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: Message Format, Encryption, Authentication and Initialization
2. BOLT #2: Peer Protocol for Channel Management
3. BOLT #3: Bitcoin Transaction and Script Formats
4. BOLT #4: Onion Routing Protocol
5. BOLT #5: Recommendations for On-chain Transaction Handling
6. BOLT #6: Interim Node and Channel Discovery

Glossary and Terminology Guide

• Funding Transaction:

  • The on-chain, irreversible transaction which pays to both peers on a channel. Thus it can only be spent by mutual consent.

• Channel:

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

• Commitment Transaction:

  • A transaction which spends the funding transaction; each peers holds a signature from the other peer for this transaction, so 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; thus when it reveals the preimage to collect funds is considered proof that it received the 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 prevoius 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, by broadcasting a commitment transaction. This transaction is larger (ie. 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, by broadcasting 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; they are independent for each peer in the channel, and start at 0.

• Channel shortid:

  • An 8 byte globally unique identifier for the funding transaction (and thus for the channel).

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

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