Lightening network

OK, lightening network is a swap protocol, something a group of traders can agree to on Telegram, for example. The idea is to defer the call to ledger while trading within the group.  The security is based on the revokable within timeout function on the ledger, every ledger needs a one step crawl back within timeout function.

So, let me say, I am not the expert on lightening, but I am great at hand waving the general idea.  Each trader in the group has a notary that watches the ledger, the notary is looking for a premature revoke from any member of the group. Once a bad player revokes, the pending payments reverts to the prior state, except parties pay the revoke transaction fee.  The revoke fee is a burden on all traders,they are incentivized to trade with known good players.

So a new trader enters the trading group and establishes a transfer to the group wallet.  Trader trader can spend the reserved bitcoins, pure liquidity transfers within the group, which keeps an exposed accounting system with instant balancing.  At any given time a trader exits the group by settling the payable on the group wallet, then the net payment is made on the blockchain, the revoke canceled, the player takes the winning or losing to another point on the ledger.

The general idea is the ledgers are off the hook until accounts settled, and the group is responsible for intermediate accounting security.  The group wallet has already accumulated the signatures need to settle the trader account on the blockchain (or other ledger).

In a technology rich swap net, like Telegram, the group wallet can be combined with prequals, crypto badges that indicate the relative history of revokes for the trader. In an environment, like Telegram, is should be possible to make legally enforceable contracts with trader,  stop the premature revokes or get sued.  

The concept really enable asynchronous S&L pits within the group, automatic borrow or lend as needed to mark to maket.