

Bitcoin Lightning Networks Part I: Revocable Transactions - RustyRussell
http://rusty.ozlabs.org/?p=450

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nightTrevors
This is fantastic, I can't wait to see who emerges as the first lightning
network payment channel provider. This helps alleviate fundamental issues with
the current implementation of Bitcoin without the need for a hardfork, and
could even be a solution to the wallet identification issue if the payment
channel provider acts as domain name registry. ie instead of accepting
transactions to an ugly string I could accept transactions to
ntq.blockchain.info.

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RustyRussell
Note: parts II - IV are there as well. I delayed posting until I'd finished
them all.

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Nimi
Thanks!

I prob. missing something about [you're] "handing me your private keys to
unlock that 1c output. Now if you ever released Transaction 1, I can spend
both the outputs". What happens if you release transaction 1, then immediately
release a transaction moving the funds away from that address? Seems like I
have to be very vigilant and closely monitor the blockchain, fearing this will
happen?

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RustyRussell
It requires dual signatures. One party has them both, the other doesn't: the
one without has to use the pre-signed 1-day-locktime transaction.

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ianpurton
Is the purpose of this to lower the amount of transactions heading towards the
blockchain ?

For example part 1 looks like a way to do recurring payments where the
receiving party is guaranteed to get their money but they don't need to
broadcast a transaction for each payment received.

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maxerickson
That's a side effect, but it's more about being able to share control over the
funds with the other party without fully committing them.

Then they can let you instantly spend them on things.

There is substantial complexity, and they would have to monitor all the
addresses used to make sure that you don't try to commit an early transaction
to the blockchain and bounce the funds out of the shared address.

Anyone offering blockchain services should anyway have automatic processes
making sure that the blockchain records of their active addresses correspond
to their internal accounting, but it is repeatedly the case that these
operations don't even do internal accounting.

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FeepingCreature
That is really cool!

