Reading Assignment: Lightning Basics

Lightning Network, Lapps & Segwit
#121

How many times can you refill your LN channel?
As often as you are able to rebalance or add additional funding to channel.

What’s the difference between Advertised and non-advertised channels?
Advertised is a public channel available for routing by the network. The non-advertised channel is a private channel.

How does Buffer capital work?
Capital that makes up reserves for additional routing of transactions.

What is onion routing?
Nodes know only a limited amount of information about the immediate predecessor and successor.

#122
  1. How many times can you refill your LN channel?

Users will fill their Lightning wallet, spend the balance over a period of days or weeks, then refill it. Just as bank or cash accounts can be emptied and refilled over and over, Lightning channels can as well.

  1. What’s the difference between Advertised and non-advertised channels?

End user nodes (smartphones, laptops, etc.) 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. Note that this diagram is simplified. A typical gateway node would have many more inbound and outbound channels, and end user devices will generally be connected to more than one gateway.

  1. How does Buffer capital work?

Essentially, within a given period of time, some of a routing node’s users will be spending, while others will be refilling. However, there will be times when funds will happen to be moving in the same direction (e.g. more spending than receiving). In these situations, a 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. Routing nodes that don’t contribute enough capital to handle periods of imbalance will experience channel exhaustion (when a node has no funds remaining in a channel) and routing failures. This type of failure should happen relatively infrequently, because nodes that produce these routing failures will be routed around and eventually disconnected by other nodes.

  1. 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.

#123
  1. How many times can you refill your LN channel?
    Unlimited
  2. What’s the difference between Advertised and non-advertised channels?
    The channels which are from end users like smart phone laptop and only intermittently available are not advertised channel. Whereas gateway routing channels are advertised.
  3. How does Buffer capital work?
    This is the fund to balance when inflow or outflow imbalance gets created.
  4. What is onion routing?
    Its method of encryption to maintain privacy
#124
  1. How many times can you refill your LN channel?

Lightning channels can be refilled “over and over” just like bank or cash accounts. There is no specific limit mentioned, implying that channels can be refilled an unlimited number of times.

  1. What’s the difference between Advertised and non-advertised channels?

Advertised channels are visible in the network graph and can be used for routing, whereas non-advertised channels are not visible and can only be accessed through “routing hints” embedded in Lightning payment requests. Non-advertised channels are expected to become the default for end users, making routing more efficient.

  1. How does Buffer capital work?

Buffer capital refers to the amount of funds that a routing node needs to maintain to handle periods of imbalance in channel flows. When a node’s channels are mostly being used for spending, it needs to have enough buffer capital to wait until the flow of funds reverses and channels return to a more balanced state. If a node doesn’t have enough buffer capital, it may experience channel exhaustion and routing failures.

  1. What is onion routing?

Onion routing is a technique used in the Lightning Network to enhance user privacy and censorship-resistance. It works by encrypting the payment path so that intermediate nodes in the path only know the identity of their immediate predecessor and successor in the route, but not the sender or receiver. This makes it difficult to track the origin and destination of a payment.