[OUTDATED] The Lightning Network FAQ

[franky1]

HTLC contracts are not bitcoin transactions that broadcast to the btc network

By design.  It would somewhat defeat the purpose of it being off-chain if they were broadcast to the blockchain.  They're still not IOUs.  A commitment transaction is more binding than an IOU.

The clue is in the name.  That's why they call it a "commitment transaction" and not an "owed transaction", or a "promised transaction".

1. not being broadcast is the point. people need to realise that until its settled on a blockchain using a proper/native bitcoin transaction, not a HTLC, the balance is temporary and can get lost because people can go offline and lose their HTLC (even LN dev's admit this flaw) thus lose where they stand and how much who owes who what
(its why they envision watch towers and factories to middleman manage the IOU's)

2. a HTLC is measured in Msats
thus even if it was a really secured lock "commitment" (as you call it) is not final/milestone/explicit/settled
p.s HTLC is Hashed Time Lock Contract. i see you subtly trying to slide in a new buzzword 'commitment' but it didnt work
trying to avoid things like agreements, promises by then throwing in a new word to push the conversation further out. doesnt main the basic definition/function of a HTLC any different

its meaningless because what the contract represents is just a peg to real bitcoins. all a HTLC does is let users know a balance of who owes who what amount of collateral, without actually moving, involving the collateral... in short its just a tally of temporary position/temporary tally of who owes who what

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[Wind_FURY]

Words, "chainhash", more words.

Are you telling everyone in the forum to trust your word, and not the LN developers' word? Wouldn't your word make the LN developers, scammers?

Because I encourage the newbies to trust you, and learn about Bitcoin. The hard way.

[LoyceV]

Is it just me or has there been way less enthusiasm for Lightning in the past 1 or 2 months?

Last week, I've installed a LN wallet (Eclair) for the first time. It didn't all go exactly as I expected, but all in all I'm quite impressed. I've made more transactions in a week just for testing LN than I've made in Bitcoin in months. I'm convinced low fees for small transactions is what Bitcoin needs to grow (be it with LN or some other system).

Some of the unexpected things I ran into:
1. After funding the channel, I had no receiving capacity. I only got that after sending some funds.
2. The amount available to send was less than what I deposited. I first thought it was a reservation for fees to broadcast it to the blockchain, but later on the available amount went up a bit. It's still not as much as I've put into the channel.
3. I'm not sure how long the channel will stay open if I don't close it. Maybe forever, unless the other party closes it?
4. I have no idea how high fees will be to close the channel, maybe I can manually set them, maybe I can't.
5. Synchronizing Eclair takes quite a while after installation, but it also takes longer than for instance Electrum when I start it up.
6. Eclair somehow didn't use my full balance to open a LN channel, it left 600 satoshi in a change address. I'm pretty sure I chose to use the maximum amount, so it shouldn't have created Bitcoin dust.

Good things:
1. I bought virtual flowers on https://niffler.co/bitcoin-graveyard/
2. I painted a few pixels on https://satoshis.place/
3. I gambled a few Satoshis on https://lightning-roulette.com/ (my 100 Sat deposit never arrived at the site, I don't know why, but I'm pretty sure this isn't LNs fault)
4. I bought some Doge coins at https://www.coinplaza.it/ (this seems to be a great way to increase or decrease funding or receiving capacity of a channel). For this transaction I paid the highest fee until now (10 satoshi).
5. Most of the transactions worth a few satoshi were sent without any fee.
6. Speed! It took a few seconds at most to send or receive funds.

I dislike the "fighting" that happens in many LN-threads though. Some people like it, some people don't, but for some reason the people who don't like it feel the need to keep posting about it, while the people who like it feel the need to keep responding to them. Let me put it this way: as a Bitcoin user, I don't care if small transactions are handled by a centralized organisation, in a second layer, or on-chain, as long as it's low-cost. The risk is low anyway (because of the small amounts involved). I trust several organisations with much larger amounts than I'll ever put into a Lightning channel.

What I'd like to see, is a topic with just information about LN. I'm not experienced enough yet to make one myself, but I'd like to see one that's heavily self-moderated.

[franky1]

Words, "chainhash", more words.

Are you telling everyone in the forum to trust your word, and not the LN developers' word? Wouldn't your word make the LN developers, scammers?

Because I encourage the newbies to trust you, and learn about Bitcoin. The hard way.

no on has to trust me and i seek no ones trust.. even read my footnote.


i encourage YOU to learn about bitcoin and LN. as someone else quoted they dont like the squabbling. but guess what. if YOU actually used LN you would learn more and actually be able to contribute to the truth rather than just repeated utopian promotional material you read from some certain echo chamber group.

if you dont even understand chainhash then you dont know about bitcoin/blockchain either, so please spend time learning that too.

if you dont want to learn the technical detail, then dont get involved in discussions about technical detail.

do not reply to me, if you dont like what i say hit the ignore button, but please just try learning bitcoin and LN
for months its been obvious you have no clue so it makes no sense for you to be getting involved in discussions about function utility when you personally have no experience.
you keep saying LN is not x,y,z but in the end your reason simply demotes down to 'coz franky says the opposite'
try learning what LN actually is and does, this means LEARNING, USING, RESEARCHING
then come back with a detailed opinion that includes actual content.
i have told you about htlc vs cltv
i have told you about msat vs sat
i have told you about consensus vs private 2 party agreement
i have told you about locked collateral vs private agreement

so until you can reply mentioning details about the same, dont even bother with the whole LN is not x,y,z but franky says it is

maybe spend some time being just a reader, not a writer. spend some time being a user not a promoter. spend some time being a learner not a ass kisser

have a good month. (use a month to actually learn.. not spam)

[franky1]

Is it just me or has there been way less enthusiasm for Lightning in the past 1 or 2 months?

Last week, I've installed a LN wallet (Eclair) for the first time. It didn't all go exactly as I expected,

Some of the unexpected things I ran into:
1. After funding the channel, I had no receiving capacity. I only got that after sending some funds.
2. The amount available to send was less than what I deposited. I first thought it was a reservation for fees to broadcast it to the blockchain, but later on the available amount went up a bit. It's still not as much as I've put into the channel.
3. I'm not sure how long the channel will stay open if I don't close it. Maybe forever, unless the other party closes it?
4. I have no idea how high fees will be to close the channel, maybe I can manually set them, maybe I can't.
5. Synchronizing Eclair takes quite a while after installation, but it also takes longer than for instance Electrum when I start it up.
6. Eclair somehow didn't use my full balance to open a LN channel, it left 600 satoshi in a change address. I'm pretty sure I chose to use the maximum amount, so it shouldn't have created Bitcoin dust.

7. I dislike the "fighting" that happens in many LN-threads though.

8. What I'd like to see, is a topic with just information about LN. I'm not experienced enough yet to make one myself, but I'd like to see one that's heavily self-moderated.

LN is not a fixed protocol network that uses a community audit mechanism, its a peer agreement which means its very loose. you will fin d different wallets act differently.
for instance bitrefill promotes a different wallet to address point 5 and 1 and 3. so try other wallets and to use one that suits you

1. again different wallets act differently. some are programmed to only scan the collateral network(bitcoin in your instance) after you try to make a payment
2.4.6 to keep a channel active there needs to be some balance.. some wallets use this as their 'punishment' fine. some use it where an amount is reserved for the collateral onramp settlement fee (bitcoins close channel tx) where by out of the two parties the broadcaster is the one 'punished' by sending first having to pay the fee
4. some wallets allow you to play with the fee's before closing. but some just lock a certain amount upfront which sometimes aint enough to guarantee a settled close session back on the bitcoin network

again LN is not a set network where its a community consensus of everyone following the same rules. so expect things to not run right all the time. its a very fluid network where new rules come in and out (too) easily
the only thing you can hope for are these things right now.

the network not being so popular so that:
you are not having to hop through multiple route parties which each hop adds complexity, uncertainty
having connections directly to the end service to get the cheap fast reliable experience

word of warning
some wallet open you up as route and open your funded channel as being full balance spendable by other routers. meaning people you connect to can spend you balance (especially if you use a feature called autopilot) without your consent.
many people get messed around with it

as for the squabbling.
some people have never used LN but strangely have an attitude they need to promote some utopian dream of LN. which doesnt help people learn about the flaws to let people know what they are getting into/risking.
most self-mod usually end up still letting the PR campaigns in but then remove those revealing the flaws. which although makes the topic magically positive and happy, isnt really helping reveal the truths.
but yea maybe those that have never used LN should take the advice and not promote/exaggerate it/comment on it until they have used it

[Wind_FURY]

Words, "chainhash", more words.

Are you telling everyone in the forum to trust your word, and not the LN developers' word? Wouldn't your word make the LN developers, scammers?

Because I encourage the newbies to trust you, and learn about Bitcoin. The hard way.

no on has to trust me and i seek no ones trust.. even read my footnote.

That doesn't answer my questions. Are you telling everyone in the forum that the developers from Lightning Labs, the creators of the Lightning Network, are scamming everyone?

i encourage YOU to learn about bitcoin and LN.

I am, and I have asked someone from Bitrefill about your posts. He said that you're nothing but a fudster.

Going back to the question, are you telling everyone that the developers of the Lightning Network are scammers?

[LoyceV]

3. I gambled a few Satoshis on https://lightning-roulette.com/ (my 100 Sat deposit never arrived at the site, I don't know why, but I'm pretty sure this isn't LNs fault)

1.  Whose Fault is it?
     a. yours
     b. lightning-roulette
     c. some random LN hub

I think b, but can't be entirely sure.

2. Were the 100 Sat lost or did it return to your account balance?

LN worked fine, the payment was sent and not returned.

3. Does LN not seem overly complicated to use ,
    and In your personal opinion, would not a simple web wallet that handles the complexity be more useful to you.
    ie: a 3rd party making it easy.

I used Eclair (Android), which works fine. The only thing difficult is when I want to receive a payment on my phone, and have to transfer the request to my PC. I did that by email because I couldn't use a QR-code.
Working with only one device would solve that, but it's very easy to send funds the other way (from Eclair to a website on my PC). This won't be any different when using Bitcoin, but I don't usually try to receive Bitcoin from a website on my PC to my phone.

4. Who do you contact when there is a problem of lost LN funds?

For 100 satoshi: nobody
For larger amounts: the third you're dealing with. Basically the same as any other Bitcoin payment.
If you mess up and lose your funds, you're on your own.

[WhyFhy]

Is it just me or has there been way less enthusiasm for Lightning in the past 1 or 2 months?

Last week, I've installed a LN wallet (Eclair) for the first time. It didn't all go exactly as I expected, but all in all I'm quite impressed. I've made more transactions in a week just for testing LN than I've made in Bitcoin in months. I'm convinced low fees for small transactions is what Bitcoin needs to grow (be it with LN or some other system).

Some of the unexpected things I ran into:
1. After funding the channel, I had no receiving capacity. I only got that after sending some funds.
2. The amount available to send was less than what I deposited. I first thought it was a reservation for fees to broadcast it to the blockchain, but later on the available amount went up a bit. It's still not as much as I've put into the channel.
3. I'm not sure how long the channel will stay open if I don't close it. Maybe forever, unless the other party closes it?
4. I have no idea how high fees will be to close the channel, maybe I can manually set them, maybe I can't.
5. Synchronizing Eclair takes quite a while after installation, but it also takes longer than for instance Electrum when I start it up.
6. Eclair somehow didn't use my full balance to open a LN channel, it left 600 satoshi in a change address. I'm pretty sure I chose to use the maximum amount, so it shouldn't have created Bitcoin dust.

Good things:
1. I bought virtual flowers on https://niffler.co/bitcoin-graveyard/
2. I painted a few pixels on https://satoshis.place/
3. I gambled a few Satoshis on https://lightning-roulette.com/ (my 100 Sat deposit never arrived at the site, I don't know why, but I'm pretty sure this isn't LNs fault)
4. I bought some Doge coins at https://www.coinplaza.it/ (this seems to be a great way to increase or decrease funding or receiving capacity of a channel). For this transaction I paid the highest fee until now (10 satoshi).
5. Most of the transactions worth a few satoshi were sent without any fee.
6. Speed! It took a few seconds at most to send or receive funds.

I dislike the "fighting" that happens in many LN-threads though. Some people like it, some people don't, but for some reason the people who don't like it feel the need to keep posting about it, while the people who like it feel the need to keep responding to them. Let me put it this way: as a Bitcoin user, I don't care if small transactions are handled by a centralized organisation, in a second layer, or on-chain, as long as it's low-cost. The risk is low anyway (because of the small amounts involved). I trust several organisations with much larger amounts than I'll ever put into a Lightning channel.

What I'd like to see, is a topic with just information about LN. I'm not experienced enough yet to make one myself, but I'd like to see one that's heavily self-moderated.

Disregard the guys fighting they are trying to work out a few kinks! Please notice LoyceV that LN Is still like pre-Beta lots of bugs and majority of the site operators are using opennode.co's service Only a few are built from scratch with minimal scrapers ex (Microlancer.io)
LN seems to have lost a lot of traction in the last month, However Ive raised some BTC to sponsor a LN Awareness campaign sponsored by at least 12 LN site operators, (since these are micro BTC platforms Ive convinced site owners to run a LN awareness campaign to advertise the current LN Eco-Sphere)
Adoptions going to be a little slow during rally's , but when fee's are 15k sats consistently LN will be brought to light .


And I agree OP should come here and lighten the mood!

[d5000]

Just wanted to write something about the word "IOU" that seems to be a symbol for what's good or bad in LN

IOUs in the Bitcoin world have a bad reputation basically because of exchange defaults like MtGox's insolvency. Of course, you can call a HTLC an "IOU". But the type of IOU exchanges offer to you are extremely different from these offered by LN.

The difference is actually in the way disputes are resolved. A conflict with a centralized exchange about an IOU can only be solved with human intervention, in severe cases the the judiciary system must be involved and the conflict may not be solved at all. In LN, however, you have a totally automated, not compromittable (if not destinating very large funds to double spend via 51% attack) and very predictable dispute solving instance - the Bitcoin blockchain.

Imagine an exchange offering you the same type of security for their IOUs. I, for myself, would use them

LN Bitcoins ("msats") are not equal to blockchain-Bitcoins, but they are backed by Blockchain BTC in a much more reliable way than all centralized wallet providers, exchanges, etc. can provide. And most (if not all) Bitcoin users still use these centralized providers, so why shouldn't they use LN if it's even better?

[franky1]

That doesn't answer my questions. Are you telling everyone in the forum that the developers from Lightning Labs, the creators of the Lightning Network, are scamming everyone?

stop with your social drama(you used the words lightning labs are scammers. not me)

LN is simply not secure it wont be secure even the devs admit it has flaws. devs admit it not due to them being "scammers" but just due to how the network functions.
(2 parties can privately agree on any rules/collateral they like because there is no community wide audit to force compliance)
(Msats are not tethered by network protocol to only represent bitcoin. Msats just tally an iou value for later settlement)


if a network could transport value securely without a blockchain. then decentralised e-currency would have been a thing before satoshi invented bitcoin/blockchain

thre is a reason blockchains were needed.
 in short YOU are saying they are all scammers
i am saying LN wont be what everyone hopes. and most definitely wont make YOU rich
scammers can find many flaws to abuse, so its worth highlighting the flaws. even devs agree to highlight the flaws.
my opinion on devs, a good amount of them are more interested in making a network to make their VC investors get some returns by deburdening the bitcoin network(mainly the ones that love the idea of huge btc fee's, small blocks and where they call LN a layer which solves adoption)

[Wind_FURY]

That doesn't answer my questions. Are you telling everyone in the forum that the developers from Lightning Labs, the creators of the Lightning Network, are scamming everyone?

stop with your social drama(you used the words lightning labs are scammers. not me)

in short YOU are saying they are all scammers

Meandering.

No, I was asking YOU if you believe they are scammers. Because as far as I know, they will never tell anyone that Lightning has IOU pegged promises to pay tokens. I never said it either, but you did.

Are the Lightning developers not telling everyone the real facts about Lightning?

Just wanted to write something about the word "IOU" that seems to be a symbol for what's good or bad in LN

IOUs in the Bitcoin world have a bad reputation basically because of exchange defaults like MtGox's insolvency. Of course, you can call a HTLC an "IOU". But the type of IOU exchanges offer to you are extremely different from these offered by LN.

The difference is actually in the way disputes are resolved. A conflict with a centralized exchange about an IOU can only be solved with human intervention, in severe cases the the judiciary system must be involved and the conflict may not be solved at all. In LN, however, you have a totally automated, not compromittable (if not destinating very large funds to double spend via 51% attack) and very predictable dispute solving instance - the Bitcoin blockchain.

Imagine an exchange offering you the same type of security for their IOUs. I, for myself, would use them

LN Bitcoins ("msats") are not equal to blockchain-Bitcoins, but they are backed by Blockchain BTC in a much more reliable way than all centralized wallet providers, exchanges, etc. can provide. And most (if not all) Bitcoin users still use these centralized providers, so why shouldn't they use LN if it's even better?

But there are no IOUs in Lightning. They are actual signed transactions by the participants of the channel that have not been broadcasted in the network yet.

[d5000]

But there are no IOUs in Lightning. They are actual signed transactions by the participants of the channel that have not been broadcasted in the network yet.

I know. But as long as they're not broadcast (in the majority of the cases, they will never be broadcast) these transactions "exist" between the participants of the transaction only (which are not only sender and receiver, but also the intermediate nodes who transmitted them). So while they're not typical IOUs (like tokens or exchange balances, for example) they have some properties of IOUs, as they show the "balance" between the participants of the channels which is independent of the current state of the blockchain (only that it cannot be higher in favour of one of the participants than the channel capacity).

But the Bitcoin blockchain acts as an arbiter. So the risk associated to them isn't comparable with "standard IOUs", but much closer to standard Bitcoin transactions.

In reality, I wouldn't describe them as IOUs but as a "new type of thing", although they share some properties with IOUs, and others not.

[Tipstar]

But if everyone moved to Lightning Network, how would the bitcoin network work. If less transaction in the pool, work would be less and miners would go out of business. If all miners left bitcoin, would the Lightning network still work? Does Lightning has any plan how to keep Bitcoin surviving?
PS - I loved Lightning network and it's the future of bitcoin

[WhyFhy]

But if everyone moved to Lightning Network, how would the bitcoin network work. If less transaction in the pool, work would be less and miners would go out of business. If all miners left bitcoin, would the Lightning network still work? Does Lightning has any plan how to keep Bitcoin surviving?
PS - I loved Lightning network and it's the future of bitcoin

LN piggy backs BTC blockchain,(layer 2 protocol) It wouldnt ever settle channels "if" this where to happen. But not to worry it wont happen LN runs off Node's and does not mine so noone would be directing hashpower to LN as thats not how it functions. Think of LN to BTC as what TCIP is to the internet.

[d5000]

But if everyone moved to Lightning Network, how would the bitcoin network work. If less transaction in the pool, work would be less and miners would go out of business. If all miners left bitcoin, would the Lightning network still work? Does Lightning has any plan how to keep Bitcoin surviving?

First, there are significant block rewards for some years to come, still.

Second, even Lightning needs on-chain transactions sometimes, for example to open channels. If millions of people wanted to open channels, some of them would have to wait because if we assume that we can open 1000 channels per block, that would be 144000 channels per day. That's less than newborn childs per day (~300-400K), so we can assume that in the case of a massive Bitcoin adoption blocks will be relatively full even if everybody uses LN and not a single "settlement" would be necessary. "Settlements" could make up for a significant transaction quantity, too. (Channel factories can reduce the blockchain bloat, however, but that's actually positive).

But what happens if Bitcoin lacks massive adoption but most people use LN? Well, there is nothing to fear either. There will be a balance between Lightning transactions and non-Lightning transactions. On-chain transactions have some decisive advantages over Lightning transactions, because they are totally trustless and independent from if the receiver is online or not. Thus, there will always be a demand for on-chain transactions if they are not too expensive, for example for important amounts of money (which would exceed most channels' capacity and provide more security), but also for example for OP_RETURN transactions (e.g. token transactions like Tether or data entries). And if blocks are not full, then on-chain TX will be relatively cheap, so this demand would prevail.

Fees will almost certainly be lower than without LN, but I think they won't be lower than they were in most of 2018, for example.

[HiBlocks]

Hello I heard that with the Lightning Network you have to be online all the time to get payment.  What happens if I'm offline will the sender even be able to send?  Since it has to be online all the time can I run a full node on my phone which is pretty much on all the time? 

[Queenvio]

Hey.
I didn’t read the full topic, so I’m sorry if my question is still answered.

Can someone explain me what’s up with these zombie nodes?
I run a node since 3 months, and haven’t change anything now since 2 weeks.
What dose that means to the node?

What can I do ?

Greetings

[Rath_]

What dose that means to the node?

Nothing. Zombie nodes issue was fixed a long time ago. Your node is fully operational if it is connected to the Internet and up-to-date with the Bitcoin blockchain. You don't have to change anything in your node's settings. Zombie node referred to a node which was offline and still had been considered capable of routing payments.

What happens if I'm offline will the sender even be able to send?  Since it has to be online all the time can I run a full node on my phone which is pretty much on all the time?  

The payment will fail after some time if not immediately. Running a node on your phone would quickly drain your battery.

[Wed]

The payment will fail after some time if not immediately. Running a node on your phone would quickly drain your battery.

Also if you're running an SPV node? I think (hope) SPV Nodes could help users to have their own node without having any knowledge about servers and just with their phones.

[Wind_FURY]

But there are no IOUs in Lightning. They are actual signed transactions by the participants of the channel that have not been broadcasted in the network yet.

I know. But as long as they're not broadcast (in the majority of the cases, they will never be broadcast) these transactions "exist" between the participants of the transaction only (which are not only sender and receiver, but also the intermediate nodes who transmitted them). So while they're not typical IOUs (like tokens or exchange balances, for example) they have some properties of IOUs, as they show the "balance" between the participants of the channels which is independent of the current state of the blockchain (only that it cannot be higher in favour of one of the participants than the channel capacity).

But the Bitcoin blockchain acts as an arbiter. So the risk associated to them isn't comparable with "standard IOUs", but much closer to standard Bitcoin transactions.

In reality, I wouldn't describe them as IOUs but as a "new type of thing", although they share some properties with IOUs, and others not.

Haha, don't give an inch to their narrative. I wouldn't give the fudsters any encouragement by saying "they share some properties with IOUs". Because you're not sending anything worthless - IOUs in Lightning.

The payment will fail after some time if not immediately. Running a node on your phone would quickly drain your battery.

Also if you're running an SPV node? I think (hope) SPV Nodes could help users to have their own node without having any knowledge about servers and just with their phones.

https://twitter.com/electrumwallet/status/1134132601046937601?s=21