This Video focused on the technical details of how the layer two lightning network works. As such I have made a followup video talking about it in a much simpler manner which answers a lot of questions below so check it out. Also believe it or not you've already used a layer two network th-cam.com/video/l-pzpacKiV8/w-d-xo.html
Franklyn [Litecoin] Hey Franklyn, First of all thanks a mil for all your informative videos. You have a great gift, explaining these rather abstract concepts to an inclined, broad audience. I'm curious about the any term goals for litecoin; technical wise. There aren't much github commits, compared to e.g. vertcoin, bitcoin, decred etc. Don't get me wrong, I totally stand behind LTC, for its 'ethical profile' and values. Just hope, that beside the efforts on general PR and merchant marketing, the technical side of the project will thrive as well. Would be nice to see an update on the road map. Happy to contribute or support.
Franklyn [Litecoin] Keep the banksters out!! With the lightening network They just created an unnecessary and more problematic solution to an easy problem. Think of this, DGB (Digibyte) can easily run ALL of the top 50 coins transactions listed on coinmarket cap... on chain (NOT OFF) AND faster than lightening and with lower fees... and its an unparralled privacy coin to boot... please educate your audience how incredibly important the DGB tech is. Thx for your vids, I always look forward to your material. Thx
The big issue here is that the common hubs that the system will naturally gravitate towards are big business and financial institutions. Supermarket chains, Petrol Stations, Utility companys and similar will all be the hubs with the most edges and as a result our payments will end up going through them, probably without us even realising it. This seems counter intuitive towards the whole blockchain/ Bitcoin ideal, which from the whitepaper itself is supposed to be a peer to peer system without financial institutions. And another thing. Brian will be charging a fee in your example, right? Now replace Brian with the companies I mentioned above and you begin to see the problem.
Thank you very much! You put into usable/every day terminology a concept I have been wanging people over the head with for the last year or so. I've explained it multiple times, in multiple ways, and have gotten way more in depth with regard to the other implications of the way LNs are described to operate, but I think your explanation is a bit easier for most people to understand.
Why is this a bad thing? im not sure ...seems 6 to one half doezen to the other....the gov the banks ect ect all know our online transactions as it is right now ....how come you cast this in a negative light? the banks and large institutions like grocery stors gov and big buisnesses charge us fees ect ect now as well..i see thisas more competition and and will force them to lower the fees if they want us to use fiat money , visa, and debt/interact tranfers...either wat i dont see this as a badthing. unless the fiat simply charges no fees and these litecoin and segwit starts charging transfer fees ect ect ....you cant get away from fees it just wont happen unless you cut out the middle man but even in the matrix there is still a middle man.there is always a middle man.
It's not a problem. With a decentralized system like this in place, anyone can set up a competing network with lower fee's, and these chains will simply be bypassed. The network is also being built so that chains of contracts only have exposure to the two nodes they are directly dealing with, so routing around a node that is passing through a high fee node, will be transparent and easy. This is going to be the end of payment lock in to specific channels such as Visa, and the end of exposing private information en mass to companies that centralize and expose it regularly. Win Win
You lie and your breath stinks. LNs are meant to create an obfiscation layer. Specifically LNs are to create an environment whereby all of the wonderful fuckery that pushed most of us into crypto will be possible, with even more power to abuse the monetary markets we use to pay for our groceries, and by the same entities who pushed most of us into crypto. If you do not see that, you are caught up in this whole "it's gonna be a mesh-network that will magically make tx fees cheaper". Sorry bro, read the paperwork and some legislation. It's all there in black-and-white, and what it describes is nothing like what you have in mind.
How would this work with lets say Walmart? I open a channel for how long? (assuming I go there on a regular basis, few times per month?) once a channel is open can you extend the time? can you shorten the time? Can I keep the channel open while adding funds?
+Micky G you would need to update the channel. So tell Walmart to create a new refund to you with a different amount and nLT (higher/lower) for another month. Once the old refund nLT is up if it hasn't been cosigned it will no longer be valid and is replaced by the new one.
I'm Bittle confuse about the variance of the fees in bi-derectional animation. Please, give more datails about flow. What is the correlation about between the increase n lock times and variance of the fees in bi-derectional animation?
+Franklyn Correct me if I am wrong but you will not be able to use the BTC/LTC you have received on the lightning network to pay someone outside of the current channel until the channel has been closed. The transactions wouldn't be recognized by outside parties or nodes until it has been mined into a new block. For that reason most vendors would prefer a shorter time period for the channel between the customer and the business so that they can use the BTC/LTC they have been paid. The lightning network is more suited to people that exchange BTC/LTC both ways between each other as in friends or coworkers.
+Ryan Zandbergen pretty much, the coins never leave the multisig until the channel closes. When the channel is closed that's when transaction fees must be paid for it to be included in a block so it can properly be sent back to the parties. Hence this is pretty useless for one off payments and much better suited to more frequent reoccurring payments as fees only need to be paid once everything is closed. Then again If you use a big middle man with lots of coins you can fill up with them and they can pay people on your behalf, this is the hope as then business will receive many small payments from one big middle man meaning only one channel and users can use this middle man for any business connected to them. In a way the LN has to be centralised to work.
Thank you. Now, I am not the only one sharing this thought ... ;-) Yes. I state in "mauesxx" thread, businesses will want to close/cash out the payment channels on a weekly basis to cover operating costs (e.g., salaries). If I understand things correctly, the benefits of LN may be marginal at best.
Is the idea that people would keep an active payment channel at all times to continue participating in btc transactions? If you open and close per transaction, the benefit of LN isn’t realized, right? But keeping a channel open vs closed is equivalent to the user since a block chain coin vs an off chain IOU has equivalent value and can be withdrawn just as easy? So there is no downside for an individual to keep an active channel for a long period of time?
I am not an expert at this in any means, however from my basic understanding the funds will not be accessible to the other party until the LN Channel is closed. In order to close the channel you will have to pay a fee. So the question is are you willing to pay a fee to receive your funds now rather than later, and then pay fees to open a new channel with the same party at a later date? Or would you rather keep the channel open, not have the money directly accessible, however be able to avoid have multiple fees for opening and closing multiple LN Channels. (Please feel free to correct me if I am wrong, however this is how I have understood it thus far)
I am getting ready to put up my latest LiteCoin blog post about things. It will be on Steemit shortly. Keep up the good work, I am happy you guys are doing well. I am newer to Crypto but liked you guys right from the start. Say hi to Charlie LOL. I tweeted him again today.
I think it would be really helpful if you explain in more detail what you are talking about from about the 1:13 mark onward. I am familiar with multisig accounts, and time locks, but fail to understand what you mean by refund. With a shared account why does Lucy need a "refund tx to her with a time lock" to send her own funds to the shared account?
I think 'escrow' is what you meant by refund account, is the shared multisig account only for insurance in case a simple A-B transaction isn't fulfilled? This sounds like the basics of smart contracting, where parties make an escrow deposit and if a party cheats they sign their escrow account signature and the other party (or both) lose their escrow deposit.
Great vid. A little gear feedback - there's a lot of enviromental noise in the sound while you talk. I'm not sure if the mike and the setup you're using was a good choice. I'd recommend trying some directional mic (like rode mic pro) or lavalier (like rode smart lav).
My question: I still dont see how this scales billionfold. as long as the consumers just send bitcoin to different adresses and dont receive bitcoin in the same time, almost every transaction has to be mined in the blockchain finally. only if the hubs like amazon and walmart etc. have bidirectional transactions in the same time, the LN reduces the number of transactions in the blockchain. Where am I wrong?
Sorry for being stubborn, but i made around 10 transactions this year from and to different public keys. I still dont see, how a LN would have reduced the mining effort. It would delay the mining, until the channels are closed. But then? In my current understanding, it just helps, if you make transactions back and forth or in a circle. But who does this really?
I don't see why you draw the conclusion that segwit will never activate on bitcoin. It's adoption is slow, but a new version of core is ALWAYS slow in terms of adoption.
+Adam Barlow we don't say it won't happen rather based on the 95% activation threshold it's currently highly unlikely. See our segwit video where we discussed this in more detail. But in short, pools amassing a total of 5%+ of the network have publicly stated they will not support segwit.
95% was chosen after seeing the problems that 75% had in the testnet. Lots of orphaned blocks and general chaos so I hear. Theoretically, any percent, even 10%, could start using a new soft-fork version without waiting, but they would effectively be cutting themselves off from the rest of the network and starting an altcoin. 95% is what is currently in the consensus rules for segwit, but any bitcoin version could choose whatever level of consensus it wanted, and as long as users decide to update to that version, users running that version will respect whatever consensus level that version runs.
As far as I could understand, bitcoin bottleneck is num tx per second, which is ~~10. So how can you speed it up if you create extra more transactions for one payment??
still don't get it... If your transactions are not on the blockchain, how safe is all that stuff? (crashes, hackers, ...) When is your wallet on the blockchain updated? twice per year?
So... Basically, it's based on smart contracts where the network "knows" based on the contract(s) where the coins are supposed to go, even if they haven't actually been confirmed by the network? Or, something..?
+meauxx yes it needs to be centralised to work. It's a layer 2 network however so it's optional for users what really matters is that the main network it sits on top of remains decentralised.
Thanks a lot for your answer. That clears a lot of things up. 1 follow-up question: Won't transactions through the LN be cheaper than directly to the blockchain and thereby force people to use the centralized LN-layer?
+meauxx LN transactions are just IOU's so they won't cost anything until you publish the final agreed transaction to the blockchain. That final transaction will have a fee just like any other transaction on the chain, all that happens is you get around having to pay fees for all the individual transactions that took place in the payment channel that led up to it. Transaction fees are dynamic they aren't constant they are supply/demand based. If people use the LN then less transactions will happen on chain resulting is lower fees, if no one uses it then the fees will remain high. It doesn't force so much that it incentives.
Franklyn I get it. So for example, if Walmart handles 1,000 bitcoin transactions between 1,000 users per day. When they close out all of the IOUs at the end of the day, they can consolidate all of the transactions into 1 transaction on the bitcoin network. Saving the bitcoin network from being clogged with 1,000 unique transactions
It is the best video on the subject to this day, but honestly, it needs more animations. We need a bigger whiteboard, that would show where is the money at any given time, and where "it is" if someone cheats. You know, to assert that this transaction is as good as typical bitcoin transaction (if we can connect to the internet once per week).
And what happens if the banks become the nodes between users. And how long it takes to be able to use your money once it is sent. Bitcoin was supposed to eliminate the middlemen, remember? Eliminate central banks and those who control, manipulate and use the money supply to their own ends. From looking at the Lightning Network in the diagrams it seems this will take Bitcoin back a few steps and none forward.
Would everyone opening a unidirectional channel with bitpay a good example? How do I prove to bitpay that I have the money? Should I deposit all my money to the multi sig address first? Also, why does Lightning need segwit? What happens if the txn fee of the multi sig address ( when at last it would be recorded to the blockchain) too low and doesn't go through??
+Ephraim Raj you would first open a channel with bitpay then ask them create a refund for the amount you plan to deposit with them. Next deposit that exact amount into your shared multisig address. Otherwise funds can get stuck when attempting to remove them. Bitpay However will most likely, being a trusted business be gladly willing to sign another refund if you ask them, just incase you were to deposit the wrong amount. You can use this set up currently but the LN plans to be a used on a mass scale with its own user software. Previously exchanges have blamed theft and other issues on transaction malleability. Segwit is one way of fixing that to protect users and businesses.
Do you mind adding subtitles or a script of your video in the TH-cam video description? It is personally difficult for me to understand you because of your accent (I do like it, though!). I am trying to learn more about cryptocurrency, specifically, LTC, because I have heard many good things about it. If you included some words for me to read, it would be easier for me to watch the video. Thank you.
my question is if person A doesn't have the funds to send to person C through B. Then B and C both broadcast on the block chain that they haven't received their money, how will they get paid? This allows for theft do be done on the part of person A purchasing something at the store. Person C should be able to check to make sure person A has the funds before they process the payment.
+Jnate Finley person C doesn't need to know how much is in A & B's channel. So long as A pays B then B will pay C. This process is near instant so C will know in store that they have been paid for the items A is purchasing by the payment and the hash associated with it. A channel is just an address on the blockchain. A and B know their address and each knows who owns what in it and the same goes for B and C.
so ive heard some people say its centralized, and some people say its decentralized. but really, it can be both right? you can have the 3rd person (in this vid brian) in betwee, and its centralized. but if you dont want to use a centralized exchange, you can do the 1st version of trade without someone in between the 2 trading partners -> decentralized
As I understand payment-channels, like the lightning network, they are working off chain (no record in the blockchain). The only record to the blockchain is the deposit transaction to open the payment-channel and by closing the payment channel. But later all the transactions inside the payment-channel running on centralized servers, like traditional bank transfers. This is very fast, and could be very cheap if there is competition. But how the banks, who would run such payment-channels can secure that inside the payment-channel the transactions are not hacked and safe? And how the bank guarantee the customers that they dont double spend the funds if inside the channel all transaction are totally anonymous?
Pro-tip, audio quality will be much better if you move your mic up close. Such a nice piece of equipment, but with it as far as it is, you're not realizing the real quality and picking up a TON of echo off the table.
To those who understand lighting reads lightening. It works by delaying consensus off of main chain through off chain Cumulative lump sum. That means the transactions are not final. And should themain chain suffered failure all this secondary layer transactions will be compromised.
One question: say you're a coffe vendor and you've received some money via the Lightning Network. Since the transaction isn't being published on the blockchain, how can you spend that money that you received? I mean in case you need to pay someone who isn't part of the Lightning Network.
+danyt19 you would need to close the channel and broadcast the transaction to the blockchain. That way the coins leave the multi Sig and go to the respective people in the channel.
Alright, fair enough. But now again in the coffee vendor case, say you receive payments from 50 people throughout the day, of 1 pound each. At the end of the day, you want to spend the total of 50 pounds that you made in a single transaction to someone who isn't part of Lightning Network. Would that mean that you have to publish all 50 transactions on the blockchain?
+danyt19 depends how many channels their funds are in. Are they between the person and the vendor or are all the people using one middle man? If they all use the middle man the vendor can close the channel and it will publish one transaction that was really 50 small individual ones.
Worst case scenario, each payment came through a different channel so the vendor would have to publish 50 transactions on the block-chain to be able to spend the money. Best case scenario, they all came through the same channel, using the same middleman. The vendor can indeed publish only one large transaction. However, this would transfer quite a bit of money to the vendor out of the middle man's account, corresponding to 50 customer payments. At some point, the middle man might need to send some bitcoins as well, and will eventually have to redeem those 50 Lightning Network transactions (perhaps not all of them at once). Either way, all of the 50 transactions will eventually need to be posted onto the block-chain in order for that money to be spent.
+danyt19 correct 50 transactions means 50 sets of transaction fees which is what the LN wants to avoid. That's why it will be centralised you need big rich middle men to facilitate trade.
Since it's on a side chain doesn't that mean the miners won't get the transactions fees? what happens when the deflationary rate hits zero and there are no more new bitcoins being mined, just transaction fees.
Mario Dian. I actually found an Andreas Antonopoulos Q&A about lightning network. It is a side chain, there is no doubt about that. Miners only get fees for opening channels and those channels can turn into a dozen other transactions that the miners collects no fees on.
Channels also have to be closed at some point if you want to get the advantage of full Bitcoin security. It's not a sidechain. It uses Bitcoin's blockchain and nTimelock transactions. Sidechain would use its own chain as it's obvious from the term itself.
+Foyva the LN is not a side chain. A side chain is its own separate blockchain pegged to the parent where assets can be moved from one to the other (see my video on it for greater detail). The LN is a layer 2 network which means it's on top of the parent network. Your opening multisig addresses between users and sending partially signed payments to each other from it, the payments are as good as real but you won't really own those coins until the channel is closed and the transactions broadcast on the network. It is not it's own blockchain.
Franklyn [Litecoin Association] Franklyn [Litecoin Association] ok maybe side chain isn't the right term, but it's not on chain. I'm not sure what to call it. Andreas states that it does take transactions off chain and away from miners, though he does say he doesn't think it will effect network security in terms of mining hash power.
Smart contracts is exactly what Bitcoin is missing. As a buyer online, you need to trust the seller will honour your purchase with traditional on chain transactions. This seems to solve this.
What if you go out to dinner and someone can't pay cause they aren't linked to a massive Darden chain? Or maybe you connect your wallet on the spot with a Darden franchise, but what if it is a small mom and pop local diner? You realize the point of decentralization is antitheitical to corporate structures like Darden as we know them today?
Miners who can see the big picture probably know they can make more from the value of bitcoin increasing (block reward) due to bitcoin being more useful, than from tx fees.
Excellent video. Thank you however think it would have benefited if you had put the blockchain there so that it would be visible where the blockchain is at all times and when it would come into play.
Watched it 5 times (3 times @ 0.75 speed !) to understand. Awesome concept. Bitcoin will became the DECentral Bank of the global monetary system and Mike and other middle man would be the banks. WoW ! But questions come then : - When Lucy or Alex send 100 coins to a multisig adresse, this transaction has to be recorded on the blockchain, right ? - Where are recorded the "blue" transactions ? in the set of unused transactions output (UTXO) of Bitcoin protocol ? If yes, scaling problem come back as this dataset will grow very big and as Bitcoin full nodes need to keep it up to date, doesn't it ? - If the blue transactions are stored in the UTXO, can someone produce billions of pending blue transaction to DoS Bitcoin protocol ? - if the unlock time is authorised to be longer than the previous one then we can have fractional reserve monetary creation mecanism, right ?
The elephant in the room is: what happens to bitcoin when mining stops? All of these transactions regardless of scaling require miners to operate. Their is no incentive for mining to continue to operate if all they are participating in is nominal transaction fees. What happens to bitcoin then? Fizzle.... pop.
This seams far too complicated for the average user. And its also bs to lock your btc's in the lightning network for days or weeks and not being able to spend them. I think IOTA and similiar coins will replace this nonsense.
Btc and ltc are the actual digital money the others are something else let's store value in btc and use ltc for payments and exchange the gold to silver analogy does actually work and we should promote this idea anew for 2017 both to shield from btc political drama and to show that ltc is the only viable alt as it works like btc and therefore is legit decentralized value. Btc and ltc are the only projects where the ledger is open enough to be regulated and still survive and yet also decentralized enough to continue as money in a stable fashion... even if the core elders face oppression the networks are wide enough to keep surviving whereas most of the Alts have human centralized organizations that can be destroyed. Anyhow thanks for the great work please keep supporting btc/ltc 👍
Bitcoiners would hate for bitcoin as a whole to become centralized. But remember, lightning is just one possible use case of bitcoin. As long as the bitcoin network itself remains decentralized, bitcoin should do just fine. also keep in mind that even if this lightning becomes "centralized", it should be ok as long as it remains trustless - can it can remain trustless as long as the underlying network is decentralized since lightning channels can be trustlessly opened and closed directly on the decentralized blockchain.
that is way too complicated. How the hell am I going to explain that to a family member? It seems like me doing all of that I could of sent 20 Bitcoin cash transactions back and forth by time I sent one of those. -.- . I rather do business one-on-one with somebody than have more people in the mix. And I thought Bitcoin was about no reverse transactions???
Opened the video for lamens explanation, saw nice diagrams... then you started off with "Lucy sends Alex directly..." so I grabbed my popcorn and buckled up. The next 7 minutes was "漢zaf語fadf語ж耳з目fк語лмнéпрстф" Give it another go dood
This is exactly why Dash will end up beting bitcoin. Only nerds can understand this. Nothing personal, I'm a nerd, but it's true. The average person won't even bother with this unless it's much much simpler.
Good luck getting the average user to use this lol most of the people I know dont even understand bitcoin or how to use a regular wallet yet properly etc. Also who or what is processing these transactions?
NichoTBE Miners process the payments on the og block chain later when the channel closes. The transaction is really just a contract signed off chain between the nodes.
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This Video focused on the technical details of how the layer two lightning network works. As such I have made a followup video talking about it in a much simpler manner which answers a lot of questions below so check it out. Also believe it or not you've already used a layer two network
th-cam.com/video/l-pzpacKiV8/w-d-xo.html
Franklyn [Litecoin] Hey Franklyn,
First of all thanks a mil for all your informative videos. You have a great gift, explaining these rather abstract concepts to an inclined, broad audience.
I'm curious about the any term goals for litecoin; technical wise. There aren't much github commits, compared to e.g.
vertcoin, bitcoin, decred etc.
Don't get me wrong, I totally stand behind LTC, for its 'ethical profile' and values.
Just hope, that beside the efforts on general PR and merchant marketing, the technical side of the project will thrive as well.
Would be nice to see an update on the road map.
Happy to contribute or support.
Franklyn [Litecoin] Keep the banksters out!! With the lightening network They just created an unnecessary and more problematic solution to an easy problem.
Think of this, DGB (Digibyte) can easily run ALL of the top 50 coins transactions listed on coinmarket cap... on chain (NOT OFF) AND faster than lightening and with lower fees... and its an unparralled privacy coin to boot... please educate your audience how incredibly important the DGB tech is. Thx for your vids, I always look forward to your material. Thx
So the solution to slow speed is centralization?
I've got to admit, was hoping for something a little easier to understand.
Well you are wrong. This system is shit, but Blockchain is amazing, and it's allowing for brand new things to occur that were not possible before.
@tenminute you're a proof of stake.
UrTwiN p
do you understand how visa and MasterCard work?
You don't have to :) Just use the software and know it's secure and all automatic.
The big issue here is that the common hubs that the system will naturally gravitate towards are big business and financial institutions. Supermarket chains, Petrol Stations, Utility companys and similar will all be the hubs with the most edges and as a result our payments will end up going through them, probably without us even realising it. This seems counter intuitive towards the whole blockchain/ Bitcoin ideal, which from the whitepaper itself is supposed to be a peer to peer system without financial institutions.
And another thing. Brian will be charging a fee in your example, right? Now replace Brian with the companies I mentioned above and you begin to see the problem.
Thank you very much! You put into usable/every day terminology a concept I have been wanging people over the head with for the last year or so. I've explained it multiple times, in multiple ways, and have gotten way more in depth with regard to the other implications of the way LNs are described to operate, but I think your explanation is a bit easier for most people to understand.
The Bright Pixel true so basically it takes a lot of energy for it to work compared to paper money that is cheaper to produce
Why is this a bad thing? im not sure ...seems 6 to one half doezen to the other....the gov the banks ect ect all know our online transactions as it is right now ....how come you cast this in a negative light? the banks and large institutions like grocery stors gov and big buisnesses charge us fees ect ect now as well..i see thisas more competition and and will force them to lower the fees if they want us to use fiat money , visa, and debt/interact tranfers...either wat i dont see this as a badthing. unless the fiat simply charges no fees and these litecoin and segwit starts charging transfer fees ect ect ....you cant get away from fees it just wont happen unless you cut out the middle man but even in the matrix there is still a middle man.there is always a middle man.
It's not a problem.
With a decentralized system like this in place, anyone can set up a competing network with lower fee's, and these chains will simply be bypassed.
The network is also being built so that chains of contracts only have exposure to the two nodes they are directly dealing with, so routing around a node that is passing through a high fee node, will be transparent and easy.
This is going to be the end of payment lock in to specific channels such as Visa, and the end of exposing private information en mass to companies that centralize and expose it regularly.
Win Win
You lie and your breath stinks. LNs are meant to create an obfiscation layer. Specifically LNs are to create an environment whereby all of the wonderful fuckery that pushed most of us into crypto will be possible, with even more power to abuse the monetary markets we use to pay for our groceries, and by the same entities who pushed most of us into crypto. If you do not see that, you are caught up in this whole "it's gonna be a mesh-network that will magically make tx fees cheaper". Sorry bro, read the paperwork and some legislation. It's all there in black-and-white, and what it describes is nothing like what you have in mind.
How would this work with lets say Walmart? I open a channel for how long? (assuming I go there on a regular basis, few times per month?) once a channel is open can you extend the time? can you shorten the time? Can I keep the channel open while adding funds?
+Micky G you would need to update the channel. So tell Walmart to create a new refund to you with a different amount and nLT (higher/lower) for another month.
Once the old refund nLT is up if it hasn't been cosigned it will no longer be valid and is replaced by the new one.
oh i forgot to ELI5 that please.
Very nice video, especially the animations, narration etc.. and even the background music. However, plz give another go at explaining..
Is it possible with Lightning Network to prevent spend balance two times if transaction not get part of the blockchain?
What incentive does miners have to support the Lightning Network?
So just for clarification once the lightening network is implemented on bitcoin this will indeed lower fees ? Right ?
So how will this be implemented?? Through a fork or will it directly effect the official bitcoin and litecoin block chains???
excuse me, what software you use to build that animation? thx
I'm Bittle confuse about the variance of the fees in bi-derectional animation. Please, give more datails about flow. What is the correlation about between the increase n lock times and variance of the fees in bi-derectional animation?
Does anyone know when will the lighting network be in used?
+Franklyn Correct me if I am wrong but you will not be able to use the BTC/LTC you have received on the lightning network to pay someone outside of the current channel until the channel has been closed. The transactions wouldn't be recognized by outside parties or nodes until it has been mined into a new block. For that reason most vendors would prefer a shorter time period for the channel between the customer and the business so that they can use the BTC/LTC they have been paid. The lightning network is more suited to people that exchange BTC/LTC both ways between each other as in friends or coworkers.
+Ryan Zandbergen pretty much, the coins never leave the multisig until the channel closes.
When the channel is closed that's when transaction fees must be paid for it to be included in a block so it can properly be sent back to the parties.
Hence this is pretty useless for one off payments and much better suited to more frequent reoccurring payments as fees only need to be paid once everything is closed.
Then again If you use a big middle man with lots of coins you can fill up with them and they can pay people on your behalf, this is the hope as then business will receive many small payments from one big middle man meaning only one channel and users can use this middle man for any business connected to them.
In a way the LN has to be centralised to work.
Thank you. Now, I am not the only one sharing this thought ... ;-)
Yes. I state in "mauesxx" thread, businesses will want to close/cash out the payment channels on a weekly basis to cover operating costs (e.g., salaries). If I understand things correctly, the benefits of LN may be marginal at best.
Is the idea that people would keep an active payment channel at all times to continue participating in btc transactions? If you open and close per transaction, the benefit of LN isn’t realized, right? But keeping a channel open vs closed is equivalent to the user since a block chain coin vs an off chain IOU has equivalent value and can be withdrawn just as easy? So there is no downside for an individual to keep an active channel for a long period of time?
I am not an expert at this in any means, however from my basic understanding the funds will not be accessible to the other party until the LN Channel is closed. In order to close the channel you will have to pay a fee. So the question is are you willing to pay a fee to receive your funds now rather than later, and then pay fees to open a new channel with the same party at a later date? Or would you rather keep the channel open, not have the money directly accessible, however be able to avoid have multiple fees for opening and closing multiple LN Channels.
(Please feel free to correct me if I am wrong, however this is how I have understood it thus far)
I am getting ready to put up my latest LiteCoin blog post about things. It will be on Steemit shortly. Keep up the good work, I am happy you guys are doing well. I am newer to Crypto but liked you guys right from the start. Say hi to Charlie LOL. I tweeted him again today.
I think it would be really helpful if you explain in more detail what you are talking about from about the 1:13 mark onward. I am familiar with multisig accounts, and time locks, but fail to understand what you mean by refund. With a shared account why does Lucy need a "refund tx to her with a time lock" to send her own funds to the shared account?
I think 'escrow' is what you meant by refund account, is the shared multisig account only for insurance in case a simple A-B transaction isn't fulfilled? This sounds like the basics of smart contracting, where parties make an escrow deposit and if a party cheats they sign their escrow account signature and the other party (or both) lose their escrow deposit.
how long before the finite supply of Bitcoin has been mined out and the system collapses?
Your videos are the best on these topics!
Great vid. A little gear feedback - there's a lot of enviromental noise in the sound while you talk. I'm not sure if the mike and the setup you're using was a good choice. I'd recommend trying some directional mic (like rode mic pro) or lavalier (like rode smart lav).
I've heard that this can make it more centralized, is that true?
Yes
have you looked into hashgraph? whats your opinion
My question: I still dont see how this scales billionfold. as long as the consumers just send bitcoin to different adresses and dont receive bitcoin in the same time, almost every transaction has to be mined in the blockchain finally. only if the hubs like amazon and walmart etc. have bidirectional transactions in the same time, the LN reduces the number of transactions in the blockchain. Where am I wrong?
asdf, thank you for the answer. so, the channel stays open for years or what?
Sorry for being stubborn, but i made around 10 transactions this year from and to different public keys. I still dont see, how a LN would have reduced the mining effort. It would delay the mining, until the channels are closed. But then? In my current understanding, it just helps, if you make transactions back and forth or in a circle. But who does this really?
sounds like migration to another network :)
very good videos you do there. the animations are super helpfull. better than all the other explanation videos i watch
I don't see why you draw the conclusion that segwit will never activate on bitcoin. It's adoption is slow, but a new version of core is ALWAYS slow in terms of adoption.
+Adam Barlow we don't say it won't happen rather based on the 95% activation threshold it's currently highly unlikely. See our segwit video where we discussed this in more detail.
But in short, pools amassing a total of 5%+ of the network have publicly stated they will not support segwit.
Any idea why 95% was chosen? wouldn't anything above 51% work?
It is safer and 95% has been used before. Litecoin has the threshold at 75% but the lower the % the more chances issues can arise.
95% was chosen after seeing the problems that 75% had in the testnet. Lots of orphaned blocks and general chaos so I hear. Theoretically, any percent, even 10%, could start using a new soft-fork version without waiting, but they would effectively be cutting themselves off from the rest of the network and starting an altcoin. 95% is what is currently in the consensus rules for segwit, but any bitcoin version could choose whatever level of consensus it wanted, and as long as users decide to update to that version, users running that version will respect whatever consensus level that version runs.
Franklyn activation finally happened.
As far as I could understand, bitcoin bottleneck is num tx per second, which is ~~10. So how can you speed it up if you create extra more transactions for one payment??
still don't get it...
If your transactions are not on the blockchain, how safe is all that stuff? (crashes, hackers, ...)
When is your wallet on the blockchain updated? twice per year?
So... Basically, it's based on smart contracts where the network "knows" based on the contract(s) where the coins are supposed to go, even if they haven't actually been confirmed by the network? Or, something..?
Bro I really do appreciate you for this help, Thanks! I subscribed and Liked the video.
Doesn't the "hub network" or "crypto-bank" cause centralization? Isn't that what we're trying to avoid with cryptocurrencies?
+meauxx yes it needs to be centralised to work. It's a layer 2 network however so it's optional for users what really matters is that the main network it sits on top of remains decentralised.
Thanks a lot for your answer. That clears a lot of things up. 1 follow-up question: Won't transactions through the LN be cheaper than directly to the blockchain and thereby force people to use the centralized LN-layer?
+meauxx LN transactions are just IOU's so they won't cost anything until you publish the final agreed transaction to the blockchain.
That final transaction will have a fee just like any other transaction on the chain, all that happens is you get around having to pay fees for all the individual transactions that took place in the payment channel that led up to it.
Transaction fees are dynamic they aren't constant they are supply/demand based. If people use the LN then less transactions will happen on chain resulting is lower fees, if no one uses it then the fees will remain high. It doesn't force so much that it incentives.
Very clear answer. Thanks for the explanation! =)
Franklyn I get it. So for example, if Walmart handles 1,000 bitcoin transactions between 1,000 users per day. When they close out all of the IOUs at the end of the day, they can consolidate all of the transactions into 1 transaction on the bitcoin network. Saving the bitcoin network from being clogged with 1,000 unique transactions
It is the best video on the subject to this day, but honestly, it needs more animations. We need a bigger whiteboard, that would show where is the money at any given time, and where "it is" if someone cheats. You know, to assert that this transaction is as good as typical bitcoin transaction (if we can connect to the internet once per week).
And what happens if the banks become the nodes between users. And how long it takes to be able to use your money once it is sent. Bitcoin was supposed to eliminate the middlemen, remember? Eliminate central banks and those who control, manipulate and use the money supply to their own ends. From looking at the Lightning Network in the diagrams it seems this will take Bitcoin back a few steps and none forward.
It wouldn't matter who is the middleman, even if it is a bank because this is a trustless transaction
Would everyone opening a unidirectional channel with bitpay a good example?
How do I prove to bitpay that I have the money? Should I deposit all my money to the multi sig address first? Also, why does Lightning need segwit? What happens if the txn fee of the multi sig address ( when at last it would be recorded to the blockchain) too low and doesn't go through??
+Ephraim Raj you would first open a channel with bitpay then ask them create a refund for the amount you plan to deposit with them. Next deposit that exact amount into your shared multisig address. Otherwise funds can get stuck when attempting to remove them.
Bitpay However will most likely, being a trusted business be gladly willing to sign another refund if you ask them, just incase you were to deposit the wrong amount.
You can use this set up currently but the LN plans to be a used on a mass scale with its own user software. Previously exchanges have blamed theft and other issues on transaction malleability. Segwit is one way of fixing that to protect users and businesses.
Awesome video. I have lerned a lot! Thanks
What is with the music?
So litecoins will now become a bunch of IOU's?
Do you mind adding subtitles or a script of your video in the TH-cam video description? It is personally difficult for me to understand you because of your accent (I do like it, though!). I am trying to learn more about cryptocurrency, specifically, LTC, because I have heard many good things about it. If you included some words for me to read, it would be easier for me to watch the video. Thank you.
+Mi Truong glad you enjoyed it, check out the 'sources' link in the description. It's a link to the script for this video.
Oh! I did not notice that. Thanks!
my question is if person A doesn't have the funds to send to person C through B. Then B and C both broadcast on the block chain that they haven't received their money, how will they get paid? This allows for theft do be done on the part of person A purchasing something at the store. Person C should be able to check to make sure person A has the funds before they process the payment.
+Jnate Finley person C doesn't need to know how much is in A & B's channel. So long as A pays B then B will pay C. This process is near instant so C will know in store that they have been paid for the items A is purchasing by the payment and the hash associated with it.
A channel is just an address on the blockchain. A and B know their address and each knows who owns what in it and the same goes for B and C.
Excellent video with respect to content, video production quality, utilization of graphics, and even your mellifluous voice. A+
This sounds so complicated and very brilliant at the same time
This is off topic but as an audio engineer, I'm quite impressed with your coffee cup mic stand. Some day I may steal this. Thanks!
so ive heard some people say its centralized, and some people say its decentralized. but really, it can be both right?
you can have the 3rd person (in this vid brian) in betwee, and its centralized. but if you dont want to use a centralized exchange, you can do the 1st version of trade without someone in between the 2 trading partners -> decentralized
Now we've got Segwit!
As I understand payment-channels, like the lightning network, they are working off chain (no record in the blockchain). The only record to the blockchain is the deposit transaction to open the payment-channel and by closing the payment channel. But later all the transactions inside the payment-channel running on centralized servers, like traditional bank transfers. This is very fast, and could be very cheap if there is competition. But how the banks, who would run such payment-channels can secure that inside the payment-channel the transactions are not hacked and safe? And how the bank guarantee the customers that they dont double spend the funds if inside the channel all transaction are totally anonymous?
the transactions inside the payment channel could also stay in a separate blockchain to achieve criptographic security
Pro-tip, audio quality will be much better if you move your mic up close. Such a nice piece of equipment, but with it as far as it is, you're not realizing the real quality and picking up a TON of echo off the table.
Does working code exist? This seems great!
+Ephraim Raj An alpha version has been released for testing:
Https://github.com/lightningnetwork/lnd/releases/tag/v0.1-alpha
yes and no
Good video. Simple words about difficult.
Excellent. Thank you very much.
Bit tricky but will have to watch it again ( and maybe once again) but it's a start. Thanks again
How do Brian and Lucy know that the hashed S is in fact, S? What's verifying that S=H? The blockchain?
It's easy to hash S.
The real puzzle is how many dam wicker baskets do you have in the background? I count 16?
Peter Kwiatkowski 😂 best comment yet!
To those who understand lighting reads lightening. It works by delaying consensus off of main chain through off chain Cumulative lump sum. That means the transactions are not final. And should themain chain suffered failure all this secondary layer transactions will be compromised.
One question: say you're a coffe vendor and you've received some money via the Lightning Network. Since the transaction isn't being published on the blockchain, how can you spend that money that you received? I mean in case you need to pay someone who isn't part of the Lightning Network.
+danyt19 you would need to close the channel and broadcast the transaction to the blockchain. That way the coins leave the multi Sig and go to the respective people in the channel.
Alright, fair enough. But now again in the coffee vendor case, say you receive payments from 50 people throughout the day, of 1 pound each. At the end of the day, you want to spend the total of 50 pounds that you made in a single transaction to someone who isn't part of Lightning Network. Would that mean that you have to publish all 50 transactions on the blockchain?
+danyt19 depends how many channels their funds are in. Are they between the person and the vendor or are all the people using one middle man?
If they all use the middle man the vendor can close the channel and it will publish one transaction that was really 50 small individual ones.
Worst case scenario, each payment came through a different channel so the vendor would have to publish 50 transactions on the block-chain to be able to spend the money.
Best case scenario, they all came through the same channel, using the same middleman. The vendor can indeed publish only one large transaction. However, this would transfer quite a bit of money to the vendor out of the middle man's account, corresponding to 50 customer payments. At some point, the middle man might need to send some bitcoins as well, and will eventually have to redeem those 50 Lightning Network transactions (perhaps not all of them at once).
Either way, all of the 50 transactions will eventually need to be posted onto the block-chain in order for that money to be spent.
+danyt19 correct 50 transactions means 50 sets of transaction fees which is what the LN wants to avoid. That's why it will be centralised you need big rich middle men to facilitate trade.
Didn't understand any of it really. I think it's all those damn acronyms.
thanks a lot for this !!! :-D
Awesome! Thanks!
Update Mar/28/2017:
Segwit for Litecoin is stuck around 20%. Miners not budging.
55% signaling now :)
need subtitles, non Engish people don't understand
Where does his accent comes from ? It's like he's speaking while eating.
Was that english?
Since it's on a side chain doesn't that mean the miners won't get the transactions fees? what happens when the deflationary rate hits zero and there are no more new bitcoins being mined, just transaction fees.
It's not a side chain. Miners will get fees when channels open and close.
Mario Dian. I actually found an Andreas Antonopoulos Q&A about lightning network. It is a side chain, there is no doubt about that. Miners only get fees for opening channels and those channels can turn into a dozen other transactions that the miners collects no fees on.
Channels also have to be closed at some point if you want to get the advantage of full Bitcoin security.
It's not a sidechain. It uses Bitcoin's blockchain and nTimelock transactions. Sidechain would use its own chain as it's obvious from the term itself.
+Foyva the LN is not a side chain. A side chain is its own separate blockchain pegged to the parent where assets can be moved from one to the other (see my video on it for greater detail).
The LN is a layer 2 network which means it's on top of the parent network. Your opening multisig addresses between users and sending partially signed payments to each other from it, the payments are as good as real but you won't really own those coins until the channel is closed and the transactions broadcast on the network. It is not it's own blockchain.
Franklyn [Litecoin Association] Franklyn [Litecoin Association] ok maybe side chain isn't the right term, but it's not on chain. I'm not sure what to call it. Andreas states that it does take transactions off chain and away from miners, though he does say he doesn't think it will effect network security in terms of mining hash power.
Very nice video!
Solid music choice
+1
Lighting already being tested.
That's what Lightning network is for...
Cool explanation! My brain hurts though now. :)
Would yoi like to do a live stream on my channel?
Segwit is on Bitcoin!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Ezy!
The porn soundtrack behind this video gave an edge of sexiness to tech talk I didn’t realize could be achieved. Nice!
Is really that simple?
Smart contracts is exactly what Bitcoin is missing. As a buyer online, you need to trust the seller will honour your purchase with traditional on chain transactions. This seems to solve this.
What if you go out to dinner and someone can't pay cause they aren't linked to a massive Darden chain? Or maybe you connect your wallet on the spot with a Darden franchise, but what if it is a small mom and pop local diner? You realize the point of decentralization is antitheitical to corporate structures like Darden as we know them today?
Now I understand why /r/btc push BCH so much
they don't want their income getting lower because bitcoin getting Lightning Network
I'm not a miner, but hubs are new agents in the ecosystem and I fail to see how they'll preserve decentralization. Instead of p2p it's peer-hub-peer
Yep.
xZeroTheGreat Kind of like trackerless torrents.
... and I've gone cross-eyed ... to difficult for me. Thanks for the attempt though.
Thank you for trying to explain, it just feels like I'm listening to another language, but that's on me
Miners who can see the big picture probably know they can make more from the value of bitcoin increasing (block reward) due to bitcoin being more useful, than from tx fees.
Excellent video. Thank you however think it would have benefited if you had put the blockchain there so that it would be visible where the blockchain is at all times and when it would come into play.
Next minute Lucy has no crypto in her wallet, and the blockchain cant force Lucy to pay anything!!!
Watched it 5 times (3 times @ 0.75 speed !) to understand. Awesome concept. Bitcoin will became the DECentral Bank of the global monetary system and Mike and other middle man would be the banks. WoW ! But questions come then :
- When Lucy or Alex send 100 coins to a multisig adresse, this transaction has to be recorded on the blockchain, right ?
- Where are recorded the "blue" transactions ? in the set of unused transactions output (UTXO) of Bitcoin protocol ? If yes, scaling problem come back as this dataset will grow very big and as Bitcoin full nodes need to keep it up to date, doesn't it ?
- If the blue transactions are stored in the UTXO, can someone produce billions of pending blue transaction to DoS Bitcoin protocol ?
- if the unlock time is authorised to be longer than the previous one then we can have fractional reserve monetary creation mecanism, right ?
WE GOT SEGWIT!
Sounds like a band-aid solution
Which is Brian and which is alex
i rememer this face!
3 years ago you made videos about peercoin, right ?
nice (new) beard !
???????????
Thank you for not using Alice and Bob!
A crypto "bank"...
aaaannnddd we're back to square 1...
when dafuq will this be operational?? 2220?
????????????????????
The elephant in the room is: what happens to bitcoin when mining stops? All of these transactions regardless of scaling require miners to operate. Their is no incentive for mining to continue to operate if all they are participating in is nominal transaction fees. What happens to bitcoin then? Fizzle.... pop.
This seams far too complicated for the average user.
And its also bs to lock your btc's in the lightning network for days or weeks and not being able to spend them.
I think IOTA and similiar coins will replace this nonsense.
Btc and ltc are the actual digital money the others are something else let's store value in btc and use ltc for payments and exchange the gold to silver analogy does actually work and we should promote this idea anew for 2017 both to shield from btc political drama and to show that ltc is the only viable alt as it works like btc and therefore is legit decentralized value. Btc and ltc are the only projects where the ledger is open enough to be regulated and still survive and yet also decentralized enough to continue as money in a stable fashion... even if the core elders face oppression the networks are wide enough to keep surviving whereas most of the Alts have human centralized organizations that can be destroyed. Anyhow thanks for the great work please keep supporting btc/ltc 👍
6:53 - I thought Bitcoiners hated centralization.
Bitcoiners would hate for bitcoin as a whole to become centralized. But remember, lightning is just one possible use case of bitcoin. As long as the bitcoin network itself remains decentralized, bitcoin should do just fine. also keep in mind that even if this lightning becomes "centralized", it should be ok as long as it remains trustless - can it can remain trustless as long as the underlying network is decentralized since lightning channels can be trustlessly opened and closed directly on the decentralized blockchain.
that is way too complicated. How the hell am I going to explain that to a family member? It seems like me doing all of that I could of sent 20 Bitcoin cash transactions back and forth by time I sent one of those. -.- . I rather do business one-on-one with somebody than have more people in the mix. And I thought Bitcoin was about no reverse transactions???
Opened the video for lamens explanation, saw nice diagrams... then you started off with "Lucy sends Alex directly..." so I grabbed my popcorn and buckled up. The next 7 minutes was "漢zaf語fadf語ж耳з目fк語лмнéпрстф"
Give it another go dood
This is exactly why Dash will end up beting bitcoin. Only nerds can understand this. Nothing personal, I'm a nerd, but it's true. The average person won't even bother with this unless it's much much simpler.
What if Brian is a bank?
Thank you so much brother I am a n00b to this I had no idea how it worked
kool vid bro
People are starting to catch on to the scheme of bitcoin. Bitcoin was never designed to scale. What is Satoshi Nakamoto?
We have other cryptocurrencies that don't need off-chain solutions.
Good luck getting the average user to use this lol most of the people I know dont even understand bitcoin or how to use a regular wallet yet properly etc. Also who or what is processing these transactions?
NichoTBE Miners process the payments on the og block chain later when the channel closes. The transaction is really just a contract signed off chain between the nodes.
DECRED will be the first to use lightning network
Or you could just scale up...😕
I have no idea what I just listened to...
It would be helpful attach proper subtitle to the video.
Lucy's missing a neck :O