Friday, July 21, 2017

The lightening network for crypto

Lightening ledger network:

The Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed.Bidirectional Payment Channels. Two participants create a ledger entry on the blockchain which requires both participants to sign off on any spending of funds. Both parties create transactions which refund the ledger entry to their individual allocation, but do not broadcast them to the blockchain. They can update their individual allocations for the ledger entry by creating many transactions spending from the current ledger entry output. Only the most recent version is valid, which is enforced by blockchain-parsable smart-contract scripting. This entry can be closed out at any time by either party without any trust or custodianship by broadcasting the most recent version to the blockchain.

It is a chained queue for the master block chain.  It is not custodial, sothis is an untrusted system.  Transactions are accumulated and only balances referred to the block chain on check out. So, on check out I guess the bot runs through the chain clearing your IOUs and UOIs; and you should force that now and then.

Lightening came up in a previous post, and I think it cause some coagulation of the network with a few larger channels operating as the custodial holders, and we are back to a trusted network.  In all the the ledger schemes, the ledger congestion risk matches the card not present risk, and side chaining makes sense. The custodial blockchain account yields huge efficiencies.

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