Reading Assignment: Lightning Basics

Are you ready for a reading assignment?? I hope so :wink: Read through this blog post and answer the following questions. Don’t forget to post your answers in this forum thread.

  1. How many times can you refill your LN channel?
  2. What’s the difference between Advertised and non-advertised channels?
  3. How does Buffer capital work?
  4. What is onion routing?
  1. How many times can you refill your LN channel?
    unlimited as long you have balance or capacity. LN payments are instant (limited only by the speed of the internet) and with sub-satoshi fees being possible.

  2. What’s the difference between Advertised and non-advertised channels?
    none advertising; end users do not advertise” channels by default such as smart phones and may require routing hints for path.
    advertising are nodes whom have route and advertise pathways on more permanent basis.

  3. How does Buffer capital work?
    need an amount of btc in a channel to allow forwarding of a transaction to fulfill an order at the end of the routed path so a balance can be transfered. The Aggregate inflows and outflows across many users so that overall flows to and from a routing node will be and must be balanced. Essentially, within a given period of time, some of a routing node’s users will be spending, while others will be refilling that amount needed is the buffer or BTC required to allow the routing pathway to work.

  4. What is onion routing?
    route using Tor an extra layer of privacy; the actual onion route is the path only knowing the previouse node it come from and the next node in the payment routed path.

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How many times can you refill your LN channel?
As many times as you want.

What’s the difference between Advertised and non-advertised channels?
Advertised channels are available for routing and are visible on the network graph. Non-advertised channels are not available for routing except for when extra routing information (routing hints) are embedded in payment requests.

How does Buffer capital work?
Buffer capital are the amount of funds that a node must maintain so that during periods of inflow / outflow imbalance the node does not become exhausted (run out of funds).

What is onion routing?
A privacy concept that is archived by each intermediate node only knowing the identity of the previous node and the next node in the payment path.

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  1. The Lightning channel can be refilled over and over, but each refill costs an onchain transaction fee.
  2. Advertised channels are routing channels which are visible in the network. Non-advertised channels are typically end users.
  3. “Buffer capital” is the capital for a Lightning node which is need ed to maintain the inflow and outflow of a payment channel.
  4. Onion routing is used in multi-hop payments with intermediate nodes. The intermediate nodes only know the the predecessor and successor in the route.
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  1. How many times can you refill your LN channel?
    Unlimited

2 What’s the difference between Advertised and non-advertised channels?
Advertised are visible in the network. Non-Advertised are light devices like mobile phones from end users

  1. How does Buffer capital work?
    It records the inflow and the outflow. Based on this information it will devide funds smarter over nodes.

  2. What is onion routing?
    A method which will gives privacy while routing the payments in the network

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  1. As many times as you want.
  2. Advertised channels are used for routing of non advertised channels which are used by end users.
  3. Buffer capital are the funds used for routing payments and must be large enough for payments to be able to get through.
  4. Routing data through layers so that intermediate nodes only know the identity of its predecessor and successor in the route.
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  1. How many times can you refill your LN channel? As many times as you want.
  2. What’s the difference between Advertised and non-advertised channels? First are broadcasted to the network.
  3. How does Buffer capital work? If founds of a node´s channels move all to the same direction (spending vs refilling), routing node must maintain enough “buffer capital” to be able to wait until the flow of funds reverses and channels return to a more balanced state.
  4. What is onion routing? A communication protocol to garantee privacy between sender and receiver; used in multi-hop payments, each node in the route only knows its previous and next node.
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  1. indefinite number of times
  2. Non-Advertised = not visible to the wider network but instead available in LN requests. Advertised = public and visible channels
  3. buffer capital: As inflows and outflows occur in a node, the node must be clever enough to maintain enough overall balance to cater for a high demand in inflows/outflows so that the channel remains “in balance”
  4. onion routing. any any given node, the route information only holds the previous node and the next node. No overall route is maintained.
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  1. LN channels can be refilled indefinitely.
  2. Advertised channels are visible to the network and are reliable as they should always be online, while non-advertised channels are typically end nodes like phones or laptops that are only online part of the time and can be relied to route payments.
  3. Buffer capital acts as a backup to fund channels in a routing node when that node is experiencing a majority of flow in a given direction and thus could run out of balance in that direction. Running out of balance would make payments fail and consequently start to get disconnected from other nodes.
  4. Onion routing is a private routing mechanism that transmits packages through many routing nodes and those nodes only know the immediate node where that package came from and going to, but not the previous or after nodes. This makes it extremely difficult to trace where a payment originated for example.
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  1. indefinite
  2. The majority of nodes (smartphones, laptops, etc.) and channels will not be available for routing and will not be visible in the network graph. End user nodes will not “advertise” channels by default. These non-advertised channels will be accessible through the use of extra routing information or “routing hints” embedded in Lightning payment requests. Payment channels that are only intermittently available should not be used for routing and generally won’t be advertised to the broader network*
  3. Routing nodes will aggregate inflows and outflows across users. Routing nodes should provide enough buffer capital to avoid channel exhaustion and routing failures.*
  4. Onion routing is a technique for anonymous communication over a computer network. The encrypted data is transmitted through a series of network nodes, each of which peels away a single layer, uncovering the data’s next destination.
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  • How many times can you refill your LN channel?
    As many as you want.

  • What’s the difference between Advertised and non-advertised channels?
    payment channels that are only intermittently available should not be used for routing and generally won’t be advertised to the broader network.

  • How does Buffer capital work?
    routing nodes should provide enough buffer capital to avoid channel exhaustion and routing failures.

  • What is onion routing?
    This means that intermediate nodes in the payment path know only the identity of their immediate predecessor and successor in the route

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  • 1. How many times can you refill your LN channel?
    As many as you want.
  • 2. What’s the difference between Advertised and non-advertised channels?
    Advertised channels are available for routing and are visible on the network graph (between “Routing nodes”). Advertised channels are used for routing of non-advertised channels which are used by the “end users” by default.
  • 3. How does Buffer capital work?
    “Buffer capital” is the total fund in a Lightning node that required for maintaining the inflow and outflow of payments. Lighting nodes should provide enough buffer capital to avoid channel exhaustion and routing failures.
    *4.What is onion routing?
    Routing data through layers - intermediate nodes only know the identity of its immediate predecessor and successor in the route.
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  1. How many times can you refill your LN channel?
    As many as necessary - just like moving FIAT.
  2. What’s the difference between Advertised and non-advertised channels?
    Advertised channels are trusted, stable and always ready for routing - can be chosen as a route to process the payment. Non-advertised channels are user-end channels that are not as frequent.
  3. How does Buffer capital work?
    by making sure the node has enough capital to cover - to counterbalance the payment cycle - if there’s too much of outflow, covering the part for the inflow and the opposite.
  4. What is onion routing?
    As the payment is processed and directed throughout different nodes, onion routing serves as protecting privacy - intermediate nodes in the payment path know only the identity of their immediate predecessor and successor in the route.
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  1. unlimited. However each refill incurs on-chain tx fees
  2. Advertised channels are almost always available and act as gateways, while unadvertised channel are for endusers who may not be online most of the time
  3. Gateway nodes may see excessive outbound flow of funds during short periods of time, and may be short of funds in those situations, therefore need buffer capital
  4. onion routing is when a node only know the incoming and outgoing peer, but does not know the orginal sender or final recipient
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  1. As many times as you want provided you have BTC to fill it.
  2. Non-advertised channels are end users who will not be on reliably so they do not get advertised as nodes others should connect to with a channel.
  3. It’s the amount of funds needed to make sure a node doesn’t run out of it’s balance and return a routing failure.
  4. Like layers of an onion, the node only knows where the money came from and where it’s going to 1 hop away.
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  1. How many times can you refill your LN channel?
  • There is no limit to how many times you can refill the channel.
  1. What’s the difference between Advertised and non-advertised channels?
  • Advertised channels are usually nodes and bridges and non-advertised channels are mobile phones, laptops etc. Non-advertised channels are not broadcasting the channel to the network.
  1. How does Buffer capital work?
  • If there are payments going much one way the buffer capital should cover for more routing until the channels are closed and settled.
  1. What is onion routing?
  • A security measure so it is only possible to se the sender and receiver in a hop, but not the original sender and receiver.
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  1. How many times can you refill your LN channel?
  • unlimited as long as your node still working
  1. What’s the difference between Advertised and non-advertised channels?
  • Advertised channels : can be used to route payment and channel details are available
    vice versa
  1. How does Buffer capital work?
  • Additional amount of btc that used for routing payment when there is a instant insufficient in balance happend.
  1. What is onion routing?
    A encryption which used to protect the information and privacy of nodes.
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  1. unlimited amount
  2. advertised nodes are on a permanent basis
  3. need to have amount in channel you are forwarding
  4. tor routing
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  1. unlimited
  2. like phones non advertised
  3. need to have enough btc in channel to pass along
  4. tor
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