number of wheels do tend to have a larger capacity.  So thank you for highlighting the very reason why we're doing what we're doing.

i got to laugh
much like core fans shouting about 4mb weight, yet the 'scaling capacity' does not = x4 tx throughput
which is my point. spending too much time re inventing a wheel to pretend its a better wheel rather than using the well balanced wheels of simplicity and scaling more efficiently

You have been criticizing protocol developers' solutions, but we haven't heard any better suggested solutions from you. What would be your proposal?

By the way, can you explain how Lightning "issues" IOU pegged promises to pay in Lightning? I want to learn more. Let's pretend I believe you.

[franky1]

You have been criticizing protocol developers' solutions, but we haven't heard any better suggested solutions from you. What would be your proposal?

LN is less secure than blockchains. LN requires more then one channel and requires other people to be online to agree to a payment. LN is not a straight 'push payment' . there are more 'if's and non-guarantee's of success with ln. and more ways for people to steal funds from eachother aswell as ddos each other

however bitcoins scaling is not just about 'bigger blocks'
1. fee priority = spammers with under X confirm should pay more then those with XXX confirms. thus spammers become forced to use LN as it fits their niche. and average joe ends up paying less ONCHAIN than spammers
2. linear sigops. = reduce sigops limit helps propagation times, it also prevents bloaters making harmfully large tx's. thus allowing more tx per block without having to mak such bigger block sizes
3. hardware limits = have a type of 'hardware speedtest' as part of a node that rates a node. when majority reaches a certain level its then safe to increase the blocksize

By the way, can you explain how Lightning "issues" IOU pegged promises to pay in Lightning? I want to learn more. Let's pretend I believe you.

you have already been told the difference between a CLTV(btc network tx) and a HTLC(ln payment that does not broadcast)
you have been told about btc and sats.. and how Msats are not btc/sats.

now go research

[Wind_FURY]

You have been criticizing protocol developers' solutions, but we haven't heard any better suggested solutions from you. What would be your proposal?

LN is less secure than blockchains. LN requires more then one channel and requires other people to be online to agree to a payment. LN is not a straight 'push payment' . there are more 'if's and non-guarantee's of success with ln. and more ways for people to steal funds from eachother aswell as ddos each other

No one can refute the claims that Lightning transactions are less secure than on-chain transactions because it is correct. I personally never said it's as secure as online transactions, as far I can remember.

But as long as it doesn't change anything in the consensus layer, I don't care what developers do to build on top of Bitcoin.

however bitcoins scaling is not just about 'bigger blocks'
1. fee priority = spammers with under X confirm should pay more then those with XXX confirms. thus spammers become forced to use LN as it fits their niche. and average joe ends up paying less ONCHAIN than spammers
2. linear sigops. = reduce sigops limit helps propagation times, it also prevents bloaters making harmfully large tx's. thus allowing more tx per block without having to mak such bigger block sizes
3. hardware limits = have a type of 'hardware speedtest' as part of a node that rates a node. when majority reaches a certain level its then safe to increase the blocksize

Ok. I can't say or debate or argue if it's good or bad. But you have a right to express an opinion/solution.

By the way, can you explain how Lightning "issues" IOU pegged promises to pay in Lightning? I want to learn more. Let's pretend I believe you.

you have already been told the difference between a CLTV(btc network tx) and a HTLC(ln payment that does not broadcast)
you have been told about btc and sats.. and how Msats are not btc/sats.

now go research

Opening and using a channel requires an on-chain transaction. I can't understand how producing conditional statements, HLTC, in payment channels create "IOU pegged promises to pay tokens" in Lightning. Make us understand.

[Rath_]

-snip

Updated, thank you. I have just finished all of my exams so I will check if there are any outdated information in this thread in the next couple of days.

You guys should stop arguing here, @BitCryptex made this to be educational and informative.

I don't mind as long as the moderator doesn't close this thread without prior notice. This would make me unable to edit it in the future.

[franky1]

By the way, can you explain how Lightning "issues" IOU pegged promises to pay in Lightning? I want to learn more. Let's pretend I believe you.

you have already been told the difference between a CLTV(btc network tx) and a HTLC(ln payment that does not broadcast)
you have been told about btc and sats.. and how Msats are not btc/sats.

now go research

Opening and using a channel requires an on-chain transaction. I can't understand how producing conditional statements, HLTC, in payment channels create "IOU pegged promises to pay tokens" in Lightning. Make us understand.

opening a channel(HTLC) does NOT require an onchain transaction(CLTV)
a LN channel can b opened by simple agreement of the two parties.
a CLTV is just proof of one form of collateral. but the 2 parties can agree that the collateral is not btc but anything they agree on.
this is where factories and 'thor turbo' come into play as examples, because a party can create channels using coinbase balance or literally any form of collateral and the other party simply agrees to it.

Msats are the token of LN

Msats are not bitcoin medium. the bitcoin network does not recognise Msats. Msats are the pegged token created to represent collateral
who owes who what amount of Msats is by very function and definition an IOU.

instead of asking me to repeat the same thing in different topics and you spam the same lame reply just to boost your sig campaign post count. please try to do some research on the topic

[Wind_FURY]

Opening and using a channel requires an on-chain transaction. I can't understand how producing conditional statements, HLTC, in payment channels create "IOU pegged promises to pay tokens" in Lightning. Make us understand.

One Last Time.  
Bitcoins Can ONLY Exist on the Bitcoin BlockChain.

While Bitcoin may be locked for a specified time on the Bitcoin Blockchain ,
AT NO TIME DO THEY EVER LEAVE THE BITCOIN BLOCKCHAIN.

That's true. No one said the coins were leaving the blockchain.

Which means anything traded on any OFFCHAIN NETWORK such as LN,
IS NOTHING MORE THAN A REPRESENTATION of a Bitcoin[/b]
(Ie: A Token, which is nothing more than a promised IOU that the real bitcoins will be redeemable on the real bitcoin blockchain at a later date.)
 

Let me stop you there before you break your fingers on your keyboard in excitement.

The Bitcoins are held in a multi-sig address as long as the channel between you and someone is open, in which Bitcoins can be transferred between you and someone through the channel. The term "off-chain" is really an imperfect term.

There are no "IOUs". They are essentially signed transactions by both participants of the channel.

By the way, can you explain how Lightning "issues" IOU pegged promises to pay in Lightning? I want to learn more. Let's pretend I believe you.

you have already been told the difference between a CLTV(btc network tx) and a HTLC(ln payment that does not broadcast)
you have been told about btc and sats.. and how Msats are not btc/sats.

now go research

Opening and using a channel requires an on-chain transaction. I can't understand how producing conditional statements, HLTC, in payment channels create "IOU pegged promises to pay tokens" in Lightning. Make us understand.

opening a channel(HTLC) does NOT require an onchain transaction(CLTV)
a LN channel can b opened by simple agreement of the two parties.
a CLTV is just proof of one form of collateral. but the 2 parties can agree that the collateral is not btc but anything they agree on.
this is where factories and 'thor turbo' come into play as examples, because a party can create channels using coinbase balance or literally any form of collateral and the other party simply agrees to it.

Msats are the token of LN

Msats are not bitcoin medium. the bitcoin network does not recognise Msats. Msats are the pegged token created to represent collateral
who owes who what amount of Msats is by very function and definition an IOU.

instead of asking me to repeat the same thing in different topics and you spam the same lame reply just to boost your sig campaign post count. please try to do some research on the topic

That's confusing. Your post doesn't show how producing conditional statements create "IOU pegged promises to pay" in Lightning.

[Wind_FURY]

The Bitcoins are held in a multi-sig address as long as the channel between you and someone is open, in which Bitcoins can be transferred between you and someone through the channel. The term "off-chain" is really an imperfect term.

The term offchain is accurate , your complete failure to comprehend that is literally your stupidity.

The fact that you are unable to understand LN only transacts in IOUs , shows a level of ignorance rare in this world.

https://cryptobriefing.com/litecoin-not-bitcoin-will-drive-the-lightning-network/

the Lightning Network is an exchange of instant, peer-to-peer IOUs

https://blog.theabacus.io/lightning-network-2-0-b878b9bb356e?gi=9571dcb5373d

when you get a Lightning payment?

you could think of it as a Bitcoin IOU

https://motherboard.vice.com/en_us/article/gyw9aq/wtf-is-the-lightning-network-and-will-it-save-bitcoin

a payment channel is just a running list of IOUs

Since you have been given the same answer multiple times, by multiple people

Quit being a prick and asking the same question,
just because your dumb ass can't understand the answer.

For someone who claims to be "smart", you sure are gullible. Who wrote those blogs/articles, and are they qualified to write about cryptocurrencies at all? Haha!

But newbies, listen to Khaos77. Learn about Bitcoin and Lightning. The hard way.

[WhyFhy]

But newbies, listen to Khaos77. Learn about Bitcoin and Lightning. The hard way.

The direction you guys took this topic detoured any real progress of educating the masses specially noobs.
You've proven that LN is in-fact #Reckless
You guys pretty much so hijacked OP's post with arguments instead of FAQ's and for a project like LN this is not acceptable.
We got to work together to reinvent the wheel.
Can we get this back on topic?
 I've been refreshing new replies to this post in hopes to help someone with valid questions but you guys keep going back a forth.

-snip

Updated, thank you. I have just finished all of my exams so I will check if there are any outdated information in this thread in the next couple of days.

You guys should stop arguing here, @BitCryptex made this to be educational and informative.

I don't mind as long as the moderator doesn't close this thread without prior notice. This would make me unable to edit it in the future.

I do I want to Help!!!!

[microlancer]

General Information

How are bitcoins on the Lightning Network different from on-chain bitcoins?

They are exactly the same coins. There are no Lightning Network tokens. The only difference is that bitcoins are stored in multi-signature addresses and transactions are settled between two parties without broadcasting anything to the blockchain (except when opening and closing the channel).

There are errors in the General information.

The Bitcoins on the blockchain and Lightning Network are not the same coins.
(They literally can't be as Bitcoins can not leave the bitcoin blockchain.)

Otherwise , when LN made any changes to the amount it would instantly be reflected on the actual blockchain, not waiting for a final settlement transaction to make the two ledgers match.

Incorrect.

LN is a name given to a method of using Bitcoin transactions in one particular way. Bitcoin consists of transactions that can be signed and broadcast over the Bitcoin network. There are many reasons to sign a transaction and keep it offline until a later date, and LN simply takes advantage of this ability. Bitcoin has the ability to create 2-of-2 multisig transactions where you simply delay the broadcast. If you consider this basic usage of transactions a different "coin" then practically every Bitcoin transaction that has happened is a different "coin" and every smart contract that ETH uses that hasn't been broadcast yet is also a different "coin" for some time, which would makes the term fairly meaningless. In terms of cryptocurrencies, using blockchain transactions of said coin that are sufficiently mathematically and cryptographically secured by a specific blockchains should be considered to be of that specific coin. This helps us use the term with relevancy when talking about a coin or alternative coins.

LN is a very cool "smart contract" of plain-old regular Bitcoin transactions on the Bitcoin chain.

LN is a offchain fractional reserve IOU system, that can be used with Bitcoin or Litecoin or anything the LN network is coded for.

Incorrect.

It's important to distinguish a banking IOU or fractional reserve IOU in it's most nasty feature: it can be fraudulently denied or withdrawn and requires trust in the hands of the banker. A major point of LN is that it requires zero trust. It is secured mathematically and cryptographically, since it is using Bitcoin transactions with a protocol that cannot be broken (minus any bugs, but that is the same of any nascent technology). Due to this, you cannot "fractionally" give someone more coins as if you have more coins that you do. This is what banks do.

With LN, you must prove that you own the Bitcoin you are transmitting over the LN by signing the transaction correctly which is then verified by the other node. If you pretend to have more coins than you claim, the LN funding transaction would simply fail (which happens on-chain to prove it).

LN is far from an IOU in that (most critical) sense. You could consider every Bitcoin payment an "IOU" on a magical global ledger, but again the term becomes less useful for the purposes of talking about cryptocurrencies. Since you cannot counterfeit, charge-back, or abandon any promises of payment with Bitcoin transactions through mathematics and cryptography -- it should be considered just hard money. The same is with a LN-type of Bitcoin transaction -- there is no way for a party to perform the same tricks of an IOU of a traditional bank.

LN is not a true part of bitcoin. As Bitcoin can be used without LN and LN can be used without bitcoins.

Incorrect.

LN-implementation of Bitcoin transactions is second-layer technology, and as such, Bitcoin Lightning Network cannot be used without Bitcoin. Bitcoin LN is a particular way of using Bitcoin. LN technology can also be implemented on other cryptocurrencies with the same mathematical security. For example, Litecoin has also implemented LN for their chain.

LN notes/tokens or whatever you want to call them , are only and i repeat only representations of bitcoins or litecoins,
and only exist on the LN network , they transact in IOU of the given representation of value only.

Incorrect.

See above. There is no representing here. It is purely regular Bitcoin transactions, and there are no other blockchains or coins involved in a LN-type of Bitcoin transactions anymore than there is involvement of other coins when doing a pure 2-of-3 Bitcoin transaction or a m-of-n Bitcoin transaction. It's a particular type of multisig transaction, nothing more. It just happens to have a really cool name, and it operates with mathematical and cryptographical security (Zero Trust) without clogging up the chain (yay, scalability!).

There is nothing new under the sun.
*Banks used Gold or Silver, and let people transact with their bank notes and redeem those notes for gold or silver, if they so choose. *
*LN uses any segwit coin and lets people transact with their LN notes/tokens and redeem those note/tokens for any agreed upon segwit coins, if they so choose.*

Incorrect.

Your bcash favoritism seems to have leaked there with your use of "segwit coins". Bank notes have a fundamental flaw in them, in that they require trust. Bitcoin eliminated that need for trust, and further, Lightning Network ensures that we don't lose that hard money security by also not requiring trust. This is where your comparison truly breaks down.

Bitcoin is extremely powerful because of the fact that once I own the private keys, there is NOBODY who can deny me the coins. Lightning Network is powerful for the exact same reason. That once I have made a Lightning Network transaction, there is NOBODY who can deny me the coins. We get the same level of security, with an awesome level of scalability, and even bonus benefits in privacy.

Any denial of the above is pure nonsense.

If no one wants the truth to be mentioned, then I suggest locking this topic and restarting with a self moderated one ,
if the intended purpose is nothing more than a public relations hype machine.

G'Day  

FYI:
Just to show how LN is nothing more than a Offchain Bank,
Here is Lightning Labs detailing how to swap LN IOUs of Bitcoins for LN IOUs of Litecoins.
At no time do either the bitcoins or litecoins actually leave their own blockchains.
Proving LN IOUs are transacting in pure representations of each coin, and only onchain transactions redeem the IOUs.
https://blog.lightning.engineering/announcement/2017/11/16/ln-swap.html

Categorizing cryptographically secure transactions that cannot be revoked by others is the furthest away from "offchain bank IOUs" that I can think of in terms of transactions. It's important to understand the security around the technology and the fact that it does not leverage any other chain other than the one it is implemented with.

This reply is not meant for Khaos77 because it seems there is some ulterior motivation for someone to be this incorrect about a technology yet seemingly so confidently wrong. In this case, I'm not here to start an argument - but I simply want to give people a chance to understand Lightning Network on their own. I, myself, may be incorrect about some of these things, and I hope that other Lightning Network experts can chime in. This reply is meant for anyone else watching the thread.

Now, I have to get back to writing code. Have a nice day!

[Khaos77]

Now, I have to get back to writing code. Have a nice day!

I hope your coding is better than your understanding of reality.  

Because the only things incorrect was everything you said.  

Since my original post was correct, just reread my post as a rebuttable to your nonsense.


FYI:
I like Litecoin over Bcash, so as usual you are wrong again.
LN offchain fractional reserve IOU system also works with litecoin and litecoin has onchain transactions capacity to spare.  
History Note : Segwit activated on Litecoin before it did bitcoin.

FYI2:
What is funny is that Tim aka micolancer.
https://microlancer.io/about
One of his Idea Contributors
Renepickhardt
Is the same guy that is proposing adding code for adding fractional reserve directly to LN.
https://www.rene-pickhardt.de/index.html%3Fp=2131.html
Now that is rich.  

Guess Tim is a little clueless about the reality that he resides in.

*WhyFhy love Tim so much , because he ran a sig campaign for him.*
https://bitcointalk.org/index.php?topic=5125748.0

[WhyFhy]

Now, I have to get back to writing code. Have a nice day!

Thanks for dropping in Tim! Very educational even for me xD