7 votes
Accepted

Non-bidirection payment channels for lightning network

There's no fundamental reason why you couldn't use a non-bidirectional link. The onion routing protocol of lightning is ignorant of the channel between two nodes. Hypothetically, if two lightning ...
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  • 28.7k
7 votes
Accepted

What technical reasons exist for off-chain transactions?

Speed An off-chain transaction can complete instantly, without waiting for confirmation. Naming With off-chain transactions, you can send Bitcoins to another user by referencing their username, ...
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  • 28.7k
6 votes

How do off-chain transactions get back on-chain?

Coins don't really move "off-chain", in the described case you would send money to an address at Coinbase that is associated with your friend's account. As Coinbase manages their customers' accounts ...
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  • 64.4k
6 votes
Accepted

How can I avoid paying transaction fees?

Is there a way to transfer/import bitcoin from one address to another in order to avoid transaction fees? No. It is not possible to move btc between addresses without publishing a transaction to the ...
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  • 17.4k
6 votes
Accepted

How can the segwit witness data be "off-chain"? What does it really mean?

No, that's not accurate. Witness data is on-chain, inputs have a similar byte length as before (they are just weighed differently), and the transaction throughput is increased because segwit is a ...
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  • 64.4k
5 votes
Accepted

Where off-chain transactions are registered afterwards?

It doesn't. From the point of view of the blockchain there are just 2 transactions: one going into an exchange address the other is going out of an exchange address. For example: You sent 0.1 btc ...
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5 votes

How does LN solve the liquidity problem?

Whoever made that example doesn't seem to understand how the lightning network works. I think the creator of this scenario is confusing how the lightning network functions with how traditional ...
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  • 8,734
5 votes
Accepted

Is it possible to splice a new participant into a LN channel factory?

You are correct. It is not possible to get Diana into the Channel Factory without a transaction that closes and reopens with Diana. Splicing-in and splicing-out as explained by Decker et al. in the ...
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  • 557
4 votes

How bittrex and other bitcoin trading websites send bitcoin to their one user to another instantly and without any fees?

They are not transferring coins. They are issuing IOUs that are only valid on their platform. The coins are not transferred until a user makes a withdrawal to their own wallet, which usually does ...
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  • 16.5k
4 votes
Accepted

Off-chain transactions with Coinbase

From the perspective of the Bitcoin network, Coinbase owns both the Bitcoins you transferred in, and the Bitcoins they sold to you. This is useful from a technical perspective, because Coinbase can ...
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  • 28.7k
3 votes

Can we benefit from Collatz conjecture-based proof of work?

I believe that paper to be misguided. The properties a good proof-of-work function needs are: Committing to blocks. The contents of a block should be a parameter that goes into the PoW, in such a way ...
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3 votes
Accepted

"state channel" v.s "micro-payment channel" : are they the same?

Payment channels are a specific form of state channels used for forwarding payments (as in the Lightning network). State channels are a more abstract idea: In theory you could use the ideas of ...
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3 votes

How do off-chain transactions get back on-chain?

Do I first need to transfer some BTC to a public bitcoin address owned by the wallet provider? Yes. Is it simply that (assuming I'm correct above) the wallet provider knows my balance off-chain ...
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  • 28.7k
3 votes
Accepted

How are off-chain transactions handled by bitcoind?

First of all, there are many types of off-chain transactions. Any movement of value in BTC that does not directly correspond to a blockchain transaction can be classified as one. This includes: ...
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3 votes

Off-chain transactions with Coinbase

Yes, you have a fully custodial account on Coinbase, thus Coinbase is holding your bitcoins for you. When a customer buys bitcoins or receives a payment from another customer of Coinbase, Coinbase ...
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  • 64.4k
3 votes

Off chain transactions

An off chain transaction is a change in BTC ownership (a payment) that is not a Bitcoin transaction (not just an invalid or non-standard one; it's something unrelated entirely). If I hand you a ...
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2 votes

If lightning network transactions are "off chain", can we still see the transaction history then?

Are the transactions private or public? Mostly private. If you are not involved in a transaction (i.e. not a sender, receiver, or intermediary), you really won't know anything about the transaction. ...
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  • 62.3k
2 votes
Accepted

Implementing an "ad-hoc-like network of payment channels" on top of Bitcoin network?

This is absolutely possible. The negotiation between the payment-channel participants can happen over the ad-hoc network. However, each participant must still run a fully validating node at all times ...
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  • 2,423
2 votes
Accepted

off-chain payment channels: Do we need to trust "Payment Service Providers"?

In lightning network payments are onion routed. The only thing a PSV could reveal is the previous and next hop, but they can not know the origin or the destination. They know it came from Alice, and ...
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2 votes
Accepted

Will the Bitcoin Network Security decrease after the last Bitcoin was mined?

Off-chain protocols like Lightning and sidechains can offer instant settlement but they come with their own set of trade-offs. Lightning requires you to be online 24/7 to monitor the chain and the ...
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2 votes
Accepted

Is one lightning network channel equal to one transaction?

No you don't need to open a channel with everyone whom you want to pay. The lightning network is a network of payment channels. This means that you can use the first channel to send money to other ...
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1 vote

What if all transactions are off-chain in Bitcoin?

I agree that a future could emerge in which most payments will be handled offchain. Whenever you want to pay someone and it can't be done via lightning you could just open a payment channel for that ...
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1 vote

Why, how, and when should an intermediate LN node terminate/resolve its HTLC(s) off-chain?

First I would recommend to read BOLT2 in the section normal channel operation in order to understand exactly how and when htlcs are resolved. The whitepaper is heavily outdated and only explains the ...
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1 vote
Accepted

How does exchanges, such as coinbase handle off-chain transaction?

Yes, exchanges tend to have huge cold wallet where they amass and send most of their bitcoins ( you can even follow those addresses by each exchange on the top 100 richest bitcoin addresses ) When a ...
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  • 2,391
1 vote

Where off-chain transactions are registered afterwards?

The information that ends up on the blockchain is the balance of all the payments between us. Imagine I commit to up to $200 going to you, and you do the same to me. That's the opening transaction ...
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1 vote
Accepted

How do nodes communicate over Lightning network?

You are confusing two things here: payment channels and network communication. A payment channel is really the set of commitment transactions and their revocations. It is unrelated to network ...
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  • 62.3k
1 vote

How bittrex and other bitcoin trading websites send bitcoin to their one user to another instantly and without any fees?

Your deposited funds are in the custody of an exchange. Since your payment instruction only moves the exchange's obligation from you to the recipient, it is detrimental to make an on-chain payment. ...
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  • 64.4k
1 vote

How do offchain transactions get validated/confirmed whilst using Lightning network?

Individual transactions on the lightning network will never be confirmed on the blockchain. However, the net sum of value passed back and forth on a single channel (regardless of how many lightning ...
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  • 8,734
1 vote

How are off-chain transactions handled by bitcoind?

An off-chain transaction means in simple terms that the parties involved in the transaction basically exchange their private keys. Say you want to pay your friend 1 BTC. You would just give the ...
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1 vote

Offchain transactions

Coinbase will do an offline transaction depending on whether the recipient address is part of coinbase wallet. If recipient address is part of a coinbase wallet then the tx can be easily done offline, ...
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  • 1,892

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