The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments
Publish Date: 14-01-2016
Synopsis: The bitcoin protocol can encompass the global financial transaction volume in all electronic payment systems today, without a single custodial third party holding funds or requiring participants to have anything more than a computer using a broadband connection. A decentralized system is proposed whereby transactions are sent over a network of micropayment channels (a.k.a. payment channels or transaction channels) whose transfer of value occurs off-blockchain. If Bitcoin transactions can be signed with a new sighash type that addresses malleability, these transfers may occur between untrusted parties along the transfer route by contracts which, in the event of uncooperative or hostile participants, are enforceable via broadcast over the bitcoin blockchain in the event of uncooperative or hostile participants, through a series of decrementing timelocks.
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