Is the bitcoin lightning network an ingenious design?

Editor’s note: This article from the blue fox notes (ID:lanhubiji), the article comes from the author: Todd:, Kronenberg, Leo: authorized reprint by odaily daily planet.

 Bitcoin lightning network is an ingenious design?

One of the biggest obstacles to mainstream bitcoin is extended, its transaction rate is slow, high cost. This leads to a different course. A large block of line expansion preferences on the chain, and also put forward the chain extended route. The chain extended backbone based on the security, and improve transaction throughput, reduce transaction costs. From a recent period of time, the number of network nodes lightning (more than 4000), the number of channels (more than 12000), the network capacity of over 400BTC, although the scale is still small, but also in advance. So, the more promising route? Is the big block line, or chain extension route? What do you see?

There are three kinds of accounting system: single entry bookkeeping, bookkeeping, three. Block chain and bitcoin innovation is that it brings three entry. But it also has a serious drawback, and lightning network solves the problem of double entry bookkeeping. Bitcoin shortcomings are 500 years ago things solved? Such is the case。

Single entry

The single entry is very simple, when an entity will be positive and negative transactions entered in the ledger. The old-fashioned way is like your own account. You only need to write down each row a positive or negative, and finally put them together with the initial balance added. For personal use, this is good. Because you can track your finances, and you know you can believe in yourself. You won’t deceive yourself? However, this single entry is not useful in business, because how can you believe other people’s books? In a single account, anyone can increase the funds without accountability, just because of how the single entry record transactions affect your books, this is isolated. If everyone just keep their isolated record books, this will easily lead to fraud, and it is difficult to prove its correctness.

Double entry

This is the business to double entry, the history of the revolution. Participants of each transaction record for two, in their own debit / credit account records, and other participants corresponding credit / debit. Now, you can’t create any money, because you must borrow from other people out, at the same time, if the other people can not match the transaction, that is fraud. You can still cheat, but you need to build the entire history of false trading, to conceal the fraud. Business audit staff through the review of the company’s accounting records to ensure everyone fair competition, in order to ensure things. But if there is a natural accounting system can prevent fraud, and without the trusted third party to carry out the audit manual, would it not be better?

Three entry and block chain, bitcoin

Block chain and bitcoin brings new things. It is no longer necessary to trusted third party auditors, no longer have to rely on economic participants, who cannot account fraud and fraud. In the three entry, not only is the transaction on each side of the record debit and credit (send and receive), and all participants in this economic system have the record of a transaction.

Now want to fraud is almost impossible, unless you control the economy of the participants, in block chain, which is called the 51% attack. Since everyone has each transaction records, a single agent can create false income for yourself, because everyone knew immediately that these “money” is not.

Now, we have security, in the final in the business ecosystem in the meantime, fraud (double) is almost impossible (assuming ecosystem participants according to similar to bitcoin distributed network to design). In addition, no trust auditors or bank and three party institutions, therefore, people are free to conduct business transactions, rather than through intermediaries such as banks.

However, there are also problems. If everyone had to record all transactions, which means that after each transaction occurs, it must be spread throughout the community. Obviously, this time, even with the use of computer and Internet, the news spread throughout the network also need time. There’s a bottleneck: in a certain period of time in the end how many transactions can be completed.

Three entry – block / chain innovation bitcoin is that it is safe, and there is no need to rely on third parties to obtain trust, because everyone has all the records, but its drawback is that it cannot handle a large number of transactions, because it must pass the transaction records for each participant in the network.

To solve the bottleneck of the blockchain

So, how to solve this problem?

Since the three entry is slow because the transaction must be broadcast to all participants, so we make a few participants retain all records, thus speeding up the whole transaction process. This way has become the center of. In the block chain, it is determined by the way of isolating who can act as administrator to complete the record, or the blockchain into private, and controlled by a single or several subjects, or create the strict requirements of the so-called super node, or simply let the blockchain allowing so many transactions, the transaction efficiency, only the most powerful and best computer network connection to record.

All of these solutions based on the accounting of the strict accounting center makes block chain trend. However, all the energy and innovation 3 entry and block chain in its security and without intermediary trust, because it is to the center of the property that it allows anyone to record transactions, and thus prevent fraud.

Therefore, the problem of slow entry and three block chain, the concept of center provides a solution, however, the scheme reduces its security and intermediary trust revolutionary value. We have high throughput, non secure double entry system, therefore, try to get the three entry system close to the double entry system, this will only make it competitive with the double entry system, but it just picked up the double entry type accounts also lost three weaknesses strengths, that didn’t seem like what real solutions.

However, if we combine the two, the new double entry system based on three layer block chain type accounting system? It sounds a bit stupid. But it is a genius idea. It solves the defects of the three entry and removal of double entry defects.

Lightning network

Lightning network is simply a double entry system, above three type accounting system which is built on bitcoin. Double entry is fast, and do not worry about the throughput bottleneck, because only the parties to the transaction records of their transactions, they need not to transfer transaction records for all. But the double entry bookkeeping system and accounting system rely on 3 support, you can get double entry throughput and security at the same time get entry and without intermediary trust.

The working principle of lightning is to create a network composed of two interwoven network participants composed of payment channels. Basically, it is between the two transactions. However, through the creation of a network, all channels of this network are connected to each other, you can double channel to route payments. If you want to send the payment to any person in the network, you can in your Lightning network channel, the direct connection with their account is credited (deposit into the account), then this account can be connected with their account is credited (including the same amount, from the debit, so in value don’t change the actual), the process continues until the transfer to the participant you actually want to deal, he will receive the funds.

So, technically, you are directly related with your payment channel funds originally sent in trading accounts. Therefore, each route between you and the final beneficiary of the connection is composed of two participants, they simply deal with each other, each participant in each other’s own account, a series of double entry path. Lightning network is composed of a double entry channel two participants in the network, therefore, there is no bottleneck in transaction throughput.

However, the key is that it is safe to trust bitcoin, three entry block chain support. Between two users all of these transactions have occurred lightning network chain. However, no fraud occurs, because each channel capacity (the total funds) in the open channel is recorded in the block chain, in the channel to increase capital or capital is the only way out of record in the block chain.

Therefore, each channel is closed, open and close it were recorded in three entry block chain, thus providing security against fraud. Here cannot create money, the total funds of lightning channel network with the number of records in the same block chain.

In the payment channels, users may try to deceive the user channel partners, but each contract to create intelligent lightning network channel in bitcoin will of any attempt to fraud payment channel partners who are punished. If a channel is open, it can be used to complete the double entry lightning network at any time as much as possible transactions, without worrying about the bottleneck problem, and support the safety of all of these transactions are 3 type accounting system block chain.

Bitcoin and lightning network together, both the double entry bookkeeping and three advantages. The business system is neither the traditional double entry system, not only the blockchain three entry system, it is the synergy.

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