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Thursday, August 29 • 10:00am - 11:50am
Onion Routing of Bitcoin payments on the Lightning Network with Hashed Time Locked Contracts (90 minute session)

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In this course, we start by comparing the payment process of Bitcoin in which the recipient can be offline with that of the Lightning Network where both parties are heavily involved in communication. We understand the concept of atomicity and understand on a visual level by comparing with a real world court system how a series of Hashed Time Locked Contracts (or HTLCs) enable the forwarding of funds across a network of payment channels in a way that we do not have to trust the intermediary nodes. This will show how the Lightning Network is an effort to reduce the Bitcoin Blockchain to what it is best at - decentralizing trust - and move the value transaction layer off chain away from the slow Blockchain technology.  

We will then look into more details how HTLCs are transported via onion Routing based on the SPHINX Mix format defined in BOLT 04. Once this is achieved we go back to BOLT 2 and add the last piece to the channel update protocol which is the protocol of how two nodes agree to set up and settle HTLCs.

Finally, we will discuss problems and downsides (like pathfinding, uncertainty or stuck payments) with the current construction and proposals that could improve on them.

This course is appropriate for current and aspiring blockchain developers who want to understand HTLCs.

Prerequisite: basic understanding of payment channels

avatar for René Pickhardt

René Pickhardt

Self Employed Data Science Consultant
Rene Pickhardt is a self employed Data Science Consultant who has studied Mathematics, Physics and Chinese. Besides data analysis and extracting knowledge from data he is interested in scaling computer systems. After becoming aware of the Lightning Network in 2017 as the scaling solution... Read More →

avatar for Andreas M. Antonopoulos

Andreas M. Antonopoulos

Author, C4 Board Member
Andreas M. Antonopoulos is a best-selling author, speaker, educator, and one of the world’s foremost bitcoin and open blockchain experts. He is known for delivering electric talks that combine economics, psychology, technology, and game theory with current events, personal anecdote... Read More →

Thursday August 29, 2019 10:00am - 11:50am MDT
  Technical, Intermediate