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- Bitcoin is not ok to pay for pay as you go: 1 minute of wifi connection or 10 seconds of livestreaming of a soccer match or

download 100kb from your torrent seed.

- Bitcoin is not ok for mainstream usage

off-chain payments

I don't broadcast to the network to avoid fees, btc network limit of 7 txs per second is not affected.

- Just broadcast to the network when we finished doing business together (ie I finished using wifi)

Problem: No confirmations, A can broadcast a double spend and I pay nothing

Funding tx 1 BTC to a 2of2 multisig

Commitment tx signed just by A

Problem: B can vanish, forcing A to looe 0.999 BTC

- Voy a explicar directamente la solucion final

- Each state has 2 commitment tx, one that A gives B another that B gives A

- Problem: Need to open a channel to do the txs

- A hashes R and gives the hash to B, C and D

- HTLC is setup on every channel: I will pay you X if you can find out R in less than 24hs

- A gives R to D

- D settles HTLC with C

- C settles HTLC with B

- B settles HTLC with A

- 1. Lightning Network Bitcoin + scalable, free and immediate
- 2. Oscar Guindzberg RSK Bitcoinj Stroem 37coins, Nimblecoin, Doosra, Microwork
- 3. Contents Payment Channels Bidirectional Payment Channels Lightning Network Hashed Timelock Contract (HTLC) BIPs Projects Open Problems Raiden
- 4. Bitcoin problems - 7 tx/second - USD 0.10 / tx - "final" confirmation in 1 hour
- 5. Payment channel – Attempt 1 TX Outputs: A: 0.99 BTC B: 0.01 BTC Inputs: A: 1 BTC TX Outputs: A: 0.98 BTC B: 0.02 BTC Inputs: A: 1 BTC TX Outputs: A: 0.97 BTC B: 0.03 BTC Inputs: A: 1 BTC
- 6. Payment channel – Attempt 2 Commitment TX Outputs: A: 0.99 BTC B: 0.01 BTC Inputs: A & B: 1 BTC Commitment TX Outputs: A: 0.98 BTC B: 0.02 BTC Inputs: A & B: 1 BTC Commitment TX Outputs: A: 0.97 BTC B: 0.03 BTC Inputs: A & B: 1 BTC Funding TX Outputs: A & B: 1 BTC Inputs: A: 1 BTC
- 7. Payment channel – Solution Commitment TX Outputs: A: 0.99 BTC B: 0.01 BTC Inputs: A & B: 1 BTC Commitment TX Outputs: A: 0.98 BTC B: 0.02 BTC Inputs: A & B: 1 BTC Commitment TX Outputs: A: 0.97 BTC B: 0.03 BTC Inputs: A & B: 1 BTC Funding TX Outputs: A & B: 1 BTC Inputs: A: 1 BTC Refund TX Outputs: A: 1 BTC Inputs: A & B: 1 BTC Lock Time: 1 day
- 8. Bidirectional Payment channel Commitment TX A1 Outputs: A RSMC: 0.50 BTC B: 0.50 BTC Inputs: A & B: 1 BTC Commitment TX A2 Outputs: A RSMC: 0.49 BTC B: 0.51 BTC Inputs: A & B: 1 BTC Commitment TX A3 Outputs: A RSMC: 0.70 BTC B: 0.30 BTC Inputs: A & B: 1 BTC Funding TX Outputs: A & B: 1 BTC Inputs: A: 0.5 BTC B: 0.5 BTC
- 9. Revocable Sequence Maturity Contract Commitment TX A1 Outputs: A RSMC: 0.50 BTC (A1 & B1) B: 0.50 BTC Inputs: A & B: 1 BTC (Signed by B) Revocable TX A1 Outputs: A: 0.50 BTC Inputs: A RSMC: 0.50 BTC (Signed by B1) Lock Time: 1 day A B A1 Private Key
- 10. Lightning Network A D
- 11. Lightning Network A B C D X Y
- 12. Lightning Network A B C D X Y
- 13. Lightning Network A B C D X Y
- 14. Hashed Timelock Contract (HTLC) A B C D HTLC Hash(R) 0.12 BTC 24hs R R R R R HTLC Hash(R) 0.11 BTC 23hs HTLC Hash(R) 0.10 BTC 22hs
- 15. Commitment TX A2 Outputs: A RSMC: 0.38 BTC (A2 & B2) B: 0.50 BTC HTLC 0.12 BTC (to B if R) Inputs: A & B: 1 BTC (Signed by B) Hashed Timelock Contract (HTLC) Commitment TX A1 Outputs: A RSMC: 0.50 BTC (A1 & B1) B: 0.50 BTC Inputs: A & B: 1 BTC (Signed by B) AB R Commitment TX A3 Outputs: A RSMC: 0.38 BTC (A3 & B3) B: 0.62 BTC Inputs: A & B: 1 BTC (Signed by B)
- 16. Topology A B C D X Y
- 17. Topology D X Y
- 18. Topology D X Y
- 19. BIPs - BIP 65 OP_CHECKLOCKTIMEVERIFY - BIP 68/112 OP_CHECKSEQUENCEVERIFY - SIGHASH_NOINPUT / segwit
- 20. Projects Lightning Labs Blockstream ACINQ/eclair (Blockstream style) bcoin-org/plasma (Lightining Labs style) Amiko-pay Thunder Strawpay/Stroem
- 21. Open problems Channel monitoring Fee Routing Network topology centralization Lock BTC Privacy
- 22. Open problems Wire protocol Different implementations Adapt wallets/exchanges
- 23. Raiden - State channels - Ethereum / RSK
- 24. Summary - Scalable, free and immediate - Bidirectional payment channels - Needs Maleability fix
- 25. Thanks https://lightning.network oscar.guindzberg@gmail.com github.com/oscarguindzberg

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