lightning-bolts/00-introduction.md

# BOLT #0: Introduction and Index

Welcome, friend! These Basis of Lightning Technology (BOLT) documents
describe a layer-2 protocol for off-chain Bitcoin transfer by mutual
cooperation, relying on on-chain transactions for enforcement if
necessary.

Some requirements are subtle; we have tried to highlight motivations
and reasoning behind the results you see here. I'm sure we've fallen
short: if you find any part confusing, or wrong, please contact us and
help us improve.

This is version 0.

1. [BOLT #1](01-messaging.md): Base Protocol
2. [BOLT #2](02-peer-protocol.md): Peer Protocol for Channel Management
3. [BOLT #3](03-transactions.md): Bitcoin Transaction and Script Formats
4. [BOLT #4](04-onion-routing.md): Onion Routing Protocol
5. [BOLT #5](05-onchain.md): Recommendations for On-chain Transaction Handling
7. [BOLT #7](07-routing-gossip.md): P2P Node and Channel Discovery
8. [BOLT #8](08-transport.md): Encrypted and Authenticated Transport
9. [BOLT #9](09-features.md): Assigned Feature Flags
10. [BOLT #10](10-dns-bootstrap.md): DNS Bootstrap and Assisted Node Location
11. [BOLT #11](11-payment-encoding.md): Invoice Protocol for Lightning Payments

## Glossary and Terminology Guide

* *Funding transaction*:
   * The on-chain, irreversible transaction that pays to both peers on a channel.
   It can only be spent by mutual consent.


* *Channel*:
   * A fast, off-chain method of mutual exchange between two *peers*.
   To move funds, peers exchange signatures for an updated *commitment transaction*.


* *Commitment transaction*:
   * A transaction which spends the funding transaction.
   Each peer holds the other peer's signature for this transaction, so that it
   always has a commitment transaction it can spend. After a new
   commitment transaction is negotiated, the old one is *revoked*.


* *HTLC*: Hashed Time Locked Contract.
   * A conditional payment between two peers: the recipient can spend
    the payment by presenting its signature and a *payment preimage*,
    otherwise the payer can cancel the contract by spending it after
    a given time. These are implemented as outputs from the
    *commitment transaction*.


* *Payment hash, payment preimage*:
   * The HTLC contains the payment hash, which is the hash of the
    payment preimage. Only the final recipient knows the payment
    preimage. In order to release funds, the final recipient releases
    the preimage as proof it has received payment.


* *Commitment revocation key*:
   * Every *commitment transaction* has a unique *commitment revocation key*
    value which allows the other peer to spend all outputs
    immediately: revealing this key is how old commitment
    transactions are revoked. To do this, each output refers to the
    commitment revocation pubkey.


* *Per-commitment secret*:
   * Every commitment derives its keys from a *per-commitment secret*,
     which is generated such that the series of per-commitment secrets
     for all previous commitments can be stored compactly.


* *Mutual close*:
   * A cooperative close of a channel, by broadcasting an unconditional
    spend of the *funding transaction* with an output to each peer
    (unless one output is too small, and thus is not included).


* *Unilateral close*:
   * An uncooperative close of a channel, through broadcasting of a
    *commitment transaction*. This transaction is larger (i.e. less
    efficient) than a mutual close transaction, and the peer whose
    commitment is broadcast cannot access its own outputs for some
    previously-negotiated duration.


* *Revoked transaction close*:
   * An invalid close of the channel, through broadcasting of a revoked
    *commitment transaction*. Since the other peer knows the
    *commitment revocation secret key*, it can create a *penalty transaction*.


* *Penalty transaction*:
   * A transaction which spends all outputs of a revoked commitment
    transaction, using the *commitment revocation secret key*. A peer uses this
    if the other peer tries to "cheat" by broadcasting a revoked
    *commitment transaction*.


* *Commitment number*:
   * A 48-bit incrementing counter for each *commitment transaction*; counters
    are independent for each peer in the channel and start at 0.


* *It's ok to be odd*:
   * A rule applied to some numeric fields that indicates optional and
     compulsory support for features. Even numbers indicate that both endpoints
     MUST support the feature in question, while odd numbers indicate
     that the feature MAY be disregarded by the other endpoint.


* `chain_hash`:
   * Used in several of the BOLT documents to denote the genesis hash of a
     target blockchain. This allows nodes to create and reference channels on
     several blockchains. Nodes are to ignore any messages which reference a
     `chain_hash` that are unknown to them. Unlike `bitcoin-cli`, the hash is
     not reversed but is used directly.

     For the main chain Bitcoin blockchain, the `chain_hash` value MUST be
     (encoded in hex):
     `6fe28c0ab6f1b372c1a6a246ae63f74f931e8365e15a089c68d6190000000000`.

## Theme Song

      Why this network could be democratic...
      Numismatic...
      Cryptographic!
      Why it could be released Lightning!
      (Release Lightning!)


      We'll have some timelocked contracts with hashed pubkeys, oh yeah.
      (Keep talking, whoa keep talkin')
      We'll segregate the witness for trustless starts, oh yeah.
      (I'll get the money, I've got to get the money)
      With dynamic onion routes, they'll be shakin' in their boots;
      You know that's just the truth, we'll be scaling through the roof.
      Release Lightning!
      (Go, go, go, go; go, go, go, go, go, go)


      [Chorus:]
      Oh released Lightning, it's better than a debit card..
      (Release Lightning, go release Lightning!)
      With released Lightning, micropayments just ain't hard...
      (Release Lightning, go release Lightning!)
      Then kaboom: we'll hit the moon -- release Lightning!
      (Go, go, go, go; go, go, go, go, go, go)


      We'll have QR codes, and smartphone apps, oh yeah.
      (Ooo ooo ooo ooo ooo ooo ooo)
      P2P messaging, and passive incomes, oh yeah.
      (Ooo ooo ooo ooo ooo ooo ooo)
      Outsourced closure watch, gives me feelings in my crotch.
      You'll know it's not a brag when the repo gets a tag:
      Released Lightning.


      [Chorus]
      [Instrumental, ~1m10s]
      [Chorus]
      (Lightning! Lightning! Lightning! Lightning!
       Lightning! Lightning! Lightning! Lightning!)


      C'mon guys, let's get to work!


   -- Anthony Towns <aj@erisian.com.au>

## Authors

[ FIXME: Insert Author List ]

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This work is licensed under a [Creative Commons Attribution 4.0 International License](http://creativecommons.org/licenses/by/4.0/).