Debunking the 11 Most Stubborn Lightning Network Myths

Video: Bitcoin Lightning Network Payment Channels Explained - Thaddeus Dryja

Video: Bitcoin Lightning Network Payment Channels Explained - Thaddeus Dryja submitted by Bitcoin_21 to Bitcoin [link] [comments]

Video: Bitcoin Lightning Network Payment Channels Explained - Thaddeus Dryja

Video: Bitcoin Lightning Network Payment Channels Explained - Thaddeus Dryja submitted by ABitcoinAllBot to BitcoinAll [link] [comments]

[uncensored-r/Bitcoin] Lightning Network and Discreet Log Contracts - Thaddeus Dryja

The following post by RubenSomsen is being replicated because some comments within the post(but not the post itself) have been silently removed.
The original post can be found(in censored form) at this link:
np.reddit.com/ Bitcoin/comments/7xrq5g
The original post's content was as follows:
https://www.youtube.com/watch?v=c4slzFdykpc
submitted by censorship_notifier to noncensored_bitcoin [link] [comments]

03-12 15:33 - 'No they are in the articles,I didn’t make them, but please elaborate, I know you disagree with the guy who created the “LN” as they are his words. So what is correct, you must know more than him. His name is Thaddeus Dryja, if yo...' by /u/tronxt removed from /r/Bitcoin within 6-16min

'''
No they are in the articles,I didn’t make them, but please elaborate, I know you disagree with the guy who created the “LN” as they are his words. So what is correct, you must know more than him. His name is Thaddeus Dryja, if you read he was one of the people who wrote the white paper on the “LN” so I’m sure he knows it’s limitations. But you sound well above him so I’d like to hear why he’s wrong.
'''
Context Link
Go1dfish undelete link
unreddit undelete link
Author: tronxt
submitted by removalbot to removalbot [link] [comments]

Scaling Bitcoin 2017 - Thaddeus Dryja: Discreet Log Contracts (1:57:00 - 2:23:20)

Scaling Bitcoin 2017 - Thaddeus Dryja: Discreet Log Contracts (1:57:00 - 2:23:20) submitted by makriath to BitcoinDiscussion [link] [comments]

What is Bitcoin's Lightning Network?

Tackling bitcoin’s scalability isn’t easy, but developers Thaddeus Dryja and Joseph Poon had an idea. In a 2016 white paper, they proposed the concept of a protocol called “the lightning network” that would enable faster and cheaper transactions while not having to change the block size.
The network creates a second layer on top of the bitcoin blockchain and comprises user-generated channels. You can securely send payments back and forth without the need to trust or even know your counterparty.
Say, for instance, that I wanted to pay you for each minute of video that I watched. We would open up a lightning channel, and as the minutes rolled by, periodic payments would be made from my wallet to yours. When I’m done watching, we would close the channel to settle the net amount on the bitcoin blockchain.
Because the transactions are just between me and you and don’t need to be broadcast to the whole network, they are almost instantaneous. And because there are no miners that need incentivizing, transaction fees are low or even non-existent.
How it works
First, two parties who wish to transact with each other set up a multisignature wallet (which requires more than one signature to enact a transaction). This wallet holds some amount of bitcoin. The wallet address is then saved to the bitcoin blockchain. This sets up the payment channel.
The two parties can now conduct an unlimited number of transactions without ever touching the information stored on the blockchain. With each transaction, both parties sign an updated balance sheet to always reflect how much of the bitcoin stored in the wallet belongs to each.
Once the two parties finish transacting and close out the channel, the resulting balance is registered on the blockchain. In the event of a dispute, both parties can use the most recently signed balance sheet to recover their share of the wallet.
It is not necessary to set up a direct channel to transact on lightning – you can send payments to someone via channels with people that you are connected with. The network automatically finds the shortest route.
Development of the technology got a significant boost with the adoption of SegWit on the bitcoin and litecoin networks. Without the upgrade’s transaction malleability fix, transactions on the lightning network would have been too risky to be practical.
Without the security of the blockchain behind it, the lightning network will not be as secure, which implies that it will largely be used for small or even micro transactions which carry a lower risk. Larger transfers that require decentralized security are more likely to be done on the original layer.
Where are we now?
In March 2018, California startup Lightning Labs announced the launch of a beta version of its software, making available what investors and project leads say is the first thoroughly tested version of the tech to date. It is still early days, however – transaction sizes are limited, and the release is aimed at developers and “advanced users”. Recent research on the lightning network shows signs of increased vulnerability due to the centralization of a number of nodes in the network that control a majority of funds. Developers are continuously exploring new possibilities to enhance the privacy and efficiency of the lightning, as well as ways to incorporate other technologies such as Schnorr into the network. There’s no doubt that it’ll be some time before such system-wide updates can successfully take place.
submitted by hackatoshi to u/hackatoshi [link] [comments]

An Insight Into Bitcoin Improvement Proposal (BIP)

While Bitcoin is the most famous and valuable cryptocurrency, its blockchain faces some challenges. In order to ensure the constant dominance of the currency in the market, the Bitcoin Improvement Proposal (BIP) was introduced. While most BIPs have different levels of potential for positive impact on Bitcoin blockchain, some of them turned out to be much more successful than others.

What is BIP?

Bitcoin is considered the first cryptocurrency and still remains the most successful crypto-project, but it also has its drawbacks. And in order to surpass it, as well as to occupy its niche in the digital world, innovators have created many new currencies, each of which has its own blockchain, designed to provide functions that are not available in Bitcoin. Eventually, one of these new currencies could potentially knock Bitcoin out of the first place.
That’s why the work on the Bitcoin Improvement Proposal began. BIP is a document where developers can submit a recommendation to fix a network problem. For example, after the introduction and implementation of BIP 141, also known as Segregated Witness (SegWit), the transaction rate on the Bitcoin network has increased, and commission fees have significantly decreased.
There are three varieties of BIP:

Bitcoin Lightning Network

The Lightning Network is a BIP proposal introduced in 2015 by Joseph Poon and Thaddeus Dryja. It aims to make Bitcoin scalable with the help of instant payments that are performed outside the network. These external channels form real Bitcoin transactions with the use of standard scripts that allow transferring funds without risk.
The Lightning network came into force thanks to the introduction of wallets with many signatures, where the parties can conduct an infinite number of transactions without having to store all the details on the blockchain. The only information recorded on the blockchain is the number of Bitcoins contained in the wallet and the percentage of contributions of the parties involved.
In addition to enabling instant transactions, the update also provides other benefits for the Bitcoin chain. For example, registration for micropayments, as well as cross-chain payments. Moreover, the update also promotes the implementation of the functionality of smart contracts on top of the blockchain.

MAST technology

MAST stands for Merkelized Abstract Syntax Tree, a technology that uses the ideas of the Merkle tree and the abstract syntax tree. This is a cryptographic tool that allows you to add large volumes of the hash to the data associated with transactions in the Bitcoin chain, due to their layout.
Three BIPs aim to introduce MAST into the Bitcoin network. The first is BIP 114, created by Johnson Lau, the developer of the Bitcoin core. The proposal shows how to increase network efficiency by introducing a new scenario, which he calls a merkelized scenario. The scenario reduces the need for large amounts of transaction data while maintaining greater privacy.
BIP 116 and BIP 117 were proposed by Bitcoin Core developer Mark Friedenbach and are intended to support MAST in a joint implementation. In BIP 116, he outlines the operation code, which allowed validation of the data without revealing the entire set. BIP 117 is called the Tail Call semantics, and in combination with the first, it led to a generalized form of MAST. The difference between the offers of Friedenbach and Lau is that the first supports all the scenarios that are currently used on the Bitcoin network, and the second supports only native SegWit.
The introduction of MAST has led to increased privacy, increased transaction speed, and the ability to include complex data sets, such as smart contracts. Besides, MAST allowed the Bitcoin network to process a much larger volume of transactions and, thereby, increased its scalability.

How many BIPs are there?

Since absolutely any developer can submit the idea of improving the network to the community, more than 300 of these ideas have already been accumulated, and not all of them have been and will be implemented in Bitcoin.
Keep up with the news of the crypto world at CoinJoy.io Follow us on Twitter and Medium. Subscribe to our YouTube channel. Join our Telegram channel. For any inquiries mail us at [[email protected]](mailto:[email protected]).
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Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.
  • Bitcoin (BTC) is a peer-to-peer cryptocurrency that aims to function as a means of exchange that is independent of any central authority. BTC can be transferred electronically in a secure, verifiable, and immutable way.
  • Launched in 2009, BTC is the first virtual currency to solve the double-spending issue by timestamping transactions before broadcasting them to all of the nodes in the Bitcoin network. The Bitcoin Protocol offered a solution to the Byzantine Generals’ Problem with a blockchain network structure, a notion first created by Stuart Haber and W. Scott Stornetta in 1991.
  • Bitcoin’s whitepaper was published pseudonymously in 2008 by an individual, or a group, with the pseudonym “Satoshi Nakamoto”, whose underlying identity has still not been verified.
  • The Bitcoin protocol uses an SHA-256d-based Proof-of-Work (PoW) algorithm to reach network consensus. Its network has a target block time of 10 minutes and a maximum supply of 21 million tokens, with a decaying token emission rate. To prevent fluctuation of the block time, the network’s block difficulty is re-adjusted through an algorithm based on the past 2016 block times.
  • With a block size limit capped at 1 megabyte, the Bitcoin Protocol has supported both the Lightning Network, a second-layer infrastructure for payment channels, and Segregated Witness, a soft-fork to increase the number of transactions on a block, as solutions to network scalability.

https://preview.redd.it/s2gmpmeze3151.png?width=256&format=png&auto=webp&s=9759910dd3c4a15b83f55b827d1899fb2fdd3de1

1. What is Bitcoin (BTC)?

  • Bitcoin is a peer-to-peer cryptocurrency that aims to function as a means of exchange and is independent of any central authority. Bitcoins are transferred electronically in a secure, verifiable, and immutable way.
  • Network validators, whom are often referred to as miners, participate in the SHA-256d-based Proof-of-Work consensus mechanism to determine the next global state of the blockchain.
  • The Bitcoin protocol has a target block time of 10 minutes, and a maximum supply of 21 million tokens. The only way new bitcoins can be produced is when a block producer generates a new valid block.
  • The protocol has a token emission rate that halves every 210,000 blocks, or approximately every 4 years.
  • Unlike public blockchain infrastructures supporting the development of decentralized applications (Ethereum), the Bitcoin protocol is primarily used only for payments, and has only very limited support for smart contract-like functionalities (Bitcoin “Script” is mostly used to create certain conditions before bitcoins are used to be spent).

2. Bitcoin’s core features

For a more beginner’s introduction to Bitcoin, please visit Binance Academy’s guide to Bitcoin.

Unspent Transaction Output (UTXO) model

A UTXO transaction works like cash payment between two parties: Alice gives money to Bob and receives change (i.e., unspent amount). In comparison, blockchains like Ethereum rely on the account model.
https://preview.redd.it/t1j6anf8f3151.png?width=1601&format=png&auto=webp&s=33bd141d8f2136a6f32739c8cdc7aae2e04cbc47

Nakamoto consensus

In the Bitcoin network, anyone can join the network and become a bookkeeping service provider i.e., a validator. All validators are allowed in the race to become the block producer for the next block, yet only the first to complete a computationally heavy task will win. This feature is called Proof of Work (PoW).
The probability of any single validator to finish the task first is equal to the percentage of the total network computation power, or hash power, the validator has. For instance, a validator with 5% of the total network computation power will have a 5% chance of completing the task first, and therefore becoming the next block producer.
Since anyone can join the race, competition is prone to increase. In the early days, Bitcoin mining was mostly done by personal computer CPUs.
As of today, Bitcoin validators, or miners, have opted for dedicated and more powerful devices such as machines based on Application-Specific Integrated Circuit (“ASIC”).
Proof of Work secures the network as block producers must have spent resources external to the network (i.e., money to pay electricity), and can provide proof to other participants that they did so.
With various miners competing for block rewards, it becomes difficult for one single malicious party to gain network majority (defined as more than 51% of the network’s hash power in the Nakamoto consensus mechanism). The ability to rearrange transactions via 51% attacks indicates another feature of the Nakamoto consensus: the finality of transactions is only probabilistic.
Once a block is produced, it is then propagated by the block producer to all other validators to check on the validity of all transactions in that block. The block producer will receive rewards in the network’s native currency (i.e., bitcoin) as all validators approve the block and update their ledgers.

The blockchain

Block production

The Bitcoin protocol utilizes the Merkle tree data structure in order to organize hashes of numerous individual transactions into each block. This concept is named after Ralph Merkle, who patented it in 1979.
With the use of a Merkle tree, though each block might contain thousands of transactions, it will have the ability to combine all of their hashes and condense them into one, allowing efficient and secure verification of this group of transactions. This single hash called is a Merkle root, which is stored in the Block Header of a block. The Block Header also stores other meta information of a block, such as a hash of the previous Block Header, which enables blocks to be associated in a chain-like structure (hence the name “blockchain”).
An illustration of block production in the Bitcoin Protocol is demonstrated below.

https://preview.redd.it/m6texxicf3151.png?width=1591&format=png&auto=webp&s=f4253304912ed8370948b9c524e08fef28f1c78d

Block time and mining difficulty

Block time is the period required to create the next block in a network. As mentioned above, the node who solves the computationally intensive task will be allowed to produce the next block. Therefore, block time is directly correlated to the amount of time it takes for a node to find a solution to the task. The Bitcoin protocol sets a target block time of 10 minutes, and attempts to achieve this by introducing a variable named mining difficulty.
Mining difficulty refers to how difficult it is for the node to solve the computationally intensive task. If the network sets a high difficulty for the task, while miners have low computational power, which is often referred to as “hashrate”, it would statistically take longer for the nodes to get an answer for the task. If the difficulty is low, but miners have rather strong computational power, statistically, some nodes will be able to solve the task quickly.
Therefore, the 10 minute target block time is achieved by constantly and automatically adjusting the mining difficulty according to how much computational power there is amongst the nodes. The average block time of the network is evaluated after a certain number of blocks, and if it is greater than the expected block time, the difficulty level will decrease; if it is less than the expected block time, the difficulty level will increase.

What are orphan blocks?

In a PoW blockchain network, if the block time is too low, it would increase the likelihood of nodes producingorphan blocks, for which they would receive no reward. Orphan blocks are produced by nodes who solved the task but did not broadcast their results to the whole network the quickest due to network latency.
It takes time for a message to travel through a network, and it is entirely possible for 2 nodes to complete the task and start to broadcast their results to the network at roughly the same time, while one’s messages are received by all other nodes earlier as the node has low latency.
Imagine there is a network latency of 1 minute and a target block time of 2 minutes. A node could solve the task in around 1 minute but his message would take 1 minute to reach the rest of the nodes that are still working on the solution. While his message travels through the network, all the work done by all other nodes during that 1 minute, even if these nodes also complete the task, would go to waste. In this case, 50% of the computational power contributed to the network is wasted.
The percentage of wasted computational power would proportionally decrease if the mining difficulty were higher, as it would statistically take longer for miners to complete the task. In other words, if the mining difficulty, and therefore targeted block time is low, miners with powerful and often centralized mining facilities would get a higher chance of becoming the block producer, while the participation of weaker miners would become in vain. This introduces possible centralization and weakens the overall security of the network.
However, given a limited amount of transactions that can be stored in a block, making the block time too longwould decrease the number of transactions the network can process per second, negatively affecting network scalability.

3. Bitcoin’s additional features

Segregated Witness (SegWit)

Segregated Witness, often abbreviated as SegWit, is a protocol upgrade proposal that went live in August 2017.
SegWit separates witness signatures from transaction-related data. Witness signatures in legacy Bitcoin blocks often take more than 50% of the block size. By removing witness signatures from the transaction block, this protocol upgrade effectively increases the number of transactions that can be stored in a single block, enabling the network to handle more transactions per second. As a result, SegWit increases the scalability of Nakamoto consensus-based blockchain networks like Bitcoin and Litecoin.
SegWit also makes transactions cheaper. Since transaction fees are derived from how much data is being processed by the block producer, the more transactions that can be stored in a 1MB block, the cheaper individual transactions become.
https://preview.redd.it/depya70mf3151.png?width=1601&format=png&auto=webp&s=a6499aa2131fbf347f8ffd812930b2f7d66be48e
The legacy Bitcoin block has a block size limit of 1 megabyte, and any change on the block size would require a network hard-fork. On August 1st 2017, the first hard-fork occurred, leading to the creation of Bitcoin Cash (“BCH”), which introduced an 8 megabyte block size limit.
Conversely, Segregated Witness was a soft-fork: it never changed the transaction block size limit of the network. Instead, it added an extended block with an upper limit of 3 megabytes, which contains solely witness signatures, to the 1 megabyte block that contains only transaction data. This new block type can be processed even by nodes that have not completed the SegWit protocol upgrade.
Furthermore, the separation of witness signatures from transaction data solves the malleability issue with the original Bitcoin protocol. Without Segregated Witness, these signatures could be altered before the block is validated by miners. Indeed, alterations can be done in such a way that if the system does a mathematical check, the signature would still be valid. However, since the values in the signature are changed, the two signatures would create vastly different hash values.
For instance, if a witness signature states “6,” it has a mathematical value of 6, and would create a hash value of 12345. However, if the witness signature were changed to “06”, it would maintain a mathematical value of 6 while creating a (faulty) hash value of 67890.
Since the mathematical values are the same, the altered signature remains a valid signature. This would create a bookkeeping issue, as transactions in Nakamoto consensus-based blockchain networks are documented with these hash values, or transaction IDs. Effectively, one can alter a transaction ID to a new one, and the new ID can still be valid.
This can create many issues, as illustrated in the below example:
  1. Alice sends Bob 1 BTC, and Bob sends Merchant Carol this 1 BTC for some goods.
  2. Bob sends Carols this 1 BTC, while the transaction from Alice to Bob is not yet validated. Carol sees this incoming transaction of 1 BTC to him, and immediately ships goods to B.
  3. At the moment, the transaction from Alice to Bob is still not confirmed by the network, and Bob can change the witness signature, therefore changing this transaction ID from 12345 to 67890.
  4. Now Carol will not receive his 1 BTC, as the network looks for transaction 12345 to ensure that Bob’s wallet balance is valid.
  5. As this particular transaction ID changed from 12345 to 67890, the transaction from Bob to Carol will fail, and Bob will get his goods while still holding his BTC.
With the Segregated Witness upgrade, such instances can not happen again. This is because the witness signatures are moved outside of the transaction block into an extended block, and altering the witness signature won’t affect the transaction ID.
Since the transaction malleability issue is fixed, Segregated Witness also enables the proper functioning of second-layer scalability solutions on the Bitcoin protocol, such as the Lightning Network.

Lightning Network

Lightning Network is a second-layer micropayment solution for scalability.
Specifically, Lightning Network aims to enable near-instant and low-cost payments between merchants and customers that wish to use bitcoins.
Lightning Network was conceptualized in a whitepaper by Joseph Poon and Thaddeus Dryja in 2015. Since then, it has been implemented by multiple companies. The most prominent of them include Blockstream, Lightning Labs, and ACINQ.
A list of curated resources relevant to Lightning Network can be found here.
In the Lightning Network, if a customer wishes to transact with a merchant, both of them need to open a payment channel, which operates off the Bitcoin blockchain (i.e., off-chain vs. on-chain). None of the transaction details from this payment channel are recorded on the blockchain, and only when the channel is closed will the end result of both party’s wallet balances be updated to the blockchain. The blockchain only serves as a settlement layer for Lightning transactions.
Since all transactions done via the payment channel are conducted independently of the Nakamoto consensus, both parties involved in transactions do not need to wait for network confirmation on transactions. Instead, transacting parties would pay transaction fees to Bitcoin miners only when they decide to close the channel.
https://preview.redd.it/cy56icarf3151.png?width=1601&format=png&auto=webp&s=b239a63c6a87ec6cc1b18ce2cbd0355f8831c3a8
One limitation to the Lightning Network is that it requires a person to be online to receive transactions attributing towards him. Another limitation in user experience could be that one needs to lock up some funds every time he wishes to open a payment channel, and is only able to use that fund within the channel.
However, this does not mean he needs to create new channels every time he wishes to transact with a different person on the Lightning Network. If Alice wants to send money to Carol, but they do not have a payment channel open, they can ask Bob, who has payment channels open to both Alice and Carol, to help make that transaction. Alice will be able to send funds to Bob, and Bob to Carol. Hence, the number of “payment hubs” (i.e., Bob in the previous example) correlates with both the convenience and the usability of the Lightning Network for real-world applications.

Schnorr Signature upgrade proposal

Elliptic Curve Digital Signature Algorithm (“ECDSA”) signatures are used to sign transactions on the Bitcoin blockchain.
https://preview.redd.it/hjeqe4l7g3151.png?width=1601&format=png&auto=webp&s=8014fb08fe62ac4d91645499bc0c7e1c04c5d7c4
However, many developers now advocate for replacing ECDSA with Schnorr Signature. Once Schnorr Signatures are implemented, multiple parties can collaborate in producing a signature that is valid for the sum of their public keys.
This would primarily be beneficial for network scalability. When multiple addresses were to conduct transactions to a single address, each transaction would require their own signature. With Schnorr Signature, all these signatures would be combined into one. As a result, the network would be able to store more transactions in a single block.
https://preview.redd.it/axg3wayag3151.png?width=1601&format=png&auto=webp&s=93d958fa6b0e623caa82ca71fe457b4daa88c71e
The reduced size in signatures implies a reduced cost on transaction fees. The group of senders can split the transaction fees for that one group signature, instead of paying for one personal signature individually.
Schnorr Signature also improves network privacy and token fungibility. A third-party observer will not be able to detect if a user is sending a multi-signature transaction, since the signature will be in the same format as a single-signature transaction.

4. Economics and supply distribution

The Bitcoin protocol utilizes the Nakamoto consensus, and nodes validate blocks via Proof-of-Work mining. The bitcoin token was not pre-mined, and has a maximum supply of 21 million. The initial reward for a block was 50 BTC per block. Block mining rewards halve every 210,000 blocks. Since the average time for block production on the blockchain is 10 minutes, it implies that the block reward halving events will approximately take place every 4 years.
As of May 12th 2020, the block mining rewards are 6.25 BTC per block. Transaction fees also represent a minor revenue stream for miners.
submitted by D-platform to u/D-platform [link] [comments]

An Insight Into Bitcoin Improvement Proposal (BIP)

While Bitcoin is the most famous and valuable cryptocurrency, its blockchain faces some challenges. In order to ensure the constant dominance of the currency in the market, the Bitcoin Improvement Proposal (BIP) was introduced. While most BIPs have different levels of potential for positive impact on Bitcoin blockchain, some of them turned out to be much more successful than others.

What is BIP?

Bitcoin is considered the first cryptocurrency and still remains the most successful crypto-project, but it also has its drawbacks. And in order to surpass it, as well as to occupy its niche in the digital world, innovators have created many new currencies, each of which has its own blockchain, designed to provide functions that are not available in Bitcoin. Eventually, one of these new currencies could potentially knock Bitcoin out of the first place.
That’s why the work on the Bitcoin Improvement Proposal began. BIP is a document where developers can submit a recommendation to fix a network problem. For example, after the introduction and implementation of BIP 141, also known as Segregated Witness (SegWit), the transaction rate on the Bitcoin network has increased, and commission fees have significantly decreased.
There are three varieties of BIP:

Bitcoin Lightning Network

The Lightning Network is a BIP proposal introduced in 2015 by Joseph Poon and Thaddeus Dryja. It aims to make Bitcoin scalable with the help of instant payments that are performed outside the network. These external channels form real Bitcoin transactions with the use of standard scripts that allow transferring funds without risk.
The Lightning network came into force thanks to the introduction of wallets with many signatures, where the parties can conduct an infinite number of transactions without having to store all the details on the blockchain. The only information recorded on the blockchain is the number of Bitcoins contained in the wallet and the percentage of contributions of the parties involved.
In addition to enabling instant transactions, the update also provides other benefits for the Bitcoin chain. For example, registration for micropayments, as well as cross-chain payments. Moreover, the update also promotes the implementation of the functionality of smart contracts on top of the blockchain.

MAST technology

MAST stands for Merkelized Abstract Syntax Tree, a technology that uses the ideas of the Merkle tree and the abstract syntax tree. This is a cryptographic tool that allows you to add large volumes of the hash to the data associated with transactions in the Bitcoin chain, due to their layout.
Three BIPs aim to introduce MAST into the Bitcoin network. The first is BIP 114, created by Johnson Lau, the developer of the Bitcoin core. The proposal shows how to increase network efficiency by introducing a new scenario, which he calls a merkelized scenario. The scenario reduces the need for large amounts of transaction data while maintaining greater privacy.
BIP 116 and BIP 117 were proposed by Bitcoin Core developer Mark Friedenbach and are intended to support MAST in a joint implementation. In BIP 116, he outlines the operation code, which allowed validation of the data without revealing the entire set. BIP 117 is called the Tail Call semantics, and in combination with the first, it led to a generalized form of MAST. The difference between the offers of Friedenbach and Lau is that the first supports all the scenarios that are currently used on the Bitcoin network, and the second supports only native SegWit.
The introduction of MAST has led to increased privacy, increased transaction speed, and the ability to include complex data sets, such as smart contracts. Besides, MAST allowed the Bitcoin network to process a much larger volume of transactions and, thereby, increased its scalability.

How many BIPs are there?

Since absolutely any developer can submit the idea of improving the network to the community, more than 300 of these ideas have already been accumulated, and not all of them have been and will be implemented in Bitcoin.
Keep up with the news of the crypto world at CoinJoy.io Follow us on Twitter and Medium. Subscribe to our YouTube channel. Join our Telegram channel. For any inquiries mail us at [[email protected]](mailto:[email protected]).
submitted by CoinjoyAssistant to u/CoinjoyAssistant [link] [comments]

⚡ Lightning Network Megathread ⚡

Last updated 2018-01-29
This post is a collaboration with the Bitcoin community to create a one-stop source for Lightning Network information.
There are still questions in the FAQ that are unanswered, if you know the answer and can provide a source please do so!

⚡What is the Lightning Network? ⚡

Explanations:

Image Explanations:

Specifications / White Papers

Videos

Lightning Network Experts on Reddit

  • starkbot - (Elizabeth Stark - Lightning Labs)
  • roasbeef - (Olaoluwa Osuntokun - Lightning Labs)
  • stile65 - (Alex Akselrod - Lightning Labs)
  • cfromknecht - (Conner Fromknecht - Lightning Labs)
  • RustyReddit - (Rusty Russell - Blockstream)
  • cdecker - (Christian Decker - Blockstream)
  • Dryja - (Tadge Dryja - Digital Currency Initiative)
  • josephpoon - (Joseph Poon)
  • fdrn - (Fabrice Drouin - ACINQ )
  • pmpadiou - (Pierre-Marie Padiou - ACINQ)

Lightning Network Experts on Twitter

  • @starkness - (Elizabeth Stark - Lightning Labs)
  • @roasbeef - (Olaoluwa Osuntokun - Lightning Labs)
  • @stile65 - (Alex Akselrod - Lightning Labs)
  • @bitconner - (Conner Fromknecht - Lightning Labs)
  • @johanth - (Johan Halseth - Lightning Labs)
  • @bvu - (Bryan Vu - Lightning Labs)
  • @rusty_twit - (Rusty Russell - Blockstream)
  • @snyke - (Christian Decker - Blockstream)
  • @JackMallers - (Jack Mallers - Zap)
  • @tdryja - (Tadge Dryja - Digital Currency Initiative)
  • @jcp - (Joseph Poon)
  • @alexbosworth - (Alex Bosworth - yalls.org)

Medium Posts

Learning Resources

Books

Desktop Interfaces

Web Interfaces

Tutorials and resources

Lightning on Testnet

Lightning Wallets

Place a testnet transaction

Altcoin Trading using Lightning

  • ZigZag - Disclaimer You must trust ZigZag to send to Target Address

Lightning on Mainnet

Warning - Testing should be done on Testnet

Atomic Swaps

Developer Documentation and Resources

Lightning implementations

  • LND - Lightning Network Daemon (Golang)
  • eclair - A Scala implementation of the Lightning Network (Scala)
  • c-lightning - A Lightning Network implementation in C
  • lit - Lightning Network node software (Golang)
  • lightning-onion - Onion Routed Micropayments for the Lightning Network (Golang)
  • lightning-integration - Lightning Integration Testing Framework
  • ptarmigan - C++ BOLT-Compliant Lightning Network Implementation [Incomplete]

Libraries

Lightning Network Visualizers/Explorers

Testnet

Mainnet

Payment Processors

  • BTCPay - Next stable version will include Lightning Network

Community

Slack

IRC

Slack Channel

Discord Channel

Miscellaneous

⚡ Lightning FAQs ⚡

If you can answer please PM me and include source if possible. Feel free to help keep these answers up to date and as brief but correct as possible
Is Lightning Bitcoin?
Yes. You pick a peer and after some setup, create a bitcoin transaction to fund the lightning channel; it’ll then take another transaction to close it and release your funds. You and your peer always hold a bitcoin transaction to get your funds whenever you want: just broadcast to the blockchain like normal. In other words, you and your peer create a shared account, and then use Lightning to securely negotiate who gets how much from that shared account, without waiting for the bitcoin blockchain.
Is the Lightning Network open source?
Yes, Lightning is open source. Anyone can review the code (in the same way as the bitcoin code)
Who owns and controls the Lightning Network?
Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code is open source and free for anyone to download and review. Anyone can run a node and be part of the network.
I’ve heard that Lightning transactions are happening “off-chain”…Does that mean that my bitcoin will be removed from the blockchain?
No, your bitcoin will never leave the blockchain. Instead your bitcoin will be held in a multi-signature address as long as your channel stays open. When the channel is closed; the final transaction will be added to the blockchain. “Off-chain” is not a perfect term, but it is used due to the fact that the transfer of ownership is no longer reflected on the blockchain until the channel is closed.
Do I need a constant connection to run a lightning node?
Not necessarily,
Example: A and B have a channel. 1 BTC each. A sends B 0.5 BTC. B sends back 0.25 BTC. Balance should be A = 0.75, B = 1.25. If A gets disconnected, B can publish the first Tx where the balance was A = 0.5 and B = 1.5. If the node B does in fact attempt to cheat by publishing an old state (such as the A=0.5 and B=1.5 state), this cheat can then be detected on-chain and used to steal the cheaters funds, i.e., A can see the closing transaction, notice it's an old one and grab all funds in the channel (A=2, B=0). The time that A has in order to react to the cheating counterparty is given by the CheckLockTimeVerify (CLTV) in the cheating transaction, which is adjustable. So if A foresees that it'll be able to check in about once every 24 hours it'll require that the CLTV is at least that large, if it's once a week then that's fine too. You definitely do not need to be online and watching the chain 24/7, just make sure to check in once in a while before the CLTV expires. Alternatively you can outsource the watch duties, in order to keep the CLTV timeouts low. This can be achieved both with trusted third parties or untrusted ones (watchtowers). In the case of a unilateral close, e.g., you just go offline and never come back, the other endpoint will have to wait for that timeout to expire to get its funds back. So peers might not accept channels with extremely high CLTV timeouts. -- Source
What Are Lightning’s Advantages?
Tiny payments are possible: since fees are proportional to the payment amount, you can pay a fraction of a cent; accounting is even done in thousandths of a satoshi. Payments are settled instantly: the money is sent in the time it takes to cross the network to your destination and back, typically a fraction of a second.
Does Lightning require Segregated Witness?
Yes, but not in theory. You could make a poorer lightning network without it, which has higher risks when establishing channels (you might have to wait a month if things go wrong!), has limited channel lifetime, longer minimum payment expiry times on each hop, is less efficient and has less robust outsourcing. The entire spec as written today assumes segregated witness, as it solves all these problems.
Can I Send Funds From Lightning to a Normal Bitcoin Address?
No, for now. For the first version of the protocol, if you wanted to send a normal bitcoin transaction using your channel, you have to close it, send the funds, then reopen the channel (3 transactions). In future versions, you and your peer would agree to spend out of your lightning channel funds just like a normal bitcoin payment, allowing you to use your lightning wallet like a normal bitcoin wallet.
Can I Make Money Running a Lightning Node?
Not really. Anyone can set up a node, and so it’s a race to the bottom on fees. In practice, we may see the network use a nominal fee and not change very much, which only provides an incremental incentive to route on a node you’re going to use yourself, and not enough to run one merely for fees. Having clients use criteria other than fees (e.g. randomness, diversity) in route selection will also help this.
What is the release date for Lightning on Mainnet?
Lightning is already being tested on the Mainnet Twitter Link but as for a specific date, Jameson Lopp says it best
Would there be any KYC/AML issues with certain nodes?
Nope, because there is no custody ever involved. It's just like forwarding packets. -- Source
What is the delay time for the recipient of a transaction receiving confirmation?
Furthermore, the Lightning Network scales not with the transaction throughput of the underlying blockchain, but with modern data processing and latency limits - payments can be made nearly as quickly as packets can be sent. -- Source
How does the lightning network prevent centralization?
Bitcoin Stack Exchange Answer
What are Channel Factories and how do they work?
Bitcoin Stack Exchange Answer
How does the Lightning network work in simple terms?
Bitcoin Stack Exchange Answer
How are paths found in Lightning Network?
Bitcoin Stack Exchange Answer
How would the lightning network work between exchanges?
Each exchange will get to decide and need to implement the software into their system, but some ideas have been outlined here: Google Doc - Lightning Exchanges
Note that by virtue of the usual benefits of cost-less, instantaneous transactions, lightning will make arbitrage between exchanges much more efficient and thus lead to consistent pricing across exchange that adopt it. -- Source
How do lightning nodes find other lightning nodes?
Stack Exchange Answer
Does every user need to store the state of the complete Lightning Network?
According to Rusty's calculations we should be able to store 1 million nodes in about 100 MB, so that should work even for mobile phones. Beyond that we have some proposals ready to lighten the load on endpoints, but we'll cross that bridge when we get there. -- Source
Would I need to download the complete state every time I open the App and make a payment?
No you'd remember the information from the last time you started the app and only sync the differences. This is not yet implemented, but it shouldn't be too hard to get a preliminary protocol working if that turns out to be a problem. -- Source
What needs to happen for the Lightning Network to be deployed and what can I do as a user to help?
Lightning is based on participants in the network running lightning node software that enables them to interact with other nodes. This does not require being a full bitcoin node, but you will have to run "lnd", "eclair", or one of the other node softwares listed above.
All lightning wallets have node software integrated into them, because that is necessary to create payment channels and conduct payments on the network, but you can also intentionally run lnd or similar for public benefit - e.g. you can hold open payment channels or channels with higher volume, than you need for your own transactions. You would be compensated in modest fees by those who transact across your node with multi-hop payments. -- Source
Is there anyway for someone who isn't a developer to meaningfully contribute?
Sure, you can help write up educational material. You can learn and read more about the tech at http://dev.lightning.community/resources. You can test the various desktop and mobile apps out there (Lightning Desktop, Zap, Eclair apps). -- Source
Do I need to be a miner to be a Lightning Network node?
No -- Source
Do I need to run a full Bitcoin node to run a lightning node?
lit doesn't depend on having your own full node -- it automatically connects to full nodes on the network. -- Source
LND uses a light client mode, so it doesn't require a full node. The name of the light client it uses is called neutrino
How does the lightning network stop "Cheating" (Someone broadcasting an old transaction)?
Upon opening a channel, the two endpoints first agree on a reserve value, below which the channel balance may not drop. This is to make sure that both endpoints always have some skin in the game as rustyreddit puts it :-)
For a cheat to become worth it, the opponent has to be absolutely sure that you cannot retaliate against him during the timeout. So he has to make sure you never ever get network connectivity during that time. Having someone else also watching for channel closures and notifying you, or releasing a canned retaliation, makes this even harder for the attacker. This is because if he misjudged you being truly offline you can retaliate by grabbing all of its funds. Spotty connections, DDoS, and similar will not provide the attacker the necessary guarantees to make cheating worthwhile. Any form of uncertainty about your online status acts as a deterrent to the other endpoint. -- Source
How many times would someone need to open and close their lightning channels?
You typically want to have more than one channel open at any given time for redundancy's sake. And we imagine open and close will probably be automated for the most part. In fact we already have a feature in LND called autopilot that can automatically open channels for a user.
Frequency will depend whether the funds are needed on-chain or more useful on LN. -- Source
Will the lightning network reduce BTC Liquidity due to "locking-up" funds in channels?
Stack Exchange Answer
Can the Lightning Network work on any other cryptocurrency? How?
Stack Exchange Answer
When setting up a Lightning Network Node are fees set for the entire node, or each channel when opened?
You don't really set up a "node" in the sense that anyone with more than one channel can automatically be a node and route payments. Fees on LN can be set by the node, and can change dynamically on the network. -- Source
Can Lightning routing fees be changed dynamically, without closing channels?
Yes but it has to be implemented in the Lightning software being used. -- Source
How can you make sure that there will be routes with large enough balances to handle transactions?
You won't have to do anything. With autopilot enabled, it'll automatically open and close channels based on the availability of the network. -- Source
How does the Lightning Network stop flooding nodes (DDoS) with micro transactions? Is this even an issue?
Stack Exchange Answer

Unanswered Questions

How do on-chain fees work when opening and closing channels? Who pays the fee?
How does the Lightning Network work for mobile users?
What are the best practices for securing a lightning node?
What is a lightning "hub"?
How does lightning handle cross chain (Atomic) swaps?

Special Thanks and Notes

  • Many links found from awesome-lightning-network github
  • Everyone who submitted a question or concern!
  • I'm continuing to format for an easier Mobile experience!
submitted by codedaway to Bitcoin [link] [comments]

Audio: Tadge Dryja, Digital Currency Initiative: uTreeXO and Bootstrapping Bitcoin Upgrades

Audio: Tadge Dryja, Digital Currency Initiative: uTreeXO and Bootstrapping Bitcoin Upgrades submitted by Bitcoin_21 to Bitcoin [link] [comments]

Lightning!

Lightning Network
Today I am going to talk about the “Lightning Network” which is a proposed solution to the issue of scaling Bitcoin faces. Lightning Network (I will use the acronym “LN” to refer to the Lightning network from this point forth) LN has its fair share of criticism in the crypto space. Some claim its brilliant, while others claim it is the antithesis of what Bitcoin was supposed to be. I am going to try my best to touch on the reasoning both crowds use to come to these conclusions. First things first, lets discuss how the whole thing got started.
The LN was first proposed in 2015 by Thaddeus Dryja and Joseph Poon in a white paper they wrote (White paper for LN can be viewed at the following linkhttps://www.weusecoins.com/assets/pdf/library/Lightning%20Network%20Whitepaper.pdf ) They decided that Bitcoin has a scalability issue and were looking for the best way to solve that issue without ultimately sacrificing the fundamentals that make BTC such a great currency. They decided that building a 2nd layer on top of Bitcoin was the best solution (rather than another useless hard fork to add to the 103 or so other Bitcoin forks out there) Many claim that coins like Bitcoin SV and Bitcoin Cash are the solution to scaling issues, but they are forks and centralized when compared to Bitcoin which sacrifices decentralization for scalability. Lightning is different than a fork as it is basically a payment channel that connects 2 or more parties directly. This makes payments almost instant, which is something people using Bitcoin core have desired since its creation. How does it work? Lets discuss that!
How does the Lightning Network work?
Okay so you have been hearing your friend Phil go on and on about how great the LN is, but why is he so excited? Lets figure it out! The LN is a payment channel that is set up between 2 or more parties. They start by creating the payment channel which is a multisig wallet (a multisig wallet is a BTC wallet that cannot be accessed by just one party as it takes “multiple signatures” to access the funds. Now that Phil and I have set up the payment channel we can now transact with each other as much as we like with no transaction fees (until we close the channel). The payment channel gets updated every time a payment is made. So if Phil and I have 2 Bitcoin on the channel, lets say I have 1 BTC and Phil has 1 Bitcoin in the multisig wallet me and him created for the Lightning channel. I could send Phil ½ of a BTC and the ledger would show that Phil now has 1.5 Bitcoin while I only hold .5 Bitcoin. This transaction occurred off the Bitcoin blockchain so it avoided the hefty transaction fees that accompany Bitcoin core transactions at times. The channel can be left open and the ledger will update every time me and Phil transact with each other (until we decide to close the channel) This layer makes micro transactions more feasible as people are not paying a 3 $ transaction fee for a 1$ transaction.
People that would like to use the LN can get a node (Casanode, Raspberry Pi 3 etc.) which will also act as a BTC core node along with a lightning node. This is a popular way to be a part of Lightning payments. It is not the only way though. There are wallets that can be used to access the LN without having to own a casanode or raspberry pi. You can still use the LN without owning a casanode by downloading an app like “Blue Wallet” which will allow you to access LN without necessarily owning a node. Apps like this make LN more available to the general public that may not quite grasp the reason people own casanodes. Either way removing barriers that could potentially hinder people from using LN is a big part of wide spread adoption. Lightning is still in its infancy really so more and more apps should pop up similar to Blue Wallet in the near future. (This is not an endorsement of Blue Wallet, I simply used it as an example) If you would like to order a casanode it can easily be found with a simple google search. I personally know a few people that paid for the node and most of them did it just to help the LN network grow and to actually be able to use it! They typically run for around $300 USD. (I see the price going down in the future as LN becomes more used and the casanodes become more in demand)
Now just because you aren’t connected to someone directly through a payment channel you can still send payments to someone in many cases. So, Lets say Phil and I want to transact with each other but we don’t have a channel connecting us. We could utilize a 3rd party to connect the payment channels. For example, I am trying to send Phil 1 BTC, but we don’t have a channel set up, but we want to transact with each other. The node will find the fastest path it can to Phil so I do not necessarily need to create a channel with him. We could use anyone to bridge the gap and transact with each other in this way. This is referred to as a “Hop”. Some people may worry that the link between me and Phil may act maliciously and attempt to take the payment, but that’s the beauty of LN. It can’t be taken in this way. So I send Phil .1 BTC. A 3rd party would first receive the .1 BTC and would send it to Phil automatically. The 3rd party cannot stop the transaction in the middle if he were to try and steal the funds. LN doesn’t allow that.
LN offers almost instant payments with Bitcoin (and soon many altcoins will also utilize LN) with minimal fees. Some think the LN is absolutely a terrible idea. They believe transaction fees will be severely diminished in the wake of LN due to the fact payments made on LN do not post to the BTC chain until the channel has been closed charging a one-time fee for multiple transactions. I would say that with LN we will see a surge of new adoption that will increase the use of BTC and in the long run should increase the amount of transaction fees collected by miners for the work the perform. People like to claim LN is centralized and the antithesis of what Satoshi was thinking when he created BTC. I have to say I disagree. LN is a layer on top of BTC. It doesn’t effect the fundamentals of BTC core and that is important to me and many others. Bitcoin is a work of art because of decentralization. LN doesn’t hinder this. It is simply an option for people that want BTC payments faster to have a means to do so. In the future people will most likely do plenty of transactions on LN (I think most dealings will be done via LN) But the big transfers will still likely be done on BTC core itself. Bitcoin is a work in progress and LN is a step towards adoption.
Right now, LN is very new and still untested in many ways. It is an experiment in my eyes that is likely to succeed. Even if LN went belly up tomorrow BTC will still be here. I have a lot of faith in LN and I think it will be a huge part of mass adoption in the future. Nobody can see the future… But we can speculate! I enjoyed writing this and I hope you learned something. I sure did.
Written by: Tim Pace 2/13/2019
submitted by HeisenbergBTC to Bitcoin [link] [comments]

Off-Chain Solutions: A Brief Intro To The Lightning Network

While the advent of Bitcoin came in 2008, The Lightning Network was proposed by Thaddeus Dryja and Joseph Poon in a 2015 white paper. The idea is based on a network that sits on top of the bitcoin blockchain and is hailed as the most scalable low cost cross blockchain (rapid) insta-payment system with the use of off-chain technology. While Visa handles 2000 transactions per second on average, Bitcoin, with a finite amount of transactions, can only handle 7 transactions per second with a block capacity of 1 MB. Bitcoin’s Lightning project is an ambitious project to fix this.
So how does The Lightning Network work? It is a decentralized system for instant, high-volume micropayments that removes the risk of delegating custody of funds to trusted third parties. Lightning could mean Bitcoin becomes as scalable in frequency of transactions as “Visa and Mastercard” — seemingly systems Satoshi hope to one day circumvent with Bitcoin. The Lightning Network is one potential way Bitcoin could scale to mass adoption, with even the Square Cash app proposing to adopt it. Before public blockchains will solve their scalability dilemma, Bitcoin’s Lightning Network could further accelerate crypto adoption in new ways. The network is comprised of user-generated channels that send payments back and forth in a secure and trust-less fashion.
Throughout its existence, Bitcoin has only been capable of processing around 7 transactions per second. This has severely curtailed its adoption as a digital asset that can be used as a means of actual payment, the very definition of what a crypto-currency is supposed to be. Although the Lightning Network may be a panacea in mind, there are some people who fear that, as the network channels become more complex, they could develop their own issues of convolution. While as of today it is not yet properly proven, the Lightning Network may be the solution to cryptocurrencies’ scaling issue which, in the long run, could be truly quite promising for mass adoption for certain kinds of large scale transactions.

To know more information about it, you may want to read this blog: https://blog.kucoin.com/lightning-network-off-chain-solution-to-bitcoin-scalability-sk-rd
submitted by sdemac00 to lightningnetwork [link] [comments]

Smart scaling, or; Why on-chain scaling does not require a similar increase in blockchain storage

A common misconception I see when people talk about future scaling of Bitcoin is the number of transactions per second you can get with any given blocksize. The argument typically goes something like "3 tps today, 5 tps with Segwit, 10 tps if you also double the blocksize". Which is technically accurate, and the only real ways to scale right now, but it does not mean that this is the best way to keep scaling beyond the near future. Even the maximum 256 MB block size supported by certain clients would add less than 1000 tps capacity, while at the same time increase the size of the blockchain by over 13 TB per year.
The smart way to scale Bitcoin usage for payment purposes at 1000 tps and beyond is, as most Bitcoin developers and many users have already realized, by using a network of bi-directional payment channels, such as those used by the Lightning Network - first envisioned by Joseph Poon and Thaddeus Dryja, this is currently an active development project headed by Rusty Russell. I have been watching this project since it was first announced back in 2015, and I am increasingly confident that this approach is in fact the only realistic way to scale Bitcoin to something that can be used daily by literally every single person on the planet - even to buy their coffee. And if your goal is having a global payment network usable for everyone, that is how high you have to aim.
It is important to emphasize that this is still on-chain scaling even if the payments are not individually inscribed on the blockchain. That is, we are not talking of "Bitcoin as a settlement network" but "Bitcoin as a globally-scaling payment network with a blockchain primarily used for settlement transactions". Any number of payments can pass back and forth through the payment channels, and after the initial funding transaction, nothing further is inscribed to the blockchain until the final outcome of a specific channel has been determined - at which point, the balance of the payment channel is settled on the blockchain. And while a channel may ideally simply remain open indefinitely, sending and receiving what is effectively the same coins an arbitrary number of times, realistically it will at some point always be closed and committed.
Not only does this mean that the vast majority of payments can safely happen without being inscribed individually; they will also happen near-instantaneously, only limited by network delay. Furthermore, the simple fact that the history of every individual payment is no longer public record adds significant fungibility to Bitcoin, as to the best of my knowledge, Lightning payments could only be tracked if they were intercepted live, if at all.
As such, the "scaling debate" should ideally be held based on the understanding that when Lighting is ready for use, even an avid Bitcoin user would typically only need to make at most a handful of blockchain transactions for payment purposes per year in order to open and close Lightning channels. If you were to limit the scope as such, it would largely reduce the debate to "what blockchain storage scaling do we need until Lightning is ready" and "what blockchain storage scaling does Lightning need to scale and operate safely" - neither of which I will attempt to address here.
However, before all of this can happen, what Lightning needs is Segwit. Non-malleable transactions are what make this possible, and if Segwit is not active by the time Lightning is ready to use it, that will be an incredible defeat for Bitcoin in general. There is still time, and it could happen as soon as with BIP148 on August 1st, or with BIP149 or similar BIP8-based activation possibly as early as November 16th if that fails. Alternatively, it could happen by throwing the miners a 2MB bone so they activate Segwit voluntarily with the SegWit2x/New York Agreement/"Barrycoin" proposal.
Ultimately, all of the alternatives have their own risks and significant detractors, but I hope that regardless of which of them end up gaining the most momentum, the rest of the ecosystem - that is, the miners, developers, economic actors and ultimately the end-users - will yield and move with them, so that any destructive chain splits can be avoided and Segwit can be activated as safely as possible.
tl;dr: Realistic future scaling absolutely relies on activating Segwit, so please do it.
submitted by ArmchairCryptologist to Bitcoin [link] [comments]

I have made a Lightning FAQ – Feedback appreciated!

Q: What is the Lightning Network?
A: The Lightning Network is currently under development and will become a decentralized network that enables instant off-chain transfer of bitcoin between counterparties without the need of a trusted third party. The system utilizes bidirectional payment channels that consist of multisignature addresses. One on-chain transaction is needed to open a channel and another on-chain transaction will close the channel. Once a channel is open, value can be transferred instantly between counterparties, who are exchanging normal bitcoin transactions, but without broadcasting them to the bitcoin network. New transactions will replace previous transactions and the counterparties will store everything locally as long as the channel stays open.
Q: Is Lightning open source?
A: Yes, Lightning will be open source. Anyone can review the code just like the bitcoin code.
Q: Who owns and controls the Lightning Network?
A: Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code will be open source and free for anyone to download and review. Anyone who wants will be able to run a node.
Q: Who is behind the Lightning Network?
A: Joseph Poon and Thaddeus Dryja wrote The Lightning white paper. Anyone who wants can contribute with the development of code. Blockstream currently has one employee who is dedicated to Lightning development
Q: Does the LN have its own “Lightning coins”?
A: No, that’s not how the LN works. The LN will be using real bitcoin transactions with actual bitcoins in them
Q: Is the LN dependent on consensus to be implemented?
A: No, the LN builds an additional layer on top of the bitcoin network and is therefore not dependent on consensus in the bitcoin network itself.
Q: I have heard that there will be some fees involved in the LN, who will be collecting those fees?
A: Potentially everyone who runs a Lightning-node. Example: Alice wants to send money to Carol, but Alice doesn’t have an open channel with Carol. But Alice has an open channel with Bob, and Bob has an open channel with Carol. Instead of opening a new channel with Carol, Alice can route the payment trough Bob: Alice - Bob - Carol. In this scenario Bob might take a small fee.
Q: Will there be any custodial risk in the Lightning Network? Do I have to trust anyone else to hold my money?
A: No, the system is not based on trust; you remain in full control of your money. If anything goes wrong you simply broadcast your state to the bitcoin blockchain and all your money is returned to you.
Q: Does the Lightning Network have its own blockchain?
A: No, Lightning is dependent on the bitcoin blockchain. On-chain bitcoin transactions are needed to open and to close “channels” between peers (nodes) in the system. Once a channel is open, bitcoin can be sent off-chain in both directions within the channel. The transactions inside a channel are real bitcoin transactions, but they are not broadcasted to the bitcoin network as long as the channel stays open. Instead those involved store the transactions locally. This enables instant transactions and a near unlimited capacity within a channel.
Q: Will there be any form of mining in the Lightning Network?
A: No, security is provided by the bitcoin miners in underlying bitcoin network
Q: Where can I find more information about Lightning?
A: http://lightning.network/
https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-286-drinks-on-a-lightning-network
https://letstalkbitcoin.com/blog/post/the-lightning-network-elidhdicacs
submitted by ABrandsen to Bitcoin [link] [comments]

CONNECTY - NEW SUPPORT FOR THE PROJECT BINANCE VISION

CONNECTY - NEW SUPPORT FOR THE PROJECT BINANCE VISION

https://www.binance.vision
The Lightning Network (LN) as a concept was created by Joseph Poon and Thaddeus Dryja in 2015. The main idea behind the project is to design a payment protocol that can be used as an off-chain solution for the scalability problem faced by the Bitcoin blockchain, but the concept may be applied to other Cryptocurrencies as well.
The introduction of the Lightning Network was triggered by the limitations that not only Bitcoin but by many other cryptocurrencies are facing. Currently, the Bitcoin blockchain is only able to process from 2 to 7 transactions per second (TPS). As the cryptocurrency ecosystem grows and more people join the network, the number of transactions being broadcasted to the blockchain also increases. As the network gets more and more congested, the overall performance is compromised, which greatly reduces the practical usability of Bitcoin as global digital currency. In such a context, the LN was created as an attempt to alleviate the network congestion of the Bitcoin blockchain.
COME TO JOIN US:
https://www.connecty.io/
submitted by boytrianda to Connecty [link] [comments]

Will the Bitcoin Lightning Network Really End the Crypto Coffee Crisis?

Imagine going to a coffee shop to buy a coffee with Bitcoin. If you create a transaction on the blockchain to pay for the coffee…you’ll probably end up paying much more on the handling fee than the actual price of the coffee, not to mention the transaction takes forever to complete.
This is essentially how the Bitcoin network looks right now.
As the world’s first and most popular cryptocurrency, Bitcoin is struggling to keep up with the demand today. Users have to go through cumbersome procedures and pay quite a transaction fee before they can transfer BTC through the congested network.
In comparison to Visa, which reportedly handles around 25,000 transactions per second (with a peak capacity at 50,000 tps), Bitcoin is only capable of handling approximately seven transactions per second.
Is Lightning Network the Ultimate Solution to Bitcoin’s Scalability?
First described in 2015 by Joseph Poon and Thaddeus Dryja, Lightning Network is one of the various community proposals to address Bitcoin’s scalability. It creates a second layer on Bitcoin’s main blockchain for users to open multiple payment channels, deposit funds and then perform unlimited transactions between themselves inside the multi-signature wallet.
Transactions conducted on Lighting Network are instant and much more efficient, because it’s more like a balance sheet of BTC distribution without the actual transfer. When the payment channel is closed, only the most recently signed balance sheet will be broadcasted to the main blockchain, hence significantly reducing the block size.
Once Lightning Network is widely adopted for everyday use, whenever you want to buy a coffee from the coffee shop, as long as you’ve opened a payment channel with the network, you can perform endless transactions in the shared wallet. All you have to do is sign the updated balance sheet with your private key to confirm the transaction.
Although not fully operational yet, the power of Lightning has already been embraced by some crypto community members. A profound movement called Bitcoin Lightning Torch (#LNTrustChain) started on Twitter on January 19, 2019, where people transfer Bitcoin via the Lighting Network to community members they think are trustworthy.
submitted by KorvoAtano to u/KorvoAtano [link] [comments]

Have made large improvements to my Lightning FAQ. Added more Qs and As. Submitted to GitHub

I would like to thank the community of bitcoin for the valuable feedback I received after posting my initial draft for a Lightning FAQ!
Below you will find a largely improved version with several new questions and answers.
The FAQ have also been made available on GitHub: https://github.com/norgesbitcoinforening/lightning-faq
All feedback is still greatly appreciated!
Q 1: What is the Lightning Network?
A: The Lightning Network is currently under development. It will become a decentralized network that enables instant off-chain transfer of the ownership bitcoin, without the need of a trusted third party. The system utilizes bidirectional payment channels that consist of multi-signature addresses. One on-chain transaction is needed to open a channel and another on-chain transaction can close the channel. Once a channel is open, value can be transferred instantly between counterparts, who are exchanging real bitcoin transactions, but without broadcasting them to the bitcoin network. New transactions will replace previous transactions and the counterparts will store everything locally as long as the channel stays open.
Q 2: Is the Lightning Network open source?
A: Yes, Lightning is open source. Anyone can review the code, just in the same way as the bitcoin code.
Q 3: Who owns and controls the Lightning Network?
A: Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code is open source and free for anyone to download and review. Anyone can run a node and be part of the network.
Q 4: Who are the inventors of the Lightning Network?
A: Joseph Poon and Thaddeus Dryja wrote The Lightning white paper. Lightning is an open source project so anyone is free to contribute with code. There are currently 5 independent implementations under development:
Lightning Network Daemon: https://github.com/lightningnetwork/lnd
Blockstream's C lightning: Blockstream currently have two employees who are dedicated to Lightning development.
Blockchain’s Thunder network
ACINQ have successfully implemented Bitfury's Flare routing algorithm into Eclair, and tested it on a live network of 2500 servers
Amiko Pay
Q 5: Does the Lightning Network have its own “Lightning coins”?
A: No, that’s not how it works. A Lightning Network will be using real bitcoin transactions with actual bitcoins in them
Q 6: Is the Lightning Network dependent on consensus to be implemented?
A: No, a Lightning Network builds an additional layer on top of the bitcoin network. Therefore it is not dependent on consensus in the bitcoin network itself.
Q 7: Will there be any form of custodian risk in a Lightning Network? Do I need to trust anyone to hold my money on my behalf?
A: No, this system is not based on trust; you remain in full control of your money. If anything goes wrong you simply broadcast the latest state of your channel as a normal on-chain bitcoin transaction. All your money will be returned to your address, and it will be recorded on the blockchain as a normal on-chain bitcoin transaction.
Q 8: I’ve heard that Lightning transactions is happening “off-chain”...Does that mean that my bitcoins will be removed from the blockchain?
A: No, your coins will never leave the blockchain. Instead your coins will be held in a multi-signature address as long as your channel stays open. “Off-chain” is not a perfect term, but it is used due to the fact that the transfer of ownership is no longer reflected on the blockchain.
Q 9: I’ve heard that the Lightning Network will require my bitcoins to be locked up... You do realize that no one wants their bitcoins to be locked up?
A: If your interpretation is that Lightning will make your money less accessible, then you are clearly misinformed. The fact is that your money will actually become more accessible when held in a Lightning channel. First of all, you do not need to wait for conformations in a Lightning Network, your money can be moved almost instantly within this network. Second, bringing your money “back on chain” is just as easy as sending a normal bitcoin transaction. You just wait for the first confirmation and your money is no longer “off chain”
The only exception is the rare case that your channel breaks down in the middle of a transaction (counterpart goes offline)
In this exceptional case; you will be subjected to a short time delay before you can spend your money. The length of this delay will vary; depending upon the parameters you have applied to your channel.
Q 10: Will a Lightning Network have its own blockchain?
A: No, Lightning is dependent on the bitcoin blockchain. On-chain bitcoin transactions are needed to open and to close “channels” between peers (nodes) in the network. Once a channel is open, the ownership of bitcoin can be transferred off-chain in both directions. The transactions inside a channel are real bitcoin transactions, but they are not broadcasted to the bitcoin network as long as the channel stays open. Instead those involved in a channel will store the transactions locally. This enables instant transactions and a near unlimited capacity within a Lightning Network.
Q 11: Will there be any form of mining to secure the Lightning Network?
A: No, security is provided by the bitcoin miners in the underlying bitcoin network
Q 12: The main chain of bitcoin is secured by a hash rate of 2 ExaHash/s, but a Lightning Network doesn't have any hash rate at all... So how can a Lightning Network be as secure as the main chain?
A: The security in a Lightning Network is extracted from the underlying Bitcoin Network. A Lightning Network cannot operate on its own; it is completely dependent on the underlying bitcoin network for security.
Basically the bitcoin network takes the role as a safety net underneath the Lightning Network. If something goes wrong in a Lightning channel (like your counterpart going offline) you will always have the option to fall back into the safety-net. (You simply broadcast the latest state of your channel as a normal on-chain bitcoin transaction)
Q 13: Does a Lightning Network have its own public ledger or some sort of database of all transactions?
A: No, a Lightning Network does not have its own ledger and there is no database. Holding value on a Lightning Network means that you are in possession of double-signed transactions. The transactions are valid, but they are not yet broadcasted to the Bitcoin Network. The transactions you are holding are of the 2 of 2 multi-signature type. Both you and your counterpart will sign, and you will both store the transactions locally.
These transactions will use a multi-signature address as their input (the funding address) and they will point at two different addresses for their output. One output is pointing to an address that only you can control, and the other output is pointing to an address that only your counterpart can control.
Q 14: How can you say that the Lightning Network is using real bitcoin transactions? You do realize that it’s not a real bitcoin transaction if it’s not recorded on the blockchain?
Short A: To understand this we first need to understand what a bitcoin transaction really is… The fact is; That there are no “coins” in Bitcoin… There are only signed messages and updates to the blockchain.
So lets say that Alice is sending 1 bitcoin to Bob… We call this a per-to-per transaction due to the fact that the ownership of value is transferred directly from Alice to Bob. But Bob does not actually receive a “digital coin” from Alice. The thing that in reality is happening; is that all the nodes in the network will update their local copy of the public ledger. The public ledger is updated so that; the “coin” that was before registered in an address controlled by Alice, is now instead registered in an address controlled by Bob.
Long A: The bitcoin transaction that Alice is sending to Bob, is in reality just a signed message that Alice is broadcasting to everybody. The message is not only received by Bob, but it is broadcasted to all the nodes in the network.
At the time of writing there are more than 5400 so called “full nodes” in the bitcoin network. The following steps illustrates the process that takes place when Alice is sending a bitcoin transaction to Bob:
  1. When Alice is broadcasting her signed message (= bitcoin transaction), it will be picked up by some of the full nodes in the network.
  2. These nodes will independently validate the message (transaction) in accordance with the consensus rules. If the nodes find the message to be valid; they will broadcast the message again so that it can be picked up by other nodes on the network.
  3. Some other nodes on the network pick up the message, and this process continues until all 5400 nodes have independently validated and re-broadcasted the message (transaction)
  4. At some point a miner will succeed in constructing a valid block that includes the message (transaction) from Alice. To make this happen the miner must bear the cost of an enormous amount of electricity.
  5. The miner will now broadcast this newly found block. The new block will be picked up by some of the full nodes. The nodes will independently validate the block and all its content. By doing this they are also validating the message (transaction) from Alice for a second time. If the nodes find the block to be valid (in accordance with the consensus rules) they will broadcast the block again so that other nodes can also receive the block.
  6. Other nodes will pick up the block, validate and broadcast. This process continues until all the nodes in the network have independently validated the block and thereby also validated the message (transaction) from Alice for a second time.
The six steps above demonstrate that a normal bitcoin transaction from Alice to Bob actually involves everyone on the network. The message is independently validated two times by 5400 nodes (= 10 800 validations)
Despite this we are still calling it a “per-to-per transaction” because the actual ownership of value is transferred directly from Alice to Bob* (*But everyone still needs to help by updating their local copy of the ledger)
Conclusion: A bitcoin transaction is just a signed message.
So lets say that Alice wants to send 1 bitcoin to Bob within a Lightning Channel. Alice is storing some of her money in a “2 of 2” multi-signature address. Alice and Bob will both sign a message that transfers the ownership of 1 bitcoin from Alice to Bob. This message is a valid bitcoin transaction, but it is not broadcasted to the bitcoin network.
Instead Alice and Bob both store the transaction (message) locally.
From Bob’s point of view this “double-signed message” has a monetary value of 1 bitcoin. The monetary value of 1 bitcoin comes from the fact that Bob can spend the money on-chain at any time by simply broadcasting the message to the bitcoin network.
Bitcoin transaction = Signed message = Lightning transaction
The purpose of any monetary transaction is to change the ownership of value. In the bitcoin network we change the ownership of value by the use of signed messages
A Lightning transaction is a double-signed message, therefore a Lightning transaction is a real bitcoin transaction
Q 15: I have heard that there will be some fees involved in the Lightning Network.. Who will be collecting those fees?
A: Potentially anyone who is running a Lightning-node. Example: Alice wants to send money to Carol, but Alice does not have an open channel with Carol. But Alice has an open channel with Bob, and Bob has an open channel with Carol. Instead of opening a new channel with Carol, Alice can route the payment trough Bob: Alice - Bob - Carol.
In this scenario it is possible for Bob to take a small fee.
16 Q: In the above scenario; what is preventing Bob from just stealing the money in transit?
Short A: Bob is actually paying out to Carol first, and then afterwards Bob will get his money back from Alice.
Long A: 1. Carol starts the process by producing a random number ( R ) that she will keep as a temporary secret.
  1. Carol then generates a hash ( H ) of R
  2. Carol gives H to Alice
  3. Alice constructs a special transaction that can transfer money from Alice to Bob. But this transaction is only valid if R is included. At this point the transaction is not valid due to the lack of R. Alice also gives H to Bob, and Bob knows that H is the hash of the missing component R.
  4. Bob will now construct another special transaction that can transfer the money from Bob to Carol. But this transaction is also only valid if R is included. At this point the transaction is not valid since Bob does not have access R.
  5. Carol wants her money, so she reveals R to Bob; thereby making the transaction valid.
  6. Since Bob is already in possession of the transaction made by Alice, he can just include R and that transaction also becomes valid. Bob knows that he has been given the correct R because he can check that H is the hash of R.
  7. At the same time Bob also reveals R to Alice. Alice can now use R as proof that she has paid Carol (R becomes the receipt)
Q 17: Where can I find more information about Lightning?
A: http://lightning.network/
https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-286-drinks-on-a-lightning-network
https://letstalkbitcoin.com/blog/post/the-lightning-network-elidhdicacs
https://github.com/lightningnetwork/lightning-rfc/blob/maste00-introduction.md
https://www.youtube.com/watch?v=8zVzw912wPo
submitted by ABrandsen to Bitcoin [link] [comments]

DAG (Directed Acyclic Graph) - A competitor to Blockchain!

DAG (Directed Acyclic Graph) - A competitor to Blockchain!
DAG:
Directed Acyclic Graph (DAG) is an outline which is more expressive than an absolutely linear model. A DAG is an information or data structure which can be utilized to demonstrate diverse problems. It is an acyclic graph in topological ordering. Each directed edge has a certain order followed by the node. Every DAG starts from a node that has no parents and end with one that has no kids. These graphs are never cyclic. A DAG comprises of a set of nodes and arrows where arrows are directed from one node to another.
In simpler terms, DAG is a graph that flows in one direction and elements cannot refer back to themselves. Hence, DAGs are not cyclic.

https://preview.redd.it/r9esxuna13u11.png?width=574&format=png&auto=webp&s=ab5e8ed3b3bdeed586dfa8d8d94e9b2f93569e89
DAG’s components:
  • Nodes or Vertices. Every node represents some information.
  • Arrows or Directed edges. A coordinated edge starting with one node to another depicts some sort of connection between those two nodes. Arrows in a DAG may not frame a cycle.
  • A root node. One of the nodes will have no predecessor. This is the base of the DAG. It is also called a zero node.
  • Leaf node. Some nodes will have no assessors. These are called leaves or leaf nodes.

https://preview.redd.it/mlcakyrc13u11.png?width=504&format=png&auto=webp&s=141f90075c6b10680e04a49198929df2a595e5b7
DAGs in Cryptos:
Did you hear the term DAG coins and thought it’s a name of a new crypto? If yes, then you are probably close to the idea… Actually all digital coins that make use of DAG (directed acyclic graphs) are called DAG coins.
The basic purpose of blockchain based cryptocurrencies was to provide a decentralized, scalable, robust and a fast replacement for financial transactions across multiple mediums. As a matter of fact, all the credit for such a revolutionary idea goes to blockchain. But, is blockchain efficient enough to provide all of this?
Well, not so far. Blockchain has limitations in speed-TPS and scalability- size of the block, Interoperability, and Sustainability.
Many crypto makers are now looking forward to implement DAG instead of blockchain to achieve a different work structure than that of blockchain. DAGs can enable multiple nodes to exist at the same time for recording transactions while in blockchain only one block is used for recording transactions (two blocks cannot exist simultaneously) at a time and a new block is created about every 10 minutes. The blockchain system based on POW slows down due to the miners competing over mining every next block.
DAG can overcome the single chain issue of blockchain by enable multiple chains to exist on the system simultaneously. It may make block less distributed records another standard in the realm of crypto.
DAG or Blockchain:
Blockchains sequential structure hinders significantly the transaction throughput. If the time of mining remains untouched a DAG of blocks can extend the storage by X times with X blocks on the network at the same time. The blend of blockchain with DAG still originates from side-chains. Distinctive sorts of transactions are running on various chains all at the same time. DAG of blocks still depends on the idea of blocks.
It is different from Blockchain. Blockchain is actually a cryptographically verifiable list of records of things that have happened in the past. It has a linked list data structure and every new entry is linked to the previous one such that you can verify it back to the beginning of history. This is how the blockchain is established. This flat sequential nature is the drawback that is apparent in Bitcoin. That is when the scaling issues arise. Even if you increase the size of the block or increase the speed of the new blocks’ creation making it more rapid, still there are a lot of trade-offs.
DAG based cryptocurrencies actually suggest to turn to a completely new data structure altogether. DAG is a completely different form of data structure. It follows a linked graphic data structure where the links are unidirectional. Acyclic means that the nodes cannot refer back to themselves and hence cannot loop. It simply acts as a flow chart where all information is flowing in one direction. It can have multiple parallel nodes that might join back at a single node. You may also relate it to a file directory structure.
The benefit is that every node and arrow does not need to be sequential by nature.
Differences that exist in DAG are:
  • Due to its block less nature, the transactions run directly into the DAG networks hence the speed of transactions increase.
  • There are no miners on DAG systems. The approval of exchanges goes straight to the exchanges themselves. This implies exchanges occur instantly.
  • As assumed, the DAG network picks an existing later exchange to connect to when new transactions occur. The objective is to keep the system width inside a specific range that can ensure speedy transaction approval.
  • DAG will be utilized for applications that require adaptability for thousands of exchanges every second.
Merits/ Advantages of using DAG:
  • More flexible and communicative.
  • No transaction fee
  • Higher scalability
  • Everyone is responsible for both issuing and validating transactions.
  • Network can easily scale
  • More adoption and usage
  • Valuable in machine-to-machine interactions
  • As the size of the network increases, the speed increases too.
  • Quantum resistant
Detriments/ Disadvantages of using DAG:
  • Needs a lot of traffic for its functioning
  • Decrease in network traffic enhances network’s vulnerability to attacks
  • Transaction propagation latency
  • Accumulation of unconfirmed transactions
  • Centralized nature
  • Unproven at a large scale
Implementation Examples:
  • In Ethereum, a DAG is created in every epoch using a version of the Dagger-Hashimoto Algorithm combining Vitalik Buterin's Dagger algorithm and Thaddeus Dryja's Hashimoto algorithm.
  • The Dagger algorithm works by producing a directed acyclic graph with ten levels including the root and a total of 2^25 - 1 values.
  • Ancestry trees are actually DAGs.
Some major projects implementing DAG are:
  • IOTA:

https://preview.redd.it/z74wdrve13u11.png?width=209&format=png&auto=webp&s=d80850b725a870d72eac8029422c1416765ae381
One of the most commonly known DAG coin is IOTA. They call their DAG Tangle. It removes miners completely from the verification process. For broadcasting every transaction you have to validate two previous transactions in order to get their transactions processed. Everybody is participating in the consensus which makes it even more decentralized. The name itself refers to the term IoT- internet of the things.
MIT disclosed a number of mistakes in this data structure and functioning. IOTA would take only 33% of the network power (number of nodes and some amount of PoW attached to every transaction) in order to generate an attack. In such a small network, that IOTA is currently, it won’t be very hard to achieve. Currently they have a central system to validate all transactions which is claimed to be only for the time being but it eliminates decentralization from the system. Currently people claim that IOTA is slow to use. That’s because they don’t have enough full nodes out there to process all the transactions. The network still needs to grow enough to become effusively decentralized.
  • Byteball:

https://preview.redd.it/8a7i9hog13u11.png?width=269&format=png&auto=webp&s=d7113b126619fac416431d7db0693ab830971ccd
It uses a DAG in the place of a traditional Blockchain. Their main net has been out longer than that of IOTA and is similarly a DAG based coin. It has a native currency called Bytes but it does not completely get rid of transaction fee as IOTA does. They have transactions fees implied to avoid scams. Their data structure is very similar to that of IOTA. Here the difference is that you have to pay a fee which will be awarded to the 12 witnesses who are responsible for verifying all the transactions. It eliminates the need to have everybody involved in the verification process. They allow you to achieve more than what you could achieve with IOTA. It has a conditional payment platform is not very robust. They have their privacy coins on the network as well for those who prefer privacy. They have enabled instant messaging systems in their wallets too. It still lacks decentralization as all the validation will be done by the 12 witnesses who will know the real life identities of people as well. They are trying to achieve too much at once which might end up worse. This implementation of DAG is only of a centralized computerized payment system.
  • Raiblocks:

https://preview.redd.it/p18rrwei13u11.png?width=266&format=png&auto=webp&s=b30536e63e613fd1dc69d26d158623402321c088
It is an almost instant, fee-less and infinitely scalable medium for transactions. It also has no miners hence no transaction fee. It has public non-shared ledgers. Every individual has their own block (similar to blockchain) which they verify themselves. This implements PoS called “Balance of vote”. It is an open source project. They have no pre-miners and no ICOs. They have their network and wallet established. The hashing Algorithm this uses is SHA3/Blake2, ED25519 elliptical curve. It is providing unlimited transaction throughput with zero network fees. The problem is that they have a small team hence it is not well developed. This coin is innovative but implements new technology which could produce its own set of problems as it scales.
  • Fantom Foundation

https://preview.redd.it/p1f3mo0k13u11.png?width=289&format=png&auto=webp&s=e71f90629b4e5eb7f9839c87e692f36f0ad36dac
Fantom claims the world’s first DAG based smart contract. It implements the architecture of DAG in the distributed ledger technology. It resolves the issue of speed and scalability present in today's blockchain based smart contracts. It can enable 300,000 transactions per second with fee less than a cent. The transactions will be made asynchronously with instant confirmations. It is aimed to be infinitely scalable. This system will have a lot of bonuses and transparency for trust. It has broad applications in the current market from food-technology to IoT. They call their DAG Opera Chain. It supports verification of people, community management and financial services etc. They use Fantom Virtual Machine (FVM) which will allow executive smart contract bi-code efficiency across all operating systems. The project aims to improve on newer blockchain platforms that are also DAG-based such as IOTA, Nano, Byteball etc. These platforms improve on current blockchain scalability as nodes are designed to process transactions asynchronously.
Fantom differentiates itself by incorporating smart contract DAPP infrastructure into a DAG-based platform so that it offers instant payment, near zero cost (under $0.01 from one wallet to another), and infinite processing scalability.
We do not have any knowledge of successful implementation of DAG as claimed by many projects though it is promising and looks useful for crypto ecosystem.
submitted by rnssol to AllAboutRNS [link] [comments]

Topological Analysis of Bitcoin's Lightning Network

arXiv:1901.04972
Date: 2019-01-16
Author(s): István András Seres, László Gulyás, Dániel A. Nagy, Péter Burcsi

Link to Paper


Abstract
Bitcoin's Lightning Network (LN) is a scalability solution for Bitcoin allowing transactions to be issued with negligible fees and settled instantly at scale. In order to use LN, funds need to be locked in payment channels on the Bitcoin blockchain (Layer-1) for subsequent use in LN (Layer-2). LN is comprised of many payment channels forming a payment channel network. LN's promise is that relatively few payment channels already enable anyone to efficiently, securely and privately route payments across the whole network. In this paper, we quantify the structural properties of LN and argue that LN's current topological properties can be ameliorated in order to improve the security of LN, enabling it to reach its true potential.

References
[1] Albert-L´aszl´o Barab´asi et al. Network science. Cambridge university press, 2016.
[2] Aaron Clauset, Cosma Rohilla Shalizi, and Mark EJ Newman. Power-law distributions in empirical data. SIAM review, 51(4):661–703, 2009.
[3] Lun Li, David Alderson, John C Doyle, and Walter Willinger. Towards a theory of scale-free graphs: Definition, properties, and implications. Internet Mathematics, 2(4):431–523, 2005.
[4] Yuan Lin, Wei Chen, and Zhongzhi Zhang. Assessing percolation threshold based on highorder non-backtracking matrices. In Proceedings of the 26th International Conference on World Wide Web, pages 223–232. International World Wide Web Conferences Steering Committee, 2017.
[5] Satoshi Nakamoto. Bitcoin: A peer-to-peer electronic cash system. 2008.
[6] Mark EJ Newman. Assortative mixing in networks. Physical review letters, 89(20):208701, 2002.
[7] Joseph Poon and Thaddeus Dryja. The bitcoin lightning network: Scalable off-chain instant payments. See https://lightning. network/lightning-network-paper. pdf, 2016.
[8] Stefanie Roos, Pedro Moreno-Sanchez, Aniket Kate, and Ian Goldberg. Settling payments fast and private: Efficient decentralized routing for path-based transactions. arXiv preprint arXiv:1709.05748, 2017.
[9] Benjamin Shargel, Hiroki Sayama, Irving R Epstein, and Yaneer Bar-Yam. Optimization of robustness and connectivity in complex networks. Physical review letters, 90(6):068701, 2003.
[10] Duncan J Watts and Steven H Strogatz. Collective dynamics of ‘small-world’networks. nature, 393(6684):440, 1998.
submitted by dj-gutz to myrXiv [link] [comments]

Bitcoin Lightning Network

https://twitter.com/ico_dog/status/1099026709133905920?s=19 Lightning Network is a new payment protocol that is designed to operate on top of a blockchain based crypto coin like Bitcoin. It aims to solve Bitcoin’s scalability issues by enabling fast and cheap transactions. The protocol was proposed in a white paper by Joseph Poon and Thaddeus Dryja back in 2015. The document describes a network that sits on top of the Bitcoin blockchain and later settles on it. It’s made up of user-generated channels that are used to send payments back and forth between two parties in a secure and trustless manner. This means the involved parties don’t need to trust or even know each other. icodog.io
submitted by sly892 to icodog [link] [comments]

Bitcoin Lightning Network.

https://twitter.com/ico_dog/status/1099026709133905920?s=19 Lightning Network is a new payment protocol that is designed to operate on top of a blockchain based crypto coin like Bitcoin. It aims to solve Bitcoin’s scalability issues by enabling fast and cheap transactions. The protocol was proposed in a white paper by Joseph Poon and Thaddeus Dryja back in 2015. The document describes a network that sits on top of the Bitcoin blockchain and later settles on it. It’s made up of user-generated channels that are used to send payments back and forth between two parties in a secure and trustless manner. This means the involved parties don’t need to trust or even know each other. icodog.io
submitted by sly892 to ico [link] [comments]

Discreet Log Contracts: Explanation and Demo What Can I Use Bitcoin For? How Many Total Bitcoins Are There? Bitcoin Beginners Fair: Bitcoin Regulation & Taxation with Thaddeus Dryja Coinbase Speaker Series: Joseph Poon and Thaddeus Dryja of Lightning Network

Thaddeus Dryja works on the Lightening Network. He is a PhD candidate at the University of Virginia studying cryptographic primitives and network security. Researching on game-theoretic implications of the Bitcoin protocol. Bitcoin articles by or related to Thaddeus Dryja. Lightning Network As A Directed Graph Single Funded Channel Network Topology Der Bitcoin hat uns eine revolutionäre neue Technik beschert: die Distributed Ledger. ... Joseph Poon und Thaddeus Dryja haben der Community bereits 2015 eine Lösung dafür präsentiert: Schaffen wir eine zweite Schicht, die als Offchain Layer funktioniert und das Hauptnetz entlastet. Die Grundidee ist einfach aber technisch schwierig umzusetzen: Zwei Parteien vereinbaren, einen sogenannten ... Bitcoin Development Lightning Network. Joseph Poon and Thaddeus Dryja published the Lightning Network white paper in January 2016. “The Bitcoin blockchain holds great promise for distributed ... The Bitcoin Lightning Network: Scalable O -Chain Instant Payments Joseph Poon [email protected] Thaddeus Dryja [email protected] January 14, 2016 DRAFT Version 0.5.9.2 Abstract The bitcoin protocol can encompass the global nancial transac-tion volume in all electronic payment systems today, without a single custodial third party holding funds or requiring participants to have anything ... Thaddeus Dryja (Tadge) is the creator and the co-author of the Lightning Network who is leading research on scaling and interoperability of cryptocurrencies and Smart contracts at DCI (Digital Currency Initiative) as an open-source developer and research scientist.Tadge is also working with students and other researchers at Massachusetts Institute of Technology (MIT).

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Discreet Log Contracts: Explanation and Demo

http://moneyandtech.com/bitcoin-beginners-fair-bitcoin-regulation-taxation-thaddeus-dryja/ Bitcoin researcher Thaddeus Dryja returned to speak at our next Bi... Joseph Poon and Thaddeus Dryja from the Lightning Network. Joseph Poon co-authored the paper on the Lightning Network, a system to allow for decentralized high-volume payments using Bitcoin. Thaddeus Dryja explains What Can I Use Bitcoin For? Thaddeus Dryja explains What Can I Use Bitcoin For? Skip navigation Sign in. Search. Loading... Close. This video is unavailable. MIT DCI's Tadge Dryja and Gert-Jaap Glasbergen describing Discreet Log Contracts and one implementation of this concept to illustrate Bitcoin settled dollar futures. This presentation was part of ... Thaddeus Dryja on How Many Total Bitcoins Are There? Category Science & Technology; Show more Show less. Loading... Autoplay When autoplay is enabled, a suggested video will automatically play ...

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