Understand the implications of Bitcoin's downfall in El Salvador. Learn about the failed economic bet and its impact on the country's financial stability.
Nope, everything gets the full security of the blockchain without having to record every last transaction. The lightning network is basically just a huge network of people with unfinalized transactions. As long as you don’t finalize by publishing the final balance to the blockchain, you and whoever else is involved can keep transacting by just agreeing on a new current balance. The only catch is you need to stay online or get online frequently so you can make sure the other parties only publish the latest version to the blockchain. If they do and you catch them, you can prove they’re cheating and take everything.
It’s sort of like if two friends are always paying each other back, so they each take $50 out of the bank and put it in a box and just keep track of who’s owed how much of it. You’re only supposed to keep a copy of the current balance that’s been time stamped and signed by both of you. At any point, they can finalize by taking the box to the bank with their copy of the debt history and depositing everyone’s money where it belongs. If anyone cheats by using an outdated debt history, you can take the latest version to the bank, prove they cheated you, and take ALL the money that was in the box.
IIRC, a deposit is made by two parties to create a lightning network channel that’s enough to cover all transactions (kinda like a multi-sig escrow), and both parties have to sign-off on their balances after every transaction (the last balance signed by both parties is the only valid state). I think most people would use a custodial wallet where the custodian already has channels set up, and this would require trust in the custodian. Lightning networks didn’t exist, and wasn’t fully spec’d out the last time I looked into it though.
Sounds like you can steal or fake things
Nope, everything gets the full security of the blockchain without having to record every last transaction. The lightning network is basically just a huge network of people with unfinalized transactions. As long as you don’t finalize by publishing the final balance to the blockchain, you and whoever else is involved can keep transacting by just agreeing on a new current balance. The only catch is you need to stay online or get online frequently so you can make sure the other parties only publish the latest version to the blockchain. If they do and you catch them, you can prove they’re cheating and take everything.
It’s sort of like if two friends are always paying each other back, so they each take $50 out of the bank and put it in a box and just keep track of who’s owed how much of it. You’re only supposed to keep a copy of the current balance that’s been time stamped and signed by both of you. At any point, they can finalize by taking the box to the bank with their copy of the debt history and depositing everyone’s money where it belongs. If anyone cheats by using an outdated debt history, you can take the latest version to the bank, prove they cheated you, and take ALL the money that was in the box.
IIRC, a deposit is made by two parties to create a lightning network channel that’s enough to cover all transactions (kinda like a multi-sig escrow), and both parties have to sign-off on their balances after every transaction (the last balance signed by both parties is the only valid state). I think most people would use a custodial wallet where the custodian already has channels set up, and this would require trust in the custodian. Lightning networks didn’t exist, and wasn’t fully spec’d out the last time I looked into it though.