The LTB Network Forum


Scaling bitcoin with micropayment channels

Back to Listener Lounge

Jump to bottom
Pages: 123

Comments

ademczuk

edit:

This post began as an initiative to improve visibility of one method of micro-payment channels, however after some research it has become evident that numerous parties are striving towards the same goal. Is it too soon to find out more before transaction malleability is addressed?

To date we know of the following people involved in micro-payment channels:

  • Joseph Poon and Thaddus Dryja with their Lightning Network
  • Tony Gallippi (Impulse or a system similar to the Lightning Network)
  • Mike Hearn with Hourglass
  • Nick Sullivan of Changetip
  • James Poole who demonstrated Http Based Bitcoin Micropayments on youtube
  • Pieter Wuille who has proposed input towards BIP 62 to make all of the above possible.
  • CEO Martin Zachrison / CFO Olle Kullberg of Strawpay.

Hi @Adam

Just to bring you up to speed when you return there has been a lot of action from the SF Bitcoin Dev conference. In particular Joseph Poon and Thaddus Dryja have presented a method of supporting billions of bitcoin transactions. It is unique in that it hopes to address malleability while incorperating the op checklocktimeverify, which is something that other developers are interested in.

Here's reddit user BobAlisons attempt to summarize it:

One way to enable millions of transactions per day is to attempt to scale the block chain and network around it. Another way is to build a network on top specifically designed with scalability in mind. That's what Lightning Network is about.

The proposal extends the hub-and-spoke micropayment channel system described here: https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg06576.html

Under hub-and-spoke, the hub can steal the payment. However, the damage is limited if you're only sending a micropayment through the channel. If the hub refuses to forward the payment, you just disconnect and find a more trustworthy hub.

But hub-and-spoke can be used to solve a slightly different problem - keeping transactions off the block chain, yet securing them cryptographically and with enforceable contracts, and ultimately settling them on the block chain. The example of an exchange comes to mind.

With larger payments flowing through the channel, you need to trust the hub not to steal them. The Lightning Network solves this problem by making it impossible for the hub to spend the payment. The payer and intended payee negotiate an offset to the hub's key pair before making the payment. Only the intended payee can unlock the funds.

This is somewhat analogous to the way stealth payments work. Payer and payee negotiate an offset to a key pair. The payer pays to the offset public key, but can't unlock the payment. Only the payee can do that.

Youtube link: SF Bitcoin Devs Seminar: Scaling Bitcoin to Billions of Transactions Per...: http://youtu.be/8zVzw912wPo

Reddit thread with interest from peter todd: https://www.reddit.com/r/Bitcoin/comments/2xcq4x/instant_bitcoin_transactions_proposal_lightning/

3 likes
  • adam

    Good find Adam, do you think this would make a better interview (one host, and if so whom?) or guest host (speaks with all three of us)

    Permalink
    1 like
  • ademczuk

    This one can deffinately wait untill all three of you are ready. Andreas to dig into the technical, stephany to ask great questions and yourself to help unpack this complex solution.

    A good title for the show could be: Low hanging fruit

    Peter Todd called this Hub and spoke payment channels at the latest MIT Bitcoin Expo

    Permalink
    1 like
  • ademczuk

    Further information regarding payment channels have been described here

    Permalink
    1 like
  • jestin

    I agree that this would be a great show. The lightning network feels like a sort of inevitibility considering bitcoin's scaling problems. It's also the first proposal I've seen that really solves decentralized and trustless micropayments.

    Permalink
    1 like
  • ademczuk

    Here is a recent coindesk article about lightning networks.

    Permalink
    1 like
  • Rob

    @ademczuk Sigh... Coindesk had to blow the lid off my find! I got in touch with Joseph Poon last week, and he agreed to come on my show when I return from vacation. But that wouldn't air for at least two weeks.

    @adam, if you want to interview Joseph and Thaddeus, by all means go for it. Just let me know, so I won't double the efforts.

    EDIT: I'm so out of it, I didn't see the dates on the original post. Thought this was new. Sorry! Their talk in SF was referenced on my Episode #11 by Paul Puey (when I asked him, from the audience, how he thought Bitcoin could scale to make the network able to become a mainstream payment system).

    Permalink
    1 like
  • ademczuk

    EDIT: I'm so out of it, I didn't see the dates on the original post. Thought this was new. Sorry! Their talk in SF was referenced on my Episode #11 by Paul Puey (when I asked him, from the audience, how he thought Bitcoin could scale to make the network able to become a mainstream payment system).

    I had another listen and loved the episode @Rob , hope you'll have a great trip.

    Permalink
    0 likes
  • ademczuk

    Coindesk had to blow the lid off my find! I got in touch with Joseph Poon last week, and he agreed to come on my show when I return from vacation. But that wouldn't air for at least two weeks.

    Coindesk are perpetually trawling reddit and bitcointalk, I wouldn't be surprised if they view these forums.

    They certainly nailed the explanation in their article:

    "While this may sound complicated, essentially it works like this – If all bitcoin transactions are being discussed in an open forum, its public ledger, the lightning network allows parties to enter into a closed room for a period of time, conduct transactions during that period, and at the end of the agreed time, broadcast these transactions to the network."

    Permalink
    0 likes
  • ademczuk

    Here is a collection of articles on lightning and other payment networks

    Permalink
    1 like
  • Rob

    Hey @ademczuk, I thought you might be interested that, at yesterday's Bitcoin conference in Los Angeles, Jeff Garzik proclaimed his support for the Lightning Network (even though he had been working on a different implementation of Payment Channels). I asked if Lightning Network white paper authors Joseph and Thaddeus were aware of his support for their ideas, and he said he had let them know.

    @adam, did you ever schedule anything with them?

    Permalink
    1 like
Jump to top
Pages: 123

Post Reply

Please Login to post a reply to this thread.

© Copyright 2013–2016 The LTB Network. All rights reserved .